• by Wendy Davis  @wendyndavis, July 13, 2015

Siding with the online data aggregator Spokeo, the U.S. Chamber of Commerce is urging the Supreme Court to rule that companies need not face federal lawsuits for purely “technical” violations of consumer protection laws.

“Frivolous class actions ... take an enormous toll on U.S. businesses,” the Chamber and other business organizations argue in a friend-of-the-court brief filed on Friday with the Supreme Court.

The trade groups are asking the court to reverse a decision of the 9th Circuit Court of Appeals, which recently reinstated a lawsuit against Spokeo by Virginia resident Thomas Robins.

He alleged in a complaint filed in 2010 that Spokeo displayed inaccurate biographical information about him -- including that he was in his 50s, married with children, and employed in a professional or technical field. He says that he was seeking a job when he filed suit, and worried that the errors in the report would affect his job search.

Robins said Spokeo violated the Fair Credit Reporting Act, which requires credit reporting agencies to ensure the accuracy of background reports used for employment, housing and credit.

U.S. District Court Judge Otis Wright II in the Central District of California dismissed Robins' lawsuit on the grounds that he didn't spell out how he suffered financial harm as a result of the inaccuracies. Robins appealed to the 9th Circuit Court of Appeals, which revived the case on the theory that the Fair Credit Reporting Act provides for private lawsuits by consumers.

Spokeo then successfully asked the Supreme Court to hear an appeal, arguing that consumers shouldn't be able to sue unless they can show some sort of economic injury.

Observers say that the Supreme Court's ruling could affect a broad array of class-actions -- including privacy cases -- alleging that a Web company has violated a specific law. In many of those situations, the companies contend that the lawsuit should be dismissed at a preliminary stage because the consumers weren't harmed by the alleged violation.

The Chamber of Commerce and other business groups argue that “no-injury” lawsuits should be thrown out of federal court.

“There are dozens of federal laws similar to the one at issue here,” the Chamber says, referring to the Fair Credit Reporting Act. Those laws all “could be read to authorize suit against businesses by plaintiffs who have suffered no actual, concrete, or particularized injury,” the organizations say.

The groups add that even when a federal statute like the Fair Credit Reporting Act authorizes private lawsuits, consumers still shouldn't be able to proceed in federal court unless they've been injured.

“A party is not injured by another’s mere (alleged) nonobservance of the law,” the organizations argue. “Rather, injury-in-fact results from the tangible consequences of another’s illegal acts -- and here there were none.”

Robins is expected to file his arguments with the Supreme Court next month. He has previously argued that his case shouldn't be considered a "no-injury" lawsuit, given his contention that Spokeo caused him "economic, reputational, and emotional injuries" by publishing false information.

While Robins' lawsuit was pending in the trial court, the Federal Trade Commission charged Spokeo with violating the Fair Credit Reporting Act by selling data about consumers without taking steps to make sure it was accurate.

Spokeo said it was merely a data aggregator and search engine, not a reporting agency. But the company agreed to settle the charges by paying $800,000, and by changing its business practices.