In order to sustain a California consumer lawsuit, a plaintiff must be able to demonstrate that they have standing to sue. “Standing” refers to the legal capacity to bring a claim in a particular capacity. Statutes that permit civil lawsuits to recover damages for violations often establish criteria for standing, and the courts have identified general rules for determining whether a plaintiff has standing, including the requirement of an “injury-in-fact.” See Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). A case arising in California under the Fair Credit Reporting Act (FCRA) resulted in a question about the “injury-in-fact” requirement. The Ninth Circuit ruled that the plaintiff had established standing, Robins v. Spokeo, Inc. (“Spokeo I”), 742 F.3d 409 (9th Cir. 2014), but the Supreme Court vacated this ruling and remanded the case. Spokeo, Inc. v. Robins (“Spokeo II”), 578 U.S. ___ (2016). Earlier this year, the Ninth Circuit again ruled in the plaintiff’s favor. Robins v. Spokeo, Inc. (“Spokeo II”), 867 F.3d 1108 (9th Cir. 2017).
The FCRA regulates the collection, use, and distribution of consumer information related to matters like “credit worthiness,…character, general reputation, [and] personal characteristics.” 15 U.S.C. § 1681a(d)(1). This type of information regularly appears in credit reports, which are used not only in credit and lease applications but also by potential employers. The statute requires “consumer reporting agencies” (CRAs), defined as businesses that collect consumer information and package it in reports for a fee, to “follow reasonable procedures to assure maximum possible accuracy” of the reports they produce. Id. at § 1681e(b). It allows consumers to seek damages in court for violations, with additional penalties for willful or knowing noncompliance. Id. at §§ 1681n, 1681o.
The defendant in Spokeo “operates a website that provides users with information about other individuals.” Spokeo I, 742 F.3d at 410. This may include contact information, economic and work history, and other personal details. The plaintiff filed suit under the FCRA for allegedly failing to confirm the accuracy of the information provided about him by the website. The district court dismissed the lawsuit for lack of standing, finding that he had failed to demonstrate an injury-in-fact. He had not, according to the court, alleged that the information on the website had actually caused him an injury, but instead that the presence of allegedly inaccurate information only created the risk of future harm.