Corporate > AG Deal Diary > Supreme Court to Consider Constitutional Limits on Statutory-Damages Suits
28 Apr '15

Supreme Court to Consider Constitutional Limits on Statutory-Damages Suits

On Monday, April 27, 2015, the Supreme Court agreed to hear an important constitutional case that could dramatically limit the viability of class action lawsuits claiming millions or billions of dollars in statutory damages for technical violations of federal privacy, data breach and consumer protection laws. The Supreme Court took the case at the urging of a number of companies and groups—such as Facebook, Google, Trans Union, the U.S. Chamber of Commerce and the Consumer Data Industry Association—with a strong stake in discouraging such abusive and costly class actions.

At issue in Spokeo v. Robins (No. 13-1339) is whether Congress can lawfully confer Article III standing on a plaintiff or group of plaintiffs for a bare violation of a federal statute and in the absence of any concrete harm (so-called “statutory injury”). The case arises from a dispute between Spokeo, Inc., an operator of a “people search engine” that generates search results based on publicly available information, and Thomas Robins, an individual who appeared in Spokeo’s search results. Robins filed suit against Spokeo in 2010 on behalf of a putative class of “millions of individuals” over allegedly willful violations of the Fair Credit Reporting Act (FCRA). The Ninth Circuit held that Robins possessed Article III standing to bring suit based on Congress’ creation of a private right of action for willful FCRA violations—and that no further injury allegation was required.

The Supreme Court’s answer to the statutory injury question raised in Spokeo could have an enormous impact on class action defense, because of the number of laws providing for statutory damages, as well as the potential exposure that companies face under such statutes.

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