High Court: ‘Concrete’ Harm Required to Sue Under FCRA

Case has implications for employers using online background checks

By Allen Smith, J.D. May 17, 2016
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A mere technical violation of the law may not injure a plaintiff enough for him or her to be able to sue, a May 16 Supreme Court decision shows.

There must be real harm to sue—or “concrete” harm, in the words of the court, which sent a Fair Credit Reporting Act (FCRA) case back to a lower court to determine whether the plaintiff in the case suffered real harm (Spokeo Inc. v. Robins, No. 13-1339 (2016)).

“For employers facing class-action litigation from employees or former employees, where the harm alleged historically has been something very short of concrete, Spokeo gives defendants another weapon in the arsenal for defending against such claims,” said Emily Keimig, an attorney at Sherman & Howard in Denver.

Website Errors

Thomas Robins, the plaintiff, sued Spokeo, which operates a “people search engine” and is an alleged consumer reporting agency covered by FCRA, after he discovered numerous errors on its website about him. His profile on Spokeo stated that he was married, has children, is in his 50s, has a job, is relatively affluent and holds a graduate degree—none of which is true, according to Robins.

Robins sued Spokeo, alleging it violated the FCRA. The district court dismissed his claim, ruling that he had not properly pleaded that he was in fact injured, but the 9th U.S. Circuit Court of Appeals reversed.

On appeal, the Supreme Court reversed the 9th Circuit and sent the case back to the appeals court to determine if there was concrete harm.

The high court noted that, to have standing to sue, the following circumstances must apply:

  • An individual must have suffered an injury in fact—both particularized harm and a concrete injury.
  • The injury must be fairly traceable to the challenged conduct of the defendant.
  • The injury must be likely to be corrected by a favorable judicial decision.

The 9th Circuit skipped over the concreteness requirement, according to the Supreme Court. “When we have used the adjective ‘concrete,’ we have meant to convey the usual meaning of the term—‘real,’ and not ‘abstract,’ ” the high court stated.

Intangible injuries and the risk of real harm can be concrete harm, the court noted. But “Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III,” the court said in an opinion written by Justice Samuel Alito Jr.

Although it sent the case back to the 9th Circuit, the Supreme Court said it was not taking any position as to whether the 9th Circuit’s ultimate conclusion—that Robins adequately alleged an injury in fact—was correct.

However, in a dissent joined by Justice Sonia Sotomayor, Justice Ruth Bader Ginsburg said Robins had clearly suffered concrete harm. “Far from an incorrect zip code, Robins complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market,” she wrote.

‘Take Heed’

“While Spokeo won a victory here, its victory is very narrow,” Keimig said. “Spokeo and other companies like it should take heed, and so should those who use such online reporting services, particularly when making decisions about matters such as employment.” She added that missing out on a job “will almost certainly serve to illustrate a concrete harm.”

Pamela Devata, an attorney with Seyfarth Shaw in Chicago, said many plaintiffs allege under FCRA that there was harm when they simultaneously receive a disclosure that a background check will be run and a written authorization for the background check to be processed. There’s good language in the Spokeo decision that suggests these plaintiffs may not have suffered harm if they are hired. But it’s safest to keep the disclosure and written authorization separate, she said.

Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.

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