U.S. Supreme Court Holds That Violation of a Statutory Right, Without a Resulting “Concrete” Injury, Does Not Satisfy Article III’s Injury-in-Fact Requirement

May 17, 2016

On May 16, 2016, the Supreme Court issued Spokeo, Inc. v. Robins, an important opinion that significantly limits the ability of civil plaintiffs to bring claims for violation of a statute without establishing that they have suffered a real, concrete injury.  The Court’s decision disapproves many lower court decisions that had deemed an alleged statutory violation sufficient on its own to satisfy the standing requirements of Article III, and as a result will have broad ramifications across numerous subject areas–including actions involving the Fair Credit Reporting Act, the Fair Debt Collections Practices Act, the Truth in Lending Act, the Telephone Consumer Protection Act, the Wiretap Act, and the Real Estate Settlement Procedures Act.  Spokeo also creates a potentially dispositive obstacle to the certification of "no injury" class actions in which plaintiffs seek to recover statutory damages on a classwide basis without proof that individual class members suffered any actual, concrete injury. 

Spokeo settled that "Article III standing requires a concrete injury even in the context of a statutory violation."  Slip op. at 9.  Violations of a statute that are "divorced from any concrete harm" do not "satisfy the injury-in-fact requirement of Article III."  Id. at 9–10.  While important questions remain regarding what a plaintiff asserting a statutory violation must allege (and ultimately prove at trial) to establish concrete harm, Spokeo clearly places a significant additional burden on plaintiffs seeking to recover statutory damages in federal court, and provides class-action defendants with an additional avenue of attack at both the pleading and class certification stages.

The Supreme Court’s Decision

Spokeo operates a "people search engine" that gathers and provides information about individuals for a number of purposes, including employers’ evaluation of prospective employees.  Thomas Robins filed a class action complaint claiming that Spokeo willfully failed to comply with the requirements of the Fair Credit Reporting Act ("FCRA")–a statute that requires consumer reporting agencies to, among other things, "follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates."  15 U.S.C. § 1681e(b).  Robins brought this suit even though the allegedly inaccurate information on Spokeo arguably enhanced his job prospects.

The district court dismissed the complaint for lack of Article III standing because Robins had not sufficiently alleged that he had suffered an injury in fact, but the Ninth Circuit reversed.  Relying on its earlier decision in Edwards v. First American Corp., 610 F. 3d 514 (9th Cir. 2010), cert. granted, 564 U. S. 1018 (2011), cert. dismissed as improvidently granted, 132 S.Ct. 2536 (2012) (per curiam), the Ninth Circuit ruled that Robins had satisfied the Article III injury-in-fact requirement because "Spokeo violated his statutory rights, not just the statutory rights of other people" and his "personal interests in the handling of his credit information are individualized rather than collective."  Robins v. Spokeo, Inc., 742 F.3d 409, 413–14 (9th Cir. 2014). 

In a 6-2 decision, the Supreme Court determined that the Ninth Circuit’s Article III analysis was "incomplete" because, although it considered whether the alleged injury was "particularized," it had "overlooked" whether Robins had also alleged a "concrete" injury.  Slip op. at 2.  The Court thus vacated the Ninth Circuit’s judgment, and instructed the Ninth Circuit to consider on remand whether Robins adequately alleged any concrete harm.  Id. 

As Justice Alito’s majority opinion explained, the Court has "made it clear time and time again that an injury in fact must be both concrete and particularized."  Slip op. at 8.  An injury must be "particularized" in that it "must affect the plaintiff in a personal and individual way."  Id. at 7.  But while "[p]articularization is necessary to establish injury in fact, . . . it is not sufficient" because "[a]n injury in fact must also be ‘concrete.’"  Id. at 8 (emphasis added).  The Ninth Circuit failed to consider this "independent requirement," which "is quite different from particularization" because it requires a showing that an injury is "’real,’ and not ‘abstract.’"  Id. 

While the Court did not resolve in the first instance whether Robins had alleged a concrete injury, it provided significant guidance on the meaning of this requirement, and the role that statutes play in assessing whether a plaintiff has standing under Article III. 

