12.10.15 by Andrew Shafer
Standing Standards - Robins v. Spokeo, Inc.
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The credit and collection industry may be in for a big break during the next Supreme Court term. On April 27, 2015, the U.S. Supreme Court has agreed to hear the appeal of Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014), cert. granted 2015 WL 1879778. The question presented is simple: Can Congress create federal court jurisdiction when a plaintiff has not suffered any “injury in fact.”
Article III of the United States Constitution limits a federal court’s jurisdiction to actual “cases and controversies.” A “case or controversy” requires the plaintiff to prove he or she has suffered an “injury in fact.” Without an injury in fact, there is no case or controversy. Without a case or controversy, the federal court has no jurisdiction and Congress cannot simply create jurisdiction by statute.
In Robins v. Spokeo, Inc., the Ninth Circuit Court of Appeals found that a plaintiff suing under the FCRA had standing to bring suit under 15 U.S.C. §1681n even though he had not alleged any actual injury. That court concluded that the statutory violation created the injury in fact. The central question is whether Congress can “create” injuries-in-fact when the plaintiff suffers no harm.
A decision in Spokeo will have significant impact on the credit and collection industry since so many of the statutes affecting the industry’s operations provide for statutory remedies even when a plaintiff suffers no actual injury (“injury-in-fact”). If the answer is no, then laws like the TCPA, FDCPA, FCRA, TILA and RESPA will all be fair game for motions to dismiss for lack of federal court jurisdiction except in the rare case where a plaintiff can prove actual injury – and emotional distress damages do count! The court has scheduled the Spokeo case for argument next fall. That means a decision is not likely before next spring.
The order granting the Writ of Certiorari is heartening because this is not the first time the Supreme Court has agreed to consider this question. In 2011 it granted a Petition for Certiorari in Edwards v. First America Corp., 610 F.3d 514 (9th Cir 2010) cert granted, 131 S.Ct. 3022 (2011), cert. withdrawn as improvidently granted, 132 S.Ct. 2536 (2012). However, before deciding the issue in Edwards, the court chose to terminate the appeal by withdrawing its order granting certiorari. With Spokeo, the court has reopened the door.
What should a defendant do between now and next spring? We have begun raising the affirmative defense of lack of standing in every case based on the body of federal consumer protection laws that create statutory remedies even when actual damages do not exist (FDCPA, TCPA, FCRA, TILA and RESPA).
While federal district courts within the Ninth Circuit (Alaska, Washington, Oregon, California, Hawaii, Arizona, Nevada, Idaho and Montana) are bound for now by that court’s decision in Spokeo, district courts in other parts of the country are not. The Sixth, Seventh, and Eighth Circuit Courts of Appeal (Tennessee, Kentucky, Michigan, Ohio, Illinois, Indiana, Wisconsin, Arkansas, Minnesota, Missouri, Nebraska, Iowa, North and South Dakota) have reached the same conclusion that the Ninth Circuit reached in Spokeo. However, the Second and Fourth Circuit Courts of Appeal (Connecticut, New York, Vermont, Maryland, Virginia, West Virginia, North Carolina and South Carolina) have reached contrary conclusions in two ERISA cases where the plaintiffs pursued statutory remedies even though they had not suffered any actual harm. See, Kendall v. Employees Retirement Plan of Avon Products, 561 F.3d 112, 121 (2d Cir. 2009) and David v. Alphin, 704 F3d 327, 338-39 (4th Cir. 2013). The First, Third, Fifth, Tenth and Eleventh Circuits have not yet addressed the issue so raising the defense in cases within those circuits is fair game.