In a putative class action case, Plaintiff Thomas Robins alleged that Defendant Spokeo, Inc.’s ("Spokeo") website aggregated personal information, including information regarding individuals’ employment history and creditworthiness, and was thus a consumer reporting agency as defined by the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq ("FCRA"). First Am. Compl., ¶ 51. Among the information included with respect to Robins was employment information that made Plaintiff appear to have a better educational and financial history than he actually did. Id., ¶ 32. Plaintiff claimed that these inaccuracies would hinder his job search, id., ¶¶ 34-35, and that he "suffered actual harm in the form of anxiety, stress, concern and/or worry about his diminished employment prospects." Id., ¶ 37. Plaintiff did not, however, seek actual damages. Rather, he alleged that Spokeo had willfully violated the FCRA and sought a judgment "awarding himself and the Class the maximum statutory damages available under 15 U.S.C. § 1681n." Id., ¶¶ 65, 71, 75. The FCRA provides that when a person willfully fails to comply with the statute, a plaintiff is entitled to "any actual damages . . . or damages of not less than $100 and not more than $1,000." 15 U.S.C. § 1681n(a) (emphasis added). Similar "statutory damages" provisions also exist for willful violations of the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692k(a), and the Telephone Consumer Protection Act ("TCPA"). 47 U.S.C. § 227(b)(3)(B).
Spokeo moved to dismiss, arguing that the possibility of an unknown prospective employer searching Spokeo's website, reviewing supposedly inaccurate information, and declining to hire Robins as a result of that information was too speculative to constitute an injury-in-fact. Doc. 46, 9. The district court dismissed Plaintiff's complaint, finding that "[m]ere violation of the Fair Credit Reporting Act does not confer Article III standing. . . where no injury in fact is properly pled." Doc. 66. However, the Ninth Circuit reversed, holding that "when, as here [under 15 U.S.C. § 1681n(a)], the statutory cause of action does not require proof of actual damages, a plaintiff can suffer a violation of the statutory right without suffering actual damages." Robins v. Spokeo, Inc., 742 F.3d 409, 413 (9th Cir. 2014). Since Plaintiff had alleged that Spokeo had actually violated his rights under the FCRA, and that Plaintiff's "personal interests in the handling of his credit information are individualized rather than collective," id. at 413 (citation omitted), he had alleged a sufficient injury-in-fact for Article III standing purposes. In so holding, the Ninth Circuit has interpreted the statute in a manner consistent with the Sixth and Seventh Circuits, Id. at 412-13 (citing Beaudry v. TeleCheck Servs., Inc., 579 F.3d 702, 705-07 (6th Cir. 2009); Murray v. GMAC Mortg. Corp., 434 F.3d 948, 952-53 (7th Cir. 2006)), but which has been called into doubt by the Eighth Circuit. Id. at 413 n.2 (quoting Dowell v. Wells Fargo Bank, NA, 517 F.3d 1024, 1026 (8th Cir. 2008) (per curiam) ("noting that one 'reasonable reading of the [FCRA] could still require proof of actual damages'") (alteration in original).
The grant of certiorari by the Supreme Court -- despite the recommendation by the Solicitor General that the Court deny certiorari -- suggests that at least some members of the Court have serious doubts as to whether a statutory cause of action can substitute for actual harm for standing purposes. If the Court were to rule that a statutory cause of action was insufficient, that ruling could sharply curtail TCPA class actions arising from junk faxes, as courts have been divided as to whether, even at the pleading stage, the damages allegedly suffered from receipt of junk faxes can constitute sufficient injury for the state law claims brought in conjunction with the TCPA. Compare G. Neil Garrett, D.D.S., P.C. v. New Albertson's, Inc., No. 13 C 7965, 2014 U.S. Dist. LEXIS 71743, at * 10 (N.D. Ill. May 27, 2014), G.M. Sign, Inc. v. Elm St. Chiropractic, Ltd., 871 F. Supp. 2d 763, 769 (N.D. Ill. 2012), Rossario's Fine Jewelry, Inc. v. Paddock Pubs., Inc. , 443 F.Supp.2d 976, 978 (N.D. Ill. 2006) (finding that loss of paper, ink, and toner insufficient damages to state a claim for conversion), with Centerline Equip. Corp. v. Banner Pers. Serv., Inc., 545 F.Supp.2d 768, 780-81 (N.D. Ill. 2008) Sadowski v. Med1 Online, LLC, No. 07 C 2793, 2008 U.S. Dist. LEXIS 41766, at *27 (N.D. Ill. May 27, 2008) (holding the opposite).
Moreover, a ruling that a statutory cause of action is insufficient to confer standing could have wide-ranging implications for consumer credit litigation, particularly class actions, under the FCRA, FDCPA, or TCPA. A narrow decision might simply decide the question of standing with respect to the Spokeo facts: at the motion to dismiss stage. If the Court upholds the Ninth Circuit's decision, it would likely do so on narrow grounds and not disturb the appellate court's decision. However, if the Court were to rule that actual damages were required to prove standing at any stage of the litigation, then a plaintiff's lack of damages would be fatal to her claim at the summary judgment stage, even if the alleged violation is willful. 15 U.S.C. §§ 1681n, 1692k. Such a ruling would likely increase dispositive motions on these claims.
The provision of statutory damages and for prevailing party attorney fees have made consumer law claims -- specifically class action claims -- staples of federal practice for over 40 years. A ruling in Spokeo that statutory causes of action do not confer Article III standing would transform consumer law practice, and that makes the case one of the most significant that the Court will review in its October 2015 term.