The Court first explained that "[a]lthough tangible injuries are perhaps easier to recognize, . . . intangible injuries can nevertheless be concrete."  Slip op. at 9.  "[B]oth history and the judgment of Congress play important roles" in "determining whether an intangible harm constitutes injury in fact."  Id.  It is thus "instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts."  Id.  And "because Congress is well positioned to identify intangible harms that meet minimum Article III requirements, its judgment is also instructive and important."  Id.  

In recognizing the relevance of "Congress’ role in identifying and elevating intangible harms," the Court made clear that this "does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right."  Slip op. at 9.  Rather, "Article III standing requires a concrete injury even in the context of a statutory violation."  Id. (emphasis added).  Thus, "Robins could not, for example, allege a bare procedural violation [of the FCRA], divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III."  Id. at 9–10.  The Court, however, noted that it is possible for a "risk of real harm" to "satisfy the requirement of concreteness," and acknowledged that "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact."  Id. at 10.

Based on these "general principles," the Court concluded that although "Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk," that did not mean that Robins could "satisfy the demands of Article III by alleging a bare procedural violation" because "[a] violation of one of the FCRA’s procedural requirements may result in no harm."  Slip op. at 10.  The Court remanded for the Ninth Circuit to address "whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement."  Id. at 11.

In a concurring opinion, Justice Thomas emphasized the distinction between violations of duties owed to the public collectively versus those owed to individuals, and claimed that the former require a greater showing of concrete harm.

Justice Ginsburg wrote a dissenting opinion, joined by Justice Sotomayor, which expressed agreement with "much of the Court’s opinion," but disagreed that a remand was necessary.  Slip. op. at 2 (Ginsburg, J., dissenting).  In Justice Ginsburg’s view, Robins’ allegations of "misinformation about his education, family situation, and economic status" were "inaccurate representations that could affect his fortune in the job market," and thus were sufficient to satisfy the concreteness requirement.  Id. at 5.

Potential Implications

1.  Curbing "No Injury" Class Actions.  Although Spokeo involved the standing of a named plaintiff before class certification, the Court’s opinion will likely make it significantly more difficult for plaintiffs to pursue class actions for violations of statutes where named plaintiffs or absent class members have not suffered any actual injury.  Many federal statutes, including the Fair Debt Collections Practices Act, the Truth in Lending Act, and the Telephone Consumer Protection Act, lack any statutory injury requirement, yet nonetheless provide for awards of statutory damages.  Those two features have given rise to class actions involving individuals who have no possible injury besides the violation of a statutory right. 

Spokeo, however, makes clear that a bare statutory violation is not sufficient to satisfy Article III and that plaintiffs must establish real, concrete harm.  As a result, plaintiffs seeking to certify a class action must show how, in a classwide proceeding, they can prove not just a statutory violation, but also that all class members actually suffered a concrete injury.  After Spokeo, that task will prove fatal to many class certification bids, as establishing concrete injury will often require fact-intensive, plaintiff-specific inquiries.  

Indeed, the analysis of the FCRA in Spokeo demonstrates the inherent variability in establishing concrete injury.  As the Court noted, "the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact."  Slip op. at 10 (emphasis added).  But not all statutory violations will be sufficient.  In fact, the Court in Spokeo provided two examples of FCRA procedural violations that did not result in a concrete injury: (a) the failure to provide required notice to a user of the agency’s consumer information (as the information could nevertheless be "entirely accurate"), and (b) the dissemination of an incorrect zip code (as it is "difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm").  Id. at 10–11.  In other words, depending on the circumstances, some alleged statutory violations may result in a sufficiently concrete injury to confer Article III standing, while others may not. 

Because Spokeo is premised on the standing requirements of Article III, the existing conflict among the courts of appeals over whether those requirements apply to absent class members is now of increased importance.  The Court declined to resolve that conflict in Tyson Foods, Inc. v. Bouaphakeo, 136 S. Ct. 1036 (2016), but it is likely to consider the issue again in the coming years.  For now, Spokeo will have its most significant impact on class actions in those jurisdictions that have recognized the applicability of Article III to absent class members.  See, e.g., Halvorson v. Auto-Owners Inc. Co., 718 F.3d 773, 778 (8th Cir. 2013); Mazza v. Am. Honda Motor Co., 666 F.3d 581, 594 (9th Cir. 2012); Denney v. Deutsche Bank AG, 443 F.3d 253, 264 (2d Cir. 2006).   Defendants seeking to leverage Spokeo in class actions can also rely on the Chief Justice’s observation in Tyson Foods that "Article III does not give federal courts the power to order relief to any uninjured plaintiff, class action or not."  136 S. Ct. at 1053 (Roberts, C.J., concurring). 

