Supreme Court Rules in Spokeo Case on Whether Consumers Must Prove Concrete Injury in Class Action Lawsuits

 Supreme Court

BREAKING NEWS

Written By ESR News Blog Editor Thomas Ahearn

On Monday, May 16, 2016, the Supreme Court of the United States (SCOTUS) ruled in the case of Spokeo, Inc. v. Robins (Docket No. 13-1339) that consumers must prove “concrete injury” in class action lawsuits for alleged “bare” violations of a federal statute. The SCOTUS ruling sent the case back to the Ninth Circuit Court of Appeals stating its Article III standing analysis in a February 4, 2014 decision to reverse a dismissal of the case was incomplete because the Ninth Circuit “failed to consider both aspects of the Article III injury-in-fact requirement.”

The case of Spokeo, Inc. v. Robins involves a Virginia man named Thomas Robins who filed a class action lawsuit against Spokeo, an online “people search engine” that sells publicly available information about individuals, for alleged violations of the Fair Credit Reporting Act (FCRA), a federal law that regulates background checks for employment purposes. The class action lawsuit claimed Spokeo violated the FCRA by publishing inaccurate information about the age, education, marital status, and professional experience of Robins.

In a 6-2 decision in the opinion delivered by Justice Samuel Alito – with Justices John Roberts, Anthony Kennedy, Clarence Thomas, Stephen Breyer, and Elena Kagan joining Alito, and Justices Ruth Bader Ginsburg and Sonia Sotomayor dissenting – the Court stated that “Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, 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.”

In explaining that there must be three elements to an Article III standing analysis, the Court stated: (a) A plaintiff invoking federal jurisdiction bears the burden of establishing the “irreducible constitutional minimum” of standing by demonstrating (1) an injury in fact, (2) fairly traceable to the challenged conduct of the defendant, and (3) likely to be redressed by a favorable judicial decision. The injury-in-fact requirement requires a plaintiff to show an injury is “concrete and particularized” and “actual or imminent, not conjectural or hypothetical.”

The Court ruled that the injury to Robins needed to be “concrete” and the Ninth Circuit had not analyzed if the alleged violations of FCRA had created a “degree of risk sufficient to meet the concreteness requirement.”  Although an injury can be intangible, there still must be a risk of harm above and beyond a technical violation. The Court also noted that: Because the Ninth Circuit failed to fully appreciate the distinction between concreteness and particularization, its standing analysis was incomplete.

The SCOTUS opinion notes that while the Court “takes no position on the correctness of the Ninth Circuit’s ultimate conclusion,” that the Plaintiff  “cannot satisfy the demands of Article III by alleging a bare procedural violation.” The opinion also states that: “Robins cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA’s procedural requirements may result in no harm.” The SCOTUS opinion in the case of Spokeo, Inc. v. Robins is at http://www.esrcheck.com/file/SCOTUS-Spokeo-v-Robins-Opinion.pdf.

As reported earlier by ESR News, the SCOTUS heard oral arguments on November 2, 2015 in the case of Spokeo, Inc. v. Robins on whether or not a plaintiff had the legal right, or “standing,” to bring a class action lawsuit for a technical violation of the FCRA if that individual suffered no actual concrete harm from the violation. Under the FCRA, consumers may claim damages from $100 to $1000 if a company publishes inaccurate information about them. More information about the case is at http://www.scotusblog.com/case-files/cases/spokeo-inc-v-robins/.

“The Supreme Court in its discussion on the harm needed to have standing to sue did observe that a person can sue for intangible harm where there is a real risk of injury, but a bare bones assertion of procedural violation is not sufficient,” commented Attorney Lester Rosen, founder and CEO of Employment Screening Resources (ESR) and author of ‘The Safe Hiring Manual,’ a guide to employment background checks. “As lawyers review and analyze the decision in the Spokeo case, more information will be available and ESR will visit this case in the future.”

Rosen also adds: “Although the decision does not put the standing to sue issues completely to rest, it does appear that the Court’s ruling may well slow down class action lawsuits based solely on highly technical violations of the Fair Credit Reporting Act  where in fact no one was harmed.  It seems to lean in the direction of the ‘no harm, no foul’ rule.   However, it would not appear to impact a class action lawsuit, for example, against a screening firm that did not use reasonable procedures in reporting criminal cases where consumers were actually or likely to be harmed.”

In response to the rising trend of FCRA class action lawsuits like the Spokeo case, ESR is offering a complimentary whitepaper written by Rosen entitled “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” that explains how FCRA class action lawsuits are often filed over alleged technical violations when employers fail to dot the “i’s” and cross the “t’s” when screening. The whitepaper is available for download at http://www.esrcheck.com/Whitepapers/Ways-Employees-Sue-Employers-Under-FCRA/.

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