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SCOTUS Will Examine Businesses’ Attempt to Curb Consumer Suits

— May 4, 2015


Image: Public domain


SCOTUS will examine businesses’ attempt to curb consumer suits in Spokeo v. Robins during the October term. If the justices side with Spokeo, Inc., an information firm that creates personal dossiers based on public information, business will have succeeded in further “corporatizing” law in America. Several federal statutes will be impacted as the decision could limit Congress’ power to authorize consumer suits in federal court.

The case is brought on appeal by Spokeo and involves Thomas Robins, plaintiff in a suit claiming Spokeo violated the U.S. Fair Credit Reporting Act. Robins asserts that he was harmed financially and emotionally by incorrect information Spokeo distributed to businesses and human resources professionals. The information, he claims, misrepresented Robin’s wealth, marital status and education, thereby negatively impacting his employment prospects. The suit is seeking status as a class action. If awarded that status, all members of the class could be awarded a minimum of $100 in damages if Robins wins.

The question around which the suit revolves is whether federal courts can adjudicate cases where damages have been authorized by statute to those who haven’t suffered concrete harm. In 2001, SCOTUS held that federal courts have jurisdiction when plaintiffs have been harmed in a way that is “concrete and particularized” and “actual or imminent.”

The Spokeo issue is not new to the Supreme Court. It heard a case over whether First American Financial Corp. was running an illegal title-insurance kickback scam that violated the Real Estate Settlement Procedures Act. For undisclosed reasons, the case was dismissed.

Spokeo had 29 potential class action claims filed against it in the first four months of 2014 under the Fair Credit Reporting Act. In 2012, the company settled with the Federal Trade Commission for $800,000 regarding privacy and its marketing practices. Other businesses are stepping up to support Spokeo, including Google, Inc., Facebook, Inc., Yahoo, Inc. and eBay, Inc.

Robins asked the court not to take Spokeo and he was joined in that request by the Obama administration. Both felt that there was a long-standing precedent allowing plaintiffs to claim injuries from the publication of false information.

Apparently, SCOTUS thinks there’s a compelling reason to look at this issue again. Personally, I’m glad they took the case. Spokeo’s track record makes it look like the company needs a lesson in proper business conduct. Rather than running to the SCOTUS like a crying child not getting his own way, maybe Spokeo should suck it up, pay those it harms and clean up its act.

Or, we could root for Spokeo to help Orwell’s 1984 take one more step forward in becoming reality.


Business Bid to Curb Consumer Suits Gets Top U.S. Court Look

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