Spokeo, Inc. v. Robins and the No-Injury Class Action

Class action practitioners have been closely watching Spokeo, Inc. v. Robins, a case before the Supreme Court on appeal from the Ninth Circuit.  Spokeo presented the Court with the opportunity to decide whether a plaintiff may maintain a class action absent any injury other than the violation of a statutory right.  On May 16, 2016, the Court issued its 6-2 decision, reaffirming the principle that Article III standing requires injury-in-fact, and holding that a statutory violation that does not produce both particularized and concrete harm is not enough.  Yet the Court declined to apply its holding to the facts alleged, instead remanding to the Ninth Circuit to consider whether both aspects of the injury-in-fact requirement had been met.

Spokeo involved an alleged violation of the Fair Credit Reporting Act (FCRA).  Plaintiff Robins claimed that Spokeo, which operates a website providing users with information about other people such as addresses, phone numbers, age, and finances, violated FCRA by providing inaccurate information about him. The Ninth Circuit held that the FCRA created a statutory right, and that the violation of that right was sufficient to confer standing under FCRA. The Ninth Circuit also held that Robins had Article III standing because he had alleged that “Spokeo violated his statutory rights, not just the statutory rights of other people,” and because “Robins’ personal interests in the handling of his credit information are individualized.”

The Supreme Court did not decide whether Robins could maintain his claim, instead finding the Ninth’s Circuit constitutional standing analysis to be deficient and remanding the case for further development.  Justice Alito, writing for the Court, explained that in order to have Article III standing a plaintiff – including a putative class representative – must show “injury in fact” that is both “concrete” and “particularized.”  In order to be “particularized,” the injury “must affect the plaintiff in a personal and individual way.” To be “concrete,” the injury “must actually exist” – that is, it must be “real, and not abstract.”  The Court held that the Ninth Circuit failed to analyze the concreteness prong.

In remanding the case to the Ninth Circuit, the Court offered guidance regarding what constitutes a concrete injury. Noting that “both history and the judgment of Congress play important roles” in making the determination whether an intangible harm is concrete, the Court made two observations.  First, an intangible harm may be concrete if it “has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit” at common law. Second, “because Congress is well-positioned to identify certain intangible harms . . ., its judgment is also instructive” in determining whether an intangible harm is concrete.

Then, in what is perhaps the opinion’s most important passage, the Court offered the following qualification: “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.”  A “bare procedural violation, divorced from any concrete harm” would not suffice to provide Article III standing.  On the other hand, if the “procedural right granted by statute” is “sufficient . . . to constitute injury in fact,” then the “plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.”

The Supreme Court’s decision in Spokeo reaffirms the importance of principles of standing in putative class actions alleging violations of statutory rights, but stops short of demonstrating how to apply those principles to a given case. Perhaps the Court would have answered the ultimate question under FCRA had the Court been at full strength.  Nevertheless, the six-Justice majority’s holding that the mere violation of a statutory right does not, without more, create Article III standing is a welcome and important message for defendants. Purely technical statutory violations will not suffice to confer standing, while statutory violations that have a “real” impact will. Courts will decide where the line should be drawn between technical and consequential violations on a case-by-case basis. Just where they place it is the multimillion-dollar question that remains to be answered.