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Monday, November 30, 2015

Robins v. Spokeo: An Injury Worth Remedying?

As I blogged about earlier this month, the Supreme Court heard oral arguments in Spokeo, Inc. v. Robins, a putative class-action lawsuit against Spokeo, an Internet people-search engine, for allegedly failing to follow required reasonable procedures to ensure the most accurate publishing of information on its website in violation of the Fair Credit Reporting Act (FCRA or the Act) and California fair competition and consumer protection laws. This blog entry takes a closer look at the amended complaint.

Previously, I explored the existence of Article III actual injury on the theory that Spokeo published inaccurate information. As Justice Kagan emphasized, she would feel harmed if a website posted inaccurate information about her. But this view focuses on a notion of injury with which we can all empathize. Technically (h/t Asher Steinberg), however, plaintiff Robins hopes to serve as representative for a class of plaintiffs on a theory that does not require publication of incorrect information for class members. This strategy broadens the potential class members to anyone reported on by Spokeo regardless of accuracy of the reporting. The Court may seize the opportunity to curtail class actions. The Spokeo complaint, however, still raises actual injury based on sufficient allegations of Spokeo’s improper processes and safeguards to ensure accuracy of reported information. Let’s look more closely to discern why.

According to Robins’s amended complaint, Spokeo operates a searchable website that provides detailed consumer reports, including assessments of data as well as personal information such as marital status. Further, Robins alleges that Spokeo does not publicly disclose the full list of sources for the reported information, though known sources include: “phone books, real estate listings, government records, and social networking websites.” Meanwhile, Robins asserts that Spokeo publishes inaccurate information, including information about Robins, without an effective system for consumers to remove mistakes. The gravamen of the complaint centers on Spokeo’s inadequate procedural compliance with the law, which creates fertile ground for misreporting information. The amended complaint includes further allegations regarding other federal law violations such as Spokeo’s failure: to make the required disclosures when offering consumer reports for employment purposes, and to create processes required to enable consumers to request annual file disclosures. Robins maintains that Spokeo violated federal consumer laws that mandate “strict guidelines for maintaining and distributing fair and accurate consumer reports.” The complaint’s final cause of action asserts Spokeo amassed an unfair business advantage in violation of California law “by failing to produce accurate reports and otherwise take the necessary steps to adhere to FCRA.” Robins seeks to represent a class of individuals for which Spokeo has published reports under these faulty procedures even if the information contains no inaccuracies.

In the amended complaint, Robins seeks the following remedies in his prayer for relief: declaratory relief, statutory damages, injunctive relief, attorneys’ fees, interest, and other relief as justice requires. Other relief, coupled with other portions of the complaint, might imply recovery for unjust enrichment if any. Regarding common questions of the class, the complaint lists: “whether Defendant unjustly received and/or continues to receive money as a result of its conduct described herein, and whether under principles of equity and good conscience, Defendant should not be permitted to retain those monies.”

Again, the Act establishes a private right of action and a statutory remedy for willful violations where plaintiff cannot prove actual damages: “damages of not less than $100 and not more than $1,000.” The Act envisions the very plaintiff that Robins is. He alleges no pecuniary loss for Robins or the putative class. Yet, the Act requires certain processes be provided to facilitate accurate reporting. Robins alleges that Spokeo willfully did not satisfy such procedures, which resulted in errors for some including himself. The injury to Robins with inaccuracies is more central than putative class members with no inaccuracies. But, if the point of the remedy in the Act is to deter willful noncompliance with consumer protection processes to ensure accuracy, then actual injury exists by virtue of the statutory violation.

What do you think? Should the Court vent its frustration at class actions by denying access to the federal court to vindicate a congressionally created right and remedy? Should Congress limit the class and the remedy to those who prove inaccurate information or to those who prove pecuniary loss based on the misinformation? Do you think this case fails to show actual injury because of the lack of pecuniary loss, despite the Act’s statutory minimum remedy? Regardless, this case raises significant standing and separation-of-powers issues as explored in the Vanderbilt Law Review En Banc Roundtable, as well as remedies concerns for a host of noncompensatory injuries that exist from public law to private.

