The California legislature made headlines on June 28 when it passed—and the Governor signed—AB 375, a sweeping new data privacy bill known as the “California Consumer Privacy Act.” As further described in our colleagues’ report, the Act grants broad new privacy rights to customers of certain companies doing business in California. In addition, the Act both provides for enforcement by the California Attorney General and creates a private right of action for some violations. Because of the latter feature, this new legislation may pave a new road to court for class actions in the wake of data breaches affecting California consumers.
Hundreds of lower courts have interpreted and applied the Supreme Court’s decision in Spokeo, Inc. v. Robins over the past ten months. We will provide a more comprehensive report on the post-Spokeo landscape in the near future, but the overarching takeaway is that the majority of federal courts of appeals have faithfully applied Spokeo’s core holdings that “Article III standing requires a concrete injury even in the context of a statutory violation,” and 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.” Nonetheless, a handful of other decisions have been receptive to arguments by the plaintiffs’ bar that Spokeo did not make a difference in the law of standing, and that the bare allegation that a statutory right has been violated, without more, remains enough to open the federal courthouse doors to “no-injury” class actions.
Two recent decisions by the Seventh and Third Circuits illustrate these contrasting approaches.
Can you have a class action if class members can’t reliably be found? That question is at the heart of the debate over ascertainability—one that has divided the federal courts. Earlier this week, the Ninth Circuit weighed in, holding in Briseno v. ConAgra Foods, Inc. (pdf) that plaintiffs need not demonstrate “an administratively feasible way to identify class members [as] a prerequisite to class certification.”
That conclusion is disappointing.
A peculiar thing happened after the Supreme Court announced its decision in Spokeo, Inc. v. Robins (pdf) on Monday.
Even though the Court ruled in favor of Spokeo—vacating the Ninth Circuit’s ruling that the plaintiff had standing to sue and holding that the court of appeals had applied a legal standard too generous to plaintiffs—both sides declared victory. (Full disclosure: I argued on behalf of Spokeo in the Supreme Court.)
What’s going on?
The Supreme Court today issued its decision in Spokeo, Inc. v. Robins (pdf), a closely-watched case presenting the question whether Article III’s “injury-in-fact” requirement for standing to sue in federal court may be satisfied by alleging a statutory violation without any accompanying real world injury.
The Court held that a plaintiff must allege “concrete” harm—which it described as harm that is “real”—to have standing to sue, and that the existence of a private right of action under a federal statute does not automatically suffice to meet the “real” harm standard. The decision is likely to have a meaningful impact on class action litigation based on alleged statutory violations. Justice Alito authored the opinion for the Court, joined by Chief Justice Roberts and Justices Kennedy, Thomas, Breyer, and Kagan. (We and our colleagues represented Spokeo before the Supreme Court.)
Under Article III of the U.S. Constitution, a plaintiff must allege that he or she has suffered an “injury-in-fact” to establish standing to sue in federal court. Today, the Supreme Court granted certiorari in Spokeo, Inc. v. Robins, No. 13-1339, to decide whether Congress may confer Article III standing by authorizing a private right of action based on a bare violation of a federal statute, even though the plaintiff has not suffered any concrete harm.
The Court’s resolution of this question in Spokeo could affect a number of different types of class actions that have been instituted in recent years seeking potentially massive statutory damages based solely on allegations of technical violations of federal statutes—even though the plaintiff has not suffered any of the different types of “injury-in-fact” usually required to establish standing. We represent the petitioner, Spokeo, Inc.
Congress has passed a number of statutes that permit recovery of statutory damages for statutory violations even in the absence of any proof of actual injury. These statutes are particularly common in the privacy and financial-services contexts. The statute at issue in Spokeo—the Fair Credit Reporting Act (FCRA)—stands at the intersection of these two fields. Among other things, it requires “consumer reporting agencies” to “follow reasonable procedures to assure maximum possible accuracy of” consumer reports. 15 U.S.C. § 1681e(b). It also requires the provision of notices to persons who provide information to a consumer reporting agency and to those who use the services of such agencies. Id. § 1681e(d). For a “willful” violation of these sections, a prevailing plaintiff may recover statutory “damages of not less than $100 or not more than $1,000,” id. § 1681n(a)(1), and also may seek punitive damages, id. § 1681n(a)(2).
The plaintiff in Spokeo, Thomas Robins, seeks to recover statutory damages on behalf of a putative class for alleged violations of FCRA. Specifically, Robins alleged that Spokeo, which is a “people search engine,” is a “consumer reporting agency” subject to FCRA and that it had published inaccurate information about him, including that he was married and that he was better situated financially than he actually is. Robins also alleged that Spokeo had failed to provide the notices required under the FCRA. The district court dismissed the case for lack of standing, concluding that Robins had not alleged the injury-in-fact necessary to satisfy Article III.
The Ninth Circuit reversed (pdf). It concluded that the “creation of a private cause of action to enforce a statutory provision implies that Congress intended the enforceable provision to create a statutory right,” and that “the violation of a statutory right is usually”—on its own—“a sufficient injury in fact to confer standing” when “the statutory cause of action does not require a showing of actual harm.”
Spokeo petitioned for certiorari (pdf), explaining that there is a persistent conflict among the courts of appeals over whether the allegation of a statutory violation—a bare “injury-in-law”—is sufficient to establish Article III standing. The petition also pointed to the importance of this question in light of the large number of class actions involving allegations of technical statutory violations that did not cause the plaintiff any concrete harm.
The Supreme Court will hear the case next Term. We look forward to making the case for Spokeo on the merits.
The Supreme Court is currently considering a petition for certiorari in Spokeo Inc. v. Robins (pdf), which raises the question whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute. This question of Article III standing potentially impacts a wide variety of lawsuits that we (and others) view as “no-injury” class actions.
In Spokeo (in which we represent the petitioner), the Supreme Court recently called for the views of the Solicitor General concerning whether certiorari should be granted. It is already clear that the business community views Supreme Court review as essential—at least ten amicus briefs representing the views of seventeen amici were filed in support of the petition.
As observers on all sides watch to see what the Supreme Court will do, the Washington Legal Foundation will be conducting a webinar next Tuesday (December 9) discussing the Spokeo case and the issue of “no-injury” class actions. My colleague Andy Pincus, who is counsel of record in Spokeo, will be speaking on the webinar. More information about the webinar is available here (pdf).
Update: A video of the webinar is available here.