One year after the Supreme Court appeared to lock the courthouse doors to certain statutory claims for lack of Article III standing, courts around the country continue to leave the door open by finding standing exists for a host of legislatively created rights. Although it has been well-settled for years that, to have standing under Article III, a plaintiff must allege both concrete and particularized harm, in Spokeo, Inc. v. Robins, the Supreme Court assessed those requirements in the context of a pure statutory violation.[i]  The Court ruled that mere statutory violations, without any monetary or apparent loss, can in some circumstances be a sufficient injury-in-fact.[ii]  Even so, the alleged statutory violation must have caused a concrete harm to the plaintiff, or created a “material risk of harm” that the statute clearly meant to address.[iii]  

The following summarizes how courts have analyzed standing in the context of alleged statutory violations, without concomitant loss, since Spokeo. The majority of cases involve four statutes: the Telephone Consumer Protection Act (“TCPA”), the Fair Credit Reporting Act (“FCRA”), the Fair Debt Collection Practices Act (“FDCPA”), and the Fair and Accurate Credit Transactions Act (“FACTA”).  The conclusion reached usually depends on which statute is being addressed.  Defendants have been more successful in FACTA cases, but plaintiffs have obtained the majority of victories with TCPA claims.  But location matters too: for example, currently, a plaintiff in San Diego will be hard-pressed to pursue a TCPA case on statutory violations alone; while one in San Francisco will almost certainly have standing.  Despite these variables, predictors have emerged from the past year of cases that help defendants determine at the outset whether a plaintiff does or does not have standing.  

Telephone Consumer Protection Act 

The TCPA prohibits unsolicited fax, text message, or phone messages  sent through automated dialing systems and prerecorded messages.[iv]  Except for a few outliers, the vast majority of courts addressing TCPA violations have found standing even when the plaintiff has not alleged monetary loss or damages of any kind.[v]  In some cases, courts liken the harm alleged to common law causes of action; for example, invasion of privacy, nuisance, and trespass. [vi]  Other courts have held that wasted time, or loss of the use of a phone or fax line, amount to a concrete injury.[vii]  

There are two outliers in the Southern District of California, both decided by the same judge: Romero v. Department Stores National Bank and Ewing v. SQM US, Inc.[viii]  In Romero, the court held that while a plaintiff who received 290 unwanted phone calls satisfied the “particular” requirement, she did not have a “concrete” injury.[ix]  The court held that standing does not necessarily exist just because a defendant used an auto-dialer, because it is “possible that the recipient’s phone was not turned on or did not ring, that the recipient did not hear the phone ring, or the recipient for whatever reason was unaware that the call occurred.”[x]  In both Ewing and Romero, the court required the plaintiffs to connect their alleged injuries to the defendant’s use of an auto-dialer, and held that neither plaintiff would have been better off had the defendant “dialed [their] number[s] manually” in which case they would not have violated the TCPA.[xi]  Romero and Ewing however, do not offer an easy out for a defendant in a TCPA violation.  Both have been roundly criticized, and Romero is currently under appeal to a Ninth Circuit that has broadly interpreted TCPA standing.[xii] 

Fair Credit Reporting Act 

The goal of the FCRA is to ensure “fair and accurate credit reporting.”[xiii]  To that end, the FCRA requires credit reporting agencies to follow “reasonable procedures” in generating credit reports for consumer credit, insurance, and employment purposes.[xiv]  The parts of the FCRA often litigated are its mandate that consumer reporting agencies “follow reasonable procedures to assure maximum accuracy” of credit reports, provide certain disclosures to consumers, and obtain credit information for a legally permissible purpose.[xv] 

