Industry Players Weigh In on Spokeo

A few months ago, we reviewed the U.S. Supreme Court’s decision to grant certiorari in Spokeo, Inc. v. Robins, and the implications that a ruling in the case will have on the landscape of litigation under privacy statutes. Since then, the petitioner, Spokeo, and numerous amici have filed briefs addressing the issue before the Court – whether Congress can confer Article III standing on a plaintiff that has not suffered a concrete injury, thus allowing that plaintiff to sue in federal court based on the bare violation of a statute.  In other words, whether Article III standing can exist based on an injury-in-law, and in the absence of an injury-in-fact.

Many of the amici focused on the effect of technology on businesses’ exposure to liability, describing how media and technology companies, and technology-dependent businesses, engage in an enormous number of transactions with consumers each minute of the day, whether via communications systems, content delivery, ATM and other banking transactions, or any other digital transmission of data. This environment creates, according to the amici, the potential for huge putative classes in actions asserting claims for statutory damages based on those transactions, which is of particular concern in the privacy context, given the statutory damages available under statutes such as the Telephone Consumer Protection Act (“TCPA”), the Video Privacy Protection Act (“VPPA”), and similar state statutes. Facing the potentially ruinous consequences of an adverse judgment, and the untenable costs of defending against such suits, the amici argued that it is not surprising that many companies would choose to settle aggregated class claims rather than adjudicate their merits. In many cases, however, such settlements can hardly be considered “missing a bullet.”  They can be enormous in their own right, often ranging from several million to tens of millions, such as Capitol One’s $75 million settlement of a TCPA class action in February.

Article III standing requirements have served as a check against class plaintiffs pursuing large settlements by bringing spurious claims - specifically, the requirement that plaintiffs sufficiently plead an injury-in-fact (i.e., a particularized harm) to ensure that the jurisdiction of federal courts is invoked to resolve actual cases and controversies rather than purely legal disputes. The amici argued that if the Supreme Court holds that the bare violation of a statute is sufficient to establish Article III standing, the flood gates for ruinous class claims will open, with more than just financial consequences. For instance, a group of media companies and trade groups, represented by this firm, argued that doing away with the injury-in-fact requirement raises First Amendment concerns, because “[t]he fear of large civil damages awards, and the mere cost of waging a defense against numerous specious claims, inhibits the development of content by media companies, and thus indirectly chills speech.” The respondent, Thomas Robins, will file his brief on or before August 31, 2015.