United States: Ninth Circuit Issues Long-Awaited Decision On Standing After Remand From Supreme Court

Last Updated: August 25 2017
Article by Amy P. Lally, Eric S. Mattson and Lauren M. De Lilly

On August 15, 2017, the Ninth Circuit again addressed whether a violation of the Fair Credit Reporting Act (FCRA) constitutes a sufficiently concrete and particularized harm to satisfy Article III's injury-in-fact requirement. In Robins v. Spokeo, No. 11-56843, the court found for a second time that plaintiff Thomas Robins had adequately alleged standing. Plaintiffs may cite this ruling to oppose motions to dismiss for lack of standing in other FCRA cases or cases alleging other statutory violations, but the actual impact of the opinion may be limited to cases involving closely similar facts.

FCRA requires consumer reporting agencies to follow reasonable procedures to assure the accuracy of information in consumer reports. Robins sued Spokeo.com under this statute after discovering that it published a report with inaccurate information about him, including his marital status, age, employment, education and wealth. The report erroneously said Robins was married with children and that he was older, better educated, wealthier and more accomplished than he actually was. In an initial appeal, the Ninth Circuit found that Robins had adequately alleged standing to sue, but in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), the Supreme Court vacated that ruling, noting that Article III standing requires an injury that is both particularized and concrete, and that the Ninth Circuit had addressed the former requirement but not the latter.

In deciding this week that Robins had standing because his alleged injury was "concrete" (as well as "particularized"). The Ninth Circuit explained that Congress enacted FCRA to protect the concrete interest of consumers in accurate credit reporting. Inaccurate credit or consumer reports have real-world – not just procedural – implications for consumers, particularly in obtaining employment. Although cautioning that it was not deciding whether every inaccuracy Robins alleged would necessarily constitute a concrete injury, the court held that the alleged inaccuracies in Spokeo's report could harm Robins's employment prospects because it is the type of information that may be important to employers.

At first glance, this decision may seem like a blow to defendants seeking to dismiss putative class actions for lack of standing, and to some extent, it is. At the same time, class action defendants should be encouraged by several takeaways. First, the Ninth Circuit's analysis is a fact-based inquiry and the number and type of factual inaccuracies published by Spokeo were material to the decision and will not be replicated in all subsequent statutory violation cases.1 The Ninth Circuit did not provide broad guidance about whether and under what circumstances a single inaccuracy in a credit report, a certain type of inaccuracy or another combination of inaccuracies would be sufficient to constitute a concrete injury. The court made clear that de minimis violations may not confer standing, but other than holding that Robins's alleged facts were enough to confer standing, it did not provide clear guidance on where the line falls between sufficient and insufficient injuries.

Second, Robins won the pleading battle, but in doing so, may have lost the class certification war, as it may prove impracticable to separate putative class members with standing from those without. The Ninth Circuit acknowledged that the Supreme Court's opinion "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 FRCA protects." The court also noted that "Robins will have to show that Spokeo did prepare a report that contained inaccurate information about him." An individualized inquiry into whether inaccurate information was actually published about each putative class member, along with the type of inaccurate information reported about each class member, may reveal that individual issues predominate over classwide issues, thereby precluding class certification.

This week's opinion also contributes to different outcomes among the circuits in addressing Article III standing for statutory violations. Another petition for certiorari from Spokeo may be forthcoming, and it may ultimately take another opinion from the Supreme Court to set a clearer line between plaintiffs with standing and those whose alleged harm is insufficiently concrete and particularized to entitle them to seek judicial relief.

In the meantime, however, the Ninth Circuit's decision on remand confirms the significant importance of the Supreme Court's Spokeo opinion: lower courts must "devote appropriate attention to whether the alleged injury is sufficiently concrete" even where complaints allege statutory violations. Slip op. at 7 (citing Spokeo, 136 S. Ct. at 1548). For Robins's allegations, the Ninth Circuit found that the impacts to his real world employment prospects were clear. In contrast, plaintiffs who can only allege intangible or abstract impacts will still face rough sledding under Spokeo.

Footnote

1 In her dissent in Spokeo, Justice Ginsburg predicted the Ninth Circuit's outcome. While she agreed with the majority's framework for analyzing the "concreteness" requirement for standing, she thought Robins's factual allegations met the test easily. Justice Ginsburg wrote:

Robins would not qualify, the Court observes, if he alleged a "bare" procedural violation, ante, at 10, one that results in no harm, for example, "an incorrect zip code," ante, at 11. Far from an incorrect zip code, Robins complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market. ... The FCRA's procedural requirements aimed to prevent such harm. See 115 Cong. Rec. 2410–2415 (1969). I therefore see no utility in returning this case to the Ninth Circuit to underscore what Robins' complaint already conveys concretely: Spokeo's misinformation "cause[s] actual harm to [his] employment prospects." App. 14. (Emphasis added.)

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