United States: Supreme Court's Spokeo Decision Erects Barriers For Privacy And Data Security Plaintiffs

On May 16, 2016, the United States Supreme Court in Spokeo, Inc. v. Robins confirmed that a "concrete" injury is required of all private parties seeking to assert claims in federal court, even those alleging violations of a federal statute for which Congress has provided a statutory damages remedy. Where no concrete injury has yet been suffered, a claimant must allege a sufficiently imminent "risk of real harm" in order to satisfy the concreteness requirement. Although the Spokeo case addressed a claim for willful violation of the Fair Credit Reporting Act ("FCRA"), the decision is likely to have broad implications in other contexts as well – particularly in the privacy and data security space, where plaintiffs frequently seek to recover statutory damages for purported violations of statutes such as the Telephone Consumer Protection Act, Video Privacy Protection Act, and Electronic Communications Privacy Act, as well as FCRA, often without alleging any actual or imminent harm.

A plaintiff seeking to invoke the jurisdiction of the federal courts must satisfy the standing requirements of Article III of the Constitution, which require that a plaintiff allege an "injury in fact." As explained in prior Supreme Court decisions such as Lujan v. Defenders of Wildlife, a plaintiff must show an "invasion of a legally protected interest which is (a) concrete and particularized" and "(b) actual or imminent, not conjectural or hypothetical."

To date, the courts have inconsistently applied this standard to cases in which the plaintiff asserts a private right action for violation of a federal statute for which statutory damages are available. Some courts, including the U.S. Courts of Appeals for the Sixth, Seventh, and Ninth Circuits, have held that the violation of the federal statute itself may suffice as the requisite "injury in fact," reasoning that Congress' creation of a private right of action to enforce the statutory provision implies the creation of a legally cognizable interest. Other courts, such as the Courts of Appeals for the Second, Third and Fourth Circuits, have held that Congress cannot confer standing merely by creating a statutory right of action, and have required plaintiffs to allege actual concrete harm in order to pass through the courthouse doors.

The resolution of these conflicts in yesterday's decision began in July 2010 when Thomas Robins filed a lawsuit against Spokeo, the operator of a self-described "people search engine" website that compiles and sells information about individuals. Robins alleged that the company generated and disseminated a profile about him that falsely identified him as married with children, in his 50's, employed, relatively affluent, and holding a graduate degree, none of which, he claims, was true. The Central District of California initially denied Spokeo's motion to dismiss on grounds that the "marketing of inaccurate consumer reporting information" could suffice as injury in fact for purposes of Article III, but later reconsidered that ruling and dismissed the complaint because Robins had failed to show that he suffered any actual harm as a result of the allegedly inaccurate information. The Ninth Circuit reversed, holding that Congress is empowered to create legally cognizable injuries where the defendant is alleged to have violated the plaintiff's statutory right as an individual and the right at issue protects against individual, rather than collective, harm, both of which were satisfied with respect to the FCRA statute. Accordingly, the Ninth Circuit found that Robins' allegations that Spokeo committed a willful violation of the FCRA were sufficient to confer Article III standing.

In a 6-2 decision by Justice Alito, the Court vacated the Ninth Circuit's decision on grounds that the opinion addressed only whether Robins had alleged an injury-in-fact that was "particularized" to him, ignoring Article III's independent requirement that the injury-in-fact must also be "concrete." The Court clarified that standing will not lie merely because "a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right," including where, for example, a plaintiff relies upon allegations of a "bare procedural violation, divorced from any concrete harm." Moreover, the Court suggested that a "risk of real harm" will suffice for purposes of standing only where the plaintiff has alleged facts sufficient to satisfy the rigorous standard set forth in the Court's 2013 decision in Clapper v. Amnesty International USA, which refused to endorse standing theories resting on speculative chains of possibilities or speculation about the decisions of independent actors.

With respect to Robins' claim specifically, the Court elaborated that Robins' allegations as to procedural violations of the FCRA were insufficient to confer standing, since not all inaccuracies in the information purportedly disseminated by Spokeo would cause harm or even a risk of harm. The Court declined to delineate whether the particular inaccuracies alleged by Robins here would "entail a degree of risk sufficient to meet the concreteness requirement," remanding that issue to the Ninth Circuit.

Spokeo has significant implications for private litigation, particularly in the field of privacy and data security. In the context of suits over data security breaches, the Spokeo decision may serve to erect additional barriers for plaintiffs seeking entry to the federal courts by way of claims for violation of the FCRA, the Stored Communications Act, and other statutes, since the allegation of a procedural or technical violation alone will no longer suffice. These hurdles may be particularly daunting for data breach plaintiffs alleging only the mere risk of future injury from the breach or steps plaintiffs took to mitigate that risk, since courts increasingly have found such injuries to be insufficient to confer standing under the Court's previous decision in Clapper. In the privacy context, plaintiffs seeking to assert claims under statutes such as the FCRA, Telephone Consumer Protection Act, and Video Privacy Protection Act similarly will be subjected to renewed scrutiny in cases where the alleged harm in many instances is nothing more than an absent notice or other similarly inconsequential noncompliance. And even where a data security or privacy plaintiff alleges a sufficiently concrete injury-in-fact, Spokeo's focus on the "risk of real harm" to each individual plaintiff could potentially frustrate attempts to later certify a class.

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
 
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.