Earlier today, the Ninth Circuit issued its long-awaited Article III standing opinion in Robins v. Spokeo. The Ninth Circuit’s new opinion comes after the Supreme Court vacated and remanded the Ninth Circuit’s earlier opinion in the same case.
The Ninth Circuit’s opinion today continues a trend among the circuit courts, identifying intangible harms arising from statutory violations that constitute concrete harm under Article III.
In reaching its conclusion, the Ninth Circuit borrowed liberally from the recent Second Circuit decision in Strubel. It also cites a range of other circuit court opinions, suggesting a burgeoning consensus in what had been a murky and arguably dissonant jurisprudence.
The Ninth Circuit laid out its framework as follows:
In evaluating Robins’s claim of harm, we … ask: (1) whether the statutory provisions at issue were established to protect his concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.
To answer the first question, the court examined the statutory purpose, and whether those aims were “‘real,’ rather than purely legal creations.” In holding that they were, the court also pointed to the fact that similar interests have been protected at common law:
Just as Congress’s judgment about an intangible harm is important to our concreteness analysis, so is the fact that the interest Congress identified is similar to others that traditionally have been protected.
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The Third Circuit handed down an opinion Monday holding that a violation of the Telephone Consumer Protection Act (TCPA) confers Article III standing even in the case of intangible injuries.
The opinion may prove to be less interesting for its impact on TCPA jurisprudence than for guiding courts in their efforts to understand and apply the Supreme Court’s Spokeo decision. After all, within the TCPA context, there already appears to be a consensus that statutory violations satisfy Article III’s requirements.
But post-Spokeo, courts have grappled with the opinion’s distinction between “procedural” and “substantive” statutory violations. Some courts have focused on that distinction; others have found it unhelpful.
The Third Circuit’s new decision, in Susinno v. Work Out World, does not require distinguishing between procedural and substantive harms – even though the Third Circuit’s earlier Horizon decision had emphasized the distinction. Per Susinno:
We summarize Horizon’s rule as follows. When one sues under a statute alleging “the very injury [the statute] is intended to prevent,” and the injury “has a close relationship to a harm . . . traditionally . . . providing a basis for a lawsuit in English or American courts,” a concrete injury has been pleaded.
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It’s axiomatic that – at the pleading stage – all inferences are to be drawn in plaintiffs’ favor. All well pled allegations are to be taken as true.
Yet complaints are often nitpicked, especially by defendants who foresee trouble once discovery is underway. They search for holes in the pleadings, even when (or especially when) those holes are likely to be filled later with evidence.
That strategy often works. So plaintiffs can take solace in the new Second Circuit opinion that not only reiterates these general principles, but expressly relies on them to form the backbone of its opinion.
The case is John v. Whole Foods Market Group. Plaintiff alleged Whole Foods systematically overstated the weights of prepackaged foods, leading to overcharges for its customers. The case followed a New York Department of Consumer Affairs investigation, which concluded some 89% of Whole Foods’ prepackaged foods featured overstated weights.
Whole Foods moved to dismiss on standing grounds. It argued that just because the weight of 89% of its food had been overstated, that didn’t necessarily mean that the weight of plaintiff’s food had been overstated. So, Whole Foods argued, plaintiff could not plausibly allege that he overpaid. Whole Foods also sought dismissal on the ground that the complaint lacked details about the New York investigation’s methodology.… Read more
The Eleventh Circuit yesterday joined several other courts in holding that a bare procedural violation of the Video Privacy Protection Act confers Article III standing under the Supreme Court’s Spokeo decision.
In Perry v. Cable News Network, the plaintiff alleged that a downloadable CNN app for smartphones tracks and records user’s views of news articles and videos. Plaintiff alleged that when a user closes the app, CNN sends the viewing activity and other data to a company called Bango, a third party company that conducts data analytics.
CNN moved to dismiss, arguing plaintiff failed to allege a legally cognizable injury under Spokeo because the alleged violation of a statutory right is not on its own sufficiently concrete. The Eleventh Circuit disagreed:
Perry has established his standing to file this action because his alleged injury is sufficiently concrete. Although Perry does not allege any additional harm beyond the statutory violation, the Supreme Court has made clear that our analysis does not end there. See Spokeo, 136 S. Ct. at 1549. Instead, “the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact” so that “a plaintiff in such a case need not allege any additional harm beyond the one Congress has identified.” Id.; see also Havens Realty Corp.
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After a longer delay than several other circuits, the Ninth Circuit has again provided analysis of the Supreme Court’s Spokeo decision – this time in the TCPA context.
In the TCPA context, a strong majority of courts appear to be in agreement that statutory violations give rise to concrete harm. The Ninth Circuit agrees.
The panel in Van Patten v. Vertical Fitness Group, began its Article III analysis by citing Spokeo for the proposition that “’both history and the judgment of Congress play important roles’ in supporting our conclusion that a violation of the TCPA is a concrete, de facto injury.”
The court elaborated:
The TCPA establishes the substantive right to be free from certain types of phone calls and texts absent consumer consent. Congress identified unsolicited contact as a concrete harm, and gave consumers a means to redress this harm. We recognize that Congress has some permissible role in elevating concrete, de facto injuries previously inadequate in law “to the status of legally cognizable injuries.” Spokeo, 136 S. Ct. at 1549 (quoting Lujan, 504 U.S. at 578). We defer in part to Congress’s judgment….
[T]he telemarketing text messages at issue here, absent consent, present the precise harm and infringe the same privacy interests Congress sought to protect in enacting the TCPA.
