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Reading Tea Leaves – How Will U.S. Supreme Court Decide Spokeo?

While the U.S. Supreme Court has issued decisions on two of its major class action cases this term, Campbell-Ewald Co. v. Gomez and Tyson Foods v. Bouaphekeo, one other previously argued case remains undecided, Spokeo, Inc. v. Robbins.  What will happen with this case given the recent passing of Justice Scalia?   

The likely result– one no different than before – is that Justice Anthony Kennedy’s “swing vote” will decide the case.  If he sides with the “liberal” wing of the Court (Justices Breyer, Ginsburg, Kagan and Sotomayor), a 5-3 decision is likely.  If he sides with the remaining “conservative” wing (Justices Alito, Roberts and Thomas), a 4-4 decision is likely, effectively affirming the lower court’s decision.

Spokeo presents the question of whether a plaintiff has standing to bring a class action claim for a statutory violation where no actual harm has occurred.  Claimant Robbins sued under the Fair Credit Reporting Act (“FCRA”) after certain inaccurate (but generally favorable) information appeared about him on Spokeo’s “people search” website.  He sought payment of the statutory penalties FCRA allows.  The U.S. District Court for the Central District of California dismissed the complaint on grounds that Robbins did not have standing because he alleged no “concrete” harm.  The Ninth Circuit Court of Appeals, however, reversed, holding that Robbins’ allegations made it plausible that Spokeo had acted with reckless disregard as to its statutory duty to collect accurate information, thus creating standing to sue per the provisions of the FCRA.  The case has been expected to resolve a split between the Second and Fourth Circuits on the one hand, which have found no standing in such circumstances, and the Sixth and Seventh Circuits on the other hand, which have gone the other way.

A review of the oral argument before the Court provides some (but not a lot) of information about where the decision may be heading.  Justices Sotomayor and Kagan heavily questioned Spokeo’s counsel, and suggested with their questions that they viewed the dissemination of inaccurate information alone a “concrete” injury.   Justice Kennedy asked only a handful of questions, but one of them suggested that he found one of Claimant’s arguments (that a person has sustained a monetary injury simply because a statute attaches a monetary penalty for a technical violation) to be circular.   Several Justices stayed fairly silent during and asked few questions.  Given the tenor of Justice Kennedy’s questioning it is possible that he may vote with the “conservative” wing of the Court, with a 4-4 decision the result, and with the decision of the lower court, and the split between the circuit courts, remaining in place.  A decision should be announced soon.

Copyright © 2019, Sheppard Mullin Richter & Hampton LLP.

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About this Author

David M. Poell, business law Lawyer, Sheppard Mullin
Associate

David Poell is an associate in the Business Trial Practice Group in the firm’s Chicago office with an emphasis in the areas of consumer privacy and class action litigation.

Areas of Practice

A large portion of Mr. Poell’s practice is devoted to defending companies against class and individual actions brought under various state and federal consumer protection statutes, including the Telephone Consumer Protection Act (TCPA) and the Fair and Accurate Credit Transactions Act (FACTA), as well as other consumer-privacy and unfair business practices laws and...

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Shannon Z. Petersen, Business Trial Legal Specialist, Sheppard Mullin
Partner

Shannon Z. Petersen is a partner in the Business Trial Practice Group in the firm’s Del Mar office and is co-chair of the firm’s consumer class action defense team and the firm’s TCPA class action defense team.

Areas of Practice

Dr. Petersen has substantial trial experience as a business litigator, including consumer class action defense. He has successfully represented clients in claims involving the federal Telephone Consumer Protection Act (TCPA), the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Acting (FCRA), the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Acts (RESPA); California's Unfair Competition Law (UCL), Consumers Legal Remedies Act (CLRA), Rosenthal Act, Automobile Sales Finance Act (ASFA or Rees-Levering), Vehicle Leasing Act, Confidentiality of Medical Information Act (CMIA); breach of contract, insurance bad faith, unfair business practices, false advertising, fraud, breach of fiduciary duty, negligence, wrongful foreclosure, wrongful repossession, unfair debt collection, unfair credit reporting, unjust enrichment, misappropriation of trade secrets, trademark infringement, quiet title, emotional distress, construction defect, privacy, and receiverships, among others.

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David S. Cannon, Sheppard Mullin, Government Contracts Attorney, High Stakes Litigation Lawyer, San Francisco,
Partner

David Cannon is a partner in the Government Contracts, Investigations & International Trade Practice Group in the firm's San Francisco office.

Mr. Cannon handles high-stakes litigation, including banking, commercial litigation and intellectual property disputes.  In banking-related matters, he has handled securities fraud claims, as well as mortgage and lender disputes stemming from the financial crisis.  This work has included large scale class actions in federal and California state courts.  With commercial disputes, he has helped...

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