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From Banking and Finance Law Daily, September 11, 2015

Violation of ‘particularized statutory right’ grants standing to sue, government argues

By Richard A. Roth, J.D.

The Fair Credit Reporting Act gives an individual a legal right to avoid the dissemination of inaccurate information about himself and an ability to sue for damages if that right is violated, according to an amicus curiae brief jointly filed by the Consumer Financial Protection Bureau and the U.S. Solicitor General. A consumer has standing to sue under the U.S. Constitution even if he cannot point to additional consequential harms that arose from the FCRA violation, the government brief in Spokeo, Inc. v. Robins argues.

The consumer’s attempted class action arose from his claims that Spokeo, Inc., operates a website that offers its 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.

A federal district court judge dismissed the suit, deciding that the consumer had not described any actual or imminent harm resulting from the inaccurate information. The consumer raised only the possibility of an injury in the future, and this did not constitute an injury in fact that would create federal court jurisdiction, the judge decided.

However, the U.S. Court of Appeals for the Ninth Circuit disagreed. Constitutional standing to sue could be based simply on the website operator’s alleged violation of a right created by the FCRA, the appellate court said (see Robins v. Spokeo, Inc., discussed in Banking and Finance Law Daily, Feb. 6, 2014).

Standing to sue. The U.S. Constitution gives federal courts subject matter jurisdiction only over “cases and controversies,” and this requires any plaintiff to establish that he has 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.

Government argument. According to the government’s brief, “Historical practice confirms that the violation of a particularized statutory right is a constitutionally sufficient basis” for establishing standing to sue. Congress has the right to create enforceable rights by law, and that authority is “particularly clear” when there is an analogous common law right. The right to sue for defamation under the common law is such an analogous right, the brief claims.

The consumer is not suing over a broad statutory violation, the brief emphasizes; rather, he is attempting to enforce his own statutory right. “Congress did not venture close to the constitutional line” in authorizing private suits for the publishing of inaccurate information, according to the government.

The appeal is scheduled for oral arguments on Nov. 2, 2015.

The petition 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 action in the 2015 term.

Attorneys: Andrew J. Pincus (Mayer Brown LLP) for Spokeo, Inc. Deepak Gupta (Gupta Beck PLLC) for Thomas Robins. Donald B. Verrilli Jr., Solicitor General, for the United States. Meredith Fuchs, Consumer Financial Protection Bureau.

Companies: Spokeo, Inc.

MainStory: TopStory CFPB FairCreditReporting

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