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US Supreme Court Considers Whether Mere Statutory Violation Provides Standing in Spokeo, Inc. v. Robins

By Jeremy M. Creelan

Supreme Court 35719-0001
On November 2, the U.S. Supreme Court will hear oral argument in Spokeo, Inc. v. Robins, No. 13-1339, which could have far-reaching implications for consumer-related class actions. 

The plaintiff, Thomas Robins, filed a putative class action in federal district court in California alleging that Spokeo, Inc., willfully violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq..  Robins alleged that Spokeo published inaccurate information about him, and thus threatened his employment prospects. 

Among other requirements, the FCRA requires consumer credit reporting agencies to “follow reasonable procedures to assure maximum possible accuracy of” consumer reports, 15 U.S.C. § 1681e(b), and includes a private right of action for consumers to obtain actual damages for violation of these requirements.

The district court dismissed Robins’ complaint under FRCP 12(b)(1) for lack of Article III standing. The district court reasoned that he lacked standing because he had failed to allege that the statutory violations he identified had caused him any “actual or imminent harm.” 

The Ninth Circuit reversed, finding that “the violation of a statutory right is usually a sufficient injury in fact to confer standing.” The court rejected the argument that, to have standing under Article III, a plaintiff must allege actual harm instead of just the violation of a statutory right. 

The question presented by this case has produced a circuit split. Like the Ninth Circuit in this case, the Sixth and Seventh Circuits have held that a plaintiff’s case under FCRA may proceed without proof of actual, rather than simply statutory, injury. See Beaudry v. TeleCheck Services, Inc., 579 F.3d 702, 705–07 (6th Cir. 2009); Murray v. GMAC Mortgage Corp., 434 F.3d 948, 952–53 (7th Cir. 2006).  By contrast, in the ERISA context both the Second and Fourth Circuits have held that a plaintiff must allege an actual, individual injury beyond simply the violation of her statutory rights. See Kendall v. Employees Retirement Plan of Avon Prods., 561 F.3d 112, 121 (2d Cir. 2009); David v. Alphin, 704 F.3d 327, 338-39 (4th Cir. 2013).

As Spokeo argued to the Supreme Court to persuade the Justices to hear the case, the Ninth Circuit’s decision effectively collapses the customary three-part test of Article III standing—injury-in-fact, causation, and redressability—into the single question of redressability. The implications for a rule eliminating any actual injury as a requirement for standing in class actions are significant.  Ironically, such a rule effectively renders it easier for a plaintiff purporting to represent a class to survive both a standing challenge and class certification simply by citing statutory violations than it would be for her if she tried to allege and demonstrate actual injuries from such violations.  If the Supreme Court accepts the Ninth Circuit’s reasoning, the case could produce a very large increase in class actions under various federal statutes even outside of FCRA.   

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