Spokeo v. Robins Recalls the Power of the Well-Pleaded Complaint

On May 16, 2016, the United States Supreme Court ruled on Spokeo, Inc. v. Robins, a class action based on Spokeo’s “willfully” failing to comply with Fair Credit Reporting Act (FCRA) requirements. No. 13-1339 (U.S. Sup. Ct. May 16, 2016), 578 U.S. ___ (2016) at 4 (slip op. available here). Plaintiff Robins alleged that Spokeo, a consumer reporting agency offering aggregate online personal “profiles” for its users (including prospective employers), published inaccurate information about him in violation of the FCRA, which prohibits certain inaccurate reporting. Seeking the statutory penalties available, Robins argued that “he encountered ‘[imminent and ongoing] actual harm to [his] employment prospects’” flowing directly from Spokeo’s conduct. Id., Ginsburg dissenting op. at 2. The U.S. District Court for the Central District of California had dismissed the plaintiff’s claims, finding that “Robins had not ‘properly pled’ an injury in fact” sufficient to establish Article III standing. Id. at 4. The Ninth Circuit reversed on appeal, and the Supreme Court granted certiorari.

In its 6-2 decision authored by Justice Samuel Alito, the Court confirmed that a plaintiff must have suffered—and sufficiently alleged—a “concrete” injury to have Article III standing. The Court cited the test for standing established by Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992), which requires a plaintiff to allege an injury in fact that is “both concrete and particularized,” as well as “actual or imminent.” Slip op. at 7 (internal citations omitted). Justice Alito observed further that an intangible harm, particularly one Congress has identified by statute, can be “concrete” for the purpose of standing. Id. at 9 (internal citations omitted). Although “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies 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” (id. at 9), the “risk of real harm” might satisfy the standing requirement of a concrete injury when invoking a statutory violation. Id. at 10 (emphasis added). Furthermore, the “violation of a procedural right granted by statute can be sufficient in some circumstances,” such that the plaintiff need not allege any “additional harm beyond the one Congress has identified.” Id. (emphasis in original). Without taking a position on the ultimate conclusion, the Court ordered the Ninth Circuit on remand to address “whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement.” Id. at 11.

Notably, Justices Ruth Bader Ginsburg and Sonia Sotomayor would have affirmed the Ninth Circuit’s judgment, indicating in their dissent that the inaccuracies Spokeo allegedly reported regarding Robins’ employment status, relative affluence, and age were sufficiently concrete to establish injury in fact based on the risk of diminishing his desirability as a potential employee. Id., Ginsburg dissenting op. at 2-3.

Statutes designed to protect consumer rights are not, in and of themselves, legal rights, because not all violations result in harm. See slip op. at 10. The potential implications for plaintiffs are significant, however, where allegations of similar statutory violations are readily discounted by defendants as “bare procedural violations” from which no harm can possibly flow. Id. Thus, a properly-framed class action complaint may still successfully plead a defendant’s failure to conform to statutory requirements based on a concrete, though intangible, harm.

Authored by: 
Karen Wallace, Associate
CAPSTONE LAW APC