January 31, 2017 Articles

“Concrete” Disparities in Article III Case Law after Spokeo

Some courts independently analyze whether concrete harm has been alleged; others find the violation of certain statutory “rights” to be inherently concrete.

By Michael N. Wolgin

When is an intangible injury, such as an unlawful disclosure or an invasion of privacy, “concrete” for purposes of establishing Article III standing? The question has been fiercely debated since the U.S. Supreme Court issued its opinion in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016). And while Spokeo is not entirely clear on the factors that determine concreteness, the majority opinion in Spokeo is clear that concreteness must be determined by the courts, not by Congress. The majority held that it is always the role of the courts to review a statutory right to determine whether it qualifies as “real” or merely “abstract.” In a concurring opinion, however, Justice Thomas argued in favor of a different framework in which concreteness automatically exists for violations of all “private rights” created by statute. This discrepancy between the majority opinion and Justice Thomas’s concurrence has also emerged in divergent rulings by various circuit courts of appeals and district courts.

Untitled Document

The Spokeo Majority Opinion
In Spokeo, the Supreme Court considered whether a plaintiff had Article III standing to bring suit for various violations of the Fair Credit Reporting Act (FCRA) against Spokeo, Inc., a people search website. Spokeo allegedly gathered and disseminated inaccurate information about the plaintiff, Thomas Robins, in response to a search conducted by a third party. Robins alleged that the profile of himself generated by Spokeo misrepresented his family, employment, financial status, age, and level of education. Robins contended that Spokeo willfully violated certain provisions of the FCRA, including the requirements to ensure the accuracy of an FCRA “consumer report” and to notify providers and users of consumer information of their responsibilities under the act.

The Ninth Circuit held that Robins met the injury test because the FCRA provides a private right of action and statutory damages for the violations alleged by Robins. The Ninth Circuit found that Robins sufficiently alleged that his particular statutory rights were violated and that his personal interests in the handling of his credit information were sufficiently individualized. The court further found that it was not necessary to evaluate the sufficiency of Robins’s alleged actual injuries (harm to his employment prospects and anxiety); standing existed solely by virtue of the alleged statutory violations.

Justice Alito, writing for the majority of the Supreme Court, reversed and remanded for the Ninth Circuit to determine whether Robins alleged a “concrete” injury. The Court explained that a “concrete” injury is “de facto”—meaning “real”—and not “abstract.” Intangible injuries or procedural statutory violations, the Court explained, could be “concrete” but only if the plaintiff has alleged real harm. The Court rejected the notion that “a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” The Court noted that “history and the judgment of Congress play important roles” (but not determinative roles), in identifying a “real” intangible injury. The Ninth Circuit was instructed on remand to determine “whether the particular procedural violations alleged in [Spokeo] entail a degree of risk sufficient to meet the concreteness requirement.”

Justice Thomas’s Concurrence
Justice Thomas’s concurring opinion provided a different view of the injury-in-fact requirement. According to Justice Thomas, “Congress can create new private rights and authorize private plaintiffs to sue based simply on the violation of those private rights. . . . A plaintiff seeking to vindicate a statutorily created private right need not allege actual harm beyond the invasion of that private right.” (Justice Thomas distinguished “public rights,” or duties owed “to the whole community, considered as a community, in its social aggregate capacity,” which require an independent showing of concreteness to satisfy Article III.) According to Justice Thomas, remand was required for the Ninth Circuit to determine “the nature” of the right to accurate personal information created by the FCRA; if the act creates a private right “owed personally to Robins,” then “the violation of the legal duty suffices for Article III injury in fact.”

Unlike Justice Thomas, the majority did not find any authority for Congress, by itself, to deem an injury “concrete” for purposes of establishing Article III standing. Rather, the majority held that the courts must decide whether a harm proscribed by a statute is sufficiently concrete for purposes of standing.

Decisions Applying the Majority Opinion’s Framework
Most circuit court decisions subsequent to Spokeo have engaged in the required independent analysis of determining whether an alleged statutory violation in fact represents a “concrete” injury. For example, in Strubel v. Comenity Bank, 842 F.3d 181 (2d Cir. 2016), the Second Circuit found no Article III standing for a portion of the Truth-in-Lending Act disclosure violations alleged in that case. In determining which violations survived the concreteness test, the Second Circuit explained that

[w]e heed Spokeo’s instruction to consider separately the risk of harm from each of the “particular procedural violations alleged in this case,” and it is only . . . where the alleged notice violation risks a consumer’s ignorance of obligations necessary to his credit rights that we identify a “material” degree of risk sufficient to plead concrete injury.

The Fifth, Sixth, Seventh, Eighth, Eleventh, and D.C. Circuits have similarly applied the Spokeo majority’s framework for determining concreteness. See Lee v. Verizon Commc’ns, Inc., 837 F.3d 523 (5th Cir. 2016) (finding no concrete harm for violation of pension plan management requirements under the Employee Retirement Income Security Act (ERISA) absent alleged adverse effect to actual benefits); Soehnlen v. Fleet Owners Ins. Fund, 2016 WL 7383993 (6th Cir. Dec. 21, 2016) (finding no concrete harm suffered as a result of alleged violations of ERISA); Meyers v. Nicolet Rest. of De Pere, 2016 WL 7217581 (7th Cir. Dec. 13, 2016) (finding no concrete harm for violation of Fair and Accurate Credit Transactions Act (FACTA) for failure to truncate expiration date of customer’s credit card on receipt); Braitberg v. Charter Commc’ns, Inc., 836 F.3d 925 (8th Cir. 2016) (finding no concrete harm where consumer failed to show a material risk of harm from a cable television provider’s failure to destroy personally identifiable information as required by the Cable Communications Policy Act (CCPA)); Nicklaw v. CitiMortgage, Inc., 839 F.3d 998 (11th Cir. 2016) (finding no concrete harm for violation of a New York law requiring recording of satisfaction of mortgage within certain time); Hancock v. Urban Outfitters, Inc., 830 F.3d 511 (D.C. Cir. 2016) (finding no concrete harm for the “naked assertion” that zip code was requested and recorded by retailer in violation of D.C. consumer protection laws); see also Galaria v. Nationwide Mut. Ins. Co., 2016 WL 4728027 (6th Cir. Sept. 12, 2016) (standing existed for violation of FCRA for theft of personal data, due to the alleged continuing risk of fraud and identity theft beyond the speculative allegations of “possible future injury”).

