Interactive Counsel

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Interactive Counsel

SCOTUS Punts on Chance to Curb Consumer Privacy Laws

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SCOTUS Punts on Chance to Curb Consumer Privacy Laws

On Monday, the US Supreme Court sent a potential class action case back to the Ninth Circuit for reconsideration, marking an intermediary win for Spokeo Inc., which uses a “people search engine” to find, compile, and sell publicly available personal information. The company came under fire for publishing inaccurate personal information about plaintiff Thomas Robins in a case that was expected to have major implications on US privacy and consumer protection law.

The issue before the Court was whether Robins had standing to sue Spokeo under the Fair Credit Reporting Act (FCRA) for returning inaccurate information about him through Spokeo’s “people search engine.” The FCRA is a federal law requiring companies like the search engine to take “reasonable procedures to ensure maximum possible accuracy” of the information they publish. The Court narrowly held that Congress can create standing for intangible harms, but also found that the Ninth Circuit’s ruling failed to properly address standing requirements. The Court also stated that “a bare procedural violation, divorced from any concrete harm,” does not provide standing because it does not satisfy the Constitution’s injury-in-fact requirement.
 
Robins’ suit alleges that Spokeo published inaccuracies that harmed his and others’ employment opportunities, making Spokeo potentially liable for millions in damages. The plaintiff’s age, education, employment status, family situation, economic status, and other personal details were allegedly incorrect on the website. Spokeo also offers information on an individual’s location, relatives, possible email addresses, gender, telephone number, court records, and more.
 
The 6-2 decision, called a “middle-ground ruling” by the Wall Street Journal, leaves the privacy case unresolved while the court remains without a ninth justice. Before Justice Scalia’s death, Spokeo was expected to prevail.
 
Supporters of the plaintiff argue that Spokeo’s position, which contends that no “real world” harm was incurred from the inaccuracies, would make it more difficult for consumers to take legal action against companies that mishandle personal data. A final ruling in favor of Spokeo could add new limits to class-action lawsuits.
 
It remains to be seen how the Ninth Circuit will respond to the Court’s instruction to determine if Robins and his fellow plaintiffs suffered a concrete “injury in fact.” Interestingly, it will develop in tandem with comparable topics across the Atlantic, such as the data transfer options available to EU citizens. This is yet another case affected by the political turmoil surrounding the selection of a new justice during an election year.
 
Arent Fox’s Cybersecurity & Data Protection group will continue to monitor developments in the data protection field. For more information on compliance with the FCRA and other data protection regulations, please do not hesitate to contact Sarah L. Bruno.

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.