The U.S. Supreme Court has asked
the Justice Department to weigh in on a legal fight between data aggregator Spokeo and a consumer who says the site posted incorrect information about him.
The court's request, issued on
Monday, signals that the judges are considering granting Spokeo's request for a hearing, but want more information before deciding to do so.
The matter stems from a 2010 potential class-action
lawsuit against Spokeo by Virginia resident Thomas Robins, who alleged that the online company violated the federal Fair Credit Reporting Act by displaying wrong data about him, without allowing him
to fix the errors. Among other alleged inaccuracies, Spokeo said Robins was in his 50s, married with children, and employed in a professional or technical field.
Robins said in his
lawsuit that he was seeking a job at the time he sued, and feared the errors would affect his job search.
Two years after Robins filed suit, the Federal Trade Commission said that Spokeo
agreed to pay $800,000 to settle charges that it violates the Fair Credit Reporting Act. Spokeo also promised to comply with the consumer protection law in the future.
The FTC's charges were
based on allegations that Spokeo sold information about job applicants to prospective employers without first taking steps to ensure the information is accurate. Spokeo also allegedly violated the
law's provisions requiring consumer reporting agencies to verify purchasers' identities, as well as provisions requiring agencies to tell people when reports about them are purchased.
Even
though Spokeo settled with the FTC, the company argued that Robins' lawsuit should be dismissed on the grounds that he lacked proof of any tangible injury.
The 9th Circuit Court of Appeals
sided against Spokeo, ruling in February that Robins didn't have to show economic harm to proceed with the case. The appellate court said in its opinion that the Fair Credit Reporting Act specifically
provides for private lawsuits by consumers, regardless of whether they've experienced “actual harm.”
That ruling reversed a 2011 decision issued by U.S. District Court Judge Otis
Wright II in the Central District of California. He dismissed the lawsuit because Robins couldn't point to any tangible injury caused by Spokeo's information.
Spokeo is now asking the Supreme
Court to rule on the question.
Two years ago, the Supreme Court heard arguments in a case that presented a similar question, but declined to issue a ruling.
The U.S. Chamber of
Commerce and a coalition of Web companies -- including Google, Yahoo, Facebook and eBay -- are backing Spokeo's request for a Supreme Court hearing. The Web companies argued in court papers filed in
June that “no-injury lawsuits” are bad for business.
The companies said that the expense of defending a case “creates a strong incentive to settle even the most baseless
suits.” Google and the others note in their legal papers that Spokeo is one of many online companies to be hit with privacy lawsuits.
The U.S. Chamber of Commerce argued in separate
court papers that the Supreme Court “rein in abusive litigation” by ruling in Spokeo's favor in this case.