InfoBytes Blog

Supreme Court to Hear Historic FCRA Standing Case During October 2015 Term

On April 27, the United States Supreme Court granted a petition for a writ of certiorari seeking review of a hotly-debated question with potentially far-reaching implications: whether a mere violation of a federal statute, without more, satisfies the “injury-in-fact” standard required for constitutional standing under Article III.  The case at issue involves a plaintiff alleging violations of the Fair Credit Reporting Act (FCRA); specifically, the plaintiff argued that he suffered actual harm when an online search engine, acting as a credit reporting agency (CRA), published inaccurate information about his background and character in violation of FCRA provisions requiring a CRA to ensure accuracy and provide notice regarding the information it disseminates.  The district court ruled that plaintiff failed to demonstrate injury-in-fact without showing more than mere violations of the FCRA.  The Ninth Circuit reversed, holding that the violation of federal statutory rights is sufficient to show constitutional standing, and that a plaintiff need not demonstrate any actual damages in order to file suit.  Notably, the Ninth Circuit did not opine that the “harm” alleged by the plaintiff – the online search engine portrayed him as wealthier and more educated than he actually was – affected him economically by impeding his employment prospects.

The Supreme Court’s decision to hear the widely-followed case has the attention of many.  Ten amicus briefs have been filed over the past year, all highlighting the “substantial impact” the Court’s decision could have.  Currently, numerous federal statutes allow a plaintiff to recover damages based on statutory violations without a showing of actual or concrete injury, including those prominent in the financial industry such as the Real Estate Settlement Procedures Act (RESPA), the Fair Debt Collection Practices Act (FDCPA), and the Truth in Lending Act (TILA), among others.  Despite the Solicitor General’s recommendation against hearing the case, in which the government argued that courts have traditionally provided redress for statutory violations alone, the Supreme Court’s decision will affect the degree to which consumers and classes can utilize federal statutes to recover without proving additional causal injury.  A decision affirming the Ninth Circuit’s decision could arguably open the floodgates to “no-injury” lawsuits, coercing defendants to pay millions in damages without a showing of any actual harm.  Oral arguments for the case will be heard this coming October, at the beginning of the Court’s 2015 term.  Reply and supplemental briefs to the petition can be found here and here, respectively.

FCRA U.S. Supreme Court Spokeo

Ninth Circuit Holds Alleged Statutory Violations Sufficient For Standing Under FCRA

On February 4, the U.S. Court of Appeals for the Ninth Circuit held that a plaintiff’s claim against a data broker alleged to have published inaccurate information about him has standing by virtue of the alleged violation of his statutory rights and need not demonstrate injury. Robins v. Spokeo, Inc., No. 11-56843, 2014 WL 407366, (9th Cir. Feb. 4, 2014). The district court held that the plaintiff failed to allege an injury in fact because his claims that the inaccurate information harmed, among other things, his ability to obtain employment did not sufficiently allege any actual or imminent harm. Applying its own precedent established in a long-running RESPA case that the U.S. Supreme Court declined to review in 2012, the court held that the violation of a statutory right usually is a sufficient injury to confer standing and that statutory causes of action do not require a showing of actual harm. The court determined that violations of statutory rights created by FCRA are concrete injuries that Congress can elevate to the status of legally cognizable injuries and are therefore sufficient to satisfy Article III’s injury-in-fact requirement. Further, the plaintiff adequately pled causation and redressability because (i) an alleged violation of a statutory provision caused the violation of a right created by that provision; and (ii) FCRA provides for monetary damages to redress the violation. The court reversed the trial court and remanded.

FCRA Ninth Circuit Appellate Spokeo