Data Company Must Face Suit Over Incorrect Information

Siding against online data aggregator Spokeo, a federal appellate court ruled Tuesday that the company must face a privacy lawsuit for allegedly displaying incorrect consumer information.

A three-judge panel of the 9th Circuit Court of Appeals ruled that a consumer's allegations that he was injured by inaccurate data were concrete enough to warrant a lawsuit.

The decision stems from a 2010 lawsuit by Virginia resident Thomas Robins, who 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 argued 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.

advertisement

advertisement

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 initially dismissed the case, but the 9th Circuit revived the lawsuit in 2014.

The data aggregator then appealed to the U.S. Supreme Court, which ruled last year that Robins need not show a "tangible" injury to proceed in federal court, but must show a "concrete" harm.

That distinction between "concrete" and "tangible" was seen as problematic by legal experts. "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 the day the decision came out.

Although the ruling may have been ambiguous, judges appear to be interpreting it as allowing privacy lawsuits. For example, last year a judge in Boston refused to dismiss a lawsuit alleging that Gannett violated a federal video privacy act by sending Adobe information about people who downloaded USA Today's app. (That lawsuit was later withdrawn on separate grounds.)

"The Supreme Court left a little bit of a mystery about what 'intangibly concrete' could possibly mean," says University of Minnesota law professor Bill McGeveran. "Courts are beginning to answer that it covers a good amount."

Robins' lawyer, Jay Edelson, said Tuesday that the 9th Circuit's ruling "will aid courts throughout the country" by clarifying that consumers need not show an additional injury -- beyond that caused by an alleged violation of a federal law -- in order to proceed in court.

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. 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.

Google, Yahoo, eBay and Facebook specifically argued in a friend-of-the-court brief submitted to the Supreme Court that “no-injury” lawsuits are hurting their businesses.

Next story loading loading..