On April 27, 2015, the United States Supreme Court granted certiorari in Spokeo Inc. v. Robins, a case which could have wide-ranging implications for lawsuits, including class actions, against businesses under a number of consumer protection statutes.
In a case that the Supreme Court will hear and decide in its next term, the Court will address the question of whether Congress may confer Article III standing on a plaintiff who suffers no concrete harm, by simply authorizing a private right of action based on the violation of a federal statute alone. If the Court reverses the lower court’s decision, it could mean the death-knell of “no harm” class action lawsuits that have proliferated under statutes that allow for statutory damages without proof of actual harm.
In Spokeo Inc. v. Robins, the plaintiff brought a class action against Spokeo under the Fair Credit Reporting Act related to information that Spokeo gathered and produced regarding the plaintiff. Although the plaintiff claimed that much of the information concerning him was incorrect, Spokeo argued that he did not allege any concrete harm resulting from this information. The district court dismissed the case, holding that the plaintiff had failed to allege an injury-in-fact and, therefore, did not have Article III standing under the United States Constitution. The Ninth Circuit reversed (click here for opinion), holding that the alleged violation of the plaintiff’s statutory rights alone is sufficient to satisfy Article III’s injury-in-fact requirement, regardless of whether the plaintiff can show a separate actual injury. Spokeo appealed this decision, arguing that to have Article III standing a plaintiff must have suffered a concrete harm separate and distinct from the violation of a statute alone.
Because the Spokeo decision could impact numerous statutory schemes outside of the Fair Credit Reporting Act, it has received significant national attention in the form of multiple amicus briefs. For example, the Supreme Court received a brief from several technology giants, including Facebook, eBay, and Yahoo. In their brief, they argued in favor of Spokeo, contending that a plaintiff must allege actual harm in order to have Article III standing, even if a statute is alleged to have been violated. The risk of “no injury” class actions is particularly acute for these companies because they interact with hundreds of millions of users on a daily basis, with many of those interactions subject to state and federal laws. According to their brief, if an actual injury – separate and apart from an alleged statutory violation – is not a necessary precursor to a lawsuit in federal court, any of the millions of individuals who interact with these companies could bring a lawsuit alleging technical statutory violations on behalf of hundreds of millions of people, with no accompanying actual injury.
At the invitation of the Supreme Court, the United States Office of the Solicitor General also filed an amicus brief. In its brief, the United States requested the Supreme Court deny the writ of certiorari. According to the United States, the Ninth Circuit correctly decided the issue and there was no need for the Supreme Court to weigh in. The Supreme Court’s grant of certiorari is contrary to the United States’ position.
Consumer protection statutes have created fertile ground for class action litigation. These statutes often require compliance with very technical provisions and allow for the award of statutory damages, without a showing of actual harm. This creates the potential for very large classes of plaintiffs who have not suffered any actual injuries and who often do not even know a technical statutory violation has taken place. These large classes, coupled with the possibility of statutory damages, often create exposure in the tens or hundreds of millions of dollars. A decision in favor of Spokeo could dramatically curtail many of these “no concrete harm” class action lawsuits due to the lack of standing of the named plaintiff.