Supreme Court: Class Actions Must Prove Real Harm

On Monday, the U.S. Supreme Court ruled that plaintiffs must prove both “concrete and particularized” injury when pursuing litigation under the Fair Credit Reporting Act (FCRA) instead of focusing on mere technical violations.

The 6-2 Supreme Court decision will vacate and remand a Ninth Circuit court ruling in a FCRA class action lawsuit brought by plaintiff Thomas Robins against the “people search engine” Spokeo.

Robins accused Spokeo in 2010 of violating the FCRA by gathering a profile on him that allegedly included false information that he was married with children, he was employed, had a graduate degree, and was wealthy. According to Robins, none of this information was correct and therefore in violation of federal law.

In the Supreme Court decision authored by Justice Samuel Alito, the subject of injury-in-fact must be broken down and established in two categories — concrete and particularized harm.

Alito states that for an injury to be considered “particularized” it “must affect the plaintiff in a personal and individual way.” However, the Justice says that while this is an important criteria, it’s simply not enough to fully establish harm. Alito then points to the other necessary element, which is “concrete” injury.

The Justice clarified that “concrete” is not synonymous with “tangible,” and that plaintiffs can confirm “intangible” injuries that are nevertheless considered “concrete.” However, Justice Alito said that not all “inaccuracies” could be considered enough to establish “risk of harm.”

“An example that comes readily to mind is an incorrect zip code,” argues Alito. “It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.”

Even so, internet privacy law pioneer, Attorney Joseph Malley, says that being able to prove concrete harm with intangible injuries should be considered a triumph.

“Privacy advocates will dispute that the ruling is a major setback to privacy and consumer class actions, and celebrate that SPOKEO set Supreme Court precedent, claiming a narrow victory that ‘risk of real harm’ creates standing for intangible harms,” Malley states.

However, Malley readily admits that with this Supreme Court ruling “there will be a claimed victory by all parties.”

One of those “victory” statements can be found on Spokeo’s blog post regarding yesterday’s Supreme Court decision. Spokeo states that the Justices have “squarely rejected the contention that merely alleging a violation of a statute alone gives a plaintiff standing to bring a claim under federal law on behalf of a class of hundreds of thousands or millions of people.”

While FCRA class action lawsuits are expected to be impacted by this recent decision, other statues may also be affected including the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, the Americans with Disabilities Act, as well as many others.

Robins is represented by Jay Edelson, Rafey S. Balabanian, Ryan Andrews and Roger Perlstadt of Edelson PC and Will Consovoy, J. Michael Connolly, Michael Park and Patrick Strawbridge of Consovoy McCarthy Park PLLC.

The Spokeo FCRA Class Action Lawsuit is Thomas Robins, et al. v. Spokeo Inc., Case No. 13-1339, in the Supreme Court of the United States.