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Standing on Solid Ground: Supreme Court Requires Concrete Harm for Statutory Violations | Missouri & Kansas Class Action Law

Not quite the wrecking ball some hoped it would be, this week’s Supreme Court decision in Spokeo v. Robins created a crack just wide enough to allow a new wave of Article III standing arguments in private actions for statutory violations.

As we discussed in our earlier post, Spokeo is a website that provides users with information about other individuals, including contact data, age, occupation, economic health, and wealth level.  The plaintiff, Thomas Robins, alleged willful violation of the Fair Credit Reporting Act (FCRA) because Spokeo’s website described him inaccurately—as a married 50-year-old, with children, and a high income.  None of the information was correct.  Robins alleged that the inaccurate information injured him when he searched for employment because potential employers saw him as someone who would expect a higher income and likely would be unwilling to relocate.  The district court dismissed the case for lack of Article III standing; the Ninth Circuit reversed.

The issue before the Supreme Court was whether “a mere statutory injury-in-law—standing alone—is sufficient to satisfy the Article III injury-in-fact requirement even when the plaintiff did not sustain any tangible harm.”  To maintain Article III standing in federal court, the plaintiff must show, among other requirements, an injury-in-fact—one that is both concrete and particularized and actual and imminent.  The focus of the decision centered on whether a statutory violation is sufficient to meet both the “concrete” and “particularized” requirements.  Under the FCRA, it is not.  While the Supreme Court agreed Robins identified a particularized harm, it remanded to the Ninth Circuit to determine whether Robins had identified a concrete harm.  The mere violation of his statutory rights did not create a concrete harm.  Robins needs to show actual harm.

The guidance offered by Spokeo on what constitutes actual harm is less than clear.  A mere violation of the FCRA is insufficient.  But what level of actual harm is sufficient, allowing the claim to survive a motion to dismiss for lack of standing?  That question was left to the lower courts, with little guidance.  The Court held that a concrete injury does not need to be tangible.  Indeed, “the risk of real harm” may be able to “satisfy the requirement of concreteness.”  This is allowed in some common law cases, such as libel and slander per se.  The Supreme Court also noted courts are free to look to Congress for instruction on whether an intangible injury is concrete.

Outside of the FCRA, the law was left even murkier.  The Supreme Court did not demolish private actions based merely on statutory violations across the board.  Instead, the Court left open the possibility that in some instances a mere statutory violation might suffice.  “[T]he violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact. In other words, a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.”

Which statutory violations will constitute an injury in fact?  The question was largely left unanswered.  The reach of Spokeo will depend on the lower courts’ interpretation of the case.  Expect to see conflicting case law develop for any number federal statutes creating a statutory private right of recovery, such as the Telephone Consumer Protection Act (TCPA), the Truth in Lending Act (TLA), the Fair Debt Collections Act (FDCA), the Employment Retirement Income Security Act (ERISA), the Real Estate Settlement Procedures Act (RSPA), the Fair Housing Act (FHA), the Americans with Disabilities Act (ADA), the Lanham Act, the Video Piracy Act, and more.  Likely, courts will undertake an analysis of whether the statute creates a private right similar to common law injuries, such as common law trespass noted in the concurring opinion, which require nothing more than a violation of a right to impart injury in fact.  All told, the effect of Spokeo will create a plethora of case law that will provide anything but a definitive resolution of this issue.

In any event, Spokeo is good news for those faced with a class action based on a statutory violation.  In a footnote, the Court reiterated that labeling a claim as a class action does nothing to provide Article III standing to the plaintiff.  In doing so, the Court hinted, as Chief Justice Roberts did in Bouaphakeo, that each individual’s actual harm will need to be examined.  Any inquiry into actual harm suffered by each class member will make certification more difficult.