Eighth Circuit Relies on Spokeo to Hold That Retention of Personal Information, Without More, Does Not Satisfy Article III’s Injury-in-Fact Requirement

The United States Supreme Court decision in Spokeo v. Robins, in which the Court considered whether a claim of statutory damages was sufficient to confer Article III standing, left much to be desired in terms of guidance for lower courts and litigants. Nonetheless, the Eighth Circuit’s recent refusal to revive a putative class action over Charter Communications Inc.’s allegedly indefinite retention of consumer data illuminated a way for defendants to trim claims of bare statutory violations, while clarifying how Spokeo should be applied.

In the published decision of Braitberg v. Charter Communs., Inc., the plaintiff alleged on behalf of himself and a putative class that Charter had indefinitely retained his personally identifiable information in violation of the Cable Communications Policy Act. Braitberg claimed that Charter’s failure to destroy customers’ personal information injured him and the proposed class members in two ways. First, he alleged a “direct invasion of their federally protected privacy rights.” Second, he claimed that Charter allegedly deprived him and the class of the full value of the services they purchased from Charter, and ascribed a monetary value to controlling their personal information. The Eastern District of Missouri granted Charter’s motion to dismiss for lack of Article III standing, and the Eighth Circuit stayed its decision pending the outcome of Spokeo.

The Eighth Circuit relied on Spokeo and concluded that Braitberg had not alleged an injury in fact as required by Article III. The panel held that the complaint asserted “a bare procedural violation, divorced from any concrete harm,” because Braitberg alleged only that Charter violated a duty to destroy personally identifiable information by retaining certain information longer than the company should have kept it, but failed to allege that Charter has disclosed the information to a third party, that any outside party has accessed the data, or that Charter has used the information in any way during the disputed period. In essence, Braitberg identified no material risk of harm from the retention. The Court held that such a speculative or hypothetical risk is insufficient – the retention of information lawfully obtained, without further disclosure, traditionally has not provided the basis for a lawsuit.

The panel also held that Braitberg did not allege an economic injury arising from an alleged diminution of the value of the cable services that he purchased from Charter. The court rejected the argument that consumers place a monetary value on protecting their personal data against improper access and unauthorized secondary use, because there was no allegation that the mere retention of the information caused any concrete and particularized harm to the value of that information. Thus, Braitberg failed to adequately allege that there was any effect on the value of the services that he purchased from Charter.

The Eighth Circuit’s ruling appears to be a strong decision for defendants, and the panel’s analysis is the most definitive among recent opinions in requiring a clear showing of harm to substantiate standing under the Supreme Court’s Spokeo decision. The decisions since Spokeo indicate that application of the Supreme Court’s decision greatly varies depending on the statute in question, but this ruling definitively shows that disclosure or use of personal information is required in order for a plaintiff to claim injury-in-fact to assert claims under privacy statutes.

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