In Spokeo, Inc. v. Robins, the U.S. Supreme Court has issued yet another narrow decision—apparently designed to avoid a 4-4 deadlock—in another hard-fought, potentially divisive case on its docket this term. On May 16, 2016, the Court held 6-2 that the Ninth Circuit had erred in not asking whether plaintiff Robins had alleged that he suffered a “concrete” harm—actual, rather than hypothetical, damage—as a result of statutory violations by defendant Spokeo.
In reaching this decision, the Court reaffirmed that plaintiffs bringing class actions in federal court must do more than allege a “mere technical violation” of a statute or regulation. In order to demonstrate that they have a real stake in the case—or “standing”—as required in federal court by Article III of the Constitution, they must also explain how the violation in question caused them real harm. At the same time, however, the majority was careful to point out that, “in some circumstances,” plaintiffs could base standing on procedural or technical violations if coupled with a “real risk of harm.” And the Court remanded the specific question of whether Robins himself had alleged that he suffered real harm as a result of Spokeo’s technical violations.
In sending the case back to the Ninth Circuit, then, the Court left the deeper issues in the case unresolved—inviting further litigation over what its holding means in specific cases.
What the Court Held: Technical Violations Must Be Accompanied by “Real” Harm
Spokeo, Inc. v. Robins asks the question: if a company posts online information about an individual that is false but not inherently negative or damaging, can that individual claim to have suffered real harm—especially without any evidence that anyone else even saw the false information?
Defendant Spokeo is a “people search engine” that compiles and disseminates online a wide array of personal information about consumers. Plaintiff Robins filed a class action lawsuit against Spokeo, alleging it violated the Fair Credit Reporting Act (FCRA), when he found that his Spokeo online profile contained information that was not true. On behalf of himself and a class of similarly situated consumers, Robins alleged that Spokeo failed to follow “reasonable procedures to assure maximum possible accuracy” of their online “consumer reports.” Robins alleged that each procedural violation was willful, meaning that he and other class members were entitled, at a minimum, to “statutory damages of $100 to $1,000 per violation”—irrespective of the exact losses they actually suffered, if any.
Spokeo pointed out to the district court that Robins had a problem in that his Complaint did not allege that the false information posted about him was itself damaging, or that anyone else had even seen the information online. Robins argued that he met the requirements of standing simply by alleging that Spokeo was in violation of a statute that grants individuals a private right of action. The district court dismissed his suit, finding that Robins did not have standing because he had not pled that he suffered any “injury in fact” resulting from the procedural violation.
But the Ninth Circuit disagreed, explaining that “the violation of a statutory right is usually a sufficient injury in fact to confer standing.” Robins had a sufficient stake in the case because Spokeo had allegedly violated the statute by mishandling his personal information specifically. His “personal interests in the handling of his credit information [were] individualized rather than collective,” because “Spokeo [had] violated his rights, not just the statutory rights of other people.”
The case before the Supreme Court thus boiled down to a central question: did Robins have standing to sue based purely on his allegations that Spokeo had technically violated the FRCA by mishandling and misstating his personal information—even without alleging specific, concrete harm resulting from these procedural violations?
The Supreme Court largely avoided answering this question. Instead, in a narrow ruling, the Court decided to send the case back to the Ninth Circuit to correct its error. Justice Samuel Alito explained that the Ninth Circuit simply had not gone far enough in its “injury-in-fact” analysis. It was not enough just to conclude that Robins had pled a violation that was “particularized,” or individual, to him. Rather, the Ninth Circuit should also have asked whether he had alleged an injury that was “concrete”—that is, “‘real,’ and not ‘abstract.’”
In finding the Ninth Circuit had erred, though, the Court was careful not to say that Robins did not, or could not, allege a real harm resulting from the technical violations at issue. The requirement of pleading concrete harm did “not mean,” for instance, “that the risk of real harm cannot satisfy the requirement of concreteness.” Likewise, “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact”—although the Court stopped short of explaining what those circumstances were. In short, the majority left unanswered many of the more granular questions that most interest practitioners in consumer class action law.
What Does Spokeo v. Robins Mean for Consumer Class Actions Going Forward?
Despite its deliberately narrow scope, the Spokeo decision is still potentially important for class-action defendants and practitioners. Most importantly, the Court corrected the Ninth Circuit by reaffirming that technical or procedural violations of statutes or regulations—without more—are not “usually” enough for standing. Instead, plaintiffs must further allege some real, non-hypothetical harm resulting from the violation at issue—even where the statute or regulation at issue authorizes automatic statutory damages for any violation.
The Court’s reasoning should apply just as forcefully to many state statutes, like California’s Unfair Competition Law, which allow private plaintiffs to sue based on technical or procedural violations of other laws or regulations. To the extent plaintiffs sue under such statutes in federal court, the principle announced in Spokeo controls: in order to establish Article III standing—and proceed in federal court—plaintiffs must allege concrete harm that goes beyond the mere fact of the violation itself.
Exactly what “concreteness” requires, though, is The Big Question on which Spokeo offers little clarity. Going forward, the decision leaves the details of these unresolved issues to parties, practitioners, and judges to hammer out in specific cases. Spokeo, then, is just one step: the real battle, as usual, is only beginning.