Watchdogs Ask Supreme Court To Let Consumers Sue Data Brokers

Three years ago, the Federal Trade Commission charged online data aggregator Spokeo with violating a consumer protection law by selling information about job applicants without first taking steps to ensure the information is accurate.

Spokeo quickly settled the allegations by agreeing to pay $800,000 and to comply in the future with the Fair Credit Reporting Act.

But the FTC settlement didn't end Spokeo's legal woes. The company also faced private lawsuits for violating the law, including a case brought in 2010 by Virginia resident Thomas Robins. He accused Spokeo of posting inaccurate biographical information about him -- including that he was in his 50s, married with children, and employed in a professional or technical field. Robins, who was seeking a job when he filed suit, said he worried that the errors in the report would affect his job search.



Spokeo and Robins have spent the last five years battling over whether he can proceed with a lawsuit in federal court. Spokeo says that Robins shouldn't be able to move forward without proof of tangible financial injury. Robins counters that Congress specifically authorized people to sue for damages when it passed the Fair Credit Reporting Act.

After much wrangling in the lower courts, the fight between Spokeo and Robins has reached Supreme Court, which could issue a decision within the next year.

The battle has drawn the interest of numerous outside groups, including Google, Facebook, eBay and Yahoo, which are backing Spokeo's effort to get the case dismissed.

But Robins also has supporters, including the digital rights groups Electronic Frontier Foundation, Center for Democracy & Technology, New America's Open Technology Institute and the World Privacy Forum.

They're telling the Supreme Court that an FTC action doesn't substitute for a lawsuit by a consumer -- especially because agencies have discretion about whether to prosecute companies for violations of consumer protection laws. If the FTC (or any other agency) declines to bring a case against a company, individuals' only recourse against that company is to sue, the groups argue.

"A private right of action ... ensures that an aggrieved individual can vindicate her own legal rights, regardless of whether an administrative agency chooses to exercise enforcement power," the groups say in a friend-of-the-court brief filed with the Supreme Court.

What's more, they say, if individuals like Robins can't bring private lawsuits, "data brokers such as Spokeo have little incentive to follow the law."

The advocacy groups also take issue with the idea that Spokeo's errors about Robins were benign.

"While Spokeo’s inaccuracies might initially appear to favor Mr. Robins, they may have in fact damaged his ability to find employment by creating the erroneous impression that he was overqualified for the work he was seeking, that he might be unwilling to relocate for a job due to family commitments, or that his salary demands would exceed what prospective employers were prepared to offer him," the Center for Democracy & Technology and other groups argue. They add that a private lawsuit is "the only way Mr. Robins can enforce his rights under the law and redress these inaccuracies."

Next story loading loading..