United States: Ninth Circuit In Spokeo: Inaccurate Consumer Reports Support Standing In FCRA Cases

The U.S. Court of Appeals for the Ninth Circuit held that allegations that Spokeo Inc. published an inaccurate consumer report in violation of the Fair Credit Reporting Act established a concrete injury sufficient to confer Article III standing. This new Robins v. Spokeo decision, which came down on Aug. 15, is significant not only because it makes it easier for plaintiffs to bring statutory violation cases but also because it places the Ninth Circuit firmly on the side of those circuits which have found that violations of federal statutory rights are generally sufficient to create Article III standing.

Fair Credit Reporting Act

Congress enacted the Fair Credit Reporting Act to "ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." See Safeco Ins. Co. of Am. v. Burr (2007). The FCRA imposes procedural requirements on any "consumer reporting agency" that "regularly . . . assembl[es] or evaluat[es] consumer credit information . . . for the purpose of furnishing consumer reports to third parties." One of these requirements is that "[w]henever a consumer reporting agency prepares a consumer report, it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates."

The FCRA provides a private right of action for willful or negligent failures to comply with its requirements. For willful violations, plaintiffs may recover statutory damages, punitive damages, and attorney's fees and costs.

Background

Spokeo operates a website that compiles consumer data and builds individual consumer information profiles. Parties can visit the website to view a report containing information about a person's life, such as age, contact information, marital status, occupation, hobbies and economic health.

Thomas Robins discovered that Spokeo had published a profile of him which inaccurately stated that he was in his 50's, married with children, employed in a professional or technical field, possessed a graduate degree and that his wealth level was higher than it actually was. Robins sued Spokeo for willfully violating the various procedural requirements under FCRA, including failing to "follow reasonable procedures to assure maximum possible accuracy" of the information in his consumer report.

The district court dismissed Robin's complaint for lack of standing, concluding that he had only alleged a bare violation of the statute which was not an actual injury-in-fact. The Ninth Circuit reversed the dismissal in Robins v. Spokeo (9th Cir. 2014) (Spokeo I), holding that Robins had suffered a concrete and particularized injury because he had alleged that Spokeo had violated his specific statutory rights. After the Supreme Court granted certiorari in Spokeo v. Robins (2016) (Spokeo II), it vacated the Ninth Circuit's decision, holding that, although the Ninth Circuit had properly addressed whether the alleged injuries were particularized as to Robins, the Ninth Circuit did not conduct a proper analysis concerning whether the alleged injuries were sufficiently concrete as well. Therefore, the Supreme Court remanded the case to the Ninth Circuit with instructions to consider specifically whether the injuries alleged by Robins met the "concreteness requirement" imposed by Article III.

Ninth Circuit Decision – A Second Time Around

Taking up Robin's FCRA allegations once again, the Ninth Circuit again reversed the district court's dismissal, concluding that Robin's alleged injuries were sufficiently concrete for purposes of Article III standing.

The Ninth Circuit began its analysis by reviewing the Supreme Court's decision. Citing Spokeo II, the Ninth Circuit noted that plaintiffs must allege a concrete injury, which may be either tangible or intangible, in the context of a statutory violation, and not simply "bare procedural violation" of the statute. In determining whether an intangible injury is sufficiently concrete, the court explained that "Congress is well positioned to identify intangible harms that meet minimum Article III requirements," and "its judgment is . . . instructive and important." Moreover, even if an injury was "previously inadequate at law," Congress may elevate it to "the status of [a] legally cognizable injur[y]."

With the Supreme Court's guidance in mind, the Ninth Circuit looked to whether the FCRA was established to protect consumers' concrete interests (as opposed to their purely procedural rights). The Ninth Circuit observed that "the Supreme Court seems to have assumed that, at least in general, the dissemination of false information in consumer reports can itself constitute a concrete harm." The court also observed that the interests that the FCRA protects are similar to other "reputational and privacy interests that have long been protected in the law[,]" and although "there are differences between FCRA's cause of action and those recognized at common law, the relevant point is that Congress has chosen to protect against a harm that is at least closely similar in kind to others that have traditionally served as the basis for lawsuit." Thus, informed by both Congress and historical practice, the Ninth Circuit held that Congress enacted the FCRA to protect consumers' concrete interest in accurate credit reporting.

The Ninth Circuit then addressed whether the injuries alleged by Robins actually harmed, or at least created a material risk of harm, to this concrete interest. The Ninth Circuit found that "Spokeo II requires some examination of the nature of the specific alleged reporting inaccuracies to ensure that they raise a real risk of harm to the concrete interests that FCRA protects." Noting that Robin's Spokeo profile contained inaccurate information about his age, marital status, profession, education level and wealth, the court found that "[i]t [did] not take much imagination to understand how inaccurate reports on such a broad range of material facts about Robin's life could be deemed a real harm." Indeed, the Ninth Circuit found that "[e]ven if their likelihood to actually harm Robin's job search could be debated, the inaccuracies alleged in this case do not strike us as the sort of 'mere technical violation[s]' which are too insignificant to present a sincere risk of harm to the real-world interest that Congress chose to protect with the FCRA."

Finally, the Ninth Circuit rejected Spokeo's argument that the injuries alleged by Robins were too speculative to establish a concrete injury. The Ninth Circuit held that both the challenged conduct and the attendant injury had already occurred as Spokeo had already published a "materially inaccurate consumer report" about Robins resulting in the alleged intangible injury caused by the report.

Takeaways

The new Spokeo decision exacerbates a growing division among the circuits concerning how Spokeo II is applied in federal statutory injury cases. It is consistent with prior Ninth Circuit precedent in Syed v. M-I (9th Cir. 2017) and Van Patten v. Vertical Fitness Group (2017) and the Third Circuit's decision in In re Horizon Healthcare Services Data Breach Litig. (3d Cir. 2017) in adopting an expansive interpretation of Spokeo II and recognizing Article III standing based on violations of the statutory protections created by federal privacy statutes, such as the FCRA. However, other circuits have applied Spokeo II much more narrowly in federal statutory injury cases and found that procedural or technical violations of statutory rights created by Congress without any allegations of actual harm do not establish a concrete injury and Article III standing. For instance, the Fourth Circuit in Dreher v. Experian Info. Solutions (4th Cir. 2017) and Seventh Circuit in Groshek v. Time Warner Cable (7th Cir. 2017) both denied Article III standing in cases alleging procedural FCRA violations on this basis. This circuit split will likely not be resolved until and if the Supreme Court decides to take up the issue again.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
17 Oct 2017, Conference, California, United States

Women are a more powerful presence in business than ever, as entrepreneurs and corporate leaders. Join us for a half-day packed with real-worl​d know-how, firsthand experiences and an in-depth look at the entrepreneurial climate today – all designed to help entrepreneurial women take their businesses (and their careers) to the next level.​​

17 Oct 2017, Seminar, California, United States

Ivy Associates presents the annual All Hands Meeting in coordination with the Silicon Valley Association of General Counsel, an association of chief legal officers from more than one hundred leading technology and life science companies.​

17 Oct 2017, Seminar, California, United States

TEDx Wilmington is holding the first TEDx Salon dedicated to ideas worth spreading in transportation on Tuesday, October 17, 2017 in Wilmington, Delaware.

 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.