The future of consumer class actions alleging privacy violations may be in the hands of the U.S. Supreme Court now that the justices have granted certiorari in Robins v. Spokeo.
The case itself is a Fair Credit Reporting Act dispute brought by Thomas Robins after he discovered that Spokeo’s Web site contained inaccurate information about him. The people search engine and data aggregator allegedly stated that Robins was in his 50s and employed in a professional or technical field, information that was incorrect and would negatively impact his job search.
Spokeo moved to dismiss the suit, arguing that Robins lacked standing to sue under the federal statute. Even if the plaintiff could show that some of his information was inaccurate—a technical violation of the FCRA—he did not suffer an injury in fact as required by Article III, Spokeo said.
Robins countered that he did suffer injury, albeit not economic. Instead, he claimed “economic, reputational, and emotional injuries caused by the publication of false information about him.”
A federal district court sided with Spokeo and dismissed the suit, but the Ninth Circuit Court of Appeals reversed. According to the court, a violation of the FCRA triggered a cause of action under the statute and satisfied the standing requirement, as “the interests protected by the statutory rights at issue are sufficiently concrete and particularized that Congress can elevate them.” An additional harm—for example, economic loss—was therefore not required.
Absent an actual economic injury, consumers should be precluded from filing a suit, the company argued. The company suggested the following question for consideration: “Whether Congress may 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 Court granted the petition and will hear oral argument next term.
A decision from the justices could have a major impact on consumer class actions generally and privacy cases specifically. In many of the cases brought against companies alleging privacy violations, the defendants have successfully argued that the plaintiffs should not be able to recover because they suffered no harm.
With high stakes on the line, amicus have lined up on both sides of the bar. Siding with Robins, the Consumer Financial Protection Bureau and Department of Justice filed a joint brief advising the justices not to grant cert. But companies including eBay, Facebook, Google, and Yahoo all filed an amicus brief in support of Spokeo, citing the rising cost of doing business for companies facing consumer class actions where the plaintiffs have not suffered an injury in fact.
To read the Ninth Circuit’s decision, click here.
To read Spokeo’s petition for writ of certiorari, click here.
To read Robins’ reply brief, click here.
Why it matters: The Court’s decision in the Spokeo case could have a potentially wide-ranging impact on consumer class actions. Multiple federal statutes—including the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, and the Video Privacy Protection Act, among many others—currently allow plaintiffs to file suit based on a statutory violation without the showing of an actual injury. A reversal of the Ninth Circuit’s opinion could deter future consumer class actions lacking an injury in fact, but if the Supreme Court were to affirm the decision, businesses could face a wave of litigation and potential multi-million dollar awards. The Court will hear oral argument next term.