The Ninth Circuit clarifies the requirements for standing in FCRA cases: Spokeo 2

On August 15, 2017, after remand from the U.S. Supreme Court, the Ninth Circuit issued a second opinion in the case of Robins v. Spokeo, case no. 2:10-cv-05306-ODW-AGR (Spokeo II).  Spokeo II clarifies the requirements for standing under the Fair Credit Report Act (“FCRA”).  At the same time, it leaves open two critical questions that will need to be resolved by future litigation.

The plaintiff in Robins alleges that Spokeo published an inaccurate report about him on the internet, and, further, that Spokeo had willfully violated certain procedural requirements under FCRA.  The Ninth Circuit had previously reversed the district court’s order dismissing Robins’ claim because he lacked standing to sue under Article III of the United States Constitution.  742 F.3d 409, 414 (9th Cir. 2014).  (Spokeo I)

The Supreme Court vacated the Ninth Circuit’s opinion, holding that its standing analysis was not thorough enough.  136 S.Ct. 1540 (2016).  Specifically, the Supreme Court held that for purposes of Article III standing, in addition to determining whether the injury alleged was particularized, courts were also required to determine whether the alleged injury was sufficiently concrete.  The Ninth Circuit had failed to do that in Spokeo I.

On remand to the Ninth Circuit, Robins argued that Spokeo’s failure to reasonably ensure the accuracy of his information alone was enough to establish a concrete injury under FCRA.  Had he prevailed on that point, consumers would have standing to sue under FCRA without having to show any further harm than, for example, procedural harm.  However, the Ninth Circuit rejected Robins’ interpretation.

Instead, the court set forth a two-part test for determining whether alleged harm is concrete enough to establish Article III standing.  Under that test, a court should ask: (1) whether the statutory provisions at issue were established to protect the plaintiff’s concrete interests, as opposed to “purely procedural rights”, and (2) whether the specific violations alleged actually harm, or present a material risk of harm to, such interests.

Turning to the first question, the court concluded that Congress had enacted the FCRA provisions at issue to protect the concrete interests that consumers have with respect to accurate reporting about themselves.  See, e.g., Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995) (FCRA “was crafted to protect consumers from the transmission of inaccurate information about them.”).  Furthermore, those interests are real: inaccurate information regarding a consumer can easily impact that person’s livelihood, resulting in uncertainty and stress in that person’s life.

The court then held that Robins had alleged violations of FCRA that harm or create the risk of harm to his interest in accurate reporting of his information.  The court clarified that a plaintiff cannot establish Article III standing simply by alleging that a defendant had failed to comply with one of FCRA’s procedures.  However, in this case Robins had alleged that Spokeo prepared a report, published it on the internet, and that it contained inaccurate information about him.  Those allegations clearly implicated Robins’ concrete interests under FCRA.

The Ninth Circuit then considered the fact that the Supreme Court had rejected the argument that every minor inaccuracy reported in violation of FCRA would meet the requirements of harm or material risk of harm.  The Supreme Court’s guidance required courts to inquire as to the nature of the underlying allegations in order to determine whether they raised a real risk of harm to the plaintiff.  By way of example, the Supreme Court had noted that reporting an inaccurate zip code would not be sufficient to establish standing because it was difficult to imagine how that could error could “work any concrete harm.”  136 S.Ct. at 1550.  The Ninth Circuit court that Robins’ allegations (inaccurate age, marital status, education, and wealth level) were much more serious, and, as such, sufficient to establish standing.

Finally, the court rejected Spokeo’s argument that pursuant to Clapper v. Amnesty International USA, 133 S.Ct. 1138, 1143, Robins lacked standing because at best he had alleged that he might suffer injury in the future due to the inaccurate information.  Rather, Robins had already suffered injury in the form of a published, inaccurate report.

Spokeo II leaves open two significant questions.  First, are there any circumstances in which consumers who do not allege inaccuracies in their reports have standing under Article III?  The court mentions this situation in dictum, but FCRA sets forth a number of procedural requirements.  It is not clear whether the Ninth Circuit’s analysis extends to all such requirements.

Second, what types of inaccuracies create the harm required for standing?  We know that wrong zip codes are not enough, and that the errors alleged by Robins are.  But there is wide gulf between those data points.  And what level of inaccuracy with regard to age, income, and education is required?

Litigants will undoubtedly wrangle over these questions in years to come.  But for now, at any rate, the Ninth Circuit has given Robins the green light to pursue his claims against Spokeo.