Posted by Caprice Roberts on November 30, 2015 at 08:53 PM | Permalink

Comments

A very important and interesting case. Perhaps I’m focusing on a seeming weakness that you’ve addressed in other posts (or perhaps I'm just misunderstanding you), but this quoted language seems a big non-sequitur:

"But, if the point of the remedy in the Act is to deter willful noncompliance with consumer protection processes to ensure accuracy, then actual injury exists by virtue of the statutory violation.”

Congress cannot define what “actual injury” means by establishing a right of action in a statute. Creating a right of action only makes legally cognizable injuries that must already be “actual.” So by noting that Robins faced willful noncompliance by Spokeo, and that this conduct is what Congress had in mind in passing the statute, only re-begs the question of whether Robin’s injury is “actual” for standing purposes.

With that said, I think most of the Court’s standing jurisprudence is not rooted in Article III at all, but rather in prudential concerns ("all standing doctrine is 'prudential standing'” as I like to say). But if we take precedent seriously, it seems no Article III standing exists here for Robins.

Posted by: Edward Cantu | Dec 1, 2015 7:25:23 AM

"Congress cannot define what 'actual injury' means by establishing a right of action in a statute."

Edward, why not?

Posted by: Bruce Boyden | Dec 1, 2015 10:00:54 AM

Edward, I agree that Congress cannot lower the Article III requirements, which case law defines as "actual injury" that thus creates the constitutional floor. Yet, the Court moves the target on what that means, and much of the Court's work here has been prudential, as you say. I think it would be a mistake to require wallet injury. That said, my blog inferred that the failure of providing required procedures to ensure accuracy creates injury. Certainly, it is more clear for Robins who alleges misinformation than it is for class members who suffer only the risk of misinformation.

Bruce, here are the limits on Congress creating injury from whole cloth: In my Federal Courts casebook (coauthored with Mike Allen & Mike Finch), we note:

Congress may create legal rights via statute, for example taxpayer and “citizen suit” standing, even where Article III standing is otherwise lacking. Congressional ability to confer standing is not boundless, however. Plaintiff must still have suffered an injury. Simple conference of statutory standing is insufficient by itself. Rather, Congress should articulate language that “at the very least identif[ies] the injury it seeks to vindicate and relate[s] the injury to the class of persons entitled to bring suit.” Lujan, 504 U.S. at 580 (Kennedy, J., concurring). Thus, Congress may overcome obstacles to congressionally created citizen standing by carefully crafting statutory language and establishing clear legislative history.

***

Whether Congress has done so in the Fair Credit Report Act requires more attention. What do you think?

Posted by: Caprice Roberts | Dec 1, 2015 10:54:25 AM

Bruce: Well, I suppose Congress can consistent with a literal reading of Article III, but it cannot consistent with standing precedent (save for an isolated and somewhat anomalous line in Warth v. Seldin that those on Robins’ side evoke regularly, but which is inconsistent with other decisions). The Court has repeatedly stated that injuries must be “in fact”: individualized and relatively concrete (save for “imminent injuries” which justify declaratory judgment actions and the like). Here, Congress has authorized individuals to recover “damages” but without any type of “harm” that amounts to injury in fact, only “statutory harm” that evades a showing of personalized injury. I understand that the response would be that, here, Congress has indeed “articulated” a “harm” of sorts and that harm is individualized: Spokeo published incorrect information about Robins specifically. But that’s not actual “harm” at all, unless we consider the negative consequences of Spokeo’s conduct, but, importantly, Robins has avoided relying on those consequences for fear of undermining class certification.

Caprice: thanks for the response. I agree the Court can “move the target,” which highlights the prudential driver of standing doctrine. But I still am not convinced Robins has a dispositively stronger standing argument than the other plaintiffs in the class. As for the excerpt in your book, I think we have different ideas of what Lujan and similar cases stand for. You write:

“Congress may create legal rights via statute, for example taxpayer and “citizen suit” standing, even where Article III standing is otherwise lacking.”

