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Ninth Circuit Finds Standing Based on Alleged Violation of Plaintiff’s Statutory Rights Even Without a Showing of Actual Harm




by:
Gregg Farnham
Kilpatrick Townsend & Stockton LLP - San Francisco Office

Cindy D. Hanson
Kilpatrick Townsend & Stockton LLP - Atlanta Office

Maureen A. Sheehy
Kilpatrick Townsend & Stockton LLP - San Francisco Office

 
February 18, 2014

Previously published on February 17, 2014

In a decision that may have broad application in cases involving an alleged violation of a statutory right, United States Court of Appeals for the Ninth Circuit held that a plaintiff suing for violation of the Fair Credit Reporting Act (the “FCRA”) has Article III standing to pursue a claim without suffering actual harm or actual damages. The decision, Robins v. Spokeo, Inc., could eventually extend beyond the FCRA to any statutory scheme that creates individual statutory rights.

The defendant, Spokeo, Inc., operates a website that provides users with information about individuals, including contact data, marital status, age, occupation, economic health, and wealth level. Thomas Robins sued Spokeo for willful violations of the FCRA on a purported class-wide basis, alleging that Spokeo’s website contained false information about him. Robins, who was unemployed, alleged that the misinformation caused actual harm to his employment prospects, as well as anxiety and stress about his diminished employment prospects.

Spokeo moved to dismiss the action for lack of subject matter jurisdiction on the ground that Robins lacked standing under Article III of the United States Constitution. The District Court eventually ruled that Robins failed to plead an injury-in-fact and that any injuries pled were not traceable to Spokeo’s alleged violations, and dismissed the action.

The Ninth Circuit reversed the District Court’s decision. The Court noted that Article III standing requires the plaintiff show that he has suffered an “injury-in-fact,” but found that the violation of a statutory right is a sufficient injury-in-fact to confer standing. As the Court noted, Congress’s creation of a private cause of action to enforce the FCRA implies that Congress intended to create a statutory right. Because the statutory cause of action does not require a showing of actual harm when a plaintiff sues for willful violations, a plaintiff can suffer a violation of the statutory right without suffering actual damages.

The court also found that a claim for an alleged violation of a statutory right also automatically satisfies the causation and redressability components of standing, stating that “[w]hen the injury-in-fact is the violation of a statutory right that we inferred from the existence of a private cause of action, causation and redressability will usually be satisfied.” With respect to causation, the court asserted that there is little doubt that a defendant’s alleged violation of a statutory provision “caused” the violation of the right created by that provision. As for redressability, the court found that because statutes like the FCRA frequently provide for monetary damages, they redress the violation of statutory rights.

While Spokeo appears to be a straightforward case of statutory interpretation, the decision is in many ways quite remarkable. Spokeo certainly opens the FCRA up to much more litigation brought by private individuals, either on their own behalf or on behalf of a class, who are not required to allege actual harm when a willful violation is alleged. Spokeo puts providers and websites that provide consumer information at greater risk in that they will no longer be able to get such actions dismissed on Article III standing grounds. Interpreted more broadly, Spokeo stands for the proposition when a statute creates a private right of action and a plaintiff alleges a willful violation of the statute, he satisfies the injury-in-fact, causation, and redressability elements, and thus has standing. It is likely that the reasoning in Spokeo will be argued to extend more broadly to encompass other statutory schemes that create a private right of action, granting automatic standing to anyone who alleges a claim for willful violation of a statutory right.



 

The views expressed in this document are solely the views of the author and not Martindale-Hubbell. This document is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance.
 

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