On May 16, 2016, the Supreme Court of the United States handed down its decision on Spokeo v. Robins, which provided new insights into the requirements to bring a lawsuit in federal court – and may serve as a valuable tool for defendants in the future. Plaintiffs in federal court must have “standing” to sue, meaning that the plaintiff must have suffered an actual, particularized injury, related to the defendant’s conduct, which the court can redress. Previously, some plaintiffs had claimed that the violation of a federal law alone, even if it did not cause the plaintiff to suffer an actual injury as a result, could give them standing to sue in federal court. The Supreme Court affirmed that a technical violation alone – meaning a violation that results in no actual, particularized injury to the plaintiff – does not grant standing.
In this case, Robins claimed Spokeo, a website that lets users search a person’s background by aggregating data from online and offline sources, compiled a report about him that contained false information in violation of the Fair Credit Reporting Act (FCRA). The trial court had originally dismissed Robins’s case by finding that Robins lacked standing, as he had not suffered any tangible harm (such as the denial of a job or a negative mark on his credit score). However, the Ninth Circuit Court of Appeals reversed that decision and found that the false information contained about the Plaintiff was sufficient to state a claim and show injury under FCRA.
On review, the Supreme Court held that the Ninth Circuit’s standing analysis had been “incomplete.” The Supreme Court explained that a concrete injury must be “real” and not merely “abstract,” even if that injury is intangible. Thus, the Supreme Court reiterated an actual injury requirement for standing and that a technical violation of the law, on its own, does not necessarily give a Plaintiff the right to sue.
Ultimately, the Supreme Court did not address whether Robins would be able to satisfy this requirement and returned the case to the lower courts to determine that issue. Although the full extent of the Spokeo decision will not be felt for some time to come, this decision has an immediate impact on consumer law violation claims, which often amount to little more than technical violations of the law, and it may have far reaching consequences on claims brought on the alleged violations of other federal laws. For example, in the context of the Fair Debt Collection Practices Act (the “FDCPA”), until now, in determining whether a communication is false or misleading in violation of the FDCPA, courts have looked to whether the communication would violate a “least sophisticated” or “unsophisticated” consumer. The Third Circuit recently stated that “the standard is an objective one, meaning that the specific plaintiff need not prove that she was actually confused or misled, only that the objective least sophisticated debtor would be,” but that standard may soon receive much more scrutiny under Spokeo. Businesses facing lawsuits under a variety of federal statutes, such as the Electronic Fund Transfers Act, Truth in Lending Act, Real Estate Settlement Procedures Act, and so on, should consult with their attorneys on whether there is a potential Spokeo standing defense that can assist them in their lawsuits.