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From Banking and Finance Law Daily, April 27, 2015

Supreme Court to consider injury needed to create standing

By Richard A. Roth, J.D.

The Supreme Court has granted a website operator’s request that it consider whether a consumer who claimed no actual injury had standing to sue for alleged Fair Credit Reporting Act violations. According to the U.S. Court of Appeals for the Ninth Circuit, constitutional standing to sue could be based simply on the website operator’s alleged violation of a right created by the act (see Robins v. Spokeo, Inc., discussed in Banking and Finance Law Daily, Feb. 6, 2014).

Spokeo, Inc., operates a “people search engine” website that offers users personal information about individuals, including information on the subject’s marital status, education, and financial condition. The consumer claimed that the website included inaccurate information about him, saying incorrectly that he held an advanced degree and was wealthy, and that this was both interfering with his ability to get a job and causing him emotional distress. He also asserted that Spokeo knew the information was inaccurate and that the company marketed its information for purposes that were covered by the FCRA, making it a consumer reporting agency subject to the Act.

At Spokeo’s request, a federal district court judge dismissed the complaint. According to the judge, the consumer had not described any actual or imminent harm resulting from the inaccurate information. He had raised only the possibility of an injury in the future. This did not constitute an injury in fact that would create federal court jurisdiction, the judge decided.

Standing to sue. The U.S. Constitution gives federal courts subject matter jurisdiction only over “cases and controversies,” and this requires a plaintiff to establish standing to sue. To establish standing, the plaintiff must demonstrate that:

  • he has suffered an injury in fact—a concrete and particularized, actual or imminent, injury;

  • the injury can be fairly traced to the defendant’s challenged actions; and

  • the court likely has the ability to redress that injury.

Spokeo’s petition for certiorari challenges the Ninth Circuit’s decision that the consumer could have suffered an injury in fact based only on a violation of the FCRA’s requirements relating to the accuracy of information that is contained in consumer reports, in the absence of any “concrete harm” resulting from the inaccuracy.

Appellate court decision. According to the Ninth Circuit, a person suing for a violation of a right granted by a statute does not need to show an actual injury; rather, he needs to describe some “concrete, de facto” injury. In this case, the consumer had to show that Spokeo had violated his statutory right, not someone else’s right. Also, he had to show that the statutory right in question protected against individual harm rather than collective harm. The consumer had met both tests, the court said.

CFPB position. In accepting Spokeo’s petition, the Court seemingly rejected arguments in an amicus curiae brief by the Consumer Financial Protection Bureau urging the Court not to review the appellate court decision. According to the bureau’s brief, the Ninth Circuit made the correct decision and there is no conflict with decisions by other U.S. appellate courts that calls for a Supreme Court resolution.

The bureau argued that Spokeo’s publication of inaccurate information about the consumer caused a concrete, particularized injury to a legally protected interest that affected the consumer in a personal way. Congress has the authority to give people the ability to sue to vindicate their freedom from being the subjects of inaccurate information, the bureau maintained.

Being a subject of inaccurate information is a tangible harm, the CFPB emphasized. It is an invasion of privacy, and it is a concrete harm regardless of whether the consumer can “prove some further consequential injury” (see Banking and Finance Law Daily, March 17, 2015).

The case is No. 13-1339.

Supreme Court docket. For details about this and other petitions and cases pending before the Supreme Court, please consult this list of selected banking and finance law cases awaiting decision in the 2014 term.

Attorneys: Andrew J. Pincus (Meyer Brown LLP) for Spokeo, Inc. Deepak Gupta (Gupta Beck PLLC) for Thomas Robins. Donald B. Verrilli Jr., Solicitor General, for the United States.

Companies: Spokeo, Inc.

MainStory: TopStory CFPB FairCreditReporting

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