Standing: Supreme Court Interprets "Injury-in-Fact" Requirement in Context of Cases Involving Purely Statutory Damages

In May, the Supreme Court considered whether Article III standing exists in cases involving purely statutory damages. The case, Spokeo, Inc. v. Robins, 578 U.S. __ (2016), involved a plaintiff who alleged that a search run on Spokeo's website had returned inaccurate information about his family, age, employment status, wealth, and level of education and sought damages on behalf of himself and a class of similarly situated individuals for Spokeo's alleged willful failure to comply with the Fair Credit Reporting Act of 1970. The US District Court for the Central District of California held that he had not pleaded an injury in fact and dismissed the complaint, and the Ninth Circuit reversed.

The Supreme Court held that the mere presence of statutory damages does not itself create Article III standing, which "requires a concrete injury even in the context of a statutory violation." The Court noted that a "risk of real harm" could satisfy the concreteness requirement, citing its earlier decision in Clapper v. Amnesty Int'l USA, which held in turn that a risk of future injury could satisfy Article III if the risk was "certainly impending." 133 S.Ct. 1138, 1143 (2013). Unusually, however, the Court declined to apply the concreteness test to the facts before it, instead reversing and remanding to the Ninth Circuit. Accordingly, while the Court held that "a plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right," it provided limited guidance on the types of statutory violations that might meet the test.

Spokeo will force plaintiffs to beef up their pleadings to allege facts showing that their damages claims satisfy the injury-in-fact requirement, and may provide an opening to challenge class certification in cases where plaintiffs' counsel cannot demonstrate that each member of the proposed class has suffered concrete harm or a certainly impending risk of harm as a result of the alleged statutory violation.