In cases that have found standing since Spokeo, several themes have emerged.  First, standing has been found to exist when “a prior lender continues to access a consumer’s personal information without any genuine reason for doing so,” the “concrete harm” being invasion of “consumer privacy and confidentiality.”[xvi]  Second, courts have held that reports containing “misleading or false” and “adverse” information confer standing when they “echo the sorts of allegations on which tort claims were permitted to proceed at common law,” including “slander or defamation.”[xvii]  The Southern District of New York, for example, held both elements were present when the defendant provided false, misleading, and deceptive information about the plaintiff’s prior residences to his prospective employer, including listing addresses where he had not lived in more than seven years (itself a violation of the FCRA) and falsely indicated the addresses were hotels, motels, and nursing facilities.  The court held this disclosure not only violated the plaintiff’s privacy rights (by disclosing address information not authorized under the FCRA), but also used “false or derogatory terms” to imply that he was an “itinerant, unstable, and unattractive” employee.[xviii]  In yet a third line of cases, courts have held standing exists where the plaintiff alleged an “informational injury.”  In Syed, for example, the Ninth Circuit held that a plaintiff had standing when the defendant failed to give him a stand-alone document that explained “a consumer report may be obtained for employment purposes.”[xix]  Although the defendant did disclose that information, it did so in the same document as the authorization to procure the plaintiff’s credit report.[xx]  The court held the “concrete injury” was that the plaintiff was “deprived of [the] opportunity to meaningfully authorize the credit check.”[xxi] 

Whether an “informational injury” confers standing appears to particularly depend on jurisdiction.  A New Jersey district court held that standing did not exist, when the plaintiffs only alleged they did not receive a stand-alone document informing them that their prospective employer would run a credit check.[xxii]  Though the facts there are different (the plaintiffs admitted they actually received the disclosure) the court held the stand-alone document requirement was purely formal.[xxiii] 

Fair Debt Collection Practices Act 

Courts consistently find standing exists in FDCPA cases when applying the Spokeo standard of review.  Several patterns have emerged since Spokeo: (1) courts are more likely to find a “concrete injury” when “the amount or validity of the debt has been misstated”; (2) standing likely exists when a communication contains any false or misleading information (for example, when it purports to be from an attorney or asserts entitlement to a credit card “convenience” fee or collection fee); and (3) standing will be found when the defendant fails to disclose that the defendant is a debt collector or fails to disclose other required information.[xxiv]  On the other hand, a plaintiff who does not actually owe and does not intend to pay debt does not have standing, even he received misleading information from a debt collector.[xxv]  

Fair and Accurate Credit Transactions Act

Of the four consumer protection statutes, standing has been most difficult to plead since Spokeo when asserting a FACTA claim.  Congress enacted FACTA to prevent identity thieves from obtaining access to consumers’ financial and credit information.[xxvi]  To further that goal, FACTA prevents merchants from printing more than the last five digits of a consumers’ credit card information or their credit card expiration date at the point of sale.[xxvii]  Courts have held standing does not exist when a plaintiff alleges a procedural violation with no actual harm or real risk of harm.  Thus, even if a merchant technically violates FACTA, there is no standing if: (1) no third parties (other than the cashier at the point of sale and the consumer) actually saw the offending receipt; (2) the plaintiff did not allege economic harm; (3) the plaintiff did not have to take protective measures to protect his or her credit card information; and (4) there was no real risk of identity theft.[xxviii]  

Conclusion

Spokeo has to some extent, reined in federal statutory claims.  Even so, courts continue to find standing under FACTA, FCRA, TCPA, and FDCPA, particularly where the harm alleged is precisely what the statute at issue was designed to prevent. Although some predictors of standing have emerged in the past year, the determination is ultimately jurisdiction and fact-specific.  Thus, as courts continue to weigh the impact of Spokeo on standing, companies must familiarize themselves with these statutes’ requirements and prohibitions to avoid potential pitfalls.

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Francis X. Riley III, Esq.  Partner and Co-Chair of Saul Ewing LLP’s Consumer Financial Compliance, Enforcement and Litigation Practice Group. friley@saul.com 

Colleen Fox, Esq. Associate and member of Saul Ewing LLP’s Consumer Financial Compliance, Enforcement and Litigation Practice Group. cfox@saul.com

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[i] Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016). 

[ii] Id. at 1549.

[iii] See id. at 1550. 

[iv] 47 U.S.C. § 227(a)(5), (b)(1)(B)-(C). 

[v] See Romero v. Dep’t Stores Nat’l Bank, 199 F.Supp.3d 1256 (S.D. Cal. 2016), appeal filed, No. 16-56265 (Sept. 1, 2016); Abante Rooter and Plumbing, Inc. v. Pivotal Payments, Inc., No. 16-cv-05486, 2017 WL 733123, at *6 (N.D. Cal. Feb. 24, 2017).     

