• by Wendy Davis  @wendyndavis, May 29, 2014

Online data aggregator Spokeo is asking the Supreme Court to hear an appeal of a ruling that allowed a consumer to proceed with a potential class-action lawsuit.

The company seeks to reverse a decision issued by the 9th Circuit Court of Appeals, which revived Virginia resident Thomas Robins's lawsuit accusing Spokeo of violating the federal Fair Credit Reporting Act. The 9th Circuit rejected Spokeo's argument that Robins hadn't suffered an economic injury, and therefore lacked “standing” to proceed in federal court.

The 9th Circuit ruled that Robins didn't need to show an economic injury to proceed, given that the Fair Credit Reporting Act provides for private lawsuits by consumers. Robins alleged that Spokeo violated that law by selling false information, without allowing him to correct mistakes.

Spokeo is now asking the Supreme Court to decide whether Robins can proceed with the lawsuit. The company argues that people shouldn't be able to sue in federal court unless they've been harmed -- regardless of whether a law allegedly was broken. Spokeo notes in its legal papers that the question comes up frequently in potential class-action cases, including a recent lawsuit accusing online video company Hulu of violating a federal privacy law by sharing information about users with Facebook

Spokeo argues that the Supreme Court should rule on that issue in order to settle the question nationally.

The company says that in the past, judges have reached different conclusions about whether consumers can proceed in court without first showing a tangible loss. “Unless this Court steps in, the extent and limits of federal jurisdiction will continue to vary circuit by circuit and case by case,” Spokeo argues in a petition filed earlier this month. “And in those circuits where a harmless statutory violation has been held sufficient to confer standing, class actions presenting huge damages exposure based on harmless conduct will proliferate.”

Two years ago, the Supreme Court declined to issue a decision in a case that presented a similar issue.

Justin Brookman, director of consumer privacy for the digital rights group Center for Democracy and Technology, says that a pro-Spokeo ruling by the Supreme Court would mark a setback for consumers' ability to bring private lawsuits to enforce their rights. But he adds that the Federal Trade Commission and state attorneys general would still be able to bring cases -- though there are questions about whether law enforcement authorities “have the resources to go after all the bad actors.”

Center for Democracy and Technology previously asked the FTC to investigate Spokeo for selling information about job applicants to potential employers, without first taking steps to ensure the data's accuracy. The FTC later brought charges against Spokeo, which the company resolved by agreeing to pay $800,000 and also promising to comply with the consumer protection law in the future.