Do I Have to Suffer Provable Economic Damages to Make a Claim Under the Fair Credit Reporting Act?

One of the main issues we face in bringing claims for consumers under the Fair Credit Reporting Act (“FCRA”) or other similar statutes is proving the amount and extent of the injury caused by the allegedly wrongful conduct.  When sued, a company will often argue that the consumer’s claim should be dismissed due to “lack of standing” as no damages resulted from the alleged statutory violation.  Particularly when a case is filed in federal court, the defendant will argue that the consumer must do more than allege that a statute was violated, the consumer must also show a sufficient injury to grant the consumer “standing” to proceed with the claim.

In the recent case of Spokeo v. Robins, 136 S.Ct. 1540, 578 U.S. No. 11-56843 (2016), the U.S. Supreme Court addressed the question of whether proof that a statute had been violated is sufficient to confer standing.  The case was based on the allegation that Spokeo, a website which claims to provide information on individuals, allowed inaccurate information to be posted under the Robins’ name.  Robins sued Spokeo under the FCRA, on his own behalf and also seeking to represent a class of other consumers

The issue facing the Supreme Court was whether Robins had alleged a sufficient “injury” to have standing to bring the claim, or whether all he had alleged was a mere violation of the statute.  The Court ruled that the violation of a statute is not always sufficient to create standing and that there must be a “concrete” injury to grant standing.  The Court did not give an exact definition of what would qualify as a “concrete” injury, but it did provide some guidance.  The Court gave examples of situation where a statutory violation would not result in a concrete injury, such as when a consumer reporting agency provides accurate information, but fails to provide the required notice to a user of the consumer information, or where the inaccuracy in a report is on a very minor point, such as a wrong zip code.  The Supreme Court held that the controlling question is whether the alleged statutory violations involved “a degree of risk” of harm “sufficient to meet the concreteness requirement.”

The Spokeo case was then sent back to the United States Court of Appeals for the Ninth Circuit for a determination of whether such a “concrete” injury had been alleged by Robins.  On rehearing, the Ninth Circuit found that a sufficiently concrete injury had been alleged by Robins as the FCRA had been established to protect a plaintiff’s concrete (as opposed to procedural) rights, and the specific procedural violations alleged by Robins could actually harm, or present a material risk of harm, to those rights.

What Does the Spokeo Decision Mean for Your Potential Case?

The ruling in Spokeo makes it clear that a mere technical violation of a statute like the FCRA will not be sufficient to establish enough of an injury to give “standing.”  That decision also establishes that a consumer does not have to prove actual economic damages to have “standing” to bring a claim.  However, Spokeo did not create a bright line test about what will qualify as a “concrete” injury and that will be decided on a case by case basis.  The practical effect of Spokeo on a potential FCRA case is that there will need to be more alleged than a mere statutory violation, but that direct economic damages are not required.


Posted November 6, 2017

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