I agree with the first clause, but not the last. How can Congress circumvent Article III standing via a citizen suit provision? What cases stand for this? This is less of a challenge and more of a question: I am certainly open to the possibility that case law says this, but I haven’t seen such case law (yet). Certainly, Congress can create citizen suit provisions, but such provisions can only work to make injury that is already “actual” actionable via private litigation. As for taxpayer standing, that is (rather arbitrarily) limited to suits involving the Establishment Clause, which of course is not involved here, and in any event the Court has signaled that such an exception seems to make little sense so it might not have much longer left to live. And further, the exception for taxpayer standing does not circumvent the requirement for injury in fact as much as it helps overcome the prohibition against generalized grievances.

Posted by: Edward Cantu | Dec 1, 2015 12:13:32 PM

Edward, Thanks as well. Our casebook statement may imply too much given that I agree that Congress cannot get around Article III's constitutional minimums (though what is the minimum seems in practice to move, and I think based on the merits views in some cases). I also agree the Court's precedent makes it increasingly difficult to meet "actual injury" without pecuniary (or physical) loss. That said, much work depends on what we conceptualize as injury in the first place. I am arguing for a broader conception that goes beyond the limitation of compensation.

Also, the taxpayer standing cases (not applicable in Spokeo) are riddled with inconsistencies and strained interpretations and thus may not be long for the world. Your point is well taken that the exception goes to circumventing the generalized grievance prohibition. As to Spokeo, Robins may have an easier path with injury as misinformation that causes suffering (if not provable job/relationship loss) than the class members that lack inaccurate reporting but instead point only to inadequate procedural safeguards. Isn't there a difference between the fact of harm and the amount of provable pecuniary recovery? Did Congress intend that plaintiffs and the Courts enforce the Act's regulatory standards (Asher Steinberg's concern on an earlier thread) and thereby created a statutory minimum award?

Posted by: Caprice Roberts | Dec 1, 2015 12:46:33 PM

To be honest, I'm not really following your argument. You really just seem to be saying that because Congress has said that credit-reportees have a right to certain procedures, the failure to use those procedures is an injury, whether or not any inaccuracy results. I can't see, if that's so, what's left of a constitutional irreducible minimum of injury. On that view, if Congress said that credit reportees have a right to have their names displayed in certain fonts in the credit agencies' internal reports, there'd be injury if the agency used the wrong font - internally.

That said, how about this? The use of faulty procedures creates a risk of inaccurate reporting in the future, inaccurate reporting (let's assume) is injurious, and while the status of probabilistic injury is unclear after Clapper, there are some cases, like Monsanto, that say a substantial risk of injury satisfies Article III. I'm not sure why this point hasn't been made in Spokeo; at oral argument, Robins's counsel was happy to concede that the class would have to exclude class members who'd never suffered a false report. He claimed that the class was just defined, in the complaint, the way it was to avoid a fail-safe objection to certification, but that at certification some sort of algorithm would be used to identify people who suffered false reporting.

Posted by: Asher Steinberg | Dec 1, 2015 4:50:54 PM

Asher, thank you for the continued dialogue on these arguments. I'm saying that is what Congress seems to have created, though that alone won't save the claims. I agree that those with posted inaccurate information have a stronger case for actual injury, though still uphill. I see trouble with the class action as currently framed, but I think the best argument for the current framing is an intolerable risk of false reporting. With the mistakes alleged, then perhaps even those all who face the risk of imminent, irreparable harm warrant standing for at least injunctive relief. Of course, imminence and irreparability may prove too difficult a hurdle, especially if Robins is still trial ballooning how best to constitute the class.

Posted by: Caprice Roberts | Dec 1, 2015 5:05:06 PM

I feel like a lot of this shows the folly/difficulty of prudential standing. The court makes a "floor" for Article III, but it's not really a floor, because if Congress gives a remedy, then someone petitioning the court for that remedy has a controversy and is entitled to a ruling on that controversy granting that remedy.

I'm not a standing specialist, but I think part of the complication is that a lot of the standing cases are about generalized harms: Monsanto (harm to party by regulation required showing of harm by regulation), Clapper (harm by those spied on had to show that they were actually spied on), Lujan (harm to species from funded projects).

But that's not this case. This case has a fixed "wrong" and a fixed remedy for an individual that fits within the prescribed "wrong." Failure to be able to seek that remedy is an actual injury - econ 101 says this is an opportunity cost - money that could be paid but is not.

