Big Consequences May Flow From Spokeo Case

This week’s oral argument in Spokeo, Inc. v. Robins  isn’t quite like some of the Supreme Court cases we’ve gotten accustomed to over the years.  This one isn’t going to draw demonstrators and it won’t be the subject of much conversation on Fox News or MSNBC.  But it may have enormous consequences nonetheless.   

The issue in Spokeo isn’t all that sexy.  Actually it’s not sexy at all.  It concerns standing.  That is, who has the right to bring a lawsuit and under what circumstances?  

Spokeo operates a “people search engine”—it aggregates publicly available information regarding individuals from phone books, social networks, marketing surveys, real estate listings, business Web sites, and other sources into a database that is searchable via the Internet using an individual’s name, and displays the results of searches in an easy-to-read format.  

Thomas Robins filed a class action against Spokeo, alleging that Spokeo is a “consumer reporting agency” that issues “consumer reports” in violation of the Fair Credit Reporting Act. Robins alleged that the search results associated with his name included inaccurate information indicating that he has more education and professional experience than he actually has, that he is married (although in fact he is not), and that he is better situated financially than he really is.  

According to Robins, Spokeo violated the FCRA when it published the inaccurate information.  The FCRA gives statutory remedies even if the subject of the violation suffered no “injury in fact.”  Robins wants to join with any other person who had a similar experience and proceed with his action.  

The trial court granted Spokeo’s motion to dismiss Robins’ complaint, but the U.S. Court of Appeals for the Ninth Circuit reversed that decision.  Spokeo successfully petitioned the United States Supreme Court to review the case.  Oral argument is this week.  The case may divide the justices along ideological grounds – the conservative wing will likely support adherence to a more rigorous standing requirement, and the liberal justices likely will be more open to a looser standard.  All of which means it may come down to what Justice Kennedy decides. Sometime in 2016, we’ll learn the final answer.   

If the Supreme Court upholds the Ninth Circuit, it could have a major impact on data privacy litigation.  So far, class action plaintiffs have struggled with demonstrating actual injury from a hacking.  Courts, for example, have ruled that merely fearing an identity theft occasioned by a breach doesn’t confer standing.  But if victims of a breach can establish that the breach itself constitutes a violation of some federal or state consumer protection law – they would be able to proceed with class actions more easily.  And that could lead to a big spike in class action lawsuits across the country.  

This case is flying under the radar, but that doesn’t make it any less impactful.