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No Harm, No Foul: Why Spokeo v. Robins is a Win for Data Privacy Defendants

No Harm, No Foul: Why Spokeo v. Robins is a Win for Data Privacy Defendants

It is easy to spin a legal decision, and the spinning commenced the moment the United States Supreme Court’s Spokeo v. Robins decision came down. Some hailed the decision as a massive win for corporate defendants, while others believe that the decision represents a win for plaintiffs in ongoing privacy battles. While both outlooks have their merits, a closer reading of the Spokeo v. Robins decision shows that it is actually a big win for data privacy defendants.

The message delivered in Spokeo v. Robins is actually one of "no harm, no foul". In that decision the U.S. Supreme Court held that the 9th Circuit’s finding was basically correct but incomplete because a plaintiff must prove that his injury is concrete and particularized. The ruling further stated that a bare procedural violation alone is insufficient to confer standing in federal court.

The ruling on standing is certainly an important one in privacy litigation as defendants routinely challege plaintiff’s standing based on lack of injury. Taking the long view, it is clear that this case is really a win for future defendants in privacy litigation.

FCRA Violation Based on Inaccurate Cyber Data

In Spokeo v. Robins, plaintiff Thomas Robins filed a class action lawsuit, in which he claimed violations of the Fair Credit Reporting Act of 1970 (FCRA). The company in question, Spokeo, operates as a search engine for people, providing information like the address, phone number, income and marital status of the individual who is the subject of the search.

Spokeo sells its services to a number of entities, ranging from potential employers to prospective dating partners. In providing these services, the company is classified as a consumer reporting agency under the FCRA, and is thus subject to the requirements of the Act.

At some point, Spokeo was used to conduct a search for plaintiff Robins, and the resulting profile contained a number of inaccuracies. As a result of those inaccuracies, Robins filed a class action complaint alleging that Spokeo willfully failed to comply with the requirements of FCRA, but the District Court dismissed the complaint, holding that Robins lacked standing. The Court of Appeals for the 9th Circuit reversed the initial decision, essentially saying that the violations of Robins' rights under FCRA were sufficient to allow the case to go forward.

Justice Alito’s Opinion – A Lecture on Establishing Standing

In all federal cases, a plaintiff must establish standing. This is done by:

  • Demonstrating an injury
  • That the injury is traceable to the alleged conduct of the defendant
  • That the injury is addressed by a favorable outcome

In rendering his decision Justice Alito held that a plaintiff must be able to show that the alleged injury was both concrete and particularized, meaning that real harm had occurred and that harm was directed at the plaintiff. In the Spokeo v. Robins ruling, the U.S. Supreme Court held that the 9th Circuit failed to analyze the concreteness of the alleged injury in the case. They thus vacated the 9th Circuit’s decision.

At first glance that may seem like good news for privacy defendants, and a deeper reading of the opinion confirms that view. Unfortunately, Justice Alito did not provide a clear standard for judging the concreteness of injuries. One the one hand, the opinion states that a plaintiff does not automatically satisfy the standing requirement whenever a statute grants a person a right and purports to authorize a person to sue to vindicate that right. On the other hand, the Court stated that a violation of a procedural right granted by statute can be sufficient to establish standing without plaintiff alleging additional harm beyond the one Congress identified.

The Decision is A Win For Defendants Going Forward

The seemingly contradictory views in the Spokeo v. Robins opinion are what have both sides claiming victory. But despite the lack of clarity in the current decision, Spokeo v. Robins is clearly a win for data privacy defendants in both ongoing cases and future consumer-oriented litigation.

Justice Alito’s opinion requires more from privacy litigation plaintiffs than we have seen in recent cases, and that is important for defendants in cases where the alleged harm is often speculative. Any interpretation of standing that requires more concrete allegations of harm by plaintiffs is a win for defendants, and that is exactly what the Court provided in the Spokeo decision.

For privacy defendants, it may not be appropriate to pop champagne over this decision, but a mild celebration is certainly in order. Even as both sides of the privacy wars rush to claim victory, it is clear that the Spokeo vs. Robins decision is actually good news for future privacy defendants. If you have any questions regarding the Spokeo v. Robins decision, or if you have any questions regarding privacy-related matters or corporate law, please contact Tim Hayes at McKenna Storer.
Categories Privacy and Data Security Litigation

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