This case was a putative consumer class action pending before the United States Supreme Court on the merits. The plaintiff and putative class representative, Thomas Robins, sought statutory damages in federal court under the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq. (“FCRA”), for a technical violation of that statute that has not caused him any harm. (In particular, Robins alleged that the defendant, Spokeo, Inc., a website operator that provides users with information about other individuals, published false (but favorable!) information about him, such as by misstating his educational level and financial status.) FCRA permits recovery for the bare violation of a statutory right. The case thus raises a constitutional separation of powers issue long familiar to NELF: does Article III of the United States Constitution, which limits the federal judiciary’s jurisdiction to “cases” and “controversies,” confer standing on a plaintiff who alleges a violation of a federal statute but who does not allege any resulting injury? Can Congress create standing in the federal courts that otherwise would not exist by legislative fiat? The Supreme Court has interpreted Article III’s case-or-controversy requirement as mandating “injury in fact”—i.e., a “concrete” and “particularized” harm that is “actual or imminent.” Clapper v. Amnesty Internat’l USA, 133 S. Ct. 1138, 1147 (2013). Despite this clear constitutional requirement of injury in fact, the Ninth Circuit in this case denied the motion to dismiss of defendant Spokeo, Inc., a website operator that provides users with information about other individuals. The lower court concluded that, because FCRA allows a plaintiff to recover statutory damages for the bare violation of a statutory right, the statutory violation is itself an injury in fact sufficient to satisfy Article III.
Notably, NELF briefed the same standing issue in the Supreme Court in 2011, in Edwards v. First American Corp., a case also arising from the Ninth Circuit. (And the Ninth Circuit in this case has based its decision primarily on its Edwards decision.) In Edwards, the Supreme Court granted certiorari but then dismissed the case without reaching the merits, on the basis that certiorari had been improvidently granted. While the Court did not explain its decision, it may have been due to the unique procedural posture of that case. Therefore, this pressing issue of Article III standing, in the absence of any actual injury, remains unresolved. (NELF has also briefed the same issue at the state statutory level, in particular under Mass. G. L. 93A before the Massachusetts Supreme Judicial Court. See Hershenow v. Enterprise Rent–A–Car Co., 445 Mass. 790 (2006)). Moreover, there are several federal statutes, like the ones at issue here and in Edwards (the Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq.), that allow plaintiffs to recover statutory damages (and reasonable attorney’s fees) without proving any concrete harm.* Therefore, the issue of Article III standing is of great significance to businesses in our region and the country as a whole. A business’s broad exposure to liability for statutory damages and attorney’s fees under these numerous laws is compounded by the class action mechanism, which is the procedural vehicle of choice for many consumers and employees (and their attorneys) suing under such statutes. Putative class members arguably need only show the bare, classwide violation of a common statutory right to obtain class certification. Businesses are thereby exposed to potential liability for vast, aggregated sums of statutory damages and high attorney’s fees, often resulting in a large settlement on a claim in which no class member has been injured.
NELF, joined by Associated Industries of Massachusetts, argued, on behalf of Spokeo, that Article III requires dismissal of Robins’ complaint because it fails to allege any injury in fact. “Injury in law” under FCRA, based on the bare violation of a statutory right, cannot satisfy Article III’s requirement that the violation must cause some concrete harm. Congress cannot create an injury in fact. It can only provide a private remedy to redress an injury in fact. Therefore, the injury-in-fact requirement under Article III is not satisfied merely because Congress has authorized an award of statutory damages for the violation of a statutory right. A federal court must always exercise independent review of a federal statute, along with the allegations of a plaintiff’s complaint invoking that statute, to determine whether the plaintiff has identified a concrete harm resulting from the violation of a statute. In short, the Article III inquiry to determine an injury in fact “has nothing to do with the text of the statute relied upon.” Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 97 (1998). As the Court has emphasized, “[i]t is settled that Congress cannot erase Article III’s standing requirements by statutorily granting the right to sue to a plaintiff who would not otherwise have standing . . . .” Raines v. Byrd, 521 U.S. 811, 820 (1997). Simply put, statutory standing to sue in federal court does not automatically create constitutional standing under Article III. In reaching its decision, the Ninth Circuit and other federal circuit courts have apparently disregarded this key precedent and have also misinterpreted other Supreme Court precedent as equating statutory standing with Article III standing. Certiorari should therefore be granted to resolve the confusion among the lower courts on this crucial issue and clarify that injury in fact is not coextensive with injury in law.
NELF initially filed an amicus brief supporting the defendant, Spokoe Inc’s petition for certiorari. When certiorari was granted in April, 2015, NELF filed an amicus brief on the merits in the case. On Monday, May 23, 2016, the Supreme Court issued its decision, agreeing with NELF, 6-2, that the plaintiff lacked standing because he had not demonstrated a concrete injury. Rather than dismissing the case, however, the Supreme Court remanded the case to the lower courts for a determination whether the plaintiff could demonstrate a concrete injury resulting from the alleged breach of the FCRA.
Although the Supreme Court did not dismiss the case outright, as NELF had argued it should do, this is nonetheless this is a victory for the principles underlying NELF’s brief—namely separation of powers and the federal judiciary’s exclusive authority to determine whether standing exists. In short, Congress cannot create standing in federal court for the mere breach of a statutory requirement that Congress has enacted.
*See, e.g., the Truth in Lending Act, 15 U.S.C. § 1640(a)(2)(B)); the Fair Debt Collection Practices Act, 15 U.S.C. § 1692k(a)(2)(B); the Telephone Consumer Protection Act, 47 U.S.C. § 227(b); the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(2); and the Video Privacy Protection Act, 18 U.S.C. § 2710(c)(1).