Magistrate Judge Laurel Beeler recently examined the Supreme Court’s Spokeo decision in the context of a claim brought under the Fair Credit Reporting Act. The decision also provides new clarity on when over-breadth is a deal-breaker for class definitions. The case is Patel v. Trans Union, LLC, No. 14-CV-00522, 2016 WL 6143191 (N.D. Cal. Oct. 21, 2016).
In Patel, the plaintiff alleges defendants disseminated a consumer-information report that wrongly described him as a terrorist and as having a criminal record. Plaintiff further alleged that when he asked defendants for their file on him, they failed to send him his complete file.
The court had previously certified classes; defendants sought decertification under Spokeo, arguing plaintiff had not suffered “concrete” harm. Judge Beeler disagreed as to both aspects of the plaintiff’s case.
First, regarding the inaccurate information, the court reasoned:
The court sees little difficulty in concluding that the alleged inaccuracies — being wrongly branded a potential terrorist, or wrongly ascribed a criminal record — are themselves concrete harms. This is fully in line with Spokeo’s express analysis. There, in describing cases in which the violation of a statutory right “can be sufficient…to constitute injury in fact,” the Court analogized to torts for which the law has “long permitted recovery” — picking out, specifically, the torts of “libel” and “slander per se.” Spokeo, 134 S. Ct. at 1549. That these torts share something crucial with the inaccuracies alleged here, in terms of the operative injury to reputation, is what no one will deny. Conversely put, a report that misidentifies someone as a terrorist or criminal “is not as benign as an incorrect zip code.” SeeLarson, 2016 WL 4367253 at *3 (quoting Hawkins v. S2Verify, 2016 WL 3999458, *5-6 (N.D. Cal. July 26, 2016)); see Spokeo, 134 S. Ct. at 1550..
It does not matter that the defendants disseminated the mistaken information narrowly: only to users of their subscription service (like Mr. Patel’s prospective landlord), rather than, say, to local newspapers or a publicly accessible website. The core harm is in the sharing of erroneous and inherently damning information about the plaintiff — regardless of how widely it is broadcast.
There is good reason to view the non-disclosure alleged here as within that family of claims in which Spokeo discerns “concrete” Article III harm. A main purpose of FCRA, after all, is “to ensure ‘fair and accurate credit reporting.’ ” Spokeo, 136 S. Ct. at 1545 (quoting 15 U.S.C. § 1681(a)(1)). Toward that end, with FCRA, “Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk.” Spokeo, 136 S. Ct. at 1550. Requiring consumer-reporting agencies to disclose, “upon request,…[a]ll information in [a] consumer’s file,” § 1681g(a)(1), empowers a consumer to monitor her file for incorrect data. Section 1681g’s disclosure requirement thus seems exactly a device “designed to decrease [the] risk” that a credit-reporting agency will “disseminat[e]…false information.” But a consumer cannot monitor her file for falsity if she is not given the relevant information. That impediment, that non-disclosure, is thus a real injury. At the very least, preventing a consumer from monitoring her file presents a “risk of real harm” of exactly the type that FCRA seeks to prevent (i.e., the dissemination of incorrect information); and this risk can itself “satisfy the requirement of concreteness.” SeeSpokeo, 136 S. Ct. at 1549-50. So it is not simply the “bare…violation” that predicates Article III injury in this context; it is the hindering of a consumer’s ability to monitor and correct information about herself. Finally in this vein, the harms from non-disclosure and inaccuracy may be practically inseparable. Which is to say, a failure to disclose will seem all the more injurious where it is linked to undeniably harmful false information. If that is so, then it may be appropriate to finish this part of the inquiry by recalling that the information disseminated here was not “entirely accurate.” Id. at 1550. And that, unlike an “incorrect zip code,” the alleged inaccuracies were of a nature to “cause harm” themselves or at least to “present [a] material risk of harm.” Id. at 1550.
[A] class is not fatally “overbroad,” and is not subject to being decertified, merely because, on the defendants’ view of the merits, some absent class members may not be able to establish liability. Rule 23 does not demand that a whole proposed class prove its case prospectively — or else no class can be formed. Put differently, and perhaps put most directly, uninjured absent plaintiffs do not necessarily defeat certification. The court pointed this out in its previous certification order. The court also thinks that the defendants use the concept of class “overbreadth” in a way that confuses more than it clarifies. (Though, in fairness to the defendants, it is a term that the case law does not handle with precision.) Maybe it is a more a question of degree than of kind, but the notion of class overbreadth seems best reserved, not for cases (like this) in which some absent plaintiffs may ultimately fail to prove their case, but for those situations in which a class definition innately sweeps past even the conceivable bounds of liability..