Supreme Court Holds That Plaintiffs Need Concrete Harm In Order To Seek Statutory Damages

Yesterday the Supreme Court issued its long-awaited decision in Spokeo, Inc. v. Robins, in which it was asked whether plaintiffs have Article III standing if they allege a bare violation of a statute (i.e., an injury in law) but no concrete harm (i.e., an injury in fact). Six of the eight sitting Justices agreed that an injury in law alone is insufficient and that plaintiffs must plead and prove concrete harm in order to satisfy Article III.

The Facts

Spokeo is a search engine that provides information on people (for example age, address, phone number, and occupational and marital status) based on computerized searches in various databases. Plaintiff Thomas Robins filed suit against Spokeo because he learned (he did not allege how) that it had reported (he did not allege to whom) that he was in his fifties, employed, married, and affluent. However, Robins alleged that he is in fact younger, unemployed, unmarried, and of modest means. Opinion at 4. Robins alleged that these inaccuracies resulted from various violations of the Fair Credit Reporting Act, which requires among other things the use of “reasonable procedures to assure maximum possible accuracy of” consumer reports, 15 U.S.C. § 1681e(b), and the posting of toll-free numbers that consumers can call to request reports. See id. § 1681j(a). Robins also alleged that those violations were “willful,” which he hoped would entitle him—and every other member of a putative class—to statutory damages plus fees and costs. See id. § 1681n(a). The District Court dismissed his claim due to the lack of an injury-in-fact but the Ninth Circuit reversed, reasoning that a “violation of a statutory right is usually sufficient injury in fact to confer standing.” Opinion at 5. The Supreme Court granted certiorari in order to answer that question for itself.

The Majority Opinion

The Supreme Court issued a 6-2 ruling that vacated the Ninth Circuit’s decision. Justice Alito’s majority opinion begins by noting that Article III is not satisfied unless an alleged injury is both “concrete and particularized.” Opinion at 2; id. at 8 (“We have made it clear time and time again that an injury in fact must be both concrete and particularized”) (emphasis in original). Because the Ninth Circuit had “focused on the second characteristic (particularity)” and “overlooked the first (concreteness),” id. at 2, the majority vacated the Ninth Circuit’s decision and remanded for further proceedings consistent with its opinion, which went on to clarify how the standing requirement should work in “no injury” cases such as this one.

The majority reiterated that standing is an “irreducible constitutional minimum” and that it is “settled that Congress cannot erase Article III’s standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing.” Id. at 7 (citing Summers v. Earth Island Institute, 555 U.S. 488 (2009); Raines v. Byrd, 521 U.S. 811 (1997); Gladstone, Realtors v. Village of Bellwood, 441 U.S. 91 (1979)). It explained that the “judgment of Congress” is “instructive and important” because the standing requirement “is grounded in historical practice” and Congress is “well positioned to identify intangible harms that meet minimum Article III requirements.” Id. at 9. But it also made clear that that judgment is not conclusive:

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. Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.

Id. at 9-10. In other words, although “Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk,” a private plaintiff “cannot satisfy the remands of Article III by alleging a bare procedural violation.” Id. at 10. That is because some violations—for example the act of reporting “an incorrect zip code”—will not “work any concrete harm.” Id. at 11. Only if plaintiffs allege a “concrete harm” can they satisfy Article III.

The Concurring and Dissenting Opinions

Justice Thomas joined the majority’s opinion but issued a separate concurring opinion that discussed the significance of whether an alleged injury is characterized as a “public” or “private” one. He emphasized that the standing requirement operates to limit the right of private plaintiffs to pursue “public rights” in collective actions by requiring that such plaintiffs show particularized and concrete injury beyond that suffered by the public at large. Justice Ginsburg issued a dissenting opinion in which Justice Sotomayor joined.  Justice Ginsburg “agree[d] with much of the Court’s opinion.” Dissent at 2. Indeed, she did not take issue with the conclusion that Robins could not state a claim “if he alleged a ‘bare’ procedural violation … that results in no harm, for example, ‘an incorrect zip code.’” Id. at 5. But she “part[ed] ways with the Court … on the necessity of a remand to determine whether Robins’ particularized injury was ‘concrete.’” Id. at 3. Because Robins alleged that he had been made to “appear overqualified for jobs he might have gained, expectant of a higher salary than employers would be willing to pay, and less mobile because of family responsibilities,” she found that his allegations already “carry him across the threshold” of stating a “concrete” harm. Id. at 2-3.

The Takeaway

Although it remains to be seen what the Ninth Circuit will do on remand, the Spokeo ruling may have a profound effect on how “no injury” class actions are litigated because it creates hurdles not only to stating a claim but also to seeking certification. Indeed, one of the more important signals in the decision may be the footnote that reminds the lower courts that styling a case as a class action “adds nothing to the question of standing.” Opinion at 6 n.6. If named plaintiffs must prove that they have a “concrete harm” in order to state a claim for statutory damages, it follows that they must also prove that unnamed plaintiffs do as well in order to obtain certification. This standing requirement may prove to be an insuperable obstacle to certification if the existence and concreteness of the alleged harm turn on individualized issues.

Michael P. Daly

About the Author: Michael P. Daly

Mike Daly has spent two decades defending, counseling and championing clients that interact with consumers. His practice focuses on defending class actions, handling critical motions and appeals, and maximizing the defensibility of marketing and enforceability of contracts. Clients large and small have trusted him to protect their businesses, budgets and brands in complex cases across the country.

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