United States: Spokeo Seeks Supreme Court Round II

Last Updated: January 23 2018
Article by Christine A. Stoddard and Kristin A. Shepard

The Spokeo standing saga, which began in 2010, continues with a second cert petition to the Supreme Court. The case began when plaintiff filed a putative class action, alleging that defendant Spokeo violated the Fair Credit Reporting Act (which provides for actual or statutory damages) because its "people search engine" published inaccurate data about him. The district court found plaintiff lacked standing because he had not suffered any actual damages; the Ninth Circuit reversed, holding the statutory violation itself was sufficient.

In May 2016, the  Supreme Court vacated the Ninth Circuit decision on the narrow basis that the circuit court failed to determine whether plaintiff's injury was sufficiently concrete to confer Article III standing. In so holding, the Supreme Court declined to address the broader certified question as to whether Article III's standing requirement is satisfied where the only harm alleged is the violation of a statute. On remand, the  Ninth Circuit held that plaintiff's injury was sufficiently concrete, as the Fair Credit reporting act was intended to protect plaintiff's interest in accurate credit reporting and the alleged procedural violation purportedly caused plaintiff to suffer stress and harmed his employment search.

On December 4, 2017, Spokeo filed another petition for writ of certiorari to the Supreme Court, asking it to determine, in light of conflicting appeals court decisions, whether intangible harm to a statutorily-protected interest constitutes injury in fact even when a plaintiff cannot allege "real-world" harm (or the imminent risk thereof). It argued that the Ninth Circuit's decision enabled plaintiff to allege a concrete injury even though he did not himself suffer any harm, thus diverging from the Court's Article III precedents, and it emphasized that review is appropriate because the issue is extremely important, arises every day in courts across the country, and has led to numerous irreconcilable decisions.

Plaintiff filed its opposition on December 20, arguing that there is no circuit split for the Court to resolve, as all appellate courts deciding the issue have recognized that intangible harms can suffice to confer standing under Article III. In its January 3 reply, Spokeo argued that the issue was not whether intangible harm can be concrete, but, rather, how courts should determine whether an intangible harm satisfies Article III. It explained that the Ninth Circuit concluded plaintiff had standing based merely on his allegation that a statutory violation could cause intangible harm to someone, even though plaintiff himself had not suffered the harm. Thus, it asked the Court to determine "how a court should determine whether a claimed intangible harm is 'real.'"

Various parties have filed amicus briefs in support of Spokeo, including Trans Union LLC; the U.S. Chamber of Commerce; the American Escrow Association and other non-profit trade associations involved in the residential real estate industry; Retail Litigation Center, Inc.; the National Association of Professional Background Screeners; and the Consumer Data Industry Association. These parties argue, inter alia, that the lower courts' inconsistent application of the first Spokeo decision have opened the door to class action lawsuits based on bare procedural violations without actual harm, tangible or intangible, leading to lawsuits without social value and threatening their businesses.

It is unclear whether the Supreme Court will take up the issue again, though its earlier,  narrow opinion led to conflicting interpretations by lower courts. If it does hear the case, which thus far has been confined to the FCRA context, the implications of its opinion may be far-reaching, making it yet another highly-anticipated decision in this ongoing saga.

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.

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