A number of district court rulings have similarly applied Spokeo’s framework. See, e.g., Groshek v. Time Warner Cable, 2016 WL 4203506 (E.D. Wis. Aug. 9, 2016) (failure to provide to consumer required disclosure under FCRA is not concrete absent showing of actual harm); Gubala v. Time Warner Cable, 2016 WL 3390415 (E.D. Wis. June 17, 2016) (retaining personally identifiable information in violation of CCPA is not concrete absent showing of actual harm); Noble v. Nev. Checker CAB Corp., 2016 WL 4432685 (D. Nev. Aug. 19, 2016) (failure to truncate credit card information on receipts as required by FACTA is not concrete absent showing of risk of harm); Romero v. Dep’t Stores Nat’l Bank, 2016 WL 4184099 (S.D. Cal. Aug. 5, 2016) (violations of Telephone Consumer Protection Act (TCPA) are not concrete absent showing of actual harm); Perry v. Columbia Recovery Grp., LLC, 2016 WL 6094821 (W.D. Wash. Oct. 19, 2016) (violation of notice requirements under Fair Debt Collection Practices Act (FDCPA) is not concrete absent showing of actual harm).

Decisions Applying Justice Thomas’s Approach
A significant number of decisions have, in effect, applied Justice Thomas’s approach, automatically finding standing for violations of private statutory rights. In In re Nickelodeon Consumer Privacy Litigation, 827 F.3d 262 (3d Cir. 2016), the Third Circuit relied on earlier Supreme Court case law holding that “in some cases an injury-in-fact may exist solely by virtue of statutes creating legal rights, the invasion of which creates standing.” In re Nickelodeon involved the alleged disclosure by an online search provider and website of their users’ personal information allegedly protected under various privacy laws. Instead of independently analyzing whether the statutory violations at issue created a real harm or material risk of harm, as Spokeo requires, the court appeared to find standing based only on the fact that “Congress ha[d] long provided plaintiffs with the right to seek redress for unauthorized disclosures of information that, in Congress’s judgment, ought to remain private.”

In addition, in Church v. Accretive Health, Inc., 654 F. App’x 990 (11th Cir. 2016), the Eleventh Circuit ruled that omitting certain required disclosures under the FDCPA is concrete because it invades a “substantive right” created by Congress. The court held that “through the FDCPA, Congress has created a new right—the right to receive the required disclosures in communications governed by the FDCPA—and a new injury—not receiving such disclosures.” The court did not independently analyze whether this injury was real or only abstract; it was content to simply rely on the fact that the right and the injury were created by the subject federal statute.

A number of district court cases have also found intangible harms to be concrete based solely on the fact that Congress created a “substantive right” with respect to the conduct identified in the statute. See, e.g., Graham v. Pyramid Healthcare Sols., Inc., 2016 WL 6248309 (M.D. Fla. Oct. 26, 2016) (finding standing solely because “plaintiff has statutorily-created rights under the FCRA to receive a clear and conspicuous stand-alone disclosure”); Guarisma v. Microsoft Corp., 2016 WL 4017196 (S.D. Fla. July 26, 2016) (finding standing for failure to truncate credit card information on receipts as required by FACTA, “as soon as a company prints the offending receipt”); Wilkes v. CareSource Mgmt. Grp. Co., 2016 WL 7179298 (N.D. Ind. Dec. 9, 2016) (citing Thomas concurrence and finding violations of TCPA were concrete even if plaintiff never “received [or] was annoyed or distracted” by illegal phone calls); Carney v. Russell P. Goldman, P.C., 2016 WL 7408849 (D.N.J. Dec. 22, 2016) (relying on Thomas concurrence to find standing where “private duty” under the FDCPA was violated); Bautz v. ARS Nat’l Servs., Inc., 2016 WL 7422301 (E.D.N.Y. Dec. 23, 2016) (same); Linehan v. Allianceone Receivables Mgmt., Inc., 2016 WL 4765839 (W.D. Wash. Sept. 13, 2016) (finding standing solely due to violation of FDCPA).

After Spokeo, federal courts have varied in whether they apply independent scrutiny to the concreteness of certain statutory violations. Some courts, in keeping with the majority opinion in Spokeo, independently analyze whether a plaintiff asserting the violation of a statute has sufficiently alleged a concrete harm to confer standing. Other courts, following Justice Thomas’s concurrence, have found the violation of certain statutory “rights” to be inherently concrete. Differences will likely continue in the courts until more robust precedent is developed by the Supreme Court and the circuit courts of appeals.

Keywords: litigation, class actions, concrete injury, standing, Spokeo, Inc. v. Robins

Michael N. Wolgin – January 31, 2017