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Supreme Court Sends Statutory Claim Back to Appellate Court to Determine if Intangible Injury Requirement For Article III Constitutional Standing Can Be Met

In the court system of the United States, it is possible for plaintiffs who have not suffered a measurable injury but have suffered an intangible injury such as invasion of privacy or loss to reputation or humiliation to file a lawsuit against another party. This means even if the plaintiff has not been physically injured or suffered any financial loss, they might still have an opportunity to make someone pay up for violating the law.

Most laws come with statutory provisions in which the statutory penalty for breaking the law is often written into the legislature itself. Sometimes it’s a defined number and other times it’s a range. Either way, they provide an opportunity for plaintiffs who have not lost anything tangible to file claims.

Businesses lately have been complaining about a slew of consumer class action lawsuits that focus on what they claim are mere technical violations of the law. One such case is that of Thomas Robins against Spokeo Inc., a people search engine. Robins alleged Spokeo had violated the Fair Credit Reporting Act (FCRA) by posting that he was employed, wealthy, and married, when in fact he was single and struggling to find work.

Robins alleged that credit reporting agencies look at online information posted by companies like Spokeo to make decisions on things like loans and credit limits. He did not list any specific damages, but filed a class action lawsuit against the company on behalf of himself and all others who had allegedly had incorrect information about themselves posted online by Spokeo.

Robins has not yet alleged any specific harm he suffered as a result of the alleged violation of the FCRA, but now he’ll have to. After the Ninth Circuit Court ruled in Robins’s favor, Spokeo appealed the decision to the U.S. Supreme Court. The court refused to hear the case, but rather than letting the Ninth Circuit Court’s decision stand, the Supreme Court provided some guidelines and remanded the case back to the Ninth Circuit.

The Supreme Court found that the Ninth Circuit Court had been wrong when it ruled that plaintiffs could sue for statutory damages without alleging any actual injury. However, the Supreme Court did note that the harm alleged by plaintiffs can be either tangible or intangible when filing for statutory damages.

It is very rare for the Supreme Court to provide guidelines for other courts to hear a case. Normally, if the Supreme Court refuses to hear a case, they simply let the lower court’s ruling stand. The Supreme Court’s unusual decision to remand the case back to the Ninth Circuit is probably the result of the Court’s vacant seat while it waits for Congress to approve a replacement for Justice Scalia who passed away earlier this year. The vacancy leaves the 8-justice court with the possibility of a tie vote, which would stall any decision until the justices could either compromise or until the vacancy is filled.

Both the attorneys for Robinson and the attorneys for Spokeo are optimistic about what the Supreme Court’s decision will mean for the case, as well as future cases with similar allegations against businesses. All that the attorneys for the plaintiffs need to do is prove their client suffered some form of harm as a result of the publication of the misinformation, while the attorneys for the defense are equally confident they can prove the plaintiffs suffered no such harm, either tangible or intangible.

Regardless of whether the Ninth Circuit Court decides to reverse its ruling, its decision may or may not have much of an effect on future rulings by lower courts all over the country. But the Supreme Court’s decision might still have a significant influence on the landscape of consumer class action lawsuits, even without the Court having made a final decision in the case.