The U.S. Supreme Court is slated to hear an appeal this November that deals with a technical question concerning the right to sue but promises to affect significantly our ability to influence the accuracy of information about us that appears online.
The case involves a lawsuit against Spokeo, a people-finder site that aggregates information from social networks, real estate listings and other public sources. The dispute began five years ago when Thomas Robins, a Virginia resident, sued the Pasadena, Calif.-based company for allegedly violating the Fair Credit Reporting Act (FCRA).
According to Robins, Spokeo’s search results showed he held a graduate degree, was affluent, and married with children. None of that was true, he charges. In reality, Robins, then in his mid-50s, was unemployed, single and searching for a job.
Robins asserts that companies use Spokeo’s results to size up applicants for employment. That, Robins claims, undermined his search by presenting him as more educated and wealthier than he happened to be. Which, according to Robins, dissuaded employers from considering him for certain jobs and contributed to his remaining unemployed as well as to anxiety, stress and worry about his allegedly diminished prospects.
Robins, whom Spokeo says did not claim he asked the company to remove the listing or correct the results (you can for your listing, via this form) also charged the company with knowing about shortcomings in the way it gathered information and its failure to follow the FCRA’s mandate that consumer reporting agencies ensure the maximum possible accuracy of reports they generate. That, alleges Robins, entitles him to damages of up to $1,000 for each violation, as provided by the FCRA.
A trial judge in Los Angeles dismissed the case, ruling that Robins failed to allege an injury concrete enough to establish a right to sue—a prerequisite for suing someone in federal court—and that any harms he asserted were insufficiently traceable to Spokeo’s alleged violations.
Robins appealed to the U.S. Court of Appeals for the 9th Circuit, which reversed the trial court and sided with Robins after determining that the violation of the FCRA he charged itself satisfied the injury-in-fact requirement. Spokeo then appealed to the Supreme Court, which last spring agreed to hear the case.
At one level, the appeal presents the justices with a question about the jurisdiction of the federal courts, which the Constitution limits to deciding legal questions that arise out of an actual dispute between real parties. To determine whether such a dispute exists, federal courts apply a three-part test, pursuant to which a plaintiff must be able to show concrete injury, a causal connection between the injury and the challenged actions of the defendant, and a likelihood that the injury will be set right, or redressed, by a favorable decision.
Spokeo, which describes itself as an Internet search engine rather than a consumer reporting agency—a distinction that matters for purposes of determining whether it has obligations under the FCRA—argues on appeal that Congress can give private parties a right to sue for alleged violations of a statute but that right, by itself, does not relieve those parties of the need to show actual injury in order to proceed.
According to Spokeo, the appeals court did not base its decision on an allegation by Robins that he suffered a specific financial loss or missed out on being hired a particular job. Instead, argues Spokeo, the panel looked no further than the alleged violation of the FCRA. “The Ninth Circuit recognized that its analysis had the practical effect of turning the three-part test for… standing into a single-factor inquiry that was satisfied by the availability of a statutory remedy,” Spokeo asserts in a brief filed in July with the Supreme Court.
The requirement that a plaintiff demonstrate concrete harm “is necessary to prevent the erosion of the Constitution’s fundamental structure,” writes Spokeo, which says the stipulation ensures that courts remain within their role of preventing “actual or imminently threatened injury.” Standing also prevents Congress from “impermissibly delegating” to private parties the duty of the executive branch to enforce the law and protects “individual liberty” from plaintiffs who, in essence, charge violations of the law out of self-interest, the company argues.
Of course, Spokeo has another concern. According to the company, a class action in this case could expose it to “billions of dollars” in damages, based on Robins’ assertion that millions of people could claim to have been on the receiving end of FCRA violations may be eligible to join the lawsuit.
Robins counters that the alleged violation of the statute means that, by definition, he also has suffered pecuniary harm. He “and Spokeo have a legal dispute over a fixed sum of money that turns on whether Spokeo violated Robins’s legal interest under the FCRA,” he writes in a brief filed Aug. 31. “This right to statutory damages is not a ‘bounty’ Robins ‘will receive if the suit is successful.’ (citation omitted). His right to statutory damages arose as soon as Spokeo violated his rights, and the monetary claim is his alone.”
According to Robins, the Supreme Court need look no further than Spokeo’s alleged violation, which is sufficient to establish standing in this case. In short, Congress conferred standing when it gave private parties the right to sue for violations of the FCRA, Robins asserts.
He also notes that three years ago Spokeo agreed to pay $800,000 to settle charges that over a period of two years ending in 2010 it marketed search results to recruiters without adhering to safeguards for credit reporting.
