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Spokeo—Round 3: The Ninth Circuit Finds Alleged Statutory Violation Sufficiently “Concrete” To Satisfy Article III Standing

The Ninth Circuit recently issued its long-awaited opinion in Robins v. Spokeo, Inc., — F.3d —-, 2017 WL 3480695 (9th Cir. Aug. 15, 2017), on remand from the United States Supreme Court. Once again, the Ninth Circuit reversed the district court’s dismissal of plaintiff’s lawsuit alleging willful violations of the Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”), holding plaintiff’s alleged injuries were sufficiently “concrete” to satisfy Article III standing requirements. This most recent Spokeo decision (a/k/a Spokeo III) is the latest in a series of appellate decisions during the last year that have determined whether, and under what, circumstances a defendant’s alleged violation of a federal statute, without more, may satisfy Article III’s “injury-in-fact” requirement.

The issue before the Ninth Circuit in Spokeo was “whether an alleged violation of a consumer’s rights under the [FCRA] constitutes a harm sufficiently concrete to satisfy the injury-in-fact requirement of Article III of the United States Constitution.” (Slip at 4.) Plaintiff Robins alleged that Spokeo—which operates a website that compiles consumer data and builds customer-information profiles—published an allegedly inaccurate report about him on its website. (Id. at 5.) Plaintiff sued Spokeo for the publication of the inaccurate information and alleged Spokeo willfully violated FCRA. (Id.) Plaintiff claimed the inaccurate information contained on Spokeo’s website (e.g., his age, marital status, wealth, education level, and profession) harmed his employment prospects when he was unemployed. (Id. at 6.) Ironically, the alleged false statements actually portrayed plaintiff more favorably than his actual credentials. He also alleged emotional distress. (Id.)

The district court dismissed plaintiff’s complaint for lack of Article III standing. On initial appeal, the Ninth Circuit reversed the district court’s dismissal of the complaint, holding plaintiff’s allegations established a cognizable injury-in-fact because he alleged Spokeo violated his FCRA statutory rights. See Robins v. Spokeo, Inc. (Spokeo I), 742 F.3d 409, 414 (9th Cir. 2014).

The Supreme Court granted certiorari and ultimately vacated the Ninth Circuit’s decision after finding that court’s standing analysis incomplete. See Spokeo, Inc. v. Robins (Spokeo II), 136 S. Ct. 1540 (2016). The Supreme Court held the Ninth Circuit neglected to consider whether plaintiff’s “injury” arising from the alleged FCRA violation was sufficiently concrete for Article III purposes. As a result, the Supreme Court vacated the Ninth Circuit’s ruling and remanded the case back to the Ninth Circuit for consideration of this issue.

On remand, the Ninth Circuit rejected plaintiff’s suggestion that Spokeo’s alleged violation of FRCA (i.e., its failure to reasonably ensure the accuracy of his consumer report) is, standing alone, enough of a concrete injury to confer Article III standing. (See Slip at 7.) The Ninth Circuit explained “the mere fact that Congress said a consumer like Robins may bring such a suit does not mean that a federal court necessarily has the power to hear it.” (Id. at 8.) Rather, “even when a statute has allegedly been violated, Article III requires such violation to have some real—as opposed to purely legal—harm to the plaintiff.” (Id.)

Nevertheless, the Ninth Circuit relied heavily on “congressional judgment” in its concreteness inquiry given the “the plaintiff alleges that he suffered an intangible harm.” (Id. at 9.) Looking to recent standing decisions from the Second, Sixth, and Ninth Circuits, the Spokeo III court concluded that “Spokeo II instruct[s] that an alleged procedural violation [of a statute] can by itself manifest concrete injury where Congress conferred the procedural right to protect a plaintiff’s concrete interests and where the procedural violation presents ‘a risk of real harm’ to that concrete interest.” (Id. at 10 (quoting Strubel v. Comenity Bank, 842 F.3d 181, 190 (2d Cir. 2016)).) And based on its analysis of legislative history of FCRA dating back to the 1970s and “historical practice,” the Ninth Circuit recognized “that the FCRA procedures at issue in this case were crafted to protect consumers’ (like plaintiff’s) concrete interest in accurate credit reporting about themselves.” (Id. at 15.)

