United States: Supreme Court Clarifies Standing Requirement For Statutory Violations

Last Updated: May 24 2016
Article by Paul Halasz

Ruling Could Limit Federal Court Access for Class Actions Alleging Only Procedural Violations

In a ruling with potentially broad implications for class actions, the Supreme Court this week reaffirmed that federal court standing requires a showing of injury-in-fact that is both "concrete" and "particularized." These requirements are no less applicable where a plaintiff's claim is based solely on a procedural statutory violation. Accordingly, in Spokeo, Inc. v. Robins,1 the Court remanded a Ninth Circuit decision for consideration of whether the plaintiff had adequately pled a concrete injury caused by an alleged procedural violation of the Fair Credit Reporting Act (FCRA).2 In so doing, the Court held that a plaintiff does not "automatically satisfy the injury-in-fact requirement whenever a statute grants a right and purports to authorize a suit to vindicate it."

Factual and Procedural Background of the Case

The case involves a website that allows users to search for information about other people by aggregating publicly available information from a variety of databases. Search results include items such as an individual's address, marital status, age, occupation, and finances. Plaintiff Thomas Robins claims that Spokeo compiled inaccurate information about him, including reporting that he is married with children, in his 50s, has a job, is relatively affluent, and holds a graduate degree. None of that information is accurate; instead, Robins stated that at the time, he was out of work and actively seeking employment. In his brief, Robins claimed that the report made him appear overqualified for job opportunities, expectant of a higher salary, and less mobile because of family responsibilities. 

Robins filed a class action complaint in federal court in California alleging that Spokeo failed to comply with several obligations imposed by the FCRA. That Act seeks to ensure "fair and accurate credit reporting" by regulating the creation and use of credit reports. Among other things, the FCRA requires credit reporting agencies (which Spokeo is alleged to be) to "follow reasonable procedures to assure maximum possible accuracy" of consumer reports. Credit reporting agencies that willfully fail to comply with the Act with respect to any individual are liable to that individual for either "actual damages" or statutory damages of $100 to $1,000 per violation, plus costs and attorneys' fees. 

The district court granted Spokeo's motion to dismiss based on Robins' failure to properly plead injury-in-fact. The Court of Appeals for the Ninth Circuit reversed. That Court reasoned that "the violation of a statutory right is usually a sufficient injury in fact to confer standing."3 According to the Circuit Court, because Robins alleged that his personal statutory rights were violated and that his personal interests were at stake, then he suffered an injury-in-fact.

The Supreme Court's Standing Analysis

Article III of the United States Constitution imposes limits on the power of the federal judiciary by restricting courts' jurisdiction to "Cases" or "Controversies."4 By design, such limited authority is consistent with the balance of powers vested in the three branches of the federal government. Because the federal courts should not be in the business of settling hypothetical political disputes, the Framers insisted that only an injured party (or one threatened with injury) should have standing to invoke the courts' jurisdiction. That constitutional limit cannot be circumvented by congressional acts that would otherwise eliminate the standing requirement.

At issue before the Supreme Court in Spokeo was whether the legislative grant of a statutory right of action for a technical violation of the FCRA conferred standing to a claimant without additional allegations of injury-in-fact. 

The Court began its analysis by articulating the "irreducible constitutional minimum" of standing as consisting of (1) an injury-in-fact (2) that is fairly traceable to the challenged conduct and (3) that is likely to be redressed by a favorable decision. Injury-in-fact in turn requires a showing that the plaintiff suffered an invasion of a legally protected interest that is both concrete and particularized. The component of a "particularized" injury simply means that it must affect the plaintiff personally – a plaintiff generally does not possess standing to pursue claims on behalf of others or the public at large. This component was not at issue in Robins' case inasmuch as he alleged a connection between the alleged violation by Spokeo and his own personal interests. Instead, the focus of the Court's attention was on the requirement that the injury be "concrete."

The Supreme Court characterized a concrete injury as one that is real and not abstract. Moreover, a concrete injury could be either tangible or intangible. To determine whether an intangible harm rises to the level of injury-in-fact, courts look to historical practice and the judgment of Congress. However, such deference cannot confer standing for a "bare procedural violation, divorced from any concrete harm."5 In the context of the case before it, the Court noted that not all violations of the FCRA are capable of giving rise to actual harm or a risk of harm. For example, the Court questioned how a credit report containing an inaccurate zip code – which might constitute a violation of the FCRA – could, without more, work any concrete harm to any claimant.

The Supreme Court concluded that the Ninth Circuit failed to distinguish between particularized harm and concrete harm and remanded for a determination as to "whether the particular procedural violations alleged by Robins entailed a degree of risk sufficient to meet the concreteness requirement."

Justice Thomas filed a concurrence to offer his perspective on how the injury-in-fact requirement applies to different types of rights. Justice Ginsburg, joined by Justice Sotomayor, dissented. In their view, the record before them would allow a conclusion that Robins suffered concrete harm by alleging Spokeo's dissemination of inaccurate information about him.

Wider Implications of the Court's Ruling

Spokeo has the potential to create significant hurdles for other claimants seeking relief for violation of a statute in the complete absence of any concrete harm. Many federal and state statutes, like the FCRA, create a private cause of action for either actual or statutory damages.6 In such cases, in order to obtain federal standing, claimants will need to plead more than simply a technical violation and a claim for the minimum statutory damages. Instead, they must allege harm that is particularized to them and concrete in the sense of being real harm, or allege a risk of the type of harm that the statute was intended to protect against. In some cases, the ability to allege actual harm from a technical statutory violation may be difficult, if not impossible.

More significantly, this pleading requirement has the potential to frustrate certain types of consumer class actions that depend upon technical violations without any real harm whatsoever being visited upon class members. Indeed, even where it is possible to allege actual harm to class members, the potential for individualized inquiries on damages may impact whether a class can or should be certified.

Both the majority and dissent provide a road map on remand for articulating the sort of concrete damage that Robins has suffered, or is at risk of suffering, from Spokeo's alleged violation of the FCRA. It remains to be seen whether other claimants will be similarly poised to make such allegations or whether Spokeo will provide powerful authority on which to challenge the standing of an individual plaintiff or putative class representatives to assert claims for mere technical statutory violations.

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
Paul Halasz
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Lewis Brisbois Bisgaard & Smith LLP
Related Articles
 
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions