In a 6-2 decision, the Supreme Court, in an opinion authored by Justice Alito, held that the Ninth Circuit’s Article III standing analysis in Robins v. Spokeo was incomplete because it focused solely on whether the plaintiff had alleged a particularized injury, and failed to assess whether the alleged injury was “concrete”.  Although Spokeo was not a false advertising case, the majority’s decision may have ramifications in false advertising class actions.

Spokeo operates a website that allows users to search for information about individuals by inputting their name, email address or phone number. Spokeo searches a number of databases and returns information such as the individual’s address, phone number, marital status, approximate age, occupation, finances, shopping habits and musical preferences.  Spokeo’s profile for the plaintiff, Thomas Robins, stated that he was married, has children, is in his 50’s, has a job and is relatively affluent – none of which is correct, according to Robins.  Miffed, Robins sued Spokeo on behalf of himself and a purported class of similarly situated individuals for violating the Fair Credit Reporting Act (FCRA), which requires, among other things, that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy” of consumer reports.

The district court dismissed Robins’ complaint with prejudice, finding that he had not adequately pled an injury in fact under Article III. The Ninth Circuit reversed, citing its precedent and observing that “the violation of a statutory right is usually a sufficient injury in fact to confer standing.”  The Ninth Circuit concluded that Robins satisfied the injury in fact requirements of Article III because he alleged that “Spokeo violated his statutory rights, not just the statutory rights of other people,” and because Robins’ “personal interests in the handling of his credit information [were] individualized rather than collective.”  (Emphasis in original).

Justice Alito first reiterated, based on prior Supreme Court decisions, that to establish injury in fact, an injury both must be particularized, in that it affects the plaintiff in a personal and individual way, andconcrete, in that it actually exists.  The Court concluded that the Ninth Circuit’s analysis improperly focused on the particularity requirement to the exclusion of the concreteness requirement.  Robins’ allegation that he suffered a violation of his statutory right went to particularity but not concreteness.  So, too, did the Ninth Circuit’s finding that the alleged FCRA violation implicated Robins’ personal interests in the handling of his credit information.

The Supreme Court elaborated that “a plaintiff [does not] automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Justice Alito observed that if, for example, Spokeo had disseminated an inaccurate zip code, while this might amount to a technical violation of the FCRA it would be difficult to imagine such a violation resulting in any concrete harm.  Accordingly, the Court held, the Ninth Circuit should have considered whether the procedural violations of the FCRA alleged by Robins entailed a degree of risk sufficient to meet Article III’s concreteness requirement.

The “quick read” of Spokeo by some other commentators is that the decision’s practical impact will be minimal.  We are not so sure; we think Spokeo may have repercussions for false advertising class action litigants, especially in the Ninth Circuit where plaintiffs can no longer get away with pleading only a particularized injury.  As a result of this decision, class action plaintiffs may feel pressure to articulate a theory of concrete harm beyond the usual allegation that they would not have bought the product but for the alleged false representation (an allegation that, even if accepted as true at the pleading stage, does not necessarily reflect any concrete injury).  For their part, class action defendants should be on the lookout for situations where, despite having pled reliance on the alleged false representation, the plaintiff has not alleged, or cannot prove, that she or he suffered any concrete injury as a result of buying the product.