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The Supreme Court Oral Argument in Spokeo v. Robins

November 2015
Privacy In Focus

The Supreme Court of the United States heard oral argument on November 2 in the potentially very important Spokeo, Inc. v. Robins case (S.Ct. No. 13-1339). While no clear consensus was revealed, the Justices’ comments and questions during the vigorous one-hour argument suggest that the decision may be narrower than many in the business community have feared.

Case Background

The underlying case was brought by an individual, Thomas Robins, in the U.S. District court for the Central District of California against Spokeo, Inc. alleging willful violations of the Fair Credit Reporting Act (FCRA) and seeking statutory damages and injunctive relief. The FCRA provides for such private actions. Robins complained that Spokeo had issued reports to third parties that contained inaccurate information about him. The complaint asserted this reflected Spokeo’s willful failure to follow practices required of credit reporting agencies designed to assure the accuracy of information provided to users such as potential lenders, employers, and insurers. The complaint proposed a class action.

The district court dismissed the complaint on the ground that Robins had not alleged injury sufficient to constitute a case or controversy and thus the federal court lacked jurisdiction under Article III of the Constitution. On appeal, the U.S. Court of Appeals for the Ninth Circuit reversed, ruling that there was Article III standing. It rejected Spokeo’s contention that “Robins cannot sue under the FCRA without showing actual harm,” and, instead, determined that “Robins has standing by virtue of the alleged violations of his statutory rights.”

Spokeo was granted review by the Supreme Court, which specified the question presented as whether Congress may “confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute?” Because of this broad statement, and the fact that it was not expressly limited to FCRA, the business community understandably has been concerned that the case holds the potential for the Supreme Court to invite class actions seeking huge amounts of statutory damages for violations of various statutory requirements. The parties’ presentations were joined by 17 amicus briefs supporting Spokeo by business, credit agency, and advocacy groups; by 15 amicus briefs supporting Respondent Robins, including the United States; and by one amicus brief supporting neither side. Oral argument was presented by Spokeo, Robins, and the Deputy Solicitor General.

Inferences from the Oral Argument

The Justices’ questions and observations recognized the possibility of a ruling as broad as on the full scope of the issue presented. At one point, Justice Sotomayor declared, “I think the breach of any legal right you are given gives Article III jurisdiction.” However, the weight of the questioning tended to focus on the narrower issue of whether Robins himself had standing to sue under the FCRA.

In response to Spokeo’s argument that standing should require that there be actual harm suffered by the plaintiff, the Justices probed whether Robins had suffered such harm. For purposes of the present decision, it was assumed that no harm had been alleged other than the dissemination of inaccurate information about Robins in credit reports. Justice Breyer recounted that Spokeo used “a photograph of the wrong person; a statement that he’s in his 50s; he isn’t. That he’s married; he isn’t. He’s employed in a professional or technical field; he isn’t. That he has children; he doesn’t. That his economic health is very strong; it isn’t. And his wealth level is in the top 10 percent; it isn’t.” Justice Kagan summarized, “They basically got everything wrong about him.” The questioning focused on whether the dissemination of credit reports containing such inaccuracies itself constituted harm for standing purposes and whether Congress had the authority to elevate it if it otherwise did not achieve that status.

Some Justices indicated their feeling that disseminating such false information did constitute harm. Justice Kagan declared that “if somebody did it to me, I’d feel harmed” and speculated that, if surveyed, “most people would feel harmed.” Justice Sotomayor noted that “if you’re not married and there’s a report out there saying you are, that’s a potential injury” because single people “look at whether someone who’s proposed to date is married or not.” In response to the suggestion that a showing of actual job loss, or a loan or insurance denial should be required, Justice Kagan asserted that false information in a credit report is “actually the quintessential kind of injury that you will never be able to detect and surely not to prove.” Justice Kennedy suggested that it might matter that the speaker “is a credit agency that is regulated.”

If the Court determines to decide the case based on whether false information about the plaintiff constitutes sufficient harm, there may arise a need to characterize how much false information or what type is, or is not, enough. The Justices seemed clear that, as Justice Sotomayor put it, there is always a “materiality question.” Chief Justice Roberts noted the example of where a “company publishes your phone number, but it’s wrong” as exemplifying “no injury whatsoever.”

Construing the FCRA as authorizing Robins to sue based on misinformation about him was seen by some as making the statute into something different from what Congress actually had enacted. Thus, Justice Scalia asserted that Congress “said nothing about people who have been hurt by misinformation being able to sue. It said anybody can sue who’s been reported on if the agency failed to use the procedures” required by the statute. Moreover, the statute “treats everybody about whom false information has been given as somebody about whom false information that harms him has been given.”

Subject to the caveat that oral argument does not always reliably signal what a decision will be, this argument suggests several things. First, there seemed to be little support for adopting the Ninth Circuit’s standing rationale. None of the Justices asserted that the standing requirement should be structured to facilitate class actions. It seems probable that the Justices will be divided on whether Congress may confer Article III standing based on the misinformation about Robins and/or whether that was done in FCRA. Depending on the split, there either will be a “no standing” conclusion or standing that is individualized and highly fact dependent. Either outcome would seem less threatening to businesses than what the Ninth Circuit decision suggested.