Supreme Court Vacates Ninth Circuit's Decision in Spokeo, Inc. v. Robbins, Holds "Bare Procedural Violation" of FCRA Does Not Confer Article III Standing
In a much-anticipated decision, the United States Supreme Court ruled on Monday in Spokeo, Inc. v. Robins, No. 13-1339, 2016 WL 2842447 (May 16, 2016), that a consumer cannot bring a lawsuit in federal court based only on a "bare procedural violation" of the Fair Credit Reporting Act, 15 U.S.C. § § 1681-1681y ("FCRA"), vacating the Ninth Circuit's earlier decision for failing to fully consider whether the plaintiff had adequately alleged an "injury in fact." See 2016 WL 2842447, at 2-3. Yet, while defendants had been arguing for months in district courts that the Supreme Court's decision in Spokeo could close the courthouse doors to all attempts to establish Article III standing based on alleged statutory violations alone, the Court's ruling was far more limited, and in fact expressly recognized that Article III standing does not always require allegations of "additional harm" separate from the violation of the statute itself. See id. at 7-8. The plaintiff in Spokeo, Thomas Robins, originally filed the FCRA class action lawsuit against Spokeo, Inc. - a self-described "people search engine" - after discovering that "some of the information [Spokeo] gathered and then disseminated [regarding the plaintiff] was incorrect." Id. at 2. In his complaint, he alleged that his profile on Spokeo's website "states that he is married, has children, is in his 50's, has a job, is relatively affluent, and holds a graduate degree," but that, in truth, "all of this information is incorrect." Id. at 4. Thus, based on these inaccuracies, the plaintiff asserted that Spokeo had willfully violated the FCRA, and particularly its requirement that consumer reporting agencies ("CRAs") "'follow reasonable procedures to assure maximum possible accuracy of' consumer reports." See id. at 2-4 (citing 15 U.S.C. § 1681e(b)). The district court disagreed and dismissed the plaintiff's complaint with prejudice, holding that the plaintiff "had not 'properly pled' an injury in fact, as required by Article III," but on appeal the Ninth Circuit reversed. Specifically, the Ninth Circuit ruled while "'the Constitution limits the power of Congress to confer standing' . . . those limits were honored in this case because Robins alleged that 'Spokeo violated his statutory rights, not just the statutory rights of other people,' and because his 'personal interests in the handling of his credit information are individualized rather than collective.'" See id. at 4 (citation omitted). After granting certiorari to review the Ninth Circuit's decision, the Supreme Court vacated the decision, finding the Ninth Circuit's analysis to be incomplete. In writing for the majority of the Court, Justice Alito explained that to have standing under Article III, "[t]he plaintiff must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision," and further clarified that "[t]o establish injury in fact, a plaintiff must show that he or she suffered 'an invasion of a legally protected interest' that is 'concrete and particularized' and 'actual or imminent, not conjectural or hypothetical.'" See id. at 5-6. According to the majority, however, the Ninth Circuit's analysis of the plaintiff's FCRA claim improperly conflated the "concrete" and "particularized" injury requirements into a single inquiry. See id. at 6. More specifically, while the Ninth Circuit reasoned that "Robins' complaint alleges 'concrete, de facto' injuries" because, "[f]irst, . . . Robins 'alleges that Spokeo violated his statutory rights, not just the statutory rights of other people,'" and "[s]econd, . . . 'Robins's personal interests in the handling of his credit information are individualized rather than collective,'" the Court explained that "[b]oth of these observations concern particularization, not concreteness." See id. Indeed, the Court made clear that "an injury in fact must be both concrete and particularized." Id. Still, while the Supreme Court reiterated that "[a] 'concrete' injury must be 'de facto'; that is, it must actually exist," and ultimately held that "Article III standing requires a concrete injury even in the context of a statutory violation" such that "Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III," the Court did not go so far as to rule that "the risk of real harm cannot satisfy the requirement of concreteness." See id. at 7-8. To the contrary, the Court recognized that "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact," and moreover expressly stated that "a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified." See id. at 8 (citations omitted). In other words, though the Court ruled that "Robins cannot satisfy the demands of Article III by alleging a bare procedural violation," as "[a] violation of one of the FCRA's procedural requirements [such as reporting "an incorrect zip code"] may result in no harm," the Court did not actually "take [a] position as to whether . . . Robins adequately alleged an injury in fact" for purposes of his FCRA claim against Spokeo, let alone up the ante for what a plaintiff must allege to adequately assert an injury in fact for purposes of other statutory causes of action, such as claims under the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA"), or the Fair Debt Collection Practices Act, 15 U.S.C. § § 1692-1692p ("FDCPA"). In the end, while the Court's decision in Spokeo is far from the complete bar to federal statutory damage cases for which many defendants plagued by TCPA, FDCPA, and FCRA claims had hoped, its ultimate impact remains to be seen. For example, even if the decision does not significantly alter a plaintiff's ability to adequately plead such causes of action, it may potentially limit a plaintiff's ability to assert certain statutory claims on behalf of a so-called "similarly situated" class. More specifically, by making clear that "Article III standing requires a concrete injury even in the context of a statutory violation," see 2016 WL 2842447, at 7, the Court's decision shows - if only implicitly - the importance that Article III standing can have on class certification, at least with respect to alleged "procedural violations" that, on their face, "may result in no harm." Indeed, showing that unique circumstances reveal a "concrete injury" and confer Article III standing with respect to the named plaintiff is one thing, explaining how these "unique circumstances" apply to everyone in a putative class is quite another.
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