Online Data Broker May Have To Face Lawsuit Over Errors

Online data aggregator Spokeo may have to face a privacy lawsuit for allegedly displaying incorrect information about consumers, but only if they can first prove the errors caused a "concrete" injury.

That's the upshot of a Supreme Court ruling issued today in a closely watched battle between Spokeo and Virginia resident Thomas Robins.

The dispute dates to 2010, when Robins alleged that Spokeo posted 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 brought the case, said he worried that the errors in the report would affect his job search.

He alleged in a potential class-action that Spokeo's report amounts to a violation of the Fair Credit Reporting Act, which requires credit reporting agencies to take steps to ensure the information they provide to potential employers is accurate.

Spokeo countered that Robins shouldn't be able to bring a lawsuit unless he can first show that he was injured by any errors.

A trial judge dismissed Robins' lawsuit, but the 9th Circuit Court of Appeals revived the case.

Spokeo then appealed to the Supreme Court, where the company argued that Robins couldn't sue in federal court without showing that he suffered a "concrete" harm.

The Supreme Court today ruled that Robins can only proceed if he shows that the wrong information led to a concrete injury, but added that Robins could do so by showing that the data placed him at "risk" of future harm.

Here's how the court put it:

"A 'concrete' injury must be 'de facto'; that is, it must actually exist ... 'Concrete' is not, however, necessarily synonymous with 'tangible.' Although tangible injuries are perhaps easier to recognize, we have confirmed in many of our previous cases that intangible injuries can nevertheless be concrete... This does not mean, however, that the risk of real harm cannot satisfy the requirement of concreteness."

The Supreme Court sent the matter back to the 9th Circuit, so that court could consider whether Robins can move forward with the case.

Several news outlets reported today that the Supreme Court sided with Spokeo in the case -- which is true to the extent that the court reversed an appellate decision in favor of Robins.

But today's ruling doesn't necessarily mean that Spokeo will prevail, because Robins may still be able to convince judges that Spokeo's inaccurate data placed him at risk of future harm.

For his part, Robins' lawyer, Jay Edelson, says he views the Supreme Court's decision as a victory because the court said that even intangible harm could warrant a lawsuit.

"We view it as we got a knockout punch," Edelson tells MediaPost.

He adds that it's often difficult to show "tangible" harm in privacy cases.

But other observers are puzzled by the court's attempt to distinguish the concepts of "tangible" and "concrete."

"SCOTUS decides Spokeo case - most questions begged, and I can't figure out what exactly was decided," George Washington University law professor Dan Solove tweeted today.

"SCOTUS Spokeo privacy case says 'concrete' not 'tangible.' Um, ok. But the whole question was: what's an intangible concrete harm?" tweeted University of Minnesota law professor Bill McGeveran.

Tech companies, media organizations, business associations, digital privacy advocates and the Obama administration weighed in on the dispute while it was pending before the Supreme Court. The White House and consumer watchdogs backed Robins, while Google, Facebook and other companies sided with Spokeo.

One reason the case drew so much interest is that many tech companies are facing lawsuits for allegedly violating a federal statute -- like the video privacy law, or anti-robotexting law -- but may not have placed any consumers at risk of harm.

Today's decision obviously gives those companies more ammunition to defeat the lawsuits. Whether they will be able to do so remains to be seen.

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