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In-depth analyses on the Supreme Court’s Spokeo decision have now been handed down by the Third, Seventh, and other Circuits. Little has come from the Ninth Circuit thus far, though that court recently heard oral argument in Spokeo itself on remand from the Supreme Court. While we await that decision, a recent ruling from a different Ninth Circuit panel may impact or foreshadow the Spokeo panel’s ruling.
In Syed v. M-I, LLC, — F.3d —-, No. 14-17186, 2017 WL 242559 (9th Cir. Jan. 20, 2017), the Ninth Circuit briefly addressed Spokeo in the context of the Fair Credit reporting act. Here’s the full analysis:
Syed has established Article III standing. A plaintiff who alleges a “bare procedural violation” of the FCRA, “divorced from any concrete harm,” fails to satisfy Article III’s injury-in-fact requirement. Spokeo, Inc. v. Robins, — U.S.—, 136 S. Ct. 1540, 1549 (2016). However, Syed alleges more than a “bare procedural violation.” The disclosure requirement at issue, 15 U.S.C. § 1681b(b)(2)(A)(i), creates a right to information by requiring prospective employers to inform job applicants that they intend to procure their consumer reports as part of the employment application process. The authorization requirement, § 1681b(b)(2)(A)(ii), creates a right to privacy by enabling applicants to withhold permission to obtain the report from the prospective employer, and a concrete injury when applicants are deprived of their ability to meaningfully authorize the credit check.
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In the past week, panels from the Third and Seventh Circuits have issued rulings that interpret the Supreme Court’s Spokeo decision on Article III standing. The decisions reflect a possible circuit split concerning the test for determining when the violation of a federal statute gives rise to a “concrete” harm under Spokeo.
In the Supreme Court’s decision, there are several references to “risk of harm” in the discussion of when a statutory violation causes concrete harm. For example, toward the end of the opinion, the Court wrote:
A violation of one of the FCRA’s procedural requirements may result in no harm. For example, even if a consumer reporting agency fails to provide the required notice to a user of the agency’s consumer information, that information regardless may be entirely accurate. In addition, not all inaccuracies cause harm or present any material risk of harm. An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.
In its recent Horizon decision, the Third Circuit held that the “material risk of harm” language in Spokeo should not be read to raise the bar for pleading concrete injury:
Although it is possible to read the Supreme Court’s decision in Spokeo as creating a requirement that a plaintiff show a statutory violation has caused a “material risk of harm” before he can bring suit, 17 id.
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As district courts continue to grapple with Spokeo on a daily basis, the Second Circuit has finally weighed in on how to understand the Supreme Court’s ruling. The decision comes in the context of claims brought under the Truth In Lending Act (TILA).
In Strubel v. Comenity Bank, — F.3d —-, 2016 WL 6892197 (2d Cir. Nov. 23, 2016), the Second Circuit analyzed consumer claims that a bank failed to provide four types of disclosures purportedly required by TILA. The court held that two of the alleged non-disclosures gave rise to concrete injuries under TILA, and two did not.
Perhaps of greatest interest, the court affirmed that under Spokeo, “violations of statutorily mandated procedures” can qualify “as concrete injuries supporting standing.” To determine whether violation of a statutory procedure gives rise to standing, the Second Circuit instructed courts to consider “whether Congress conferred the procedural right in order to protect an individual’s concrete interests.” If so, the procedural violation will suffice to give rise to standing as long as “the procedural violation presents a ‘risk of real harm’ to that concrete interest.”
The Second Circuit recognized that a core objective of TILA is to protect consumers’ concrete interest in avoiding the uninformed use of credit. … Read more
Courts around the country continue to grapple with the Supreme Court’s Spokeo decision – particularly as nearly every Rule 12(b)(6) motion filed these days raises Article III standing as a basis for dismissal.
U.S. District Court Judge Cecilia M. Altonaga recently analyzed Spokeo in Flaum v. Doctor’s Associates, Inc., 2016 WL 7015823 (S.D. Fla. Aug. 29, 2016). Plaintiff brought suit alleging a single claim under the Fair and Accurate Credit Transactions Act (“FACTA”).
Undertaking a close look at the statute and its legislative history, Judge Altonaga concluded that Congress created a “substantive right” under FACTA for consumers to have their personal credit card information truncated on printed receipts:
Courts have … considered a FACTA violation to be concrete as soon as a company prints the offending receipt, as opposed to requiring a plaintiff actually suffer identity theft.
The FACTA’s legislative history supports the Court’s finding Congress desired to create a substantive legal right for consumers to utilize in protecting against identity theft. In particular, the “FACTA arose from a desire to prevent identity theft that can occur when card holders’ private financial information, such as a card holder’s complete credit card number, is exposed on electronically printed payment card receipts.” Creative Hosp.
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Last month, we wrote about a decision in the Eastern District of California, where the court held that a violation of a procedural right granted by a state statute could constitute a concrete harm under Spokeo. Several new decisions agree.
Most recently, in Bellino v. JPMorgan Chase, Judge Nelson Roman of the Southern District of New York reached the same conclusion in the context of claims that JPMorgan systematically fails to timely present mortgage satisfaction notices for recording. 2016 WL 5173392 (S.D.N.Y. Sept. 20, 2016).
Presented with an Article III standing challenge, Judge Roman held that violations of state statutes like the New York Real Property Law and the New York Real Property Actions and Proceedings Law give rise to concrete harm under Spokeo. As a starting point, Judge Roman agreed with an earlier decision
that “a state statute, like a federal statute, may create a legal right, the invasion of which may constitute a concrete injury for Article III purposes.” Jaffe, 2016 WL 3944753, at *4. As noted by Judge Briccetti, though the Second Circuit has yet to address the issue, other circuits have determined that state statutes may define an injury for Article III standing purposes. Id. at *3 (citing FMC Corp.
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