Hunton Retail Law Resource

A year ago, the United States Supreme Court held in Spokeo, Inc. v. Robins that a plaintiff must do more than plead a mere statutory procedural violation to establish standing; to plead an injury in fact, a plaintiff also must allege a harm that is both “concrete” and “particularized.” Two recent decisions by the U.S. Court of Appeals for the Eleventh Circuit—one involving a rare written dissent from the denial of a petition for rehearing en banc—demonstrate the continuing difficulties courts are facing in determining what constitutes a concrete injury under Spokeo. They suggest that the Eleventh Circuit is most likely to find standing for violations of statutes that are intended to protect personal privacy or create a right to information, although judges do not always agree as to which statutes fall within these categories.

In Perry v. Cable News Network, Inc., (11th Cir. Apr. 27, 2017), the plaintiff alleged that CNN’s proprietary mobile software application tracked and collected records of users’ viewing activity, which CNN then sent to third-party companies. Although the plaintiff alleged no additional harm beyond the statutory violation of the Video Privacy Protection Act (“VPPA”), the Eleventh Circuit held that the plaintiff established Article III standing because the alleged injury was sufficiently concrete. The court focused on the structure and purpose of the VPPA, noting that the VPPA prohibits the wrongful disclosure of video tape rental or sale records and creates a cause of action for any person aggrieved by an action in violation of the VPPA. The court noted that the law was passed to protect personal privacy (in response to a newspaper’s publication of Supreme Court nominee Judge Robert Bork’s video rental history from a particular store), and found the statute’s creation of a cause of action for this type of harm “has a close relationship to a harm traditionally regarded as providing a basis for a lawsuit in English or American courts.” Thus, a violation of the statute alone was sufficient to confer standing.

Shortly after the Perry decision, the Eleventh Circuit reached a different result in another case involving an alleged statutory violation. In Nicklaw v. CitiMortgage, Inc., (11th Cir. May 1, 2017), a majority of the Eleventh Circuit’s 10 judges voted to deny a request to rehear en banc a panel decision holding that a mortgagor lacked standing to pursue a claim alleging violations of two New York state statutes requiring a lender to record a satisfaction of a mortgage within 30 days after the satisfaction occurred. Where the lender had recorded the satisfaction after the statutory deadline, but two years before the plaintiff filed suit, and the plaintiff failed to allege anything other than speculative harms to the market for residential property, the majority concluded that the violation of a legal right alone was not sufficient to constitute a concrete injury.

In a rare published dissent to the denial of a rehearing petition, Judge Beverly Martin argued that the Nicklaw majority misread Spokeo. In Judge Martin’s view, the New York statutes at issue give property owners “the right to have truthful information posted about their property”; the New York legislature set up this system to address the serious harms that can befall property owners when satisfaction of their mortgages is not timely recorded, which can affect a person’s ability to get credit and make it difficult to transfer real estate. Under her reading of Spokeo, an allegation of a statutory violation coupled with a “real risk of harm” that the statute was intended to prevent is sufficient to establish standing. The panel divided over the factual question of whether there was a real risk of harm, where the violation was corrected two years earlier and the plaintiff was unable to allege any resulting harm. The majority accused Judge Martin of citing no Supreme Court decision that “holds—or even hints—that a plaintiff has standing to sue because he faced a risk of harm that never materialized and has since disappeared.” The majority rejected her assertion that the New York statutes involve a plaintiff’s statutory right to truthful information and they analogized the New York statutes instead to the statute at issue in Spokeo, the Fair Credit Reporting Act (“FCRA”), which requires credit reporting agencies to follow reasonable procedures to assure maximum possible accuracy of consumer reports. The majority noted that the Supreme Court explained in Spokeo that, unlike a statute that confers a right to truthful information to a plaintiff, a violation of the FCRA alone might not cause harm or present any material risk of harm. The majority concluded that the New York statutes are similar to the FCRA, and, therefore, do not involve a plaintiff’s statutory right to truthful information.

The Perry and Nicklaw decisions demonstrate the difficulties—and disagreements—courts are facing as they attempt to apply Spokeo’s concrete injury rule. These decisions suggest that businesses should be most concerned about potential liability for no-injury class actions for violations of statutes that by themselves cause an injury, including statutes that exist to protect personal privacy (such as the VPPA and, as interpreted by the Ninth Circuit, the Telephone Consumer Protection Act) and statutes that create a statutory right to truthful information (such as the Fair Housing Act). As these cases demonstrate, though, courts may differ as to which statutes fall in which category. One thing is clear, though: litigation regarding the meaning of Spokeo will continue.