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Argument preview: Justices to tackle key standing question

It is often said that there are two sides to every story.  That will certainly be the case tomorrow, when the Court hears oral arguments in Spokeo, Inc. v. Robins, a Virginia man’s lawsuit against the Internet database that allegedly published inaccurate information about him.  The dispute before the Justices is about whether his lawsuit can proceed at all, and the stakes are potentially quite high.  The defendant in the case, Spokeo, complains that allowing lawsuits like these will have dire consequences, opening the door to all kinds of frivolous class action lawsuits.  But plaintiff Thomas Robins and his supporters predict equally ominous results, telling the Court that a ruling for Spokeo could bar not only lawsuits like his but also potentially important civil rights and environmental lawsuits.  

Spokeo operates what it calls a “people search engine,” which collects information from sources ranging from phone books and real estate listings to social networks.  It then compiles that information into a database that can be searched over the Internet for use, for example, in credit and background checks.  Robins contends that Spokeo violated the Fair Credit Reporting Act – which requires companies like Spokeo to “follow reasonable procedures to ensure maximum possible accuracy” of the information that it makes available for use in credit reports – when it published information about him that was not accurate:  it said, among other things, that Robins had a graduate degree (even though he does not); that he has children (which he does not); and that he is in his fifties (which he is not).  He therefore sought to file a class action, seeking the one thousand dollars allowed by FCRA for each violation of the statute, on behalf of a class that could include millions of people.

A federal district court dismissed Robins’s case.  The court ruled that Robins lacked “standing” – the legal right to bring a case – because he could not point to any actual harm from Spokeo’s publication of inaccurate information about him.  The court of appeals reversed, holding that it was enough that Spokeo had violated the FCRA even if Robins had not suffered any concrete harm from that violation.  At Spokeo’s request, the Supreme Court agreed to weigh in earlier this year.

Spokeo regards the case as an easy one.  Article III of the Constitution, it reasons, gives federal courts the power to rule on “Cases” or “Controversies.”  The Supreme Court has held, it continues, that “Cases” or Controversies” require what is called an “injury in fact” – which in turn means a “real world” harm, rather than merely a violation of a statute.  Spokeo acknowledges that Congress can authorize lawsuits based on an actual “real world” harm.  But what it can’t do, Spokeo maintains, is manufacture an injury – that is, say that an injury has occurred just because a statute has been violated, without more.

That analysis does not change, Spokeo argues, simply because in some cases (including this one) Congress specified that plaintiffs can recover damages for a violation of the statute.  When Congress does so, Spokeo contends, it is to make sure that plaintiffs can recover money even when it is difficult to quantify and prove the exact damages; Congress does not do so to provide damages to plaintiffs who haven’t been injured at all.  Nor is it enough, Spokeo suggests, for a plaintiff like Robins to meet the requirement of “real world” harm simply by alleging that the erroneous information in Spokeo’s database harmed his job prospects:  Robins is describing only “a highly attenuated chain of possibilities” that hinge on decisions made by other people – “the precise situation that [the] Court has held insufficient to demonstrate injury in fact.”

Spokeo and its supporters paint a grim picture for the Court of the consequences if Robins’s lawsuit is allowed to go forward.  Focusing on the FCRA specifically, they warn that credit reporting companies – which, they say, already spend “millions of dollars” each year to comply with the law – will be exposed to “potentially massive” lawsuits by consumers who may not have actually been harmed, which will in turn making it harder and more expensive to obtain credit.  Spokeo and its supporters add that allowing such lawsuits will be particularly perverse given that consumers can sometimes benefit from violations of the FCRA – for example, when an error means that a delinquent credit card debt shows up as having been paid.

But the consequences of a ruling for Robins will have a ripple effect far beyond the FCRA, Spokeo and its supporters contend.  A ruling for Robins will make it much easier to bring all kinds of class actions, argues the U.S. Chamber of Commerce, which filed a brief supporting Spokeo, because plaintiffs will need to show only that a law has been violated, even if the violation affects individual class members differently or not at all.  Indeed, the Chamber of Commerce suggests, people will file lawsuits “precisely because there is no injury,” which will allow opportunistic plaintiffs’ lawyers “to obtain certification of massive classes that would be impossible if class members had experienced real, inherently individual, injuries.”

