On May 16, 2016, the United States Supreme Court issued its long-awaited decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). In Spokeo, the Supreme Court addressed whether plaintiffs could sue under the Fair Credit Reporting Act (and by implication similar statutes such as the Fair Debt Collections Practices Act and the Telephone Consumer Protection Act) merely by alleging the defendant technically violated the statute. The Supreme Court rejected such an argument and held that for a consumer plaintiff to have Article III standing in federal court, he or she must allege that they suffered “concrete harm” as a result of the statutory violation.

In Spokeo, the Plaintiff alleged that the search engine Spokeo had disseminated inaccurate information about him concerning his age, marital status, employment status and educational background. Plaintiff sued Spokeo, alleging that the posting of such inaccurate information constituted a violation of the Fair Credit Reporting Act (“FCRA”). While the United States District Court for the Central District of California had dismissed the case for lack of standing, the Ninth Circuit Court of Appeals reinstated the complaint, holding that “violation of a statutory right is usually a sufficient injury in fact to confer standing.”

In a 6-2 decision, the Supreme Court held that the Ninth Circuit’s analysis was incomplete and remanded the case back to them for further review. In so holding, the Supreme Court stated that a plaintiff does not automatically satisfy the standing requirement merely by alleging a violation of a statute. According to the Supreme Court, “Article III standing requires a concrete injury, even in the context of a statutory violation.” The Court went on to state that an allegation of a bare procedural violation, such as the posting of an incorrect zip code, would not confer standing.

However, the Court did state that the mere risk of real harm can satisfy the concreteness requirement, even if such harm is difficult to prove or measure. Thus, the Court remanded the case to the Ninth Circuit to determine whether the procedural violations alleged by Plaintiff entailed a degree of risk sufficient to meet the concreteness requirement.

Spokeo is a victory for credit reporting agencies, debt collectors and other subject to the FCRA, the FDCPA and the TCPA. No longer can bare technical violations constitute the basis for a federal, class-action lawsuit. However, the Spokeo decision still gives District and Circuit Courts a great deal of leeway in finding what constitutes “concrete harm”. This will no doubt lead to litigation as to the precise parameters of “concrete harm”.

Winget Spadafora & Schwartzberg, LLP has been closely following the Spokeo decision and the impact on its clients. For more information, of if you would like to discuss this or other issues that affect your business, please contact Matthew Tracy at tracy.m@wssllp.com or (212) 221-6900.