Supreme Court in Spokeo Holds Plaintiffs Must Allege More Than a Bare Procedural Violation to Stand Up for Their Rights

After much anticipation, the United States Supreme Court issued its decision in Spokeo v. Robins, a case that many believed would finally establish a definitive ruling as to whether a federal statute which awards statutory damages to those impacted is sufficient to confer Article III standing. The question is particularly relevant in the class action context where class members could be awarded statutory damages in the absence of any actual damages. Unfortunately, although the Court considered the scope of the injury-in-fact requirement, the 6-2 decision still leaves the standing question open to interpretation by courts and by both plaintiffs and defendants.

In Spokeo, the plaintiff alleged that the defendant, which compiles individual’s information in a search engine, violated his rights under the Fair Credit Report Act (FCRA) by failing to accurately report his information. The District Court dismissed for lack of standing, but the Ninth Circuit reversed, noting first, that the plaintiff had alleged that “Spokeo violated his statutory rights, not just the statutory rights of other people,” and, second, that the plaintiff’s “personal interests in the handling of his credit information are individualized rather than collective.”

The Supreme Court held that the Ninth Circuit’s analysis was incomplete, in that the injury-in-fact requirement requires a plaintiff to allege an injury that is both “concrete and particularized.” The Court said that the Ninth Circuit’s analysis focused on the second characteristic (particularity), but overlooked the first (concreteness). The Court emphasized that a “concrete” injury must actually exist, even in the context of a statutory violation. Accordingly, where Congress elevates the status of an intangible harm to grant standing for a private cause of action, it does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Thus, plaintiffs cannot allege a bare procedural violation, divorced from any concrete harm. The Court did not rule on whether Robins had alleged a “concrete” harm, frustrating counsel on both sides of the bar, instead choosing to remand the case to the Ninth Circuit to consider this framework.

Justice Thomas issued a concurring opinion to explain how the injury-in-fact requirement applies to public versus private rights. For example, a plaintiff suing for a violation of a public right, such as to address a public nuisance, has a higher burden and most allege that he has suffered a “concrete” injury particular to himself. Thus, Congress cannot authorize private plaintiffs to enforce public rights in their own names, absent some showing that the plaintiff has suffered a concrete harm particular to him. Justice Ginsburg dissented, reasoning that the “particular and concrete” requirements for an injury-in-fact are to be analyzed jointly, not separately, and, thus, Robins sufficiently alleged an injury-in-fact.

The Supreme Court’s ruling leaves plaintiffs with the opportunity to pursue an action based upon a statutory violation, as long as they allege a concrete injury caused by that violation. Thus, a technical violation of a statute, without more, will no longer suffice to show standing. In putative class actions, the predominance inquiry could be complicated by questions of class members’ standing. The Spokeo decision will likely have broad implications in the consumer protection and data breach contexts.

Only a handful of courts have attempted to make sense of Spokeo. In Kanfer v. PharmaCare US Inc., the Southern District of California denied class certification because there was a dispute over whether the proposed class included consumers whose claims were time barred, received a refund or were otherwise satisfied with the product, on the grounds that, under Spokeo, “plaintiffs raise[d] claims and theories they do not have standing to raise, and to the extent that the class includes consumers who have no cognizable injury, including those who obtained full refunds.” And, in Khan v. Children’s Nat’l Health Sys., the Maryland District Court dismissed a data breach action on the grounds that a state legislature or court, through a state statute or cause of action, cannot manufacture Article III standing for a litigant who has not suffered a concrete injury. Additional decisions interpreting Spokeo are surely on the horizon. Stay tuned to this blog for updates as courts interpret and apply Spokeo.

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