On Remand, Ninth Circuit Says Robins Satisfied Article III Standing
Robins v. Spokeo is a putative class action that looked like it would examine the contours of Article III standing. The Supreme Court remanded to the Ninth Circuit so it could take a second look as to whether Spokeo’s allegations amounted to injury that was sufficiently concrete. On remand, the Ninth Circuit reaches the same result.
In Spokeo, the Supreme Court said that Congress has the power to identify which intangible harms meet minimum Article III requirements. The Ninth Circuit says that, while Robins can’t always show injury-in-fact just by pointing to a statutory violation, the Supreme Court made clear that some statutory violations could, stating alone, establish concrete harm. Citing to a Second Circuit case, the Ninth Circuit says that a procedural violation of a statute is sufficient for Article III standing where the procedural right exists to protect a plaintiff’s interests and where the procedural violation presents a risk of harm. The Ninth Circuit finds both criteria satisfied here.
The court says it’s clear that the FCRA provisions at issue were established to protect the concrete interests of consumers. The court says:
given the ubiquity of consumer reports in modern life—in employment decisions, in loan applications, in home purchases, and much more—the real-world implications of material inaccuracies in those reports seem patent on their face.
Congress acted to protect the interests of consumers that are similar to those reputational interests that have traditionally been protected at common law, such as defamation or libel. The fact that FCRA protections do not require a showing of actual harm is not determinative. What’s more important is that Congress is acting to protecting the same genre of rights that has previously been protected at common law.
The Ninth Circuit also agrees that Robins’s alleged FCRA violations actually harm or create a risk of harm to Robins’s concrete reputational interests. The court acknowledges that some procedural violations or minor inaccuracies (such as an incorrect zip code) may not result in a risk of harm. The Supreme Court in its opinion did not offer precise guidelines as to what types of inaccuracies are sufficient. But according to the Ninth Circuit, Robins’ allegations here clearly suffice:
Robins . . . alleged that Spokeo falsely reported that he is married with children, that he is in his 50s, that he is employed in a professional or technical field, that he has a graduate degree, and that his wealth level is higher than it is….
It does not take much imagination to understand how inaccurate reports on such a broad range of material facts about Robins’s life could be deemed real harm. For example, Robins alleged that he is out of work and looking for a job, but that Spokeo’s inaccurate reports have ‘caused actual harm to his employment prospects’ by misrepresenting facts that would be relevant to employers . . .
The court also notes that the Consumer Financial Protection Bureau weighed in to note that “even flattering inaccuracies can hurt an individual’s employment prospects as they may cause a prospective employer to question the applicant’s truthfulness or to determine that he is overqualified for the position sought.”
Finally, the court rejects the argument that Robins’s allegations are too speculative (distinguishing Clapper).
When the Supreme Court’s ruling came out, we noted that it would be tough to predict whether the ruling would help plaintiffs or defendants. See “Will the Spokeo v. Robins Supreme Court Ruling Favor Plaintiffs Or Defendants? Uh…“. The Ninth Circuit’s ruling on remand bears out this observation. Did the Supreme Court give lower courts any clarity on how to determine what statutory violations standing alone could support Article III standing? Although the Ninth Circuit rules in Robins’s favor, it’s tough to see what aspects of the Supreme Court ruling the Ninth Circuit actually applied. In fact, the Ninth Circuit’s approach to when a privacy statute’s procedural violations are sufficient for Article III’s standing purposes is similar to Justice Stewart’s famous formulation of the test for obscenity.
The Ninth Circuit’s latest ruling can be summed up as follows: (1) the FCRA is a statute that protects reputational interests without showing specific harm, but those interests are similar to those that are protected at common law; (2) “consumer reports” are widely used and incorrect information could have harmful effects given their ubiquity; and (3) Robins’s allegations that Spokeo’s consumer report had broad demographic information that could be used by employers to deny him employment could very well be true in some hypothetical scenario. Conclusion (3) is particularly befuddling. The court’s own recitation of the allegations do not appear to satisfy the typical Iqbal/Twombly formulation of when allegations are sufficient to withstand a motion to dismiss. If flattering information about Robins’s income level or education is sufficient to result in concrete harm, it’s tough to see what inaccuracy is not sufficient.
NB: there is some very privacy-friendly language in this opinion that should make data aggregators cringe.
Case citation: Robins v. Spokeo, Inc., No. 11-56843 (9th Cir. Aug. 15, 2017)