United States: Standing In Uncertainty: Spokeo Three Years Later

>In 2016, the Supreme Court issued its decision in Spokeo Inc. v. Robins, holding that even when Congress has granted parties a statutory right, a procedural violation of that right will not by itself satisfy the "concrete harm" requirement for Article III standing. The Court explained that while harm must be "concrete," it need not be "tangible." With little guidance on what this distinction actually means, the Court sent the case back to the Ninth Circuit, then denied a petition for writ of certiorari when the petitioners sought clarification on what constitutes a concrete, "intangible" harm.

Three years later, we are no closer to truly understanding what is required for Spokeo standing. Indeed, the recent decision in Frank v. Gaos, 139 S. Ct. 1041 (2019) not only demonstrates the Supreme Court's present unwillingness to substantively address standing under Spokeo, but also serves as a sobering example of how a lack of clarity on the issue can derail nearly a decade's worth of litigation and settlement efforts.

Frank v. Gaos originated in 2010 when a proposed class sued Google for various causes of action, including alleged violations of the Stored Communications Act. Google twice moved to dismiss for lack of standing. The district court denied the motions based on the Ninth Circuit's decision in Edwards v. First American Corp., 610 F.3d 514 (9th Cir. 2010), which held that standing exists whenever a statutory right has been violated. In 2011, the Supreme Court granted cert in Edwards, prompting Google to again move to dismiss for lack of standing. Google later withdrew its standing argument when the Supreme Court dismissed Edwards as improvidently granted.

In 2015, the district court approved a class settlement granting cy pres relief. A cy pres award dispenses settlement funds to charitable organizations whose work is determined to indirectly benefit the class members when distributing funds to every class member is deemed infeasible. Here, class counsel and several cy pres organizations were to receive the $8.5 million settlement from Google while the plaintiffs and unnamed class members received nothing. Several class members subsequently appealed to the Ninth Circuit, arguing that the cy pres settlement was not fair or reasonable under Rule 23. While the appeal was pending before the Ninth Circuit, the Supreme Court issued Spokeo – a decision that effectively overruled Edwards. Curiously, even though Google brought Spokeo to the Ninth Circuit's attention, the Ninth Circuit affirmed the settlement without addressing standing.

The Supreme Court subsequently granted certiorari in Frank v. Gaos to determine whether cy pres settlements satisfy Rule 23.1 But at oral argument, the Court made clear it would not reach the cy pres issue where standing remained uncertain. The Court later vacated the Ninth Circuit's judgment and remanded for further proceedings to address standing. In so doing, the Court noted that "[n]othing in [its] opinion should be interpreted as expressing a view on any particular resolution of the standing question."

The Supreme Court's decision in Frank v. Gaos makes clear that the standing question is as important as ever, particularly in the class action context. Unfortunately, while Spokeo is key to the statutory standing analysis, the Supreme Court has yet to offer substantive guidance as to what that analysis actually requires. Until it does, litigants – and the courts in which they advance their claims – are on uncertain ground.

Footnote

1 The petition for certiorari was authored by Andrew Grossman and Richard Raile of Baker & Hostetler LLP on behalf of Ted Frank.

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