The Spokeo saga continues. As our sister blog, the Data Privacy Monitor, reported here, the United States Supreme Court’s May 2016 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1550 (2016) (Spokeo II) vacated and remanded a Ninth Circuit decision (Spokeo I) for failure to consider the concreteness prong of the “concrete and particularized” test for constitutional Article III standing. Other courts have since grappled with Spokeo II’s impact on standing analysis, for example, as reported here. But on Aug. 15, 2017, on remand from the Supreme Court, the Ninth Circuit applied the Spokeo II framework to the case and ultimately came out the same way – finding again that the plaintiff has standing. Robins v. Spokeo, Inc., No. 11-56843, 2017 WL 3480695 (9th Cir. Aug. 15, 2017) (Spokeo III).
As those familiar will recall, Spokeo operates a website that searches various sources to compile profiles on individuals that contain details about the person’s life. The plaintiff sued Spokeo in a putative class action claiming that a consumer profile Spokeo created and published on him contained inaccurate information on his age, marital status, wealth, education level and profession. His suit was based on the Fair Credit Reporting Act (FCRA), which imposes certain procedural requirements on consumer reporting agencies and gives affected consumers a right to sue for statutory damages (otherwise viewed as statutory penalties).
On remand from the Supreme Court, the Ninth Circuit set out to analyze whether the plaintiff’s alleged statutory violation was a sufficiently concrete injury to confer standing. The court concluded that it was.
The Ninth Circuit began its analysis by acknowledging Spokeo II’s holding that violation of a statute, by itself, does not necessarily confer standing even when Congress grants a right to sue for statutory damages based on the violation. As to what more was required, the court characterized the concreteness element as requiring “some real – as opposed to purely legal – harm to the plaintiff.” To determine whether the statutory violation amounts to that “real” harm, the Ninth Circuit adopted the test employed by the Second Circuit in a post-Spokeo II Truth in Lending Act case addressing standing. That test asked (1) whether Congress designed the statutory right to protect a plaintiff’s concrete interest and (2) whether the violation of the statutory right presents a real risk of harm to the plaintiff’s interest. If so, then the claimed violation was sufficient to satisfy the concreteness requirement for Article III standing.
In answering the first question, the Spokeo III court focused on why Congress enacted the FCRA and the harms that inaccuracies in consumer credit reports can cause. The court made its own observations on the “ubiquity and importance” of consumer reports in modern life and cited the congressional record and prior cases recognizing the harms of inaccurate credit reporting to conclude that “it makes sense that Congress might choose to protect against such harms.” The court then bolstered its reasoning by analogizing to “reputational and privacy interests” (such as libel and slander) that have long been protected by the common law without necessarily requiring proof of individual harm. Rather than requiring the FCRA harms to “exactly track” a recognized common law harm, the court found it sufficient that the harm Congress chose to guard against with the FCRA was “closely similar in kind” to those traditionally protected at common law. Accordingly, the Ninth Circuit found that the FCRA provisions at issue were designed to protect against a concrete harm.
Moving to the second question, the court considered whether the alleged violations actually harmed or created a “material risk” of harm to the concrete interest the FCRA was designed to protect. The court tackled this question by comparing its view of what would not be actual harm with the plaintiff’s allegations. In this regard, the court’s analysis put “trivial or meaningless” technical violations (e.g., a misreported ZIP code that would likely not affect anything) on the insufficient end of the spectrum, while finding that the plaintiff’s alleged violations could be deemed a real harm (e.g., misreported educational background that employers would rely on). The court recognized that some of the alleged inaccuracies could have been worse, or could have even been positive or “flattering” for the plaintiff (e.g., education level being reported higher than reality), but ultimately concluded that the nature of the misreported information was more important than determining whether it actually helped, harmed or both. In other words, regardless of the outcome of the misreports, the court found it sufficient that they were not “mere technical violations” and at least had the real potential to harm.
The court then concluded its analysis by distinguishing between threat of harm and threat of the statutory violation itself. While a threatened statutory violation would not satisfy standing requirements, the court concluded that an actual violation accompanied by a threatened harm was sufficient to confer standing.
The Ninth Circuit’s analysis raises interesting questions about the scope of its application. By considering hypothetical, theoretical injuries in addition to those injuries actually alleged, this decision might be seen as watering down the “concreteness” requirement for standing. Moreover, in the class action context, the Ninth Circuit stated that “some examination of the nature of the specific alleged risk of harm to the concrete interest that FCRA protects” is necessary, thus raising the question whether claims are necessarily amenable to class treatment. For example, can a plaintiff with an error in her educational history represent the interests of an absent class member with an error regarding his work history? How does one identify and exclude claimants with “minor” inaccuracies that are insufficient for an injury? Similarly, are all of the various types of inaccuracies sufficiently similar so that common issues predominate? We will continue to monitor developments in the law as courts continue to grapple with Spokeo II.