The Slatest

SCOTUS Misses an Opportunity to Gut Class Actions and Consumer Privacy Laws

Justice Samuel Alito enjoys gutting class actions and preventing consumers from suing corporations—but in Spokeo v. Robins, he had to settle for a punt.

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Spokeo Inc. v. Robins was supposed to be one of those cases that lets the Supreme Court’s conservatives gut class-action rules without most people noticing. What, you don’t remember AT&T Mobility v. Concepcion? How about American Express v. Italian Colors? Well, they remember you, and they are why it’s so difficult for you to bring legal claims against corporations to court. Cheated by your phone company? Screwed over by your credit card service? Too bad! The Supreme Court’s conservative wing spent the past decade using such cases—cloaked, as they are, in tedious complexity—to quietly hobble class actions.

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Initially, Spokeo seemed destined to follow this trend. Instead, with the Conservative Five down a member, the court punted—thereby allowing a critically important form of class action to survive.

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At bottom, Spokeo is a case about harm. Spokeo runs a somewhat dystopian-sounding “people search engine,” gathering globs of data from the internet about individuals, then compiling it on a searchable website. If you have ever used the search engine, you will know that a sizable amount of its information is incorrect. My entry gets my address wrong, for instance, though it does nail my zodiac sign. Thomas Robins was also saddled with a flawed Spokeo entry: The website botched his age, education, employment status, and details of his personal life—presenting, he believed, an unflattering portrait to potential employers. Robins sued, alleging the misinformation harmed his employment opportunities. And he filed his case as a class action on behalf of everyone else who was harmed by Spokeo’s negligent misreporting.

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The big fear in Spokeo was that the Supreme Court’s five conservatives would rule that Robins—and, by extension, the class of similarly situated people—weren’t really harmed in a constitutional sense. Article III of the Constitution gives federal courts the authority to rule on any “case or controversy,” and the court has interpreted that ambiguous language quite stringently. A plaintiff only has “standing” to sue in federal court if she suffers a “real world” harm, a “concrete and particularized injury.”

Spokeo insists that Robins and his class do not meet this constitutional level of harm—at least absent a clear showing that the website’s mistakes truly injured them. Robins, however, points to a federal law that requires websites to “follow reasonable procedures to ensure maximum possible accuracy” of information used in credit reporting, which Spokeo’s information is. That law explicitly gives consumers a cause of action to sue in federal court when companies negligently violate the law, as Spokeo allegedly did.

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But Spokeo says a federal law is not enough: Even though Congress gave consumers a right to sue the website in court, Article III still bars the suit if the plaintiffs cannot show a particularized injury. Spokeo’s mere violation of federal law doesn’t open it up to lawsuits, the company argues; only individuals who can demonstrate real-world harm get to sue the website in federal court. Put differently, Spokeo asserts that Congress cannot create standing where the Supreme Court says standing does not already exist.

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Pretty much everybody agreed that Spokeo was fated to win this case, scoring another blow against class actions and consumer privacy. Then Justice Antonin Scalia died and all bets were off. With the court’s four liberals holding firm, it was apparent that the justices were scrambling to avoid a 4–4 tie.

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On Monday, they revealed their solution: A big old punt that essentially freed the court from having to reach a final decision. In a brief opinion, six justices concluded that the lower court did not sufficiently analyze the standing question. Specifically, the majority found that the lower court had given short shrift to the question of “concreteness.” An injury, the majority says, must be “ ‘real,’ and not ‘abstract.’ ” The harm might be “intangible,” but it still has to be a “de facto injury.” Congress has a role in “identifying and elevating intangible harms” through statutes, but courts still must independently ask whether an intangible harm is an “injury in fact.”

If that melts your brain, don’t worry: It’s more of a nitpicky distinction than a crucial legal contrast, unlikely to have any significant impact. The lower court here is the 9th Circuit, whose liberal judges will probably find that Robins and his class have, indeed, alleged a concrete injury. Spokeo may then wind up at the Supreme Court yet again. And with any luck, at that point, a full court of nine justices will be able to dispose of this case properly rather than tossing it around like a misbegotten hot potato. 

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