Standing Reservations: Courts Divide on Injury Claims

By Dawn Causey, Thomas Pinder and Andrew Doersam

The Supreme Court’s decision in Spokeo v. Robins was supposed to bring order to the wild frontier of plaintiffs manufacturing injuries in order to gain standing to sue under Article III of the Constitution. Unfortunately, courts attempting to apply Spokeo have done so in a confusing and inconsistent manner, leaving us in the wild, wild west for Article III standing.

Thomas Robins brought a class action against Spokeo, the “people search engine,” contending that it willfully violated the Fair Credit Reporting Act by failing to ensure the accuracy of report information about him. Spokeo’s search results made Robins appear wealthy and rich, but in real life, he was single and not making a lot of money. The information was technically inaccurate, though not harmful per se.

The lower court dismissed Robins’ claims for lack of an Article III injury, and the Ninth Circuit reversed. In May 2016, the Supreme Court held that “a bare procedural violation, divorced from any concrete harm,” was insufficient. Put another way, plaintiffs must claim an injury in fact that is concrete and particularized to them. The court held that the Ninth Circuit failed to apply the correct standing test and remanded the case back to the lower court.

The Ninth Circuit took another stab at evaluating Robins’ alleged injuries and, once again, found that Robins established standing. The Ninth Circuit concluded that Robins’ claim of an intangible statutory injury—without pleading any additional harm—was sufficient for Article III standing. The Ninth Circuit noted that Congress created the FCRA to protect consumers’ concrete interests in accurate credit reporting about themselves.

And again, Spokeo petitioned the Supreme Court for review. Spokeo argued that the Court’s decision that some intangible injuries could meet the standing threshold has spurred “widespread confusion” that “cried out” for an immediate resolution. However, the Supreme Court denied review without comment.

The Supreme Court made clear that courts must ensure that harm resulting from a statutory violation is concrete. Meaning, a plaintiff must allege real-world harm with real-world consequences. Puzzlingly Robins did not identify any specific job opportunity that he lost as a result of the Spokeo report, did not show any denial or weakening of credit from the inaccurate report and did not even show any negative financial consequences. But the Ninth Circuit concluded that the dissemination of inaccurate but positive information that might affect someone’s employment prospects is a “concrete harm” sufficient for Article III standing.

Certainly, the Ninth Circuit is not alone in weighing the meaning of the Supreme Court’s Spokeo decision. In litigation over a data breach at Horizon Healthcare Services, the Third Circuit held that the alleged unauthorized dissemination of a plaintiff’s private information was not a mere procedural violation of the FCRA, but was the very kind of injury the FCRA was designed to prevent.

However, the Second and Seventh Circuits have split the other way. For instance, the Seventh Circuit’s Groshek v. Time Warner Cable decision arose from serial FCRA plaintiff Groshek’s claim that when he applied for a job with Time Warner, the company failed to provide him a statutorily required “clear and conspicuous disclosure” that it would be obtaining his credit report. The Seventh Circuit noted that if Time Warner technically violated the FCRA, Groshek needed to show he suffered a concrete injury. The court concluded he could not. Additionally, in Crupar-Weinman v. Paris Baguette, the Second Circuit concluded that a plaintiff lacked standing to pursue a claim under the Fair and Accurate Credit Transactions Act for printing credit card expiration dates on receipts in violation of the statute.

Taken together, the circuit split signals the continued uncertainty on how to apply the Supreme Court’s concrete standard. Plaintiffs may now establish standing simply by pleading a statutory violation that amounts to anything more than meaningless technicality. And the strength of plaintiffs’ pleadings may depend more on which circuit your branch is located. This uncertainty could lead to outlaw plaintiffs that forum shop for the lowest threshold to prove an injury.

Dawn Causey is general counsel at ABA, where Thomas Pinder is SVP for litigation and Andrew Doersam is a paralegal.