Spokeo as Class-Action Silver Bullet? Two More Dismissals Based on Lack of Concrete Harm
Despite claims from the plaintiffs’ bar that the Supreme Court’s decision in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), did not significantly change the landscape for class actions, courts continue to rely on Spokeo to dismiss claims that have no concrete injury beyond a statutory violation. In the last month, two more cases — including one federal circuit-level decision and one TCPA decision — were dismissed because the plaintiff was unable to demonstrate Article III standing under Spokeo. These cases demonstrate the important role that Spokeo-related arguments can play in stymying class actions.
In Nicklaw v. CitiMortgage, Inc., 2016 U.S. App. LEXIS 18206 (11th Cir. Oct. 6, 2016), the court held that the plaintiff lacked Article III standing to pursue a claim where the class action complaint alleged statutory violations and sought only statutory damages. The only claim asserted by the plaintiff in Nicklaw was that the plaintiff failed to comply with a New York statute requiring it to sign and record a certificate of discharge within 30 days of a mortgage satisfaction. Based on the defendant’s alleged failure to do so, the plaintiff sought monetary damages. The court held that plaintiff alleged “neither a harm nor a material risk of harm that the district court could remedy.” This opinion marked the first time that the Eleventh Circuit had applied the Spokeo framework and will undoubtedly have a ripple effect on district court cases within the circuit (and beyond) when defendants make similar arguments. Although Nicklaw is not a media or privacy case, it certainly provides a roadmap for all manner of class actions.
In fact, a district court handling a TCPA case employed this same reasoning a couple weeks later in Kostmayer Const., LLC, v. Port Pipe & Tube, Inc., 2016 U.S. Dist. LEXIS 145947 (W.D. La. Oct. 19, 2016). In Kostmayer, the plaintiff alleged that the defendant had sent at least six unsolicited faxes in violation of the TCPA. The court noted that, other than its demand for statutory damages, “[t]he complaint does not further explain any alleged damages incurred by the plaintiff.” Citing Spokeo, the court also observed that “a plaintiff must still allege ‘a concrete injury even in the context of a statutory violation.’” Conclusory damage allegations are inadequate, as is the “bare assurance that an unspecified injury exists.”
The Nicklaw and Kostmayer cases present the ideal scenario for defense litigators. The decisions show how the Spokeo standard can be used to pursue dismissal in class action litigation, which is a valuable tool that all class action defense lawyers should be considering in every case based on statutory violations and statutory damages.