Takeaway: The decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), where the U.S. Supreme Court evaluated Article III standing in the context of a federal statutory violation, continues to generate controversy. Since its issuance in May 2016, Spokeo has been cited in over 400 lower-court decisions. Class actions in particular have wrestled with Spokeo, because a finding that a class representative does not have Article III standing – because he or she has not suffered an “injury-in-fact,” for example – should end the federal case and may defeat the class action entirely. Spokeo, moreover, has divided individual courts. In a recent and unusual decision, Judges within the Eleventh Circuit argued about the meaning of Spokeo, in dueling opinions issued in connection with that court’s denial of a petition for rehearing.
In Nicklaw v. Citimortgage, Inc., 839 F.3d 998 (11th Cir. 2016), the three-judge panel (consisting of Circuit Judges William Pryor and Stanley Marcus and Middle District of Georgia judge R. Hugh Lawson, Jr., sitting by designation) unanimously dismissed the appeal for lack of Article III standing. The Nicklaw decision arose out of a New York mortgagor’s sale of his home and subsequent pay-off of his mortgage. Despite a New York statutory requirement that CitiMortgage record the satisfaction of the mortgage within 30 days, CitiMortgage did not record the sale for 107 days. Two years later, Nicklaw sued CitiMortage to recover the $1,500 statutory penalty for its failure to file a timely satisfaction and sought class treatment of similarly situated mortgagors. But Nicklaw did not allege he suffered any harm as a result of the delayed recordation (such as losing any money or experience an adverse impact on his credit). To the contrary, Nicklaw apparently did not even know about the violation until after CitiMortgage had recorded the satisfaction of mortgage (thereby removing any cloud on the title).
The district court dismissed the complaint and Nicklaw appealed. Following the issuance of Spokeo, CitiMortgage moved to dismissal the appeal for lack of jurisdiction. The panel dismissed the appeal on the ground Nicklaw had not suffered an “injury in fact” sufficient to support federal court standing. In so ruling, the court relied on the statement in Spokeo that “Article III standing requires a concrete injury even in the context of a statutory violation.” Id. at 1002. According to the Eleventh Circuit, “Nicklaw alleges neither a harm nor a material risk of harm that the district court could remedy.” Id.
Nicklaw petitioned for rehearing, and Circuit Judge Beverly Martin requested a poll on whether the case should be reheard by the Eleventh Circuit sitting en banc. When the majority of active Eleventh Circuit judges voted against rehearing en banc, Judge Martin dissented from the denial of rehearing, prompting Judge Pryor (joined by Judge Marcus) to pen his own opinion in support of the denial and “to respond to the errors in arguments made by our dissenting colleague.” Nicklaw v. Citimortgage, Inc., No. 15-14216-FF, 2017 WL 1548204 (11th Cir. May 1, 2017).
Judge Martin’s dissent focused on two aspects of Spokeo. First, Spokeo instructed federal courts, in evaluating injury-in-fact, to “consider both history and legislative judgments,” further observing that “a legislative body may decide to elevate intangible harms, previously deemed inadequate to confer standing, into legally cognizable injuries.” Id. at *4. Second, “any real harm or ‘risk of real harm’ stemming from that legislative judgment can satisfy the concreteness requirement.” Id. (quoting Spokeo, 136 S. Ct. at 1549). On this second point, a plaintiff faced with a real risk of harm “need not allege any additional harm beyond the one Congress has identified.” Id. (quoting Spokeo, 136 S. Ct. at 1549) (emphasis in original).
Judge Martin found Nicklaw adequately alleged a risk of real harm. “The New York legislature identified and elevated the intangible harm alleged by Mr. Nicklaw,” Judge Martin wrote, and “it unambiguously created a right to have truthful information reported about the title to one’s property.” Id. at *6. For his part, “Mr. Nicklaw suffered a material risk of a concrete harm” and was not required to allege that he actually suffered any harm. Id. She concluded: “I am afraid the holding of the Nicklaw panel opinion might end the private vindication of many societal harms identified by legislatures. I dissent to what this Court has done in this regard.” Id. at *7.
The response by the two Circuit judges on the Nicklaw panel (reported before Judge Martin’s dissent from the denial of rehearing) viewed the case as presenting a straightforward situation where a plaintiff suffered a technical statutory violation without suffering an injury-in-fact. According to Judge Pryor, “Nickaw’s complaint alleged only speculative harms to the market for residential property” and he “neither alleged that he had suffered any concrete harm nor that he was at risk of incurring any future harm as a result of the earlier delay in recording the certificate of discharge.” Id. at *1. He concluded: “The panel opinion adhered to the requirement of a concrete injury under Article III, as explicated in Spokeo. It held that Nicklaw’s complaint failed to allege that he suffered a concrete injury when the New York statutes were violated and that he failed to allege a risk of any future harm. CitiMortgage remedied Nicklaw’s earlier risk of harm when it recorded the certificate of discharge two years before he filed his complaint. Because the panel opinion is correct, we agree with our decision not to rehear this appeal en banc.” Id. at *3.
Although the dueling decisions reached different outcomes as to the applicability of Spokeo to the facts of Mr. Nicklaw’s case, they agreed on aspects of the Spokeo analysis determining whether the injury at issue supports federal court standing. Among other things, both the original panel and Judge Martin’s dissent from the denial of rehearing emphasized the importance of whether the alleged injury at issue “has traditionally been regarded as providing a basis for a lawsuit in English or American courts.” 839 F.3d at 1002 (panel decision); see also 2017 WL 1548204, at *4, *6 (referring repeatedly to “history” in analyzing whether violation at issue supporting standing) (Martin, J., dissenting from denial of rehearing). This common ground may advance Spokeo jurisprudence by directing practitioners and courts to examine traditional causes of action in evaluating whether a given harm should support federal court standing.