BI’s Article search uses Boolean search capabilities. If you are not familiar with these principles, here are some quick tips.

To search specifically for more than one word, put the search term in quotation marks. For example, “workers compensation”. This will limit your search to that combination of words.

To search for a combination of terms, use quotations and the & symbol. For example, “hurricane” & “loss”.

Login Register Subscribe

High court rules real damage needed for class action to proceed

High court rules real damage needed for class action to proceed

Businesses won a partial, if not unalloyed, victory in dealing with class action lawsuits in a U.S. Supreme Court ruling earlier this month, experts say.

The high court's 6-2 ruling May 16 in Spokeo Inc. v. Robins involved Thomas Robins, who claimed that inaccurate information provided by Pasadena, California-based Spokeo, which describes itself on its website as a “people search engine,” harmed his employment prospects.

The website allegedly inaccurately described Mr. Robins as holding a graduate degree and as wealthy, both of which Mr. Robins said are untrue. This information cost him money as well as anxiety and stress, Mr. Robins said in a lawsuit that charged Spokeo with violating the Fair Credit Reporting Act and sought class action status.

In a 2014 ruling, the 9th U.S. Circuit Court of Appeals in San Francisco reversed a lower court ruling and held that Mr. Robins had adequately alleged an “injury-in-fact,” which was a requirement for him to sue under Article III of the U.S. Constitution.

In its ruling overturning the appeals court, the Supreme Court held that it is not enough that Spokeo may have technically violated the FCRA by reporting inaccurate information, and that the plaintiff still needs to allege injury that was both “concrete and particularized” in order to have standing to sue. It said Mr. Robins' injury was particularized, but not concrete.

“A 'concrete' injury must be 'de facto,' that is, it must actually exist,” said the Supreme Court ruling. Mr. Robins cannot satisfy Article III”s demands “by alleging a bare procedural violation” of the FCRA, the court said.

“A violation of one of the FCRA's procedural requirements may result in no harm,” said the ruling. “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,” said the ruling.

The high court sent the case back to the 9th Circuit to reconsider whether Mr. Robins had adequately alleged an “injury-in-fact.”

A dissenting opinion by Associate Justice Ruth Bader Ginsburg, in which Associate Justice Sonia Sotomayor joined, stated, “Judged by what we have said about 'concreteness,' Robins' allegations carry him across the threshold.”

“Far from an incorrect zip code, Robins complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market … I therefore see no utility in returning this case to the Ninth Circuit, to underscore what Robins' complaint already conveys concretely,” that Spokeo's misinformation caused actual harm, said the dissenting opinion.

Defense attorneys “were hoping for a decision that would categorically undercut the ability of the plaintiffs bar” to file litigation where there was only a statutory violation of the law, said Kevin LaCroix, Beachwood, Ohio-based executive vice president of RT ProExec, a division of R-T Specialty L.L.C., who was not involved in the litigation.

However, “it is still a defense-friendly decision,” Mr. LaCroix said. There will be “more vigorous motions to dismiss where the defense will try to rely on Spokeo” to say there has not been a concrete injury, he said.

Joseph W. Jacquot, a partner with Foley & Lardner P.C. in Jacksonville, Florida, who participated in an amicus brief on Spokeo's behalf, said the ruling minimizes the “massive threat of litigation” in cases in which there has been no injury.