"[E]ven if you are given a right to the procedure, that alone does not suffice for standing." "[I]t has to be something more than just the violation of . . . what Congress says is a legal right." At the November 2, 2015, oral argument in Spokeo, Inc. v. Robins, No. 13-1339, Justice Antonin Scalia stated these, and other, characteristically firm opinions about the plaintiff’s statutory claims under the Fair Credit Reporting Act (FCRA), leaving no room for doubt that, in his mind, this plaintiff’s case has no place in federal court.

After all, this is one of many "no-injury" statutory class actions brought in federal court based on a technical violation of a consumer protection statute.

Justice Scalia’s concern was that allowing this case to move forward in federal court would mean that essentially "anyone" could sue under this statute, and others, allowing Congress to effectively nullify the Article III standing requirement of an injury in fact. And given Justice Kennedy’s apparent doubts about the plaintiff’s "circular" argument and other comments made by the conservative wing of the Court, it seemed the defense bar may have been on the verge of a sweeping victory against statutory "no-injury" cases

However, yesterday, three months after Justice Scalia’s sudden death, the Supreme Court handed down its ruling in Spokeo, which vacated and remanded the case to the Ninth Circuit with the instruction to conduct an additional analysis. The opinion reflects the high Court’s post-Scalia trend of issuing narrow, middle-ground holdings in business cases and class actions that could have otherwise produced decisive precedential decisions.

Background

FCRA (15 U.S.C. § 1681 et seq.) is a federal consumer protection act with the purpose of ensuring, among other things, that credit reporting agencies and creditors who report to those agencies offer accurate information. Relevant to this case, it grants consumers a private right of action to seek damages of up to $1,000 each, attorney’s fees and punitive damages.

In Spokeo, Mr. Robins alleged that the profile displayed by the data-aggregation website Spokeo reflected incorrect information about him, including that he is married, has children, is in his 50s, has a job, is relatively affluent and holds a graduate degree. Among other things, Mr. Robins claims that the website had a negative impact on his job prospects.

Lower Court Rulings

Mr. Robins filed a class-action complaint alleging FCRA violations, which Spokeo moved to dismiss. After initially denying Spokeo’s motion, the United States District Court for the Central District of California reconsidered and dismissed the complaint with prejudice, finding the plaintiff did not properly plead an injury in fact.

The Ninth Circuit Court of Appeals disagreed, relying on its own precedent and finding that the allegations were sufficient to satisfy the injury-in-fact requirement of Article III. Among other noteworthy statements, the appellate court found that "the violation of a statutory right is usually a sufficient injury in fact to confer standing." 742 F.3d at 412.

High Court Ruling

Following the Supreme Court’s granting of certiorari, there was a sense among those closely following this case that the Ninth Circuit’s statement – that is, that a mere statutory violation can amount to Article III standing – might be the cornerstone of the Court’s decision. Following oral argument, that conclusion seemed all but inevitable.

However, while the Court did indeed vacate and remand, it did so on a narrow basis. The upshot of the opinion is that the Ninth Circuit failed to address the "concreteness" factor of Article III’s "injury-in-fact" requirement and must reevaluate that factor in a subsequent ruling.

The majority opinion (authored by Justice Alito and joined by Chief Justice Roberts and Justices Kennedy, Thomas, Breyer and Kagan) sets forth the three Article III standing requirements (i.e., injury in fact; that the injury is fairly traceable to the challenged conduct; and that the injury is likely to be redressed by a favorable judicial decision) and honed in on the first requirement – the injury in fact. That requirement has two components that, the Court notes, some lower federal courts including the Ninth Circuit conflate: particularity and concreteness. Only the latter is at issue in Spokeo.

Regarding "concreteness," the Court held that an injury-in-fact "must actually exist," must be "real" and must not be "abstract." And in rebuttal to the Ninth Circuit’s statement referenced above, the Supreme Court held that "Article III standing requires a concrete injury even in the context of a statutory violation"– that a "bare procedural violation" is not sufficient to show concrete harm.

But at the opposite end of the spectrum from a "bare procedural violation" lie "some circumstances" that might constitute an Article III injury in fact. Such "circumstances," according to the Court’s case citations, would include certain groups’ inability to obtain information that Congress decided to make public and/or subject to disclosure under federal statutes. As applied to Mr. Robins’ case, an incorrect zip code would not be considered "concrete harm" whereas other false information might be sufficient.

The Court found the appellate court “failed to fully appreciate the distinction between concreteness and particularization,” thus resulting in an “incomplete” analysis. The Court narrowly instructed the Ninth Circuit to address, specifically, “whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement,” expressly taking no position as to whether the ultimate conclusion was correct.

Remand and Beyond

Spokeo’s significance at this time lies not in what it is, but what it is not:

It is not a resolution of the case. The Court could have reversed the Ninth Circuit’s opinion and upheld the trial court’s dismissal, but it instead remanded back to the appellate court for further analysis on one discrete issue.

It is not a blanket ban on "no-injury," statutory class actions. The eight-justice Court had an opportunity to take a bold step with a bright-line rule that "no-injury" class actions could not proceed in federal court. Many businesses and defense attorneys hoped – and plaintiffs’ attorneys feared – this would be the outcome following oral argument.

But it is also not a validation of "no-injury," statutory class actions. The opinion is peppered with nods to Justice Scalia’s opinions that a mere procedural violation cannot confer standing, and that Congress cannot obviate the Article III requirements.

Despite the Court’s emphasis on the need for concreteness, Spokeo is far from concrete in delineating what is or is not a "concrete" injury in fact for Article III purposes. The opinion recognizes both that "standing requires a concrete injury," yet the technical violation of a statute "can be sufficient in some circumstances." Rather than deciding the issue one way or the other, the opinion effectively serves only to further frame the question for future courts. As a result, large companies will continue to face potentially large legal exposure from plaintiffs that might not have suffered any actual harm.

Perhaps due to Justice Scalia’s absence, the opinion reads as a compromise that sought to avoid a 4-4 decision so the Court could reach a majority opinion which could have precedential impact. After all, Justices Alito, Thomas, Roberts and Kennedy seemed to be siding with Spokeo at oral argument, while the same was not true for Justices Breyer and Kagan. Whatever the Court’s motivation, the resulting middle-ground approach will likely have only marginal applicability outside of the Spokeo case itself, at least for now.

Given the volume of statutory "no-injury" class actions, the issue is not going away. Quite the opposite. Plaintiffs will continue to file statutory class actions, and when faced with Article III standing issues, federal courts must continue to determine whether the claimed injury is “concrete.” While it is clear, under Spokeo, that a “concrete” injury must be something beyond a "bare procedural violation," the injury need not be "tangible" and could even be a mere "risk of real harm"– at least in "some circumstances." What those "circumstances" are remains to be seen. Stay tuned.