Wednesday, August 16, 2017
Page 3
Ninth Circuit Holds:
Website Inaccuracy Might Breach Fair Credit Reporting Act
Reverses Judge Wright’s Dismissal of Action Against Spokeo for Reporting That Plaintiff—Who Was Single, Childless, Unemployed—Had a Wife, Children and a Job
By SHERRI OKAMOTO
The Ninth U.S. Circuit Court of Appeals yesterday ruled that inaccuracies in a consumer credit report had caused an actionable injury to the consumer under the rubric laid down by the U.S. Supreme Court last year.
In a 6-2 decision in Spokeo v. Robins, decided May 16, 2016, the U.S. Supreme Court explained that constitutional standing depends on the existence of an injury that is both “concrete and particularized.”
When the case had first passed through the Ninth Circuit in 2014, a three-judge panel found Thomas Robins had asserted a viable claim for violation of the Fair Credit Reporting Act (“FCRA”) because of the company’s act of marketing incorrect information about Robins.
However, the Supreme Court said the Ninth Circuit’s analysis had erroneously elided the two factors necessary to establish he had suffered an “injury in fact” by concluding Robins had alleged a “concrete” injury because it was particularized.
The Supreme Court remanded the case to the Ninth Circuit to re-evaluate Robins’ claim against Spokeo.
‘People Search Engine’
Spokeo advertises itself as a “people search engine” that aggregates information about people from phone books, social networks, marketing surveys, real estate listings, business websites, and other public records.
The company then provides reports containing a person’s age, contact information, marital status, occupation, hobbies, economic health, and wealth—free of charge—on its website.
Robins, a resident of Virginia, filed a putative class action against the company after discovering an allegedly inaccurate report about him on its website.
The report indicated that he was wealthy, that he was married with children, and that he worked in a professional or technical field.
In fact, Robins was single, childless, and unemployed. He asserted that the inaccuracies in the Spokeo report were hurting his ability to find work because it made him seem overqualified for the positions he was seeking, and it conveyed the idea that he might want a higher salary or be unwilling to relocate because of his non-existent family.
Robins asserted that Spokeo qualified as a “consumer reporting agency” subject to the FCRA, and that the company had failed to “follow reasonable procedures to assure maximum possible accuracy” in the reports it produced.
The FRCA imposes a number of procedural requirements on consumer reporting agencies to regulate their creation and use of consumer reports. It also gives consumers affected by a violation of such requirements a right to sue the responsible party for willful violations—even if the consumers have not suffered any actual damages.
Judge Wright’s Dismissal
U.S. District Court Judge Otis D. Wright of the Central District of California dismissed Robins’ complaint, finding Robins lacked standing to sue because he could not prove any actual harm he suffered.
The Ninth Circuit on Feb. 4, 2014, reversed, finding Robins had established an actionable injury since he allegedly suffered particularized harm caused by Spokeo’s violation of his statutory rights, and the FCRA’s statutory damages could redress such injury.
Spokeo then petitioned the U.S. Supreme Court for certiorari, and the Supreme Court vacated the Ninth Circuit’s decision because the Ninth Circuit had only considered whether Robins suffered a particularized injury and did not analyze whether he had also suffered a concrete one.
O’Scannlain’s Opinion
On remand, the Ninth Circuit yesterday found he had. Judge Diannuid F. O’Scannlain wrote the opinion.
Although O’Scannlain noted that Robins only allegedly suffered an “intangible” harm, he said a procedural violation of a statute will constitute a concrete harm when the failure to comply with the statutory procedure presents gives rise to the sort of harm the statute was designed to protect against.
As the FCRA’s provisions were intended to protect consumers from the transmission of inaccurate information about them, the judge reasoned that a violation which undermines the accuracy of a consumer’s credit report is a concrete harm redressable by legal action.
But that doesn’t mean that a consumer can show a concrete injury just by proving a violation of the FCRA, he cautioned. There must be something about “the nature of the specific alleged reporting inaccuracies” that raises “a real risk of harm to the concrete interest that the FCRA protects,” O’Scannlain said.
He said did not need to “conduct a searching review for where that line should be drawn” in this case, however, because it “does not take much imagination” to understand how Spokeo’s inaccurate report about Robins “could be deemed a real harm.”
Could Be Worse
While O’Scannlain acknowledged that the misrepresentations could have been worse—indicating Robins had less education or money than he really did—he agreed that information about his age, marital status, education and employment history was the sort of information that may be important to potential employers and others who make use of consumer reports.
“Ensuring the accuracy of this sort of information thus seems directly and substantially related to FCRA’s goals,” the jurist.
The case is Robins v. Spokeo, No. 11-56843.
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