The Court of Appeals for the District of Columbia shot down a putative class action brought against Urban Outfitters, Inc., and Anthropologie, Inc., which had alleged that the companies violated D.C. consumer protection statutes by collecting customer ZIP code information during in-store checkout. The July 26 ruling remanded the suit for dismissal, and held that Plaintiffs failed to establish Article III standing under the Supreme Court's recent decision in Spokeo. The ruling highlights the continuing obstacles facing would-be class action plaintiffs under Spokeo.
Plaintiffs Whitney Hancock and Jamie White brought the action against the retailers for alleged violations of the District of Columbia's Use of Consumer Identification Information Act (the "Identification Act") and its Consumer Protection Procedures Act (the "Protection Act"). Specifically, Plaintiffs alleged that Defendants' request for ZIP codes at checkout violated the Identification Act's ban on obtaining addresses as a condition of a credit card transaction. Plaintiffs further claimed that the request for ZIP codes violated the Protection Act by, among other things, falsely implying to consumers that disclosure of the ZIP codes is required to complete a credit card transaction.
Quoting Spokeo, the court dismissed Plaintiffs' statutory claims. "The complaint here does not get out of the starting gate. It fails to allege that Hancock or White suffered any cognizable injury as a result of the [ZIP] code disclosures." The court noted that Plaintiffs' counsel admitted that the only alleged injury was that Plaintiffs were asked for a ZIP code, when under D.C. law they should not have been. "The Supreme Court's decision in Spokeo thus closes the door on Hancock and White's claim that the Stores' mere request for a [ZIP] code, standing alone, amounted to an Article III injury. Spokeo held that plaintiffs must have suffered an actual (or imminent) injury that is both particularized and 'concrete ... even in the context of a statutory violation.'"
In the wake of Spokeo, it is clear that plaintiffs cannot allege mere "bare procedural" statutory harm to establish Article III standing. Spokeo mandates allegations of a concrete harm. The Spokeo decision continues to aid defendants in dodging putative class actions before they get out of "the starting gate." This blog's further discussion of the Spokeo decision can be found here.
The Troutman Sanders' Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, click here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
