High Court Sides With Businesses in Privacy Case

Consumers must show "concrete" harm when consumer reporting agencies publish inaccurate information about them, the court rules on a 6-2 vote.
Matthew HellerMay 16, 2016

The U.S. Supreme Court may have made it harder for consumers to sue companies that handle consumer data for publishing inaccurate information about them.

The court agreed with web-based data broker Spokeo that a Virginia man had not shown its erroneous description of him violated the Fair Credit Reporting Act, which requires consumer reporting agencies to “follow reasonable procedures to assure maximum possible accuracy” of their data.

The ruling reversed a federal appeals court that found Thomas Robins had standing to sue Spokeo. The Ninth Circuit Court of Appeals erred, the Supreme Court said, by failing to consider whether Spokeo’s inaccurate reporting had caused Robins “concrete” harm.

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“Not all inaccuracies cause harm or present any mate­rial risk of harm,” Justice Samuel Alito wrote for a 6-2 Supreme Court majority. “An example that comes readily to mind is an incorrect zip code. It is difficult to imagine how the dissemination of an incorrect zip code, without more, could work any concrete harm.”

According to Fortune, a loss for Spokeo “would have opened the door to other class action complaints like the one filed by Robins, and potentially billions of dollars in damages.” But the high court sent the case back to the Ninth Circuit to evaluate whether Spokeo’s misreporting “entail[ed] a degree of risk sufficient to meet” the requirement of concrete harm.

“In practical terms, this is a punt — one that privacy advocates will likely debate for the foreseeable future,” G.S. Hans, policy counsel at the Center for Democracy & Technology, said in a news release.

Robins, 29, sued Spokeo in July 2010, alleging it inaccurately reported he was in in his 50s, married with children, gainfully employed, having a graduate degree, with “very strong” economic health and personal wealth in the top 10%.

In a dissent, Supreme Court Justice Ruth Bader Ginsburg said that “Far from an incorrect zip code, Robins complains of … inaccurate representations that could affect his fortune in the job market.”

“I therefore see no utility in returning this case to the Ninth Circuit to underscore what Robins’ complaint al­ready conveys concretely: Spokeo’s misinformation ’cause[s] actual harm to [his] employment prospects,’” she added.