The United States Supreme Court on March 20, 2019 remanded an $8.5 million settlement in a class action against Google to the 9th Circuit so that the lower court could evaluate standing under the Supreme Court’s 2016 Spokeo v. Robins decision. In the case, Frank v. Gaos, plaintiffs challenged Google’s transmission of “referrer headers” as a violation of the Stored Communications Act. Specifically, the complaint alleged that “when an Internet user conducted a Google search and clicked on a hyperlink to open one of the webpages listed on the search results page, Google transmitted information, including the terms of the search, to the server that hosted the selected webpage.”
The parties ultimately agreed to a settlement that “would distribute more than $5 million to cy pres recipients, more than $2 million to class counsel, and no money to absent class members” and the courts below upheld it. Certain absent class members challenged the settlement for failing to be “fair, reasonable, and adequate” as required under the rules and sought certiorari, which was granted. The Court never reached the settlement fairness issue, however, instead focusing on the Solicitor General’s request “to vacate and remand the case for the lower courts to address standing.”
Article III standing has three elements. In broad strokes, a plaintiff must show:1) a concrete injury that is 2) traceable to the defendant and that can be 3) redressed with a favorable decision.
In Spokeo, the Court held that a bare procedural violation of a statute without actual harm was insufficient to meet the first element of Article III standing. Even though Congress may have established a private right of action for an intangible harm, that does not mean a plaintiff automatically has suffered an injury in fact as a result of a statutory violation. It will be interesting to see how the 9th Circuit handles this case.
On remand in Spokeo II, the 9th Circuit held again that the plaintiff had standing because 1) the Fair Credit Reporting Act was meant to protect consumers from the spreading of false information related to their credit ratings, and 2) the type of information that was disseminated about the Spokeo plaintiffs was the exact type that was addressed under FCRA and that any inaccuracy could harm plaintiffs with employers and others who rely on consumer reports to make decisions. See Robins v. Spokeo, Inc., 867 F.3d 1108 (9th Cir. 2017), cert. denied, 138 S. Ct. 931, 200 L. Ed. 2d 204 (2018).
In Tuesday’s opinion, SCOTUS admonished the 9th Circuit for not addressing the standing issue: “Our decision in Spokeo abrogated the ruling in Edwards that the violation of a statutory right automatically satisfies the injury-in fact requirement whenever a statute authorizes a person to sue to vindicate that right… Since that time, no court in this case has analyzed whether any named plaintiff has alleged SCA violations that are sufficiently concrete and particularized to support standing… We ‘are a court of review, not of first view.’ Resolution of the standing question should take place in the District Court or the 9th Circuit in the first instance.”
The opinion in Frank v. Gaos is available here.