In a case that could shape the future of data privacy litigation, the Supreme Court recently agreed to review the decision by the U. S. Court of Appeals for the Ninth Circuit under the Fair Credit Reporting Act (FCRA) in Robins v. Spokeo, Inc.  At issue is the extent to which Congress may create statutory rights that, when violated, are actionable in court, even if the plaintiff has not otherwise suffered a legally-redressable injury.

Spokeo is a data broker that provides online “people search capabilities” and “business information search” (i.e., business contacts, emails, titles, etc.).   Thomas Robins (Robins) sued Spokeo in federal district court for publishing data about Robins that incorrectly represented him as married and having a graduate degree and more professional experience and money than he actually had.  Robins alleged that Spokeo’s inaccurate data caused him actual harm by (among other alleged harms) damaging his employment prospects.

After some initial indecision, the district court dismissed the case in 2011 on the grounds that Robins had not sufficiently alleged any actual or imminent harm traceable to Spokeo’s data.  Without evidence of actual or imminent harm, Robins did not have standing to bring suit under Article III of the U.S. Constitution.  Robins appealed.

On February 4, 2014, the Court of Appeals for the Ninth Circuit announced its decision to reverse the district court, holding that the FCRA allowed Robins to sue for a statutory violation: “When, as here, the statutory cause of action does not require proof of actual damages, a plaintiff can suffer a violation of the statutory right without suffering actual damages.” The Court of Appeals acknowledged limits on Congress’ ability to create redressable statutory causes of action but held that Congress did not exceed those limits in this case.  The court held that “the interests protected” by the FCRA were “sufficiently concrete and particularized” such that Congress could create a statutory cause of action, even for individuals who could not show actual damages.

Why Spokeo Matters

If the Supreme Court reverses the Ninth Circuit’s decision, the decision could dramatically redraw the landscape of data privacy protection litigation in favor of businesses by requiring plaintiffs to allege and eventually prove actual damages.  Such a ruling could severely limit lawsuits brought under several privacy-related statutes, in which plaintiffs typically seek statutory damages on behalf of a class without needing to show actual damages suffered by the class members.  Litigation under the FCRA, the Telephone Consumer Protection Act and the Video Privacy Protection Act (among others statutes) all could be affected.