Court Breathes Life Into Lawsuit Over Inaccurate Online Data

Last Tuesday, the U.S. Court of Appeals for the Ninth Circuit revived a California man’s lawsuit accusing Spokeo, Inc. of violating the Fair Credit Reporting Act (“FCRA”). The FCRA regulates any “consumer reporting agency” that furnishes a “consumer report,” and those terms are broadly defined to include operators such as Spokeo. The lawsuit arose when Spokeo allegedly published an online profile about Thomas Robins that contained numerous material inaccuracies.

The lower court initially dismissed Robins’ claims. On appeal, the Ninth Circuit ruled to revive the suit, and Spokeo appealed to the U.S. Supreme Court. In May 2016, the Supreme Court asked the Ninth Circuit to look more closely at whether Mr. Robins had suffered the type of “concrete and particularized” injury needed to maintain the lawsuit. The gist of the Supreme Court’s decision is that plaintiffs must allege concrete injuries and not rely on mere statutory violations to establish Article III standing. The high court remanded the dispute to the Ninth Circuit to decide if Robins’ claims met this standard.

Spokeo sells data collected from various online sources to third parties, including employers, landlords and even people seeking romantic partners. Robins sued after learning that his Spokeo profile, which displayed someone’s else’s photo, claimed he was affluent, employed, married with children, in his 50s and had a graduate degree. Robins claims all of that was false and, as a result, accused Spokeo of violating the FCRA.

The case is significant because Robins initially sought to pursue a class action lawsuit, which if allowed to proceed could expose other online data providers such as Facebook and Google, to similar lawsuits. Writing for the Supreme Court, Justice Samuel Alito concluded that not all inaccuracies – such as a wrong zip code – could threaten real harm.

In Tuesday’s decision, the Ninth Circuit found that “it does not take much imagination” to see how Robins could have suffered real harm, given the importance of consumer reports to finding employment, buying or renting homes and obtaining loans. It therefore rejected Spokeo’s argument that Robins’ allegations of harm were too speculative to establish a concrete injury.

According to the Ninth Circuit, the alleged errors “do not strike us as the sort of mere technical violations which are too insignificant to present a sincere risk of harm to the real-world interests that Congress chose to protect with FCRA.” “While Robins may not show an injury-in-fact by merely pointing to a statutory cause of action, the Supreme Court also recognized that some statutory violations, alone, do establish concrete harm.”

The case is Robins v Spokeo, Inc., Ninth U.S. Circuit Court of Appeals, Case No. 11-56843.