Today the U.S. Supreme Court ruled that the violation of a federal statute does not in itself confer Article III standing to sue in federal court, unless that violation results in actual or threatened “concrete injury” to the plaintiff. Spokeo, Inc. v. Robins, No. 13-1339, 2016 WL 2842447 (U.S. May 16, 2016). The Court, however, declined to elaborate on the nature of the injury required to establish standing, and instead remanded the case to the Ninth Circuit to determine whether the plaintiff demonstrated both a concrete and a particularized injury.

The Supreme Court’s decision is a mixed result for class action defendants. On the one hand, the decision should halt the wave of “no injury” class actions against businesses for technical violations of federal statutes, such as the Fair Credit Reporting Act (FCRA, which was at issue in Spokeo), the Fair and Accurate Credit Transactions Act (FACTA), and the Telephone Consumer Protection Act (TCPA). Spokeo makes clear that a “bare procedural violation” of a federal statute—unaccompanied by actual or threatened injury—is insufficient to confer standing. On the other hand, the Court provided little guidance on precisely what kinds of injuries and statutory violations will satisfy Article III, thereby ensuring that courts and litigants will continue to grapple with these issues.

The Decision Below

Spokeo involved an online search engine that generated an allegedly inaccurate profile of the plaintiff. The profile stated that the plaintiff was married, had children, was in his 50’s, had a graduate degree, held a job in a professional or technical field, and was relatively affluent. The plaintiff claimed that all of this information was incorrect; that the profile was posted at a time when he was unemployed and looking for work; and that he suffered harm to his employment prospects because the profile made it appear that he was overqualified for the jobs he wanted and less mobile due to family responsibilities.

The plaintiff filed a federal class action suit alleging that Spokeo had willfully violated the FCRA by failing to follow “reasonable procedures to assure maximum possible accuracy” of consumer reports.¹ The district court dismissed the case for lack of subject matter jurisdiction, but the Ninth Circuit reversed. The Ninth Circuit ruled that the “violation of a statutory right is usually a sufficient injury in fact to confer standing.” The court specifically declined to decide whether the plaintiff’s alleged injuries (harm to employment prospects, anxiety) were sufficient for Article III standing, because the FCRA “does not require a showing of actual harm when a plaintiff sues for willful violations.” The court ruled that the plaintiff had Article III standing because he alleged that “Spokeo violated his statutory rights, not just the rights of other people,” and that his “personal interests in the handling of his credit information are individualized rather than collective.”²

The Supreme Court’s Opinion

The Supreme Court reversed, holding that the Ninth Circuit had applied an “incomplete” analysis of Article III standing—specifically, the requirement that the plaintiff have sustained an “injury in fact.” The Supreme Court held that to establish an injury in fact, a plaintiff must show that he or she “suffered an invasion of a legally protected interest that is [1] concrete and particularized and [2] actual or imminent, not conjectural or hypothetical.” The Court held that the Ninth Circuit improperly “elided” the independent requirement of concreteness with the requirement that an injury be particularized.

The Court held that for an injury to be “concrete,” it must be “de facto”—in other words, it must “actually exist” and be “real,” not “abstract.” But a concrete injury can be “tangible” or “intangible,” “actual” or “threatened.”

The Court noted that although intangible harms can be more difficult to identify than tangible injuries , two factors play important roles in determining whether intangible harm constitutes an injury in fact:  historical practice (that is, whether the alleged intangible harm “has a close relationship to a harm that has been traditionally regarded as providing a basis for a lawsuit in English or American courts”) and congressional judgment in identifying intangible harms that satisfy Article III.

The Court then set out a series of general principles for courts to apply when determining whether an intangible injury resulting from a violation of a federal statute satisfies Article III.

On the one hand:

• Congress “cannot erase Article III’s standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing.”

• A plaintiff does not “automatically” satisfy Article III “whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.”

On the other hand:

• “Congress is well positioned to identify intangible harms that meet minimum Article III requirements.”

• The violation of a “procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact; in such a case, a plaintiff need not allege any additional harm beyond the one identified by Congress.”

• Congress has the power “to elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate at law.”

According to the Court, these general principles “tell us two things” about the FCRA claim at issue in Spokeo:

• “Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk.”

• “Robins cannot satisfy the demands of Article III by alleging a bare procedural violation.”

The Court then provided two examples of FCRA violations that “may result in no harm”:

• “For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency’s consumer information, that information regardless may be entirely accurate.”

• “In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.”

The Court, however, “express[ed] no view about any other types of false information that may merit similar treatment.”

The Dissent

Justice Ginsburg’s dissent (joined by Justice Sotomayor) “agree[d] with much of the Court’s opinion,” but “part[ed] ways” with Justice Alito’s majority opinion over whether a remand was necessary to determine whether the plaintiff’s injury was concrete. Justice Ginsburg determined that it was: “Far from an incorrect zip code, Robins complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market. The FCRA’s procedural requirements aimed to prevent such harm.”

_{[1]  15 U.S.C. § 1681e(b).}

_{[2] Robins v. Spokeo, Inc., 742 F.3d 409, 412-13 (9th Cir. 2014).}