The Supreme Court’s Spokeo Decision Left Confusion in Its Wake. What Happened, and What Comes Next?   

When you read the word “harm,” what comes to mind?

If you’re like most people, your first thought is probably a physical injury – a broken bone, a cut, a concussion, or something like…

When you read the word “harm,” what comes to mind?

If you’re like most people, your first thought is probably a physical injury – a broken bone, a cut, a concussion, or something like that.

If you stretch a little further, you might think about loss of money, damage to property, or even damage to reputation.

What if a website gave other people the impression you were wealthy, highly educated, and married with children, but you weren’t any of those things? Is that “harm?”

It may seem like a silly hypothetical, but it was the dispute at the center of one of the most impactful decisions of the last decade in the world of federal litigation, as well as class actions. The consequences of that decision continue to transform the litigation landscape.

In 2010, Thomas Robins filed suit under the Fair Credit Reporting Act (FCRA) against Spokeo—a company operating a people search website drawing from a variety of data sources about individuals—for incorrectly stating in a report about him that he was a high-income, married professional and father with a graduate degree. Most notably, Robins claimed that prospective employers who saw his Spokeo profile could have made an adverse decision about his employment application based on the perception that he was wealthy (Robins was unemployed at the time). Robins sought a maximum statutory penalty of $1,000 per asserted violation on behalf of himself and a putative nationwide class.

Initially, Robins did not meet with success. The district court dismissed his claim for failing to meet one of the U.S. Constitution’s basic standards for filing a lawsuit—you must allege an “injury in fact.” Robins appealed to the Ninth Circuit Court of Appeals, which took a broader view of that requirement. The Ninth Circuit reversed the lower court and found that a technical violation of the FCRA statute alone was enough for Robins to claim he was harmed.

Spokeo sought and obtained U.S. Supreme Court review. In its 2016 ruling in Spokeo, Inc. v. Robins, the Court found that the Ninth Circuit had skipped a couple of important steps and told it to go back to the drawing board. Specifically, the Court reminded the Ninth Circuit that plaintiffs don’t just need to allege a statutory injury—they need to allege a concrete injury, something “real, and not abstract,” that resulted in more than a “bare procedural” harm. While the Court didn’t give its view on whether Robins’ claims involved a real injury, many court-watchers assumed its guidance left the Ninth Circuit little choice but to throw out the lawsuit.

As it turned out, the Ninth Circuit had other ideas. After applying its own more expansive analysis, a Ninth Circuit panel determined that “even seemingly flattering inaccuracies (such as those in Spokeo’s report on Robins) can hurt an individual’s employment prospects” and revived Robins’ lawsuit yet again. It’s worth noting at this point Robins never actually alleged Spokeo’s reporting stopped him from getting a job.

The Ninth Circuit’s post-Spokeo holding—that the bare violation of a statute still can amount to a concrete harm when it comes to the standard for filing lawsuits—created a tremendous amount of confusion for courts grappling with what exactly counts as “real” harm. Some courts, like the Sixth Circuit, disagreed directly with the Ninth and found that the violation of a consumer protection statute was not enough to file a lawsuit because the plaintiffs did not allege any resulting real world harm. Other courts agreed with the Ninth Circuit’s approach by, for example, finding that plaintiffs in a data breach lawsuit did not actually have to show their data had been misused to allege harm.

May 16th marked the sixth anniversary of the Spokeo decision. Spokeo’s first few birthdays were rough, as lower court attempts to interpret the reasoning in Spokeo resulted in a tangled knot of precedent and improvisation.

But things are looking up. Recognizing the unsettled landscape in Spokeo’s aftermath, the Supreme Court provided an additional, important degree of clarity with its June 2021 ruling in TransUnion v. Ramirez. The Court’s reasoning in that case shines a bright light on the lingering constitutional question of what is considered real harm, and provides clear guidance.

For more on how the Supreme Court’s decision in TransUnion is shaping the evolution of lower court rulings on the definition of harm for the purposes of being able to bring a lawsuit in federal court, join the ILR mailing list or follow us on LinkedIn to be the first to receive our upcoming research and blog posts.