Photo by Andrew Harrer/Bloomberg
Photo by Andrew Harrer/Bloomberg

Supreme Court Justices Suggest They May Limit Consumer Suits

By Greg Stohr, Bloomberg News

A divided U.S. Supreme Court indicated it may put limits on consumer lawsuits, questioning arguments by a man seeking to sue over what he says is an error-riddled Internet profile.

Hearing arguments in Washington, members of the court’s conservative majority expressed doubt that the man had suffered the type of concrete injury necessary for federal courts to hear his claims against the company that assembled the online dossier.

“We have a legion of cases that say you have to have actual injury,” Chief Justice John Roberts said.

The court’s ruling next year will help determine when companies can be sued under more than a dozen federal statutes, including the credit-reporting law invoked by the man, Thomas Robins. The case may affect laws governing copyrights, real- estate settlements, employee benefits, disabilities and housing discrimination.

Internet businesses — including EBay Inc., Facebook Inc., and Google Inc. — and media companies led by Time Inc. are among those seeking limits on what they say is abusive litigation. Consumer, privacy and anti-discrimination advocates say the case could cut off longstanding avenues that let people vindicate their rights.

Married, Wealthy

The case centers on Robins, a Virginia man who says the profile he found about six years ago inaccurately described him as being married and wealthy and as having a graduate degree and technical background.

The profile, created by the data broker Spokeo Inc., allegedly said Robins was in his 50s, more than double his actual age, and included a picture of someone else. Robins claimed the profile undercut his job search, though a trial judge concluded he wasn’t harmed.

Robins’ Supreme Court lawyer, William Consovoy, said those allegations are sufficient to permit a suit against Spokeo under the U.S. Fair Credit Reporting Act. Consovoy drew support from the court’s four Democratic appointees, including Justices Elena Kagan and Sonia Sotomayor.

‘Concrete Injury’

“It seems like a concrete injury to me,” Kagan said. “If somebody did it to me, I’d feel harmed. And I think that if you went out on the street and you did a survey, most people would feel harmed.”

Sotomayor said inaccurate information about marital status in an online profile could harm a person’s romantic prospects.

“I know plenty of single people who look at whether someone who’s proposed to date is married or not,” she said.

“So if you’re not married and there’s a report out there saying you are, that’s a potential injury.”

The outcome most likely will hinge on Justice Anthony Kennedy, who asked questions of both sides. Kennedy called one of Consovoy’s arguments “circular” and separately asked whether credit-reporting agencies might have “less latitude” than other entities to argue that a person wasn’t harmed.

The FCRA requires credit-reporting agencies to adopt “reasonable procedures” to ensure against inaccuracies and says victims can collect from $100 to $1,000 each.

At issue is a fundamental constitutional question: whether Congress can pass a law authorizing people to sue and win damages even if they haven’t suffered any concrete harm.

Spokeo’s lawyer, Andrew Pincus, argued that the Constitution lets people sue in federal court only if they suffer “actual or imminent, tangible harm,” beyond the mere violation of a statute.

‘Vested Interest’

Consovoy countered that a “legally vested interest, whether it’s created by Congress or created by the common law, is itself a concrete injury.”

Justice Samuel Alito asked whether there was any indication that anyone other than Robins had found his profile. When Consovoy said no, Alito asked, “then isn’t that quintessential speculative harm?”

Spokeo admits it made mistakes in its online profiles, which it compiled by scraping publicly available information from other sites. Even so, the company says those errors didn’t cause Robins any harm.

The company, based in Pasadena, California, no longer offers the types of profiles Robins discovered when he ran a search for himself six years ago.

The case is Spokeo v. Robins, 13-1339.

For more news, visit Bloomberg Business.