Supreme Court’s Spokeo Ruling Places Increased Pleading Standards On Plaintiffs

On May 16, 2016, the United States Supreme Court decided Spokeo v. Robins, a case that challenges whether a plaintiff can maintain a lawsuit if a law was broken but the plaintiff has suffered no real harm. Statutes like the Telephone Consumer Protection Act (TCPA), Fair Credit Reporting Act (FCRA) and Fair Debt Collections Practices Act have been plaintiff favorites because they allow for fixed damages awards (such as a baseline $500 per call in the case of the TCPA) regardless of whether any real injury was sustained.

After discovering a credit report that contained inaccurate information about him (such as his age, marital status and education level), the plaintiff sued under the FCRA. However, he was unable to articulate any adverse consequence that he suffered because of the inaccurate information. The Supreme Court agreed to consider whether the inaccurate information alone gave the plaintiff the right to sue the credit reporting agency.

Article III of the United States Constitution has been interpreted to require an injury in fact in order for a person to have standing to sue.  According to the Spokeo ruling, a plaintiff does not automatically satisfy the injury-in-fact requirement even if a statute clearly grants him the right to sue. He must allege a tangible injury. In terms of the TCPA, simply receiving an illegal robo-call will not necessarily allow a lawsuit to proceed because, under Spokeo, Article III requires a plaintiff allege an injury in fact.  “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute […] purports to authorize that person to sue […] Article III standing requires a concrete injury even in the context of a statutory violation.”

The Supreme Court said that a “bare procedural violation” of a statute does not satisfy Article III and an injury is sufficiently concrete only if it is “tangible” or presents a “material risk of harm. In this respect, the decision is a victory, though not an unequivocal one, for defendants because the Supreme Court did not decide what constitutes the minimum degree of concrete injury necessary to maintain a lawsuit.  Instead of a definitive decision, the case was remanded back to the Ninth Circuit Court of Appeals for that court to decide.

The ruling was 6-2, with Justice Samuel Alito, Jr. delivering the opinion of the court.

Takeaway: While this decision increases plaintiffs’ pleading burden under certain consumer-protection statutes, it does not set a definite standard to guide federal courts. There will still be plenty of room for plaintiffs to make creative arguments concerning their injury allegations.

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