Last Monday, the Supreme Court of the United States (SCOTUS) announced its 6-2 ruling in favor of Spokeo in Spokeo Inc. v. Robins. The focus of the case is defining the “injury in fact” that the Constitution requires a plaintiff to demonstrate in order to institute a lawsuit in federal court. In particular, the question was whether the Constitution permits a lawsuit to proceed when a person purporting to represent a class of millions of people is claiming merely that federal law has been violated and is not able to allege that he or she otherwise has been harmed or injured by a company’s action.
The Court held that a plaintiff must allege “concrete” harm – which it described as harm that is “real” – in order to be able to sue.
The lawsuit was filed by Thomas Robins, who claimed that a profile on Spokeo’s site in 2010 contained incorrect information about him that might have harmed his job prospects at the time (though he makes no allegation that any employer failed to hire him for this reason or even that his profile was ever searched by a possible employer). Robins claims that Spokeo violated several provisions of the Fair Credit Reporting Act (FCRA), a federal law that regulates consumer reporting agencies such as credit bureaus (Spokeo vigorously denies that the statute applies or that it violated the statute).
The FCRA allows plaintiffs to recover their actual damages or a statutory minimum of up to $1,000 per violation. Mr. Robins purported to represent every one of the tens of millions of people whose information is posted on the site. He sought statutory damages on behalf of everyone for each violation, which could add up to billions of dollars – all without having to prove that anyone suffered any harm.
The federal district court dismissed the lawsuit because Mr. Robins didn’t allege that he suffered a real-world injury. The Ninth Circuit Court of Appeals said the absence of real-world injury didn’t matter, because it believed that a claim of statutory violation was enough to permit a lawsuit, even when there is no accompanying harm.
Spokeo asked the US Supreme Court to review that ruling and correct what it believed to be an erroneous interpretation of the law. The decision from the Supreme Court held that the Constitution’s “injury-in-fact” test requires a plaintiff to allege an injury that is both “concrete and particularized.” The court explained that, with its prior decision, the Ninth Circuit made a mistake by ignoring the “concreteness” element of the “injury-in-fact” test that requires every plaintiff to show that his or her alleged injury “actually exists” and that it is “real,” and not “abstract.”
Having corrected the Ninth Circuit Court of Appeals’ legal error, the Supreme Court directed the court of appeals to consider the case again under the proper legal standard, and address whether Mr. Robins has met the “concreteness” element’s requirement of “real” harm. As we noted in our official statement, Spokeo believes he has not, but even if he has, the Court’s standard will make it much harder to turn individual cases like this one into million-member class actions.
Spokeo garnered much support in this matter from many other organizations that could potentially be devastated by meritless “no-injury” class actions. Companies like Google, Facebook, Yahoo!, eBay, Time, and more all filed briefs supporting Spokeo’s position.
It’s important to note that individuals who have actually been harmed by violations of the law do retain the right to pursue claims for damages and seek redress from companies that irresponsibly take advantage of consumers by violating the law, and Spokeo fully supports that fundamental right! What Spokeo has fought for, and what the Supreme Court has done with its decision, is to simply stop the frivolous no-injury class action suits that only benefit class action attorneys and curb innovation.
We celebrate this small victory together with our supporters and on behalf of all Americans. Instead of opening the floodgates for bloodthirsty class action lawyers, we’ve gotten some protection against abusive lawsuits for companies providing valuable and innovative services to the American consumer.