Monday, May 16, 2016 led to major developments regarding consumer limits in class action lawsuits. The Supreme Court of the United States (SCOTUS) ruled against Thomas Robins in the case Spokeo, Inc. v. Robins, stating that class action lawsuits must carry proof of “concrete injury” in order to be valid.
The case arose as a result of Robins, a Virginia resident, filing a lawsuit against Spokeo, a “people search engine,” alleging that the company violated Fair Credit Reporting Act (FCRA) guidelines by publishing inaccurate information about him that was available to employers. According to Robins, though the information Spokeo published made him look favorable in certain aspects, he claims that the misrepresentation of his educational and financial background hurt his employment opportunities and cost him money.
Currently, FCRA statutes entitle victims of violations akin to Robins’ to damages ranging from $100 – $1,000, and the entity responsible for such misrepresentations could sustain further legal consequences. SCOTUS decided that awarding a plaintiff a class action win based on procedural violations alone with no concrete evidence of harm is inappropriate compensation for technical errors. However, if an entity violates FCRA regulations by reporting inaccurate information and that information has a valid potential for harm, such an incident could warrant grounds for a class action suit.
The decision in Spokeo, Inc. v. Robins may prohibit consumers from taking advantage of the legal system by going after affluent companies based on bare violations of federal acts alone, but the case opens up the problem of defining harm, particularly if the potential for harm can be grounds for a suit. SCOTUS’ decision seems to diminish a consumer class action free-for-all and require future suits to carry greater evidentiary weight. Pursuing confirmed damages of an entity’s violations wastes much less time than assessing whether or not violations were committed in the first place.
Though the outcome of Spokeo Inc. v. Robins requires further legal clarification, the decision unequivocally set a major precedent for future FCRA-related class action suits.
