United States: Spokeo: On The One-Year Anniversary Of The Pivotal Case, Insights For Retailers

Retail Did You Know?

Many of you are likely familiar with the US Supreme Court's decision in Spokeo, Inc. v. Robins. On the one-year anniversary of Spokeo, data shows that retailers' chances of success in challenging a plaintiff's claims for lack of concrete harm largely depend on the statute at issue. This edition of Morgan Lewis Retail Did You Know? takes a brief look back at the pivotal case and summarizes findings from our analysis of decisions that followed in Spokeo's wake.

Background

The Spokeo decision analyzed the standing requirement of Article III in the context of federal statutory claims—particularly addressing whether the US Congress may confer standing on a plaintiff who suffers no concrete harm and seeks only statutory damages. In the decision, the Supreme Court clarified that "Article III standing requires a concrete injury even in the context of a statutory violation," noting that a plaintiff cannot "allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury in fact requirement of Article III." The Spokeo decision is important to retailers because it provides support for an early dismissal of a plaintiff's putative class action claims from federal court.

Decisions in the Wake of Spokeo

Over the past year, many defendants have filed motions to dismiss plaintiffs' claims for lack of Article III standing in light of Spokeo, and we have conducted a comprehensive analysis of lower court decisions in response to such motions.

We have found that a defendant's success has varied greatly depending on the statute at issue (as well as, of course, on the particular facts of each case and other factors). For example, retailers that mistakenly printed prohibited information on a credit card receipt (e.g., a card's expiration date or more than the allowed last five digits of the card number) were successful in their standing challenges approximately 67% of the time. By comparison, companies that sent text or facsimile messages or made phone calls to consumers without consent were successful in their standing challenges only 13% of the time.

For our comprehensive look at a full year's worth of decisions after Spokeo, read our article recently published in Law360.

This article is provided as a general informational service and it should not be construed as imparting legal advice on any specific matter.