2.  Reassessment of Pre-Spokeo Decisions.  Spokeo effectively rejects the decisions of several appellate courts that had held that an allegation of a bare statutory violation was sufficient, without more, to satisfy the requirements of Article III.  For example, the Ninth Circuit in Edwards held that a plaintiff who had alleged a violation of the Real Estate Settlement Procedures Act, but had not alleged any harm from that violation (such as an overcharge), had nonetheless "established an injury sufficient to satisfy Article III."  610 F.3d at 517.  Similarly, the Sixth Circuit allowed a FCRA claim to proceed without any showing of "actual harm," ruling that "[n]o Article III (or prudential) standing problem arises" in that scenario.  Beaudry v. TeleCheck Servs., Inc., 579 F.3d 702, 706–07 (6th Cir. 2013). 

These expansive views of the ability of uninjured persons to pursue claims in federal court cannot be reconciled with Spokeo‘s holding that a plaintiff does not "automatically satisf[y] the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right" because "Article III standing requires a concrete injury even in the context of a statutory violation."  Slip op. at 9. 

Spokeo‘s framework thus forecloses the expansive and simplistic reasoning that many courts had previously adopted.  Defendants should consider challenging prior rulings in pending cases that have followed decisions like Edwards and Beaudry, particularly if plaintiffs will not be able to establish any "concrete harm" stemming from the alleged statutory violation at issue. 

3.  Impact on Privacy Cases.  Plaintiffs in data privacy class actions have relied in the past several years on decisions such as Edwards and Beaudry to argue that the mere allegation of a statutory right–i.e., a technical violation of a privacy-related statute for which there is a private right of action–is sufficient to establish standing, even where there is no actual injury.  Indeed, the plaintiffs’ class action bar has frequently asserted statutory claims of dubious merit for the purpose of pleading Article III standing.  But after Spokeo, those arguments are no longer viable.  Instead, plaintiffs pursuing data privacy claims will now have to allege (and ultimately prove) a concrete harm, and courts will be required to determine whether that alleged harm or material risk of harm is "real" or "abstract."  After considering the Supreme Court’s guidance in Spokeo, courts may very well hold that many of the fact patterns alleged in recent privacy-related class actions do not satisfy the requirements of Article III standing because the alleged injuries simply are not concrete.

*  *  *

While some commentators have labeled Spokeo a "punt" because the Court did not resolve all the issues presented for decision, what the Court did decide is an important contribution to the jurisprudence of standing to sue in federal court for statutory violations, in both individual and class actions.  The Court’s emphasis that a plaintiff must suffer an injury that is both particularized and concrete to maintain suit, coupled with its unambiguous rejection of the premise that a mere allegation of statutory violation is sufficient to confer standing, will go a long way toward curbing the abuse and expense of "no injury" lawsuits.

Gibson, Dunn & Crutcher’s lawyers are available to assist in addressing any questions you may have regarding these developments.  Please contact the Gibson Dunn lawyer with whom you usually work in the firm’sClass Actions,Appellate and Constitutional Law, orPrivacy, Cybersecurity and Consumer Protection practice groups, or any of the following lawyers who assisted in preparing this client alert:

Theodore J. Boutrous, Jr. Co-Chair, Litigation Practice Group – Los Angeles (213-229-7000, [email protected])
Mark A. Perry – Co-Chair, Class Actions Group – Washington, D.C. (202-887-3667; [email protected])
Christopher Chorba Co-Chair, Class Actions Group – Los Angeles (213-229-7396, [email protected])
Joshua A. Jessen – Orange County/Palo Alto (949-451-4114/650-849-5375,[email protected])
Blaine H. Evanson – Los Angeles (213-229-7228, [email protected])
Bradley J. Hamburger – Los Angeles (213-229-7658, [email protected])
Jeana Bisnar Maute – Palo Alto (650-849-5348, [email protected])   

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