Consumer Finance Insights
August 17, 2017

Spokeo Resurfaces: Ninth Circuit Holds FCRA Plaintiff Has Standing to Sue

Yesterday, the Ninth Circuit issued its opinion in Robins v. Spokeo, finding that plaintiff Thomas Robins has standing to continue his Fair Credit Reporting Act (FCRA) suit against Spokeo, Inc.  In its opinion, a unanimous panel of the Ninth Circuit articulated a two-part concreteness test to determine standing.  The court concluded that Robins’ allegations satisfied the test because the FCRA provision at issue was designed to protect a concrete interest and the alleged violation of that protection presented a material risk of harm to Robins.  The court also rejected Spokeo’s argument that Robins’ injury was only speculative.  The Ninth Circuit’s Spokeo decision is noteworthy not only because of the case’s protracted history in the Ninth Circuit and the Supreme Court, but because it shows the evaluation of individual claims that courts must undertake in determining whether plaintiffs have standing.

We have written extensively about Spokeo (most recently, here, here, here, and here) throughout its now-lengthy life cycle.  By way of brief background, Robins filed a putative class action against Spokeo alleging that the company’s publicly-available report about him contained incorrect information regarding, inter alia, his age, marital status, and employment status.  He claimed that this violated the FCRA’s requirement in Section 1681e(b) that consumer reporting agencies must follow reasonable procedures to ensure the accuracy of information they report.  The Central District of California initially dismissed the case for lack of standing, but the Ninth Circuit reversed that ruling.  In May 2016, the Supreme Court reversed the Ninth Circuit’s first Spokeo order because it concluded the Ninth Circuit had not fully analyzed whether Robins suffered a concrete injury.  In reaching this conclusion, the Court distinguished concrete injuries from mere “procedural violations” and noted that “not all inaccuracies cause harm or present any material risk of harm.”

On remand, the Ninth Circuit acknowledged that a plaintiff cannot satisfy Article III standing by merely alleging a violation of a statutory violation, but must allege some real harm.  Looking to the Second Circuit’s decision in Strubel v. Comenity Bank (which we covered here), the Ninth Circuit articulated a two-part test to evaluate whether an alleged statutory violation includes a concrete injury—“(1) whether the statutory provisions at issue were established to protect [the plaintiff’s] concrete interest (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged . . . actually harm, or present a material risk of harm to, such interests.”

Applying that test to Robins’ allegations, the Ninth Circuit first concluded that Section 1681e(b) protects real, rather than procedural, rights because its requirements are designed to protect consumers by ensuring accurate reporting by consumer reporting agencies.  Turning to Robins’ allegations, the Ninth Circuit observed that not all FCRA plaintiffs will be able to show actual harm or a material risk of harm.  For example, the Ninth Circuit noted that some procedural violations may not result in the dissemination of inaccurate information and that even the publication of “some inaccurate information” may not be sufficient.  Rather, it explained that the Supreme Court’s Spokeo decision requires courts to examine “the nature of the specific alleged reporting inaccuracies to ensure that they raise a real risk of harm.”  Considering Robin’s complaint, the Ninth Circuit found that he met that burden by alleging that the inclusion of inaccurate information in Spokeo’s published report about him created an actual risk of harm to his job prospects.

The Ninth Circuit’s decision is the next step (although perhaps not the last if Spokeo decides to seek en banc or Supreme Court review) in a case that has been hotly debated throughout the federal courts.  Although the Ninth Circuit reached the same result as before remand, this most recent decision emphasized the necessity of considering the individual plaintiff’s factual circumstances in deciding the standing inquiry.  Defendants challenging standing—and particularly those involved in FCRA cases—will need to closely consider how this ruling might impact their own cases.