© 2016 The Texas Lawbook.
By Michelle Hartmann and Christa Powers of Sidley Austin
(Oct. 24) – Injury-in-fact is one of the three “irreducible constitutional minimum[s]” necessary for standing to sue in federal court. It requires not only that the relevant “invasion of a legally protected interest” be “particularized,” but also that it be “concrete.”
But following the Supreme Court’s guidance in the Spokeo decision, courts are required to analyze the separate and independent element of “concreteness,” which the Court defined as “quite different from particularization.” This article examines that separate element and post-Spokeo decisions interpreting it.
Before Spokeo, some circuit courts imposed a fairly lenient standing requirement for plaintiffs. For example, the 9th Circuit previously held that “the violation of a statutory right is usually a sufficient injury in fact to confer standing,” which was supported by its previous decision in Edwards v. First American Corp., as well as the 6th Circuit’s decision in Beaudry v. TeleCheck Services Inc.
In Spokeo, the Supreme Court addressed this trend head on, emphasizing that plaintiffs cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” The Court held that, to establish injury-in-fact, the plaintiff must demonstrate an injury that is both “concrete and particularized” – meaning that the injury “must affect the plaintiff in a personal and individual way” (i.e., be particularized), and it must be “‘de facto’ [and] actually exist” (i.e., be concrete).
As an example of a “technical” harm that would not meet the “concreteness” requirement, the Supreme Court noted a bare procedural violation of the Fair Credit Reporting Act as merely disseminating an incorrect zip code. The Court provided as an additional example of “procedural” harm that would not meet the “concreteness” requirement an instance where a consumer reporting agency failed to provide notice to the user – despite including accurate information about her.
As taught by the Supreme Court, these instances pose situations where the plaintiffs do not meet the threshold standing requirement and, therefore, cannot recover the prescribed statutory damages.
Notwithstanding the mandate that a concrete injury must be alleged “even in the context of a statutory violation,” the Court went on to recognize that Congress may play a “role in identifying and elevating intangible harms.” In so doing, the Court fell short of squarely articulating the circumstances when Congress can, through its words, elevate a statutory violation to the level of tangibility – meaning, when Congress can mandate that a statutory violation satisfies the element of concreteness for purposes of Article III of the Constitution.
Post-Spokeo, it seems clear that a mere procedural or technical violation of a statute – such as the zip code or notice example provided in Spokeo – should be insufficient to confer standing. Thus, while many statutes, such as the FCRA, provide for a specific amount of statutory damages (in this case, from $100 to $1000) as an alternative to actual damages (such as, in the case of the FCRA, when the defendant “willfully fails to comply with any requirement” imposed by the statute), an accurate interpretation of Spokeo requires dismissal for failure to meet the standing requirement in instances where no actual or de facto harm is alleged.
That said, parsing which statutory violations involve technical and procedural violations versus which statutory violations involve more tangible and substantive violations is not without complication, as is easily recognized by the inconsistent holdings regarding the issue in post-Spokeo decisions:
• The 8th Circuit, in Braitberg v. Charter Communications, Inc., held that the plaintiff asserted “a bare procedural violation, divorced from any concrete harm” under the Cable Communications Act and affirmed the district court’s decision granting the defendants’ motion to dismiss for lack of standing.
• The 5th Circuit, in Lee v. Verizon Communications, Incorporated, held “that a plaintiff’s bare allegation of incursion on the purported statutory right to ‘proper plan management’ under ERISA was insufficient to meet the injury-in-fact prong of Article III standing” and affirmed district court’s dismissal of case.
• The D.C. Circuit, in Hancock v. Urban Outfitters, Inc., vacated and remanded with instructions to dismiss plaintiffs’ claims under D.C. consumer laws, because “[t]he Supreme Court’s decision in Spokeo thus closes the door on Hancock and White’s claim that the Stores’ mere request for a zip code, standing alone, amounted to an Article III injury.”
• The 6th Circuit, in Galaria v. Nationwide Mutual Ins. Co., held that the “[p]laintiffs’ allegations of a substantial risk of harm [under the FCRA], coupled with reasonably incurred mitigation costs, were sufficient to establish a cognizable Article III injury at the pleading stage of the litigation” and reversed the district court’s dismissal of the case.
• The 3rd Circuit, in In re Nickelodeon Consumer Privacy Litigation, held that the plaintiffs alleged a particularized and concrete injury for Article III standing under the Video Privacy Protection Act, the Wiretap Act, the Stored Communications Act, the California Invasion of Privacy Act, the New Jersey Computer Related Offenses Act, because “[w]hile perhaps ‘intangible,’ the harm is also concrete in the sense that it involves a clear de facto injury, i.e., the unlawful disclosure of legally protected information.”
• And the 11th Circuit, in Church v. Accretive Health, Inc., held that the plaintiff’s alleged injury resulting from the defendant’s failure to provide certain disclosures under the Fair Debt Collections Practices Act “was one that Congress has elevated to the status of a legally cognizable injury through the FDCPA.” The uneven patchwork of decisions underscores the difficulty in deciphering a tangible and existing statutory harm from an intangible and technical statutory harm – thereby leaving both plaintiffs and defendants with arguments to lodge.
Michelle Hartmann is a partner and Christa Powers is an associate in Sidley Austin’s Securities & Shareholder Litigation and Labor and Employment Practice Groups. They frequently litigate securities and employment class action matters.
This article has been prepared for informational purposes only and does not constitute legal advice. This information is not intended to create, and the receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this without seeking advice from professional advisers. The content therein does not reflect the views of the firm.
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