UNITED STATES – On November 2, 2015, the Supreme Court heard oral argument on an issue that is likely to have a significant impact on the future of consumer class action litigation. The issue before the Court was 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 case, Spokeo, Inc. v. Robins, stems from a class action claim brought against Spokeo, which operates a website known as the “people search engine.” The plaintiff, Mr. Robins, alleged that Spokeo published inaccurate information about him, and others like him, in violation of the Fair Credit Reporting Act (“FCRA”). Spokeo moved to dismiss, arguing that Mr. Robins failed to plead an injury in fact and, therefore, lacked standing to bring the suit. The district court for the Central District of California agreed with Spokeo, finding that Mr. Robins’s allegations that his employment prospects were hurt by the inaccurate information Spokeo published were too speculative, attenuated, and implausible to substantiate an injury in fact. Where no injury in fact had been properly pled, the district court held that merely alleging a violation of the FCRA did not confer Article III standing on Mr. Robins and dismissed the case.
On appeal, the Ninth Circuit reversed the lower court’s ruling and held that Mr. Robins had satisfied the Article III standing requirement. The appellate court found that Mr. Robins’s allegations that Spokeo violated his statutory rights under the FCRA based on Mr. Robins’s personal interests in the handling of his credit information constituted a properly pled injury in fact and was, therefore, sufficient to satisfy the Article III standing requirements. The appellate court explained that the interests protected by the FCRA were sufficiently concrete and particularized that Congress could elevate them to legally cognizable injuries. Following the Ninth Circuit’s ruling, Spokeo successfully petitioned the Supreme Court for certiorari.
During oral argument at the Supreme Court, both parties faced skeptical justices leaving the ultimate outcome of this issue in question. During an exchange with Spokeo’s counsel, Justice Sonia Sotomayor commented that the Supreme Court had “always said that an ‘injury in fact’ is the breach of a legal right,” suggesting that Mr. Robins had done enough to plead an injury in fact. In contrast, Chief Justice John Roberts and Justice Antonin Scalia probed Mr. Robins’s counsel on whether any violation of the statute would be sufficient to satisfy the Article III standing requirement. For example, Justice Scalia asked whether the failure of a credit reporting agency to provide a “1-800” number, a requirement under the FCRA, would be enough to grant standing for anyone to sue, even if it didn’t affect them at all. Justice Anthony Kennedy, often considered to be the deciding vote on close issues, did not provide a clear indication as to his position on the question before the Court.
The Supreme Court’s ruling in this case, expected to be published by June 2016, could have a significant impact on consumer class action litigation, including cases brought under the Telephone Consumers Protection Act, the Americans With Disabilities Act, the Truth in Lending Act, and similar federal laws that authorize consumers to sue for statutory damages. If the Supreme Court affirms the Ninth Circuit’s ruling, the decision could open the door to an even wider array of consumer class action cases based entirely on technical statutory violations where no real harm is alleged. A ruling the other way, however, could create a requirement that plaintiffs have to plead a concrete harm. This would increase the burden on class action plaintiffs and give defendants an avenue for an early escape from a class action premised upon a statutory violation.
