United States: 'Spokeo' Starts To Show Its Effects

On May 16, 2016, the Supreme Court issued its highly anticipated decision in Spokeo, Inc. v. Robins. In Spokeo, the Court addressed the issue of whether the Plaintiff alleged a sufficient injury-in-fact to satisfy Article III standing requirements. The case was ultimately vacated and remanded based on the Ninth Circuit's failure to address the "concreteness" of the Plaintiff's alleged harm – a required element under the injury-in-fact analysis. In so holding, the Court ruled that a mere technical, statutory violation is insufficient to confer Article III standing.

More specifically, the Supreme Court held that a "concrete" injury may either be tangible or intangible. "In determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles," the Court said. "Congress may 'elevat[e] to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law." However, "Congress' role in identifying and elevating intangible harms 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." The Court made clear that "Article III standing requires a concrete injury even in the context of a statutory violation." In other words, "a bare procedural violation, divorced from any concrete harm" does not satisfy the injury-in-fact requirements of Article III." 

Lower courts have now begun to untangle the language set forth in the Spokeo decision. The United States District Court for the Southern District of Ohio in Smith v. The Ohio State University, for example, recently relied on Spokeo in dismissing a Fair Credit Reporting Act ("FCRA") complaint for lack of concrete harm.

Smith v. The Ohio State University

In Smith, the two Plaintiffs applied to work at The Ohio State University ("OSU"). During the hiring process, OSU allegedly asked the Plaintiffs for consent to pull their credit reports in order to conduct background checks before making a final hiring decision. Plaintiffs claim that OSU provided a disclosure and authorization form to Plaintiffs, which improperly included extraneous information, such as a liability release, in violation of the FCRA's requirement that such disclosure be made in a stand-alone document that "consists solely of the disclosure." Plaintiffs were ultimately hired by the OSU, but they filed suit claiming that their privacy and statutory rights were violated. Plaintiffs sought statutory and punitive damages. The case was originally filed in Ohio state court, but later removed to the federal court by OSU. 

OSU subsequently moved to dismiss Plaintiffs' Complaint for lack of standing under Article III, and the Court granted a stay of discovery pending the Supreme Court's decision in Spokeo. After the Supreme Court issued its decision, OSU filed a supplementary brief highlighting the impact of the Court's ruling. 

Relying on Spokeo, the Ohio district court granted the Defendants' motion to dismiss on June 8, 2016. "Plaintiffs admitted that they did not suffer a concrete consequential damage as a result of OSU's alleged breach of the FCRA." Rather, Plaintiffs only alleged that they suffered harm when their "privacy was invaded and they were misled as to their rights under the FCRA." The Court thus held that it could not "find that Plaintiffs have suffered an injury-in-fact from OSU's alleged breach of the FCRA." It added that "[w]ithout a concrete and particularized injury-in-fact, there is no Article III standing in this Court." Accordingly, the Court dismissed for lack of subject-matter jurisdiction and remanded the case back to the Ohio state court. 

Conclusion

With a significant number of cases stayed pending the Supreme Court's decision, it is expected that many lower courts will soon begin interpreting the contours of Spokeo. The OSU decision is one of the first decisions and exemplifies that plaintiffs must now plead a "concrete consequential" harm, beyond a mere technical violation, to satisfy Article III standing requirements. 

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