The Supreme Court on Monday agreed to hear Spokeo's appeal of a ruling that allowed a Virginia resident to proceed with a lawsuit alleging that the company displayed incorrect information about him to potential employers.
The people-search engine and data aggregator contends that Thomas Robins shouldn't be able to move forward with his lawsuit without first showing that he was injured by the incorrect information.
The Supreme Court's ruling in the matter could affect a broad array of class-actions -- including privacy cases -- where consumers allege 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.
Robins' battle with Spokeo dates to 2010, when he alleged in a class-action complaint that the company violated the Fair Credit Reporting Act. That law requires credit reporting agencies to ensure the accuracy of background reports used for employment, housing and credit.
Robins alleged that Spokeo offered 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.
U.S. District Court Judge Otis Wright II in the Central District of California dismissed Robins' complaint on the grounds that he didn't spell out how he suffered financial harm as a result of the inaccuracies. Robins successfully 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 asked the Supreme Court to decide the matter. The company argued in its petition for an appeal that consumers shouldn't be able to sue unless they can show some sort of economic injury. Google, Yahoo, eBay and Facebook sided with Spokeo, arguing in a friend-of-the-court brief filed that “no-injury” lawsuits are hurting their businesses.
The Department of Justice weighed in recently against Spokeo. U.S. Solicitor General Donald Verrilli argued in written papers that Congress specifically authorized private individuals to sue for violations of the Fair Credit Reporting Act.
Robins disputes that his case should be considered “no-injury.” He says he “has alleged concrete and particularized injuries -- economic, reputational, and emotional injuries caused by the publication of false information about him.”
While Robins' lawsuit was making its way through the courts, the Federal Trade Commission brought an enforcement action alleging that Spokeo violated 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 nonetheless agreed to settle the charges by paying $800,000, and by changing its business practices.