August has been a busy month for two circuit courts faced with appeals addressing whether a plaintiff has Article III standing to pursue, on a class basis, a claim alleging a statutory violation of the Fair Credit Reporting Act (FCRA), 15 U.S.C § 1681 et seq. On August 1, the Seventh Circuit Court of Appeals in Groshek v. Time Warner Cable, Inc., No. 16-3355, 2017 U.S. App. LEXIS 13953 (7th Cir. Aug. 1, 2017), applied the Supreme Court’s concrete injury analysis from Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (Spokeo I), to find a plaintiff lacked standing to pursue an FCRA claim based on the plaintiff’s failure to allege anything more than a statutory violation that was devoid of any concrete harm or appreciable risk of harm.

On August 16, the Ninth Circuit Court of Appeals, issued the long-awaited remand decision in Robins v. Spokeo, Inc., No. 11-56843, 2017 U.S. App. LEXIS 15211 (9th Cir. Aug. 16, 2017) (Spokeo II). The circuit court applied the Spokeo I analysis to hold the plaintiff had standing to pursue an FCRA statutory violation claim after finding that the FCRA provisions at issue were established by Congress to protect a concrete interest and the provisions allegedly violated would more likely harm the plaintiff’s concrete interests.

While the Groshek and Spokeo II courts reached different outcomes, the Spokeo I standing analyses they applied were similar and reaffirmed the principle that a plaintiff must allege more than a bare statutory violation to satisfy Article III standing.

In Groshek, a plaintiff job applicant filed class action complaints against Time Warner Cable, Inc. and Great Lakes Higher Education Corporation (Employer Defendants), alleging that these entities violated the FCRA, specifically 15 U.S.C. § 1681b(b)(2)(A), by failing to provide him with an adequate standalone disclosure and failing to obtain valid authorization before they obtained a copy of his credit report as part of their consideration of him for employment. The plaintiff alleged that the standalone disclosure and authorization provided to him contained extraneous information, including a liability release, that violated the procedural requirements of section 1681b(b)(2)(A)(i). That section requires, among other things, that a job applicant receive a disclosure and authorization in “a document that consists solely of the disclosure” before a consumer report is obtained. The plaintiff claimed the extraneous language in his standalone disclosure resulted in a statutory violation of the FCRA, was willful, and entitled him to recover statutory and punitive damages from the Employer Defendants.

The Employer Defendants moved to dismiss the complaint based on lack of any concrete injury to give rise to Article III standing. The district court agreed and dismissed the complaint. On appeal, the Groshek court affirmed. In applying Spokeo I, it noted that, for an injury to be concrete, a harm “‘must actually exist;’ it must be ‘real,’ not ‘abstract,’ but not necessarily tangible.” Groshek, 2017 U.S. App. LEXIS 13953, at *4 (quoting Spokeo, 136 S. Ct. at 1548-49). The court then examined Congress’s intent in enacting the FCRA, finding that the enactment was to “‘ensure fair and accurate credit reporting,’ and ‘protect consumer privacy.’” Id. at *5 (quoting Safeco Ins. Co. v. Burr, 551 U.S. 47, 52 (2007)).

Despite recognizing the consumer privacy interest that Congress intended to protect under the FCRA, the Groshek court nevertheless concluded the alleged statutory violation did not constitute a concrete injury. In doing so, it scrutinized the complaint and noted that the plaintiff failed to allege any harm beyond the FCRA statutory violation of him receiving a standalone disclosure containing extraneous information. The court recognized there was no allegation that the Employer Defendants failed to provide the plaintiff with a disclosure informing him that a consumer report may be obtained for employment purposes, and the plaintiff failed to allege that any of the additional information in the disclosure caused him to not understand the consent he was giving. Accordingly, the Groshek court held that the plaintiff lacked standing because the statutory violation that he alleged was completely removed of any concrete harm or risk of harm.

Approximately two weeks after the Groshek decision, the Ninth Circuit issued its opinion in Spokeo II, finding that a complaint alleging an FCRA statutory violation adequately established a concrete injury for purposes of standing. In Spokeo II, the plaintiff, Robins, alleged that Spokeo, Inc. published an inaccurate credit report about him on its website and willfully failed to follow reasonable procedures to ensure the accuracy of information in his consumer report as required by section 1681e(b). In a prior decision, the Ninth Circuit reversed a district court order dismissing Robins’ complaint for lack of standing. After granting certiorari, the Supreme Court in Spokeo I vacated that order on the basis that the Ninth Circuit failed to properly analyze whether Robins’ injury was concrete.

On remand, the Spokeo II court analyzed whether Robins adequately alleged a concrete injury under the standard articulated in Spokeo I. It reiterated that, when a statutory violation has been alleged, Article III standing requires some real (tangible or intangible) harm to the plaintiff. In analyzing Robins’ standing, the Spokeo II court employed a two-prong analysis to determine: “(1) whether the statutory provisions at issue were established to protect [Robins’] concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.” Spokeo II, 2017 U.S. App. LEXIS 15211, at *11. In undertaking this analysis, the Spokeo II court recognized that Spokeo I requires an examination of the specific alleged reporting inaccuracies at issue to ensure they raise a real risk of harm to the concrete interests the FCRA sought to protect.

The Spokeo II court found that the FCRA provisions at issue were enacted to shield consumers from the transmission of inaccurate information about them. The Spokeo II court noted that the concrete interests Congress sought to protect through the FCRA provisions at issue were analogous to the reputational and privacy interests that have long been protected under common law.

Next, the Spokeo II court found that the complaint’s allegations demonstrated a real risk of harm to Robins beyond a mere technical violation of the FCRA. In reviewing the allegations, the Spokeo II court noted that Robins claimed that Spokeo published inaccurate information about his age, marital status, education and employment history, and further demonstrated that this information is relevant to prospective employers or others who rely on a consumer report. Consequently, because the FCRA provisions at issue in Spokeo II sought to protect concrete interests and because Robins adequately alleged a substantial risk of harm to those interests, the court found the harm alleged was sufficiently concrete for purposes of standing and reversed the district court’s order dismissing Robins’ complaint and remanded the matter.

While the Groshek and Spokeo II cases resulted in different outcomes on standing, the Spokeo I analyses these courts employed are similar and demonstrate two important principles: (1) a mere technical statutory violation alone is insufficient to confer standing and (2) a concrete injury analysis requires some examination of the specific allegations in a complaint to determine if the statutory violation alleged raises a real risk of harm to interests sought to be protected by the statute. And, while some defendants will view the Spokeo II decision as lowering the bar for standing, the recognition in Spokeo II and Groshek that a statutory violation alone does not automatically satisfy the concrete injury requirement still provides support for pre-answer motions to dismiss on the basis of a lack of standing. Moreover, the recognition that courts should examine allegations in a complaint to determine the existence of a “real” risk of harm from a statutory violation may demonstrate the existence of individualized issues of fact that can be used to oppose class certification.