This is no different than many other statutes. Consider trademark dilution: blurring does not require any showing of economic injury. It's right there in the statute: "regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury." And, yet, no one argues that there's no case or controversy by the trademark owner because there's no actual injury. There is a controversy because there is behavior that the statute bans and the trademark owner has a remedy provided by Congress.

In short, I think the reason Robins seems so novel is that it's not really the type of standing case where there's no standing. At least, it shouldn't be in my view.

Posted by: Michael Risch | Dec 1, 2015 9:28:54 PM

Michael, the trademark point is an interesting one. I might be misinterpreting you, but I think you overemphasize the importance of economic harm, specifically, to arguments made against there being standing for Robins. Nobody means to equate “actual” with economic, at least I don’t. An actual injury could be to other concrete personal interests, even if those concrete interests arise from something abstract.

So, in the trademark context, I see infringement as perhaps akin to trespass of physical property (I’m far from a trademark expert so perhaps the analogy doesn’t work, but it seems to). In order to sue for trespass must a property owner plead/show economic harm as a result of the tort? Last I checked, the asnwer is no. Does she still have an injury in fact? Yes, she does; the harm is to her right of exclusion, which is considered a real and personal (even if abstract) interest of property owners. Trespass is thus considered violative of the owner’s personal interests not simply because a statute expediently declares it to be so, but rather because people are already presupposed to have an individualized, material, and non-speculative interest in protecting their property from use by others. Which is why we have other laws that establish property rights to begin with.

So, while drawing a definitive and conceptually clear line between actual/non-actual injury is impossible, I think this is how a court would draw the distinction between the “injury” Robins asserts and the injury relevant for trademark dilution, and that distinction makes a lot of sense, at least under current doctrine.

Posted by: Edward Cantu | Dec 2, 2015 4:43:48 PM

Hi Edward - I think we're on the same page, but I don't think it's so simple: "So, in the trademark context, I see infringement as perhaps akin to trespass of physical property" Sure, but this "trespass" (especially for dilution) is entirely a creature of statute. It's only wrongful to use a mark in a dilutive way because Congress says it so. Without that statute there's no trespass or injury.

So too with Robins - Congress says that behavior is wrongful and provides a remedy. There is injury because Congress says it is so. QED. I think returning to first principles of some sort of common law definition of what constitutes an injury is going down the rabbit hole.

Posted by: Michael Risch | Dec 2, 2015 9:24:48 PM

Hmm, I’m not so sure it’s a rabbit hole; I still see an meaningful distinction. One could always say that X is a legal principle because those with power to make law say so, but that doesn’t really illustrate much for present purposes.

WHY did Congress think that trademark dilution should be actionable? My understanding of trademark dilution—which is admittedly limited—is that the claim is premised on the diminishment of the uniqueness that represents the primary value of a trademark in the first place. Ie, Congress makes the injury actionable, but the injury is presumed to exist nonetheless (no need to prove actual damages is not the same as no need for there to be actual harm) due to the the nature of what trademarks do and why they exist (and the reality that dilution is much easier to result in recovery if the given mark is “famous” seems to support this point). So Congress’ definition of “harm” corresponds to an external property interest of sorts.

I suspect that the exercise of making conceptually meaningful distinctions is only a rabbit hole if we abstract things out to a level such that the distinctions appear to not exist.

Posted by: Edward Cantu | Dec 2, 2015 10:44:09 PM

True, but what statute did Congress ever pass where it grants a specific remedy but didn't think there was some injury? Certainly not the Robins case, as discussed above: increased risk is injury - or so Congress thinks. And from an expected value proposition, it's certainly true. Is there a statute where Congress gives the aggrieved a direct remedy but explicitly or implicitly finds that the person entitled to the bounty gets the bounty only because they they followed the statute?

One case I can think of is an appeal from PTAB challenges to patents, where the challenger is not actually at risk of infringing the patent for one reason or another. They get standing before the PTO, but arguably not in the Article III court on appeal. But that's nowhere near this case.

Posted by: Michael Risch | Dec 3, 2015 5:45:50 PM

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