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Ninth Circuit Sheds Further Light On Article III Standing in Spokeo III

Aug 31, 2017 | Topic: Class Actions

The question of what statutory harms satisfy the injury-in-fact requirement under Article III standing has been the topic debated among the circuit courts.  In Robins v. Spokeo, Inc., 2017 U.S. App. LEXIS 15211 (9th Cir. Aug. 15, 2017) (“Spokeo III”), the plaintiff alleged that the defendant search engine Spokeo had published an erroneous report that the plaintiff had a graduate degree, was in the “top 10%” in terms of wealth level, and was in his 50’s married with children (among other incorrect details).  While such information may not seem particularly damning at first glance, the plaintiff claims these erroneous details harmed his employment prospects because he was in the midst of a job search, and such falsehoods would have indicated an expectation of a higher salary, as well as unwillingness to move for a particular position due to family concerns.   

The plaintiff brought a class action in the Central District of California, and the district court ultimately dismissed the complaint on the basis that plaintiff had not properly pleaded injury in fact and thus lacked standing.  The Ninth Circuit reversed and remanded, holding that the plaintiff established injury-in-fact due required under Article III, since the alleged violation of the Fair Credit Reporting Act (“FCRA”) spoke to a violation of plaintiff’s individual statutory rights tied to individual harms (as opposed to collective harms), as recognized by Congress. 

The U. S. Supreme Court granted certoriari and vacated and remanded on the basis that the Ninth Circuit had not adequately addressed both inquiries under the injury-in-fact element required for Article III standing: concreteness and particularity.  While SCOTUS found that the Ninth Circuit had addressed the particularity aspect, it had failed to separately address the concreteness requirement.  In its discussion on just what constitutes “concrete,” the U. S. Supreme Court explained that the injury must be “real”—thus not “abstract”—but not necessarily tangible.  It can be enough, therefore, that the injury alleged presents a risk of real harm.  In its analysis of what may constitute the risk of real harm, the U. S. Supreme Court looked to those elusive harms typically seen in the tort context.  As noted by the Ninth Circuit on remand, SCOTUS did not delineate exactly what would suffice (or not) under the concreteness requirement; however, it did create a line by pointing to the example of a report that merely showed the wrong zip code as being insufficient.  Accordingly, SCOTUS confirmed that not just any statutory violation would present a risk of material harm sufficient to satisfy the concreteness standing requirement.

Thus, most recently, the question before the Ninth Circuit was whether the harm alleged by the plaintiff was concrete enough to satisfy the injury-in-fact requirement.  In its analysis, the Ninth Circuit distinguished between the plaintiff’s right to sue based on a statutory violation, and a federal court’s power to hear a claim arising from such a violation.  In deciding which kinds of statutory violations are sufficient under the concreteness requirement, the Ninth Circuit stated that it had “little difficulty concluding that these interests protected by the FCRA’s procedural requirements are ‘real,’ rather than purely legal creations.”  Here, the plaintiff did not merely allege a statutory violation occurred, but the plaintiff also alleged that the defendant actually prepared and published a report showing the inaccurate information.  Because the legislative record suggests that Congress, in enacting the FCRA, contemplated the “threat to a consumer’s livelihood” caused by the very existence of such published inaccurate information, the Ninth Circuit did not need to reach the question of whether the plaintiff at bar actually lost a specific job opportunity in order to find that a concrete interest and material risk of harm exists with regard to the alleged injury-in-fact.