Spokeo Speaks — Again

Will Spokeo Flood the Courts?

In Robins v. Spokeo, Inc., the U.S. Court of Appeals for Ninth Circuit has again allowed a case to go forward on a gossamer thread of alleged “harm,” despite the U.S. Supreme Court’s admonition that concrete harm must alleged.

Spokeo:  Background

Spokeo publishes online a “people search engine.”  Spokeo draws on a variety of public sources to assemble information about each person.  The plaintiff searched for himself on Spokeo, and that search returned incorrect information.  The incorrect information appears to have put Mr. Robins in what might be seen as a falsely positive light–describing him as rich, married with children, and a professional, when, apparently, he was single, childless, and unemployed.

A lay person might ask how Mr. Robins was harmed by a third party publishing ostensibly flattering, but incorrect information about him. But, Mr. Robins had a theory, as yet to materialize, that these errors could, for example, harm his future job-hunting prospects by making him appear too qualified, to be seeking a much higher salary, or as less geographically mobile.  All of this potential future mischief, according to Mr. Robins, resulted in emotional distress.  He sued, claiming (among other things) a violation of the federal Fair Credit Reporting Act or FCRA, which requires a degree of due diligence on the part of companies like Spokeo in connection with publishing information about individuals.

The United States District Court dismissed the case for lack of standing on the basis that Mr. Robins had neither alleged nor shown sufficient concrete harm to permit the case to go forward.  The Ninth Circuit disagreed, reinstating the case, finding that the only harm that needed to be shown was the the plaintiff’s statutory rights had been violated.  The Ninth Circuit’s approach could be read as opening the courthouse doors to a wide variety of highly technical lawsuits where there was no real injury in need of redress.

The Supreme Court vacated the Ninth Circuit’s decision.  It held that a violation of statutory rights was, alone, insufficient to establish the legal standing to sue.  The plaintiff also had to allege (and ultimately prove) an injury that is both “concrete and particularized.”  It remanded the case to the Ninth Circuit to examine whether this previously ignored requirement had been met.

Spokeo:  Where Is the Concrete Injury?

Many heralded the Supreme Court’s decision as an important victory for companies beset by lawsuits over actions or practices that resulted in little or no harm.  The Ninth Circuit’s decision to reinstate the lawsuit, yet again, calls that optimism into question.

On remand, the Ninth Circuit, managed a detour, taking upon itself to explore the question when a mere statutory violation, alone, satisfies the concrete harm requirement, something the U.S. Supreme Court hadn’t asked it to undertake.  In doing so, the Ninth Circuit all but brushed over the real issue of how a remote possibility of future harm–that might or might not be occasioned by incorrect, but ostensibly positive information published on a web site–should open the door to federal court for a costly class action lawsuit.

How did the court of appeals get there?

It did so by concluding, summarily, that “[i]t is clear to us that Robins’s allegations relate facts that are substantially more likely to harm his concrete interests than the Supreme Court’s example of an incorrect zip code.”  One could argue that just about anything other than an incorrect zip code causes more of a potential for harm than an incorrect zip code.

The Ninth Circuit acknowledged that the alleged misrepresentations “could [have been] worse—for example, Spokeo could have reported that Robins had less education or money than he has. But we agree with Robins that information of this sort (age, marital status, educational background, and employment history) is the type that may be important to employers or others making use of a consumer report. Ensuring the accuracy of this sort of information thus seems directly and substantially related to FCRA’s goals.”

As noted Internet law expert Professor Eric Goldman observed, “[i]f flattering information about Robins’s income level or education is sufficient to result in concrete harm, it’s tough to see what inaccuracy is not sufficient.”

What’s Next?

By setting the standard so low, the possibility exists that Spokeo may end up before the U.S. Supreme Court once more.  In the meantime, the Ninth Circuit’s ruling is likely to have ripple effects in a number of areas, including privacy claims that have traditionally been difficult to sustain because an absence of concrete harm.