Spokeo, Inc. v. Robins, a case pending before the Supreme Court, presents several important questions concerning the scope and reach of the Fair Credit Reporting Act (FCRA). The Court must consider whether a consumer can sue if inaccurate information about him is published, even if he suffers no real-world harm from the publication. The consequences of the Court's answer may be far-reaching, particularly to companies that provide consumer credit reports.
Spokeo, Inc. is a "people search engine" that aggregates and furnishes personal information. It is undisputed that Spokeo falsely published that Robins was married, employed, wealthy, and had a graduate degree, when Robins is in fact single, unemployed, financially constrained, and without a graduate degree. But the issue before the Court is not whether Spokeo published false information; rather, it is whether that publication harmed Robins in a manner that would permit him to sue for damages. Even though Robins cannot demonstrate a specific instance in which the false information cost him a job, financing, or other prospect, he contends that the publication of the false information itself is sufficient injury to permit him to sue under the FCRA.
At oral argument, the Justices took turns voicing concerns regarding the Act itself and the breadth of its reach, hinting that the decision will turn not on the many policy arguments put forth in the briefs, but on Congress's purpose in crafting the Act, and whether and to what extent Congress intended to permit individual consumers to sue for publication of false information. At the heart of the Justices' questions were three issues: what constitutes actionable harm under the FCRA; what potential defendants must do to satisfy their obligations under the Act; and to whom the Act applies.
Spokeo's central question regards the extent of harm necessary for an individual to bring a lawsuit under the Act. Questions posed by Justice Kagan suggested that the mere publication of false information constitutes sufficient harm, though Spokeo argued (and Justices Scalia and Roberts seemed to agree) that an individual must be able to show that he suffered a more concrete harm, such as the loss of an employment opportunity or denial of credit, as a result of the publication. Certainly the latter, more rigorous standard should better inure data providers from claims of injury under the statute.
Justice Scalia questioned what, exactly, the statute demands. He seemed to imply in his questions that the Act demands only that providers follow the procedures imposed by Congress. If the procedures are followed, Scalia suggested, then the provider has done its part. Counsel for plaintiff Robins, seemingly supported by Justices Kagan and Sotomayor, contended that the procedures referenced in the Act's language are only a means to the Act's end—the prevention of the dissemination of false information. If adherence to procedures satisfies the Act, as Justice Scalia suggests, then companies can better inoculate themselves against lawsuits simply by using reasonable measures to ensure accuracy. If, on the other hand, the Court finds that the publication of false information itself is punishable conduct, then exposure among data providers could be considerably broader.
Justice Kennedy, often viewed as a "swing vote," suggested that the Act may be present different harms and remedies depending on who was providing the information, asking whether only credit reporters would be liable for the publication of false information or if, instead, the Act extends to other furnishers of information. The answer to this inquiry could dictate how vulnerable data furnishers are under the Act, an especially acute concern considering the Act's utility in supporting class action suits.
Although the Court laid its focus squarely on the nature of the Act itself, it did not leave the class action issue unaddressed. Several questions touched on larger legal issues regarding whether individuals about whom false information has been published have enough in common to be considered a single class, and whether permitting an entire class of those individuals to sue in the first place would invite class action suits that all but demand settlement by the sheer number of plaintiffs involved. The defendant, and a cadre of amici curiae arguing in support, say that permitting people to sue in class action simply because bad information was posted about them would stymie any efforts to provide information services at all. In its amicus curiae brief in support of Spokeo, for example, credit reporter Experian cited several cases in which class action suits were brought for technical violations that actually benefited consumers, and still presented potential statutory damages totaling up to billions of dollars.
Though the Court as a whole ultimately did not reveal its position during oral arguments, its decision could have a significant impact of the breadth on the FCRA's reach and the potency of class actions arising under the statute—which, in turn, could dramatically alter the litigation landscape among creditors, data furnishers, and consumers.
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