With this understanding of the statute’s purpose in mind, the Ninth Circuit went on hold plaintiff had alleged FCRA violations that caused him actual harm, or at least created a “material risk of harm” to, this concrete interest. (Id.) Thus, while the court rejected plaintiff’s claim that “any FCRA violation premised on some inaccurate disclosure of his information is sufficient” (Id. at 16.), it found that the information at issue here “is the type that may be important to employers or others making use of a consumer report.” (Id. at 18.) The court further explained that “[e]nsuring the accuracy of this sort of information thus seems directly and substantially related to FCRA’s goals.” (Id.)

At this point, is unclear whether Spokeo III is a fact-bound standing decision or whether it articulates a broader standing rule for alleged violations of certain statutory rights. The Ninth Circuit itself took pains to make clear it was not articulating a new rule for statutory standing post-Spokeo. It expressly “caution[ed] that [its] conclusion on Robins’s allegations does not mean that every inaccuracy in these categories of information . . . will necessarily establish concrete injury under FCRA.” (Id. at 19 n.4.) And it was also was careful to “express no opinion on the circumstances in which alleged inaccuracies of this nature would or would not cause a concrete harm.” (Id.) However, depending on how courts interpret the holding of Spokeo III, the decision could have major implications in putative class actions that are predicated upon statutory violations of federal laws such as FCRA and the Telephone Consumer Protection Act, 227 U.S.C. § 227 (“TCPA”). The issue of a plaintiff’s standing in these types of cases could transform into a fact-driven, case-by-case inquiry that would make it much more difficult to certify a class under Rule 23 going forward.

The Ninth Circuit is not alone in weighing in on the meaning of the Supreme Court’s Spokeo II decision. Both the Second and Seventh Circuits have held that a mere statutory violation of the Fair and Accurate Credit Reporting Act, 15 U.S.C. § 1681c(g) (“FACTA”), which is part of FCRA and prohibits the printing of more than the last 5 digits of a credit or debit card number on an electronically-printed customer receipt, does not constitute a concrete injury for Article III purposes. See Crupar-Weinmann v. Paris Baguette Am., Inc., 861 F.3d 76, 80-82 (2d Cir. 2017); Meyers v. Nicolet Restaurants of De Pere, LLC, 843 F.3d 724, 727 (7th Cir. 2016). Taken together, these decisions signal continued uncertainty among the lower courts on how to apply Spokeo II and when alleged statutory violations may be sufficiently “concrete” to confer Article III standing. Following the Ninth Circuit’s decision, Spokeo may indeed seek review before the newly constituted Supreme Court to dispel such uncertainty – again.

For earlier commentary on Spokeo decisions, see:

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About this Author

Paul A. Werner, Litigation Attorney, Sheppard Mullin, Law firm

Mr. Werner is a partner in the Business Trial Practice Group in the firm's Washington D.C. office.

Mr. Werner is a seasoned first-chair litigator, whose prodigious representations over the past decade have been before all levels of courts and administrative tribunals, federal and state, and spanned a wide range of complex litigation matters. These matters have run the gamut from high-stakes, “bet the company” commercial disputes to disputes involving statutory, constitutional, communications, energy, environmental, insurance, intellectual...

David M. Poell Business Trial Attorney Sheppard Mullin Chicago, IL

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

Areas of Practice

David represents companies in a variety of class actions, multi-district litigations and other complex commercial litigation matters in state and federal courts. He specializes in defending corporate clients in high-stakes litigation matters involving federal consumer-protection statutes, privacy torts, unfair business practices, false advertising claims and large-scale data breaches.

David is also particularly experienced in prosecuting and defending actions involving the enforcement of restrictive covenants and non-competes, deceptive trade practices, misappropriation of trade secrets, the Lanham Act and unfair competition. He further advises companies regarding privacy matters matters and provides counseling on compliance with FCC, FTC and state-specific rules and regulations. 

In addition, David works on appellate litigation matters and is well-versed in issues involving administrative law, Article III standing issues and federal jurisdiction. 

Pro Bono

Of note with regard to his pro bono practice, David previously represented a prisoner in an Eighth Amendment excessive force trial in the Eastern District of Missouri.