A group of eight state attorneys general filed an amicus brief with the U.S. Supreme Court, weighing in on the high-profile dispute over standing in privacy lawsuits.
Next term the justices are set to hear Robins v. Spokeo, a case involving Thomas Robins, who sued Spokeo alleging that the people search engine and data aggregator violated the Fair Credit Reporting Act (FCRA) by featuring inaccurate information about him that negatively impacted his job search.
Spokeo moved to dismiss, arguing that Robins did not suffer an injury-in-fact to establish Article III standing, as he merely alleged a technical violation of the statute. A federal court judge agreed, but the Ninth Circuit Court of Appeals reversed. The U.S. Supreme Court granted certiorari to answer the question, “May Congress confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute?”
The state AGs answered with a resounding “No.”
“A balance must be struck between robust enforcement of laws meant to protect consumers and costly, economically destructive windfall class actions. Fortunately, the Constitution has already struck that balance by requiring actual harm for Article III standing,” the Alabama Attorney General wrote. He was joined by his counterparts from Colorado, Michigan, Nebraska, Tennessee, West Virginia, Wisconsin, and Wyoming.
The states expressed concern that the Ninth Circuit’s decision would upset that balance and result in “abusive, no-harm lawsuits,” potentially “unleash[ing] a torrent of potentially firm-killing class actions for technical statutory violations that have caused no actual harm to plaintiffs.”
What makes the states think such a flood of class actions is likely? Past experience, the AGs explained, looking back to the 1990s when “class actions were out of control” and a veritable “Wild West” existed in the courtrooms. Many states, including Alabama, reacted with class-action reforms, the amicus brief said, and upholding the Ninth Circuit opinion would reverse those efforts.
Affirming the lower court’s opinion would also undermine the Rule 23(a) test, by collapsing the standing analysis, and it would “threaten to return us to the ‘bad old days’ of abusive class litigation,” the AGs wrote. And weakening the injury-in-fact requirement would effectively end the lawsuit, as defendants—facing significant verdicts—are pressured to settle, the states argued.
“Statutory damages serve an important purpose, but they can be abused, particularly when combined with class actions, according to the amicus brief. “This Court should reaffirm that actual harm is necessary to establish Article III standing and restore a balance that respects the interests of both consumers and businesses.”
To read the state attorneys general amicus brief, click here.
Why it Matters: With the potential for a huge impact on class actions generally and privacy lawsuits in particular, the Spokeo case has garnered a great deal of attention even before the justices have heard oral argument. In addition to the state AGs, several companies and trade organizations have filed amicus briefs in support of Spokeo, including the American Bankers Association, Google, National Public Radio, Netflix, the Retail Litigation Center and the U.S. Chamber of Commerce.