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U.S. Supreme Court Remands Spokeo; Ninth Circuit Must Consider Whether “Concrete” Injury Occurred

Spokeo, Inc. v. Robins has been closely watched because of its potential implications for class actions alleging mere “technical violations” of consumer protection statutes.  Yesterday, the U.S. Supreme Court issued a 6-2 decision confirming that a plaintiff must have suffered a “concrete” injury to have standing under Article III of the U.S. Constitution.  According to the Court, a plaintiff who suffers the injury defined in a consumer protection statute may or may not have suffered an injury sufficiently “concrete” to have standing.  But because the Ninth Circuit Court of Appeals had failed to address the concreteness of Plaintiff’s injury as a separate issue, the Supreme Court remanded the case.

Spokeo runs a website that aggregates data about individuals from various online sources.  Plaintiff Robins determined that Spokeo reported inaccurate information about him, reflecting that he was married, employed and was “relatively affluent,” none of which was true.  578 U.S. ___ at 4.  Robins filed a class action lawsuit, seeking the statutory penalties available under the Fair Credit Reporting Act (FCRA) for “willful” reporting of inaccurate personal information.  The U.S. District Court for the Central District of California dismissed the case, finding Robins had not alleged an injury-in-fact sufficient to have Article III standing.  The Ninth Circuit reversed, and the Supreme Court granted certiorari.

Justice Alito wrote the Court’s opinion, which was joined by all but Justices Kagan and Sotomayor. The opinion begins by addressing separation of powers principles, the constitutional requirement that courts hear only “Cases” and “Controversies,” the corollary requirement that any plaintiff must have standing, and the test for standing announced in Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).  That test includes “first and foremost” a requirement that plaintiffs sufficiently allege “injury in fact.”  Id. at 7.   As to the “injury in fact” test “[w]e have made it clear time and time again that an injury in fact must be both concrete and particularized.”  (Citations omitted; emphasis added).  Observing that the Ninth Circuit had addressed only the “particularized” requirement, the Court determined that remand was needed.

Before doing so, the Court discussed the parameters of the “concrete” injury test.  “A ‘concrete’ injury must be ‘de facto’; that is, it must actually exist.”  Id. at 8.  “’Concrete’ is not, however, necessarily synonymous with ‘tangible.’”  Id.  “[I]ntangible injuries can . . . be concrete.”  Id. at 9.  While Congress may “’elevate to the status of legally cognizable injuries concrete, de facto, injuries that were previously inadequate at law’” (citations omitted) “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”  Id. at 9.  Instead, “Article III standing requires a concrete injury even in the context of a statutory violation.”  Id.  A “risk of real harm” might satisfy the concreteness requirement, and the “violation of procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact.”  Id. at 10.  Given these factors, the Court determined that the Ninth Circuit needed to address “whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement.”  Id. at 11.

The Spokeo opinion affirms that concrete injury, either actual or imminent, must occur for standing to exist, and opens up at least two new class action battle grounds.  First, class actions under FCRA and other consumer protection statutes, such as the Telephone Consumer Protection Act (TCPA), could be subject to dismissal for lack of standing if they allege only a “bare violation” of the relevant statute without alleging particularized and concrete injury sufficient to confer standing under Article III.  Second, class certification may be subject to challenge under the Rule 23(b)(3) “predominance” requirement where certain members of a proposed class can allege injury that is sufficiently concrete, but others can allege only a bare violation of the relevant statute.

As to the Spokeo case itself, the Supreme Court’s opinion provides a victory at this stage for Spokeo, but leaves open whether Robins suffered sufficiently concrete harm to have standing.  At oral argument, and in their dissenting opinion, Justices Kagan and Sotomayor referred to inaccurate information reported by Spokeo about Robins (his employment status, relative affluence and age) that could constitute sufficiently imminent, concrete harm, as it may, for example, affect Robins’ employment prospects.  578 U.S. __ at 4 (2016).  On that question, we will need to watch the proceedings on remand at the Ninth Circuit.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume VI, Number 139

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About this Author

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...

415.774.3216
Liên H. Payne, Sheppard Mullin, commercial litigation lawyer, tort contract disputes attorney
Associate

Liên Payne is an associate in the Business Trial Practice Group in the firm’s San Francisco Office.  Ms. Payne has worked on teams representing prominent financial institutions in high stakes commercial litigation involving tort and contract disputes and teams representing auto finance companies in complex class actions involving alleged unfair business practices and improper consumer disclosure. Ms. Payne’s practice also involves representing public and private entities and individuals in government investigations and  white collar criminal defense.

415.774.3158