By Clifford Masch

The concept of establishing standing under Article III of the U.S. Constitution in federal class actions has long been the subject of great dispute.  In the Spokeo decision, the U.S. Supreme Court has provided some needed clarity as to the appropriate standards to be applied to a class action premised on an alleged class wide statutory violation.  The Spokeo court reviewed a decision by the Ninth Circuit Court of Appeals which recognized Article III standing in a class action based on an alleged violation of the Fair Credit and Reporting Act of 1970 (FCRA).  Specifically, the plaintiff alleged that a search engine operated by the defendant contained inaccurate information about the representative plaintiff.   The plaintiff filed a complaint on his own behalf and on behalf of a class of similarly situated individuals.  The Circuit Court held that the plaintiff established Article III standing to pursue the class action by alleging that the defendant violated his statutory rights and that the plaintiff’s personal interest in the handling of his credit information was individualized rather than collective.

The U. S. Supreme Court found that the Ninth Circuit Court of Appeal’s Article III standing analysis was incomplete and remanded the matter with the specific instruction that the circuit court consider whether the plaintiff sufficiently alleged the existence of a requisite class wide “concrete” injury.  The Spokeo court held that in order to establish the existence of “injury in fact” standing at the pleading stage in a class premised on the alleged violation of a statute, the plaintiff must show that he or she suffered an invasion of a legally protected interest that is concrete and particularized.  For an injury to be particularized, it must affect the plaintiff in a personal and individual way.  A concrete injury must be “defacto;” that is, it must actually exist and not be abstract.  The Spokeo court went on to conclude that mere alleged violation of the FCRA, without proof of a “concrete injury,” was insufficient to establish Article III standing.   

It is noteworthy that the Spokeo court noted a distinction between a class action premised upon the alleged violation of a statutory right (which requires proof of particularized and concrete injury) versus a class action premised on the violation of a procedural right where the risk of harm sufficient to establish Article III standing may be implicit from the very denial of a procedural right recognized by Congress.  The court held that the latter category “can be sufficient in some circumstances to constitute injury in fact,” citing as examples, Federal Election Comm’n v. Akins, 524 U.S. 11-20-25, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1980) (where the court held that the failure to provide information required under the Federal Campaign Act sought by a group of voters was a concrete injury because it would aid in their evaluation of candidates in a specific election) and Public Citizens v. Dept. of Justice, 491 U.S. 440, 449, 109 S.Ct. 2558, 105 L Ed.2d 377 (1989) (where the court held that the plaintiffs’ efforts to compel the Justice Department and the ABA committee to comply with requirements under the Federal Advisory Committee Act to disclose various documents relating to recommendations for judicial appointments constituted sufficient injury in fact to establish Article III standing).

The holding in Spokeo provides persuasive grounds to challenge the right to pursue a class action premised solely on the basis of a statutory violation in situations where a concrete class wide injury is not implicit from the violation.  If you should have any questions regarding how this decision may impact any specific class action matter, or if you have any other substantive or procedural question with respect to class actions or mass tort please call one of our Class Action/Mass Tort Practice Group Members. 

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel. 

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