Spokeo Update: Ninth Circuit Holds that Plaintiff Adequately Alleged Article III Standing

This article was written by David N. Anthony, Cindy D. Hanson and Julie D. Hoffmeister, and originally published on the Troutman Sanders LLP Consumer Financial Services Law Monitor. It is republished here with permission. 

On August 15, 2017, the Ninth Circuit issued its decision on remand in Spokeo, reversing and remanding the case to the District Court after finding that the named Plaintiff, Thomas Robins, has standing to pursue his claims.

Background

In Spokeo, Inc. v. Robins, Plaintiff Robins sued the “people search engine” for alleged violations of the Fair Credit Reporting Act (“FCRA”). Robins alleged Spokeo published inaccurate (though not harmful per se) information about him, including that Robins had a graduate degree and was married and had children. At issue was the fact the Complaint alleged only statutory violations and no injury-in-fact. Spokeo argued that this statutory violation alone was insufficient to confer Article III standing because it does not meet the “irreducible constitutional minimum” to establish standing, which required a plaintiff to have suffered an injury-in-fact by sustaining an “actual or imminent” harm that is “concrete and particularized.”

The District Court for the Central District of California originally dismissed the case, holding Robins failed to allege any injury-in-fact and, therefore, did not have Article III standing. The Ninth Circuit reversed, holding the alleged violation of Robins’ statutory rights alone was sufficient to satisfy Article III’s requirements, regardless of whether the plaintiff can show a separate actual injury.

On May 16, 2016, the Supreme Court in a 6-2 decision vacated and remanded the Ninth Circuit’s decision. The Supreme Court found the Ninth Circuit’s injury-in-fact analysis “incomplete” because it “focused on the second characteristic (particularity), but it overlooked the first (concreteness).” According to the Court, “a ‘concrete’ injury must be ‘de facto’; that is, it must actually exist” in a “‘real,’ and not ‘abstract’” sense, but is not “necessarily synonymous with tangible.”

While noting Congress’s role in identifying and elevating intangible harms to create standing for statutory violations, the majority made clear that this “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.” More (i.e., a concrete injury) is necessary. Indeed, this is exactly why Robins could not “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.”

Ninth Circuit’s Decision on Remand

On August 15, 2017, a unanimous Ninth Circuit issued its decision authored by Judge O’Scannlain regarding whether Robins had sufficiently pled a concrete injury required to establish Article III standing. The Court held true to its original conclusion finding Robins has standing to pursue his claim.

In evaluating Robins’s claim of harm, the Ninth Circuit considered two main issues: "(1) whether the statutory provisions at issue were established to protect [Robins’s] concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.”

As to the first question, the Ninth Circuit answered in the affirmative. The Court held “that Congress established the FCRA provisions at issue to protect consumers’ concrete interests,” namely their interests in ensuring fair and accurate credit reporting and protecting consumer privacy. “Even if there are differences between FCRA’s cause of action and those recognized at common law, the relevant point is that Congress has chosen to protect against a harm that is at least closely similar in kind to others that have traditionally served as the basis for [a] lawsuit.”

With respect to the second question, the Ninth Circuit held because Robins alleged Spokeo prepared an inaccurate report and published that report on the Internet, his claim “clearly implicates, at least in some way, Robins’s concrete interests in truthful credit reporting.” The Ninth Circuit emphasized however that “in many instances, a plaintiff will not be able to show a concrete injury simply by alleging that a consumer-reporting agency failed to comply with one of the FCRA’s procedures.” Rather, the consumer must show that the violationmaterially affected the consumer’s protected interests in accurate credit reporting. In other words, the Supreme Court’s decision “requires some examination of thenature of the specific alleged reporting inaccuracies to ensure that they raise a real risk of harm to the concrete interests that FCRA protects.”

“We are satisfied that Robins has alleged injuries that are sufficiently concrete for the purposes of Article III,” held the Court. Based on its previous finding that Robins’s injuries were also sufficiently particularized, the Court concluded that Robins has “adequately alleged the elements necessary for standing.”

Conclusion

In Spokeo, the Supreme Court laid down an important marker that federal lawsuits should be based on claims of real harm. Since then, courts across the nation have issued varying decisions attempting to interpret the contours of the Supreme Court’s decision. The Ninth Circuit’s decision represents one in a wave of cases discussing the requirement of “concrete harm” in FCRA matters.

We will monitor this case on remand as well as report on other circuit court cases that continue to grapple with these standing related issues.

Troutman Sanders is also hosting an FCRA webinar on August 24, 2017, which will include a Spokeo-related discussion. To register for the webinar, please click here.

The Ninth Circuit Opinion can be found here.