On remand from the U.S. Supreme Court, the U.S. Court of Appeals for the Ninth Circuit has held in Spokeo v. Robins that an alleged Fair Credit Reporting Act (FCRA) violation was sufficiently concrete to support Article III standing. In its closely watched decision in Spokeo last year, the Supreme Court held that an alleged statutory violation does not automatically give a plaintiff standing, and instead the plaintiff must allege that the violation caused a concrete injury.

In Spokeo, the plaintiff alleged that the defendant, a website operator that compiles consumer data and builds individual consumer profiles, published false information about him on its website in violation of the FCRA. The alleged false information included the plaintiff's age, marital status, wealth, education level, and profession, as well as a photo of a person someone other than the plaintiff.

On remand, the Ninth Circuit was charged with determining whether the plaintiff's alleged harm was concrete enough for standing. The court began by noting the Supreme Court's recognition that some statutory violations, standing alone, establish concrete harm. The court then adopted the Second Circuit's rubric for determining when a statutory violation constitutes sufficiently concrete harm. Specifically, a court must determine whether the statutory provisions at issue were established to protect the plaintiff's concrete interests (as opposed to purely procedural rights), and, if so, whether the specific violations alleged actually harm—or present a material risk of harm to—such interests.

Regarding the first question, the Ninth Circuit concluded that the dissemination of false information in consumer reports—i.e., the harm that the FCRA's procedural requirements were designed to prevent—is concrete harm given the ubiquity and importance of consumer credit reports in many facets of modern life, such as in employment decisions, home purchases, and loan applications. The court also noted that the interests protected by the FCRA resemble other reputational and privacy interests that have long been protected under the law, such as in the areas of defamation and libel.

As for the second question, the Ninth Circuit acknowledged that not every FCRA violation will actually harm—or create a material risk of harm to—the plaintiff's concrete interests. For example, the court stated that an FCRA violation that does not result in the creation or dissemination of an inaccurate consumer report, or one that results in a trivial or meaningless inaccuracy, does not satisfy the applicable standard.

The court, however, did not set forth a bright-line test for when an inaccuracy becomes something more than trivial or meaningless because it concluded that the inaccurate information published about the plaintiff, specifically material inaccuracies about his age, marital status, education, wealth level, and profession, demonstrated a harm to the real-world interests—in this case, the plaintiff's employment prospects—that Congress sought to protect through the FCRA.

The Ninth Circuit's fact-specific analysis of the standing issue may ultimately make it difficult for plaintiffs to obtain class certification, because individualized proof may be required to establish whether each class member suffered sufficiently concrete harm. Also, the court's fact- and statute-specific analysis may limit its applicability to cases arising under other statutes.

This decision is the latest in a number of conflicting circuit court opinions analyzing standing in the wake of the Supreme Court's Spokeo decision, and it remains to be seen whether the Supreme Court will once again step in to try to provide further guidance and clarity to courts, practitioners, and parties.

Ballard Spahr's Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, its experience with the full range of federal and state consumer credit laws, and its skill in litigation defense and avoidance. Ballard Spahr's litigators have repeatedly achieved outstanding results in defending our clients against major class actions in federal and state courts throughout the country.


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