Technology companies like eBay, Facebook, and Twitter also chime in to support Spokeo, telling the Court that they could be “disproportionately susceptible” to being sued if lawsuits like this one are allowed to go forward because they work on a global scale and reach “billions of people,” “usually at little or no cost.”  And the tech companies push back against any suggestion that private plaintiffs like Robins need to be able to bring lawsuits to keep companies accountable; they emphasize that federal officials are actively enforcing statutes like the FCRA, the Wiretap Act, and the Telephone Consumer Protection Act.

Robins counters that his lawsuit is intended to address a problem that is both real and substantial.  Although Spokeo knows that its database and the reports that it generates contain significant amounts of inaccurate information, it’s hard for an individual who learns that Spokeo is publishing erroneous information about him to correct it, because “Spokeo has no effective system for allowing them to do so.”  This is exactly the kind of scenario Congress had in mind when it passed the FCRA, to give consumers redress when companies knowingly fail to comply with the law and inaccurate credit reports are created as a result.

More broadly, Robins contends, his lawsuit is hardly remarkable.  He characterizes the practice of allowing lawsuits based on a violation of a legal right, without having to show actual harm, as a well-established one dating back to the fourteenth century.  For example, landowners could file lawsuits for trespassing even if there was no real harm from the incursion on their land.  And he invokes the legendary Chief Justice John Marshall and the seminal nineteenth-century case of Marbury v. Madison, in which the Supreme Court famously ruled that it is the Court’s job to say what the law is:  at the same time, he says, the Court held that, if there is a legal right, then there is a right to bring a lawsuit when that right is violated.  Indeed, Robins adds, the Court itself has recognized this principle, allowing lawsuits by fair housing “testers” and individuals seeking to review public records to go forward when the only harm that they alleged was the violation of the relevant statutes.

Even if the Court ultimately agrees with Spokeo that a “real world” harm is required, Robins has two fall-back arguments.  The first is that he has such a harm – to his wallet.  Spokeo and Robins, the argument goes, have a legal dispute over the statutory damages that hinges on whether the company violated his rights under the FCRA.  And the Court doesn’t have to decide more generally whether a plaintiff like Robins can bring a lawsuit based solely on a violation of a statute, because at a minimum Robins historically would have been able to bring these kinds of claims in a lawsuit for defamation.

Much like Spokeo, Robins and his supporters foresee a bleak future, although for very different reasons, if the other side’s position prevails.  They reiterate that companies which compile information for credit and background checks frequently get their facts wrong – falsely reporting, for example, that individuals were on the government’s “terrorist watch list” or had criminal convictions.  Although that kind of incorrect information may play a key role in an employer’s decision about whether to offer someone a job, they emphasize, someone who is denied a job based on that information likely will not have another opportunity to compete for the position.  But on Spokeo’s theory, he also would not be able to bring a lawsuit under the FCRA because he did not suffer a “real world” harm.  And contrary to the assurances by Spokeo supporters Facebook and Twitter that lawsuits like Robins’s are not necessary because the federal government will enforce federal privacy laws, the privacy rights group Center for Democracy and Technology tells a different story:  it describes a “digital era in which data brokers routinely acquire, access, compile, analyze, and sell vast data stores of consumers’ personal information, transactions, and behaviors,” but “with little regulation or market incentive to ensure that information is accurate, timely, and used in a manner compliant with existing law.”

Beyond credit reports and background checks, Robins’s supporters warn that a ruling for Spokeo could imperil other kinds of important lawsuits as well.  For example, they contend a narrow reading of the injury requirement could make it harder to stop patent abuse, because the public interest groups and trade associations that are often in the best position to challenge patents might lack standing because they cannot point to a “real world” harm.  Pension rights advocates argue that a ruling for Spokeo would make it harder for employees to recover for violations of their rights under federal employee retirement laws until they have actually lost retirement benefits – at which point it could be too late.  And civil rights groups filed a brief to express their concern that a decision in Spokeo’s favor would at a minimum call into question their ability to use testers to ferret out violations of the Fair Housing Act.

Recommended Citation: Amy Howe, Argument preview: Justices to tackle key standing question, SCOTUSblog (Nov. 1, 2015, 5:39 PM),