April 27, 2015

Supreme Court grants important “standing” case

By Deborah J. La Fetra Senior Attorney

Thomas Robins, an unemployed man, sued Spokeo Inc., which runs a website that collects and publishes consumer “credit estimates,” for willful violations of the Fair Credit Reporting Act (FCRA), because it published false information, such as Robins was married, had a graduate degree, and was wealthy.  Publication of any false information is prohibited by the statute, but the  trial court held that publication of these particular “facts” did not cause Robins any real injury. Therefore, he lacked standing to sue under Article III of the United States Constitution, which permits federal courts to hear only “cases or controversies,” defined as cases brought by plaintiffs who have suffered actual (not speculative) harm that can be redressed by court action.  The Ninth Circuit Court of Appeals reversed on the theory that any statutory violation sufficed to confer standing.  Today, the Supreme Court granted Spokeo’s petition for a writ of certiorari in Spokeo, Inc. v. Robins, as  PLF had urged in its amicus brief.

This is an extremely important case because Robins purports to represent an entire class of people allegedly “injured.”  Leveraging his own non-injury into a class action means that he is seeking substantial statutory damages—potentially running to tens or hundreds of millions of dollars—for technical violations that caused no harm.  The Ninth Circuit decision encourages plaintiffs to bring such actions, survive dismissal, and succeed in certifying a class.  Given the potential for exorbitant damage awards, these actions impose massive transaction costs and are difficult to defeat early in the litigation process.   “No harm” lawsuits—particularly “no harm” class actions—are a drain on both economic and judicial resources, to no one’s benefit except the plaintiffs’ bar.  PLF will, of course, be filing an amicus brief on the merits of the case.

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