Spokeo Was a Loss for Plaintiffs, Seventh Circuit Reaffirms
Plaintiffs’ lawyers across the land have trumpeted the U.S. Supreme Court’s decision in Spokeo as a victory (or at least not a loss). Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). At least one plaintiff’s lawyer has gone so far as to suggest that defense lawyers who raise Spokeo-based arguments should fear sanctions. As a Southern colleague of mine would say, those lawyers are trying to make a silk purse of a sow’s ear.
Although many post-Spokeo decisions have not yielded dismissal, many have, and they have done so based largely on Spokeo, which does more than reaffirm prior notions of standing and rather strengthens them in a way that is quite beneficial to corporate defendants facing trumped-up claims with no real harm. One of the most recent defense victories post-Spokeo is Meyers v. Nicolet Rest. of De Pere, LLC, 2016 U.S. App. LEXIS 22139 (7th Cir. Dec. 13, 2016).
In Meyers, the plaintiff sought statutory damages under FACTA, (15 U.S.C. § 1681,) based on failure to truncate his credit card expiration date on a restaurant receipt. Id. at *2. Relying heavily on Spokeo, the Seventh Circuit rejected the claim, finding that a mere statutory violation, without concrete harm, could not give rise to standing. Id. at *8. Because the plaintiff had realized right away that the expiration date was printed on the receipt, and no one else saw the receipt, the plaintiff could not demonstrate actual harm via compromise of his identity. Id. “This case asks whether the violation of a statute, completely divorced from any potential real-world harm, is sufficient to satisfy Article III’s injury-in-fact requirement. We hold that it is not.” Id.
Notably, the Seventh Circuit vacated and remanded without even reaching the second two elements of Article III standing: causation and redressability. Id. at *4 n.1. Those too can serve as very powerful tools to defeat suits.
Spokeo was a reversal of a plaintiff victory, plain and simple. To cast it as anything other than a defense victory is fantasy. Defense lawyers should continue to consider Spokeo-based arguments and see any related threats of sanctions as validation of the strength of their arguments. Putative class actions asserting statutory violations without actual harm abound. We look forward to continuing to invoke Spokeo to help courts clean up their overcrowded dockets.