ROUND 2: SUPREME COURT ONCE AGAIN HEARS ORAL ARGUMENTS AS TO CONGRESS’S ABILITY TO CONFER ARTICLE III STANDING

Earlier this month the Supreme Court heard oral arguments in Spokeo, Inc. v. Robins, as to what limits Article III places on Congress’s power to create statutory rights enforceable through a private right of action, where plaintiff suffers no concrete harm.  In Spokeo, plaintiff claimed defendant willfully violated the Fair Credit Reporting Act (FCRA) by publishing false information about him on its website.  The district court dismissed plaintiff’s claim for failure to state an injury in fact.  The U.S. Court of Appeals for the Ninth Circuit reversed, holding that the allegation of a violation of a statutory right was sufficient injury to confer Article III standing.  On April 27, 2015, the Supreme Court granted certiorari.

Interestingly, oral arguments in Spokeo came nearly four years after the Court heard oral arguments in a similar case -- First American Financial v. Edwards.  In First American, the issue before the Court was whether a plaintiff alleging that her title insurance company violated the Real Estate Settlement Procedures Act (RESPA) had Article III standing to sue when she suffered no injury beyond the bare violation of rights established under the statute.  The Court’s decision to grant certiorari in First American was, at the time, quite surprising considering there did not appear to be a significant circuit split on the issue.   Having granted certiorari anyway, many considered that the Court would use the case to establish new Article III limitations on Congress’s power to create private rights of action.  Seven months after hearing oral arguments, however, the Court dismissed the writ of certiorari “as improvidently granted.”

The Justices’ comments during oral arguments in Spokeo suggest that the Court will be closely divided on whatever decision they eventually reach.  On the one hand, conservative Justices appeared to agree with defendant Spokeo that plaintiffs must be able to point to actual harm rather than just a violation of the statute.  For example, Justice Scalia posited that the FCRA is not drafted to allow only injured plaintiffs to sue but rather allows anyone to sue.  Similarly, Chief Justice Roberts used a hypothetical statute where a publisher has to pay every individual it publishes information about -- whether good, bad, or indifferent -- $10.00 in questioning plaintiff’s position as to the breadth of Congress’ power.  On the opposite end of the spectrum, Justice Ginsburg and Justice Sotomayor appeared to agree that plaintiffs only have to allege a violation of a right created by statute, without the need to show a concrete injury.  Indeed, Justice Ginsburg commented that it would be “very strange” to have a rule where “damages are awarded to someone who has no out-of-pocket loss, if the common law says so” but not if Congress says so; while Justice Sotomayor stated “for two centuries” the Court’s rulings have been clear “that injury in fact is the breach of a legally recognized right.”

A copy of the transcript from the November 2, 2015 oral arguments may be found HERE.

For more information on Spokeo, Inc. v. Robins and/or arguing lack of Article III standing in defense of consumer law cases, contact Katherine Olson at (312) 334-3444 or kolson@messerstrickler.com

.