Supreme Court to Hear Case on Limiting Consumer Lawsuits

By | April 28, 2015

The U.S. Supreme Court will consider a business-backed bid to put new limits on Congress’s power to authorize consumer lawsuits in federal court.

The justices said they will hear an appeal from the data broker Spokeo Inc. in a dispute with implications for a slew of federal statutes.

Spokeo, which uses public information to compile personal dossiers, is seeking to stop a lawsuit by a man who says the company misrepresented his education, wealth and marital status.

The suit, seeking class action status, accuses Spokeo of violating the U.S. Fair Credit Reporting Act, which authorizes damages of at least $100 for each victim.

The central question is whether federal judges can hear cases when a statute authorizes damages to someone who hasn’t suffered any concrete harm, as Spokeo contends is the case with plaintiff Thomas Robins.

Businesses say that issue has broad implications, affecting laws governing copyrights, real-estate settlements, employee benefits, disabilities and housing discrimination. Under the Fair Credit Reporting Act, 29 would-be class actions were filed in the first four months of 2014, Spokeo said in its appeal.

The companies supporting Spokeo in the case include eBay Inc., Facebook Inc., Google Inc. and Yahoo! Inc.

A 2001 Supreme Court decision said federal courts have jurisdiction only if a plaintiff has suffered an injury that is “concrete and particularized,” as well as “actual or imminent.”

Human Resources

Robins says the inaccurate information damaged his employment prospects because Spokeo at the time was marketing its information to businesses and human resources professionals. Robins says he suffered financial and emotional harm.

Spokeo’s marketing practices led to an $800,000 privacy settlement with the Federal Trade Commission in 2012.

Robins urged the court not to hear the case. He said American law has long recognized injuries stemming from the publication of false information.

In agreeing to take up the case, the justices rejected the recommendation of the Obama administration, which said the appeal was a poor candidate for Supreme Court review. The administration said the publication of false information was a sufficient injury to let Robins press his lawsuit.

The issue before the justices is one they considered three years ago in a case involving accusations that First American Financial Corp. operated an illegal title-insurance kickback scheme in violation of the Real Estate Settlement Procedures Act. The court dismissed the case without explanation.

The justices will hear the latest case in the nine-month term that starts in October.

The case is Spokeo v. Robins, 13-1339.

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