United States: An Intangible Injury Caused By A Consumer Report Is Concrete Enough, Says The Ninth Circuit

Last Updated: August 21 2017
Article by James R. Silvers

On August 15, 2017, the Ninth Circuit Court of Appeals decided Robins v. Spokeo, Inc. (No 11-56843), a case addressing the standing necessary to maintain an action in federal court that had been remanded to the court by the Supreme Court of the United States. In Spokeo, an individual claimed that a search engine company (which the court presumed to be a consumer reporting agency (CRA)) willfully failed to comply with the Fair Credit Reporting Act (FCRA) by providing inaccurate information about him. According to the Ninth Circuit's decision, because Robins suffered an intangible injury under the FCRA, he established a concrete harm sufficient to give him standing. Although the case deals with alleged injuries resulting from a CRA's alleged failure to comply with the FCRA, its holding may impact injury allegations against employers brought under the act.   

Background

Spokeo, Inc. operates a search engine that obtains, compiles, and distributes information on people at the request of visitors to its site. Robins discovered that the profile that Spokeo generated on him contained a large number of inaccuracies (e.g., claiming that he was: (1) married with children, (2)  in his 50s, (3) employed, (4) relatively affluent, and (5) a holder of a graduate degree—none of which was accurate, according to Robins). As a result, Robins filed a complaint on his own behalf and on behalf of a class of similarly-situated individuals, alleging that Spokeo willfully failed to comply with the FCRA's requirements to follow reasonable procedures to assure the maximum possible accuracy of the background check reports that it provided.

A lower federal district court dismissed the case for lack of standing. On appeal, the Ninth Circuit reversed the lower court's decision and ruled that Robins had adequately alleged an injury in fact. However, on further appeal, the Supreme Court of the United States held that the Ninth Circuit failed to properly assess whether Robins had alleged an injury in fact. According to the Supreme Court, such an analysis requires a court to examine both the concreteness and the particularization of the alleged injury. The Ninth Circuit had erred because it did not consider concreteness. Thus its standing analysis was incomplete and the case was remanded back to the Ninth Circuit.

The Ninth Circuit's Decision

Because the Supreme Court did not call into question the Ninth Circuit's previous analysis on particularity, the Ninth Circuit limited its analysis to the concreteness requirement for an Article III injury. The Ninth Circuit recognized that an alleged procedural violation of a statute can by itself manifest a concrete injury if (1) Congress confers a procedural right to protect a plaintiff's concrete interests, and (2) an alleged procedural violation presents "a risk of real harm" to that concrete interest. The analysis for determining if a procedural violation establishes a concrete injury involves two inquiries:

(1) whether the statutory provisions at issue were established to protect concrete interests (as opposed to purely procedural rights), and if so,

(2) whether the specific procedural violations alleged in the case actually harm, or present a material risk of harm to, such interests.

In addressing the first prong of the inquiry, the Ninth Circuit had little trouble concluding that the FCRA requirement for CRAs to follow reasonable procedures to assure maximum possible accuracy was established to protect consumers' concrete interests in accurate consumer reporting about themselves. The court noted that several pages of legislative history demonstrate how inaccuracies in reports may harm consumers.  

Next, the court focused on whether the alleged FCRA violation actually harmed Robins, or at least created a "material risk of harm." For this analysis, the court recognized that a plaintiff will not be able to show concreteness simply by alleging a CRA failed to comply with one of the FCRA's procedural requirements. Likewise, the court disagreed with Robins who argued that any FCRA violation premised on some inaccurate disclosure of his information was sufficient to establish concreteness (the court gave the example of how it would be difficult to prove a concrete injury if someone's zip code was reported incorrectly). Ultimately, the court concluded that the allegedly incorrect information reported on Robins did result in real harm, or at least a material risk of harm, to Robins because the errors he alleged were substantially more likely to harm his concrete interests than providing an incorrect zip code.

Employer Takeaways

Although Spokeo does not specifically address FCRA liability by employers, because the standard for damages and standing are similar for employers and background check companies, the case has some significant takeaways for employers:

  • The decision does not overrule the Ninth Circuit's earlier ruling on standing in an employer FCRA disclosure and authorization case, Syed v. M-I, LLC
  • We can expect plaintiffs' lawyers to use Spokeo to argue that FCRA procedural violations can provide sufficient standing to bring suit.
  • Spokeo does not diminish state and local background check requirements.

Federal and state background check requirements are summarized in Ogletree Deakins'  O-D Comply: Background Checks subscription materials, which are updated and provided to  O-D Comply subscribers as the law changes.

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
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