The Obama administration has sided with Robins. “FCRA confers upon [Robins] a legal right to avoid the dissemination of inaccurate personal information about himself under the circumstances presented here,” writes Solicitor General Donald B. Verrilli Jr. in a friend-of-the-court brief filed Sept. 8. “Under this Court’s precedents, a violation of that legal right is an injury sufficient to satisfy Article III requirements, whether or not respondent can identify further consequential harms resulting from the violation.”
But there’s much more at stake than standing say privacy and civil liberties groups. In revising the FCRA in 1969, Congress specifically expressed concern that computerization of personal data could lead to inaccurate credit reports—which by their very nature are derived from data supplied by creditors whose own records may contain errors—to be published widely while leaving consumers without recourse to correct the information or to hold companies that furnish or report such data accountable.
“We are now in a digital era in which data brokers routinely acquire, access, compile, analyze, and sell vast data stores of consumers’ personal information, transactions, and behaviors,” write the Center for Democracy & Technology (CDT), the Electronic Frontier Foundation (EFF), and the New America foundation (New America) in a friend-of-the-court brief filed Sept. 8. “This activity occurs with little regulation or market incentive to ensure that information is accurate, timely, and used in a manner compliant with existing law.”
Robins alleges that unlike a search engine such as Google or Yahoo, Spokeo, in its search results, “draws conclusions, makes predictions, and otherwise makes factual assertions” about the data that tie to a consumer’s financial well being or lifestyle “that do not appear in the public or private data that defendant’s search result draws from.” According to the CDT, EFF and New America:
“While Spokeo’s inaccuracies might initially appear to favor Mr. Robins, they may have in fact damaged his ability to find employment by creating the erroneous impression that he was overqualified for the work he was seeking, that he might be unwilling to relocate for a job due to family commitments, or that his salary demands would exceed what prospective employers were prepared to offer him. The FCRA’s private right of action is the only way Mr. Robins can enforce his rights under the law and redress these inaccuracies. If the FCRA’s requirements are effectively unenforceable, data brokers such as Spokeo have little incentive to follow the law.”
Not surprisingly, a host of companies have weighed in on behalf of Spokeo. According to a brief filed July 9 by Facebook, Google, Twitter, eBay, Netflix and other tech firms that fear liability from class actions alleging “technical statutory violations that are not alleged to ‘have affected the plaintiff’ or harmed anyone.” (citation omitted) Credit reporting agencies, banks, home builders, media companies, and other businesses have raised similar arguments.
The chorus from companies sparked a reply from Patricia Moore, a professor at St. Thomas University School of Law, who wrote recently that “literally hundreds of state and federal statutes create private rights of action to encourage compliance with laws meant to protect consumers, workers, and the environment.”
According to Moore, Spokeo and the companies that are weighing in on its behalf “have conceived a new way to neutralize any statute anywhere that authorizes statutory damages. That is: tar the private right of action… and claim that violation of the statute is ‘technical,’… so not good enough for standing.”
A group of 15 information privacy scholars have sounded a similar point. In a friend-of-the-court brief filed Sept. 4, the group argues that “a broad ruling” in favor of Spokeo would “disrupt established privacy law well beyond the boundaries of the FCRA.”
The scholars cite the Video Privacy Protection Act, a federal law that bars disclosure of the movies someone has rented without his or her consent, and the Wiretap Act, as examples of laws that allow private parties to sue for violations and, in the case of the Wiretap Act, specify statutory damages as an alternative to actual damages, much like the FCRA. According to the scholars, whether in those laws or the FCRA:
“Congress did not ‘create’ injury in any of these statutes. Rather, in each case, it simply recognized privacy injuries-in-fact occurring in new technological contexts, delineated corresponding legal violations, and created private civil rights of action as legal remedies. This it was constitutionally empowered to do. The Court should not second-guess considered legislative judgments about the desirability of affording such remedies.”
Of course, it’s hard to predict whether a majority of the Court will embrace that argument or insist on a showing by Robins of injury beyond the statutory violation, as Spokeo suggests. Or accept the distinction drawn by Spokeo between technical violations and violations generally. It may be, as Moore suggests, a distinction without a difference and calculated solely to allow companies to evade liability.
Or the Court could look to see who was harmed here. Did Robins have more difficulty finding a job thanks to Spokeo’s practices, assuming, that is, the company acted as a consumer reporting agency? What about the anxiety and stress he alleges? If so, what might Robins’ recourse be, if not a lawsuit like the one at issue in this case? And how might the Court feel about people-searches that disseminate inaccuracies? Some of the justices are listed in Spokeo, too.