In Spokeo v. Robins, the U.S. Supreme Court delivered a ruling affecting the establishment of harm in cases that trigger statutory damages. In ruling 6-2, the court held that individuals suing under the Fair Credit Reporting Act, as well as similar laws, must demonstrate “concrete” harm rather than merely allege the existence of a technical legal violation of the applicable statute. The court affirms the view that simply parroting the elements of a statutory claim is insufficient to establish a valid claim. A number of cases had been stayed pending a decision in Spokeo, including a suit against Google in the U.S. District Court for the Northern District of California.

Spokeo reacted to the decision with a statement that it “looks forward to the chance to continue advocating against no-injury class action lawsuits that threaten American businesses and the overall economy.” Spokeo was named as a defendant in a class action lawsuit brought by Thomas Robins in 2010 after he discovered it had compiled a false profile of him as rich, married and in his 50s.

Robins alleged that Spokeo violated the Fair Credit Reporting Act by failing to take appropriate safeguards to ensure the truthfulness and accuracy of its information. However, Spokeo is not yet in the clear as the court remanded the case back to the Ninth Circuit, which more than a few legal experts believe may find that Robins has sufficiently established concrete harm under the federal statute involved, the Fair Credit Reporting Act.

Many attorneys and advocates of tort reform were hoping that the Supreme Court would increase the burden for plaintiffs pursuing exorbitant statutory damages for privacy violations and other intangible harms. Silicon Valley companies that process consumer data are frequently targeted by privacy suits. Several of these companies (eBay, Facebook, Google, and Twitter) formed a coalition and filed an amicus curiae brief urging the court to hear the case to prevent future “opportunistic lawsuits … in which the only alleged harm is a bare statutory violation.”

However, the court placed few limits on what would constitute a concrete injury and allowed that intangible and potential future harm might still qualify. Justice Alito wrote that having standing to sue,” requires a concrete injury even in the context of a statutory violation. … This does not mean, however, that the risk of real harm cannot satisfy the requirement of concreteness.”

On its face, this decision works to the advantage of business entities targeted by suits under federal privacy laws like the Electronic Communications Privacy Act, the Video Privacy Protection Act, and the Telephone Consumer Protection Act. The Spokeo decision will make it more difficult to sufficiently establish concrete harm and standing that is general enough to be litigated in a class-action lawsuit.

Some attorneys believe that this is going to significantly change in how these cases are going to be litigated by the plaintiffs bar while others believe that the ruling essentially changes little. We’ll have to wait to find out.

If you are an employer in California, it is important to obtain sound legal guidance for your business. DeAnn Flores Chase and her team of experienced attorneys can advise you on all your business needs. Contact Chase Law Group, P.C. at (310) 545-7700 or visit www.chaselawmb.com to schedule a consultation.