In a continuation of what is starting to look like a trend before the ideologically split, eight-member Supreme
Court, on Monday morning a majority of the Justices signed on to a narrow
procedural ruling in Spokeo v. Robins, which had
the practical effect of preserving consumer class actions based on statutory,
non-pocketbook injuries. Had the Court ruled in favor of Spokeo, the ability of
consumers to bring class action lawsuits for harms such as the privacy rights
at stake in this case would have been severely limited.
Thomas Robins sued Spokeo, the self-described “people search
engine,” under the Fair Credit Reporting Act (“FCRA”), on behalf of a class of
consumers, for publishing inaccurate reports concerning his age, marital
status, education, and employment history. Mr. Robins alleged that the
misinformation had negatively interfered with his job search efforts. The FCRA,
an attempt by Congress to address widespread inaccuracies in consumer credit
reporting and the significant challenges consumers face in trying to correct
such information, requires that consumer
reporting agencies take certain steps to ensure the accuracy of consumer data
and grants injured consumers a right to sue for negligent or willful
noncompliance with the Act.
The district court had granted Spokeo’s motion to dismiss on
the basis that Robins lacked Constitutional standing to sue because he had not
adequately pleaded an injury-in-fact. The injury-in-fact requirement demands
that a plaintiff has suffered a harm that is both individualized and concrete.
The Supreme Court has aggressively enforced this and other components of
standing doctrine in the past three decades, making it more difficult for
individuals to challenge corporate or government misconduct. For example, in an
influential but extremely troubling 1984 decision, the Supreme Court held that
the parents of African-American school children lacked standing to challenge
the unlawful granting of tax-exempt status to racially discriminatory private
schools, because they lacked an injury-in-fact.
Mr. Robins appealed to the Ninth Circuit, which ruled in his
favor, finding that he had satisfied the injury-in-fact requirement by alleging
that Spokeo had violated his statutory rights granted by FCRA and that he had a
personal (rather than collective) stake in the handling of his own credit
information.
Prior to Justice Scalia’s death, Spokeo seemed destined to continue the efforts of the Court’s conservative
majority to weaken the ability of employees and consumers (amongst others) to
recover against corporations through class action lawsuits. The conservatives
Justices’ previous successes in this realm include two infamous decisions
handed down five years ago: AT&T
Mobility LLC v. Concepcion (2011) 563 U.S. 333 (upholding class-action
waivers in consumer arbitration agreements) and Wal-Mart Stores Inc. v. Dukes (2011) 131 S. Ct. 2541 (de-certifying a nationwide class of
female employees who relied on statistics to prove rampant sex discrimination).
These decisions led to increasingly aggressive attempts by corporations to
immunize themselves from class actions. Spokeo’s assertion that Mr. Robins
lacked standing to sue Spokeo for violations of the FCRA reflected one such
attempt, this time relying on the modern standing doctrine, described above, to
strip consumers of an essential remedy for the widespread abuses in credit
reporting.
However, without a fifth conservative vote, the high court instead
sent the case back to the Ninth Circuit for further consideration of whether
Mr. Robins’s injury was sufficiently concrete to satisfy the injury-in-fact
requirement. Justice Alito, writing for a six-Justice majority, expounded on
the concreteness element and noted that standing requires something more than
“a bare procedural violation” of a statute. As an example, Justice Alito
hypothesized that the incorrect reporting of an individual’s zip code likely
would not result in concrete harm. Justice Alito added that a risk of future concrete harm could also
satisfy the injury-in-fact requirement.
Justice Ginsburg, in an opinion joined by Justice Sotomayor,
dissented to opine that remand to the Ninth Circuit was unnecessary because Mr.
Robins’ allegations met the concreteness requirement. Therefore, all eight
Justices appeared to agree that Congress may confer standing by creating
statutory rights and remedies, so long as the plaintiff bringing suit has suffered
an individualized harm resulting from something more than a bare procedural
violation of a statute.
This issue is likely to return before a nine-member Court,
but by preserving the status quo with respect to standing and class actions,
the result was a clear win for consumers, employees, and those who advocate on
their behalf.
