The federal judiciary derives its power from Article III of the United States Constitution. That power is limited to deciding “Cases” and “Controversies,” Art. III, section 2. In the case of Spokeo v. Robins, the United States Supreme Court considered whether a plaintiff presents such a “case” or “controversy” where he only alleged a violation of a consumer protection statute, but did not allege any additional harm. The statute in question was the Fair Credit Reporting Act (“FCRA”). The Court found that plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA’s procedural requirements may result in no harm.” Slip op. at 10. Even though Congress enacted the FCRA to avoid dissemination of inaccurate information, for example, “It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.” Id. at 11. The Supreme Court remanded this case for the Ninth Circuit Court of Appeals to further consider whether this plaintiff presented a “concrete injury” justifying the assertion of Article III jurisdiction.

The Court did reaffirm that “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” Slip op. at 9. In that connection, the Court considered “instructive” whether the alleged intangible harm “has a close relationship” to harm traditionally viewed as providing a basis for lawsuits in English or American courts. Id. However, “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” Id.

The exact impact of Spokeo will be determined by lower court implementation. However, the Court’s unqualified statement that “Article III standing requires a concrete injury even in the context of a statutory violation” seems likely to pose difficulties for the plaintiffs’ class action bar in pursuing recovery for technical violations of statutory law.

ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, THOMAS, BREYER, and KAGAN, JJ., joined. THOMAS, J., filed a concurring opinion. GINSBURG, J., filed a dissenting opinion, in which SOTOMAYOR, J., joined.

Reed Smith will be hosting a webinar on Tuesday, May 24 2016 at 3:00 p.m. ET | 2:00 p.m. PT | 12:00 p.m. CT on this important topic titled “The Future of No Harm Class Actions: Spokeo v. Robins and Its Aftermath”. Click here to register.