[vi] See, e.g. Van Patten v. Vertical Fitness Corp., 847 F.3d 1037, 1043 (9th Cir. 2017) (“Actions to remedy defendants’ invasion of privacy, intrusion upon seclusion, and nuisance have long been heard by American courts.”); Mohamed v. Off Lease Only, Inc., No. 15-23352, 2017 WL 1080342, at *2 (S.D. Fla. March 22, 2017) (holding standing existed because the defendant’s unsolicited text messages invaded the plaintiff’s privacy, were a nuisance, and a “trespass on his cellular telephone”); Abante, supra, 2017 WL 733123, at *7 (quoting Mey v. Got Warranty, Inc., 193 F.Supp.3d 641, 644 (N.D. W. Va. 2016)) (holding that “’intrusion upon and occupation of the capacity of the plaintiff’s cell phone’” are akin to a “’common law claim of trespass to chattels’”).

[vii] See, e.g. Compressor Eng’g Corp. v. Thomas, ___ F.R.D. ___, 2016 WL 7473448, at *10 (E.D. Mich. Dec. 29, 2016) (finding that the specific injury in a TCPA junk fax case is the occupation of the recipient’s phone and fax lines, regardless of whether the fax was printed or read).

[viii] Romero, supra, 199 F.Supp.3d 1256; Ewing v. SQM US, Inc., 211 F.Supp.3d 1289 (2016). 

[ix] Id. at 1261.

[x] Id. at 1261-62.

[xi] Id.; Ewing, supra, 211 F.Supp.3d at 1293.

[xii] See, e.g. Abante, supra, 2017 WL 733123, at *7 (citing LaVigne v. First Cmty. Bancshares, Inc., No. 1:15-CV-00934, 2016 WL 6305992, at *7 (D.N.M. Oct. 19, 2016)); Van Patten, supra, 847 F.3d at 1043.

[xiii] 15 U.S.C. § 1681(a)(1). 

[xiv] 15 U.S.C. § 1681a(d).   

[xv] See, e.g. Gambles v. Sterling Infosystems, Inc., ___ F.Supp.3d ___, 2017 WL 589130 (S.D.N.Y. Feb. 13, 2017); In re Ocwen Loan Servicing LLC Litigation, ___ F.Supp.3d ___, 2017 WL 1289826 (D. Nev. March 3, 2017); In re Michaels Stores, Inc. Fair Credit Reporting Act Litigation, No. 14-7563, 2017 WL 354023 (D.N.J. Jan. 24, 2017).

[xvi] Ocwen Loan Servicing, supra, 2017 WL 1289826, at *6.

[xvii] Gambles, supra, 2017 WL 589130, at *8. 

[xviii] Id. at *1, 9. 

[xix] Syed v. M-I, LLC, 853 F.3d 492, 497, 499 (9th Cir. 2017). 

[xx] Id. at 497-98.

[xxi] Id. at 499.

[xxii] In re Michaels Stores, supra, 2017 WL 354023, at *4-5.

[xxiii] Id. at *6.

[xxiv] Pisarz v. GC Services Limited Partnership, No. 16-4552, 2017 WL 1102636, at *4 (D.N.J. March 24, 2017) (quoting Thomas v. Youderian Jr., LLC, ___ F.Supp.3d ___, 2017 WL 1250988, at *20-21 (D.N.J. Feb. 3, 2017)); Bock v. Pressler & Pressler, LLP, Civ No. 11-7593, 2017 WL 2304643, at *9 (D.N.J. May 25, 2017); Toohey v. Portfolio Recovery Assocs., No. 15-cv-8098, 2017 WL 2271548, at *1, 3 (S.D.N.Y. May 12, 2017); Guerrero v. GC Services Limited Partnership, CV 15-7449, 2017 WL 1133358, at *10 (E.D.N.Y. March 23, 2017); Thomas, supra, LLC, 2017 WL 1250988, at *9; Carney v. Russell P. Goldman, P.C., No. 15-260, 2016 WL 7408849, at *5 (D.N.J. Dec. 16, 2016).

[xxv] Benali v. AFNI, Inc., No. 15-3605, 2017 WL 39558 (D.N.J. Jan. 4, 2017).

[xxvi] 15 U.S.C. § 1681c(g); Fullwood v. Wolfgang’s Steakhouse, Inc., 13 Civ. 7174, 2017 WL 377931, at *3 (S.D.N.Y. Jan. 26, 2017).

[xxvii] Id. at *1 (citing 15 U.S.C. § 1681c(g)).  

[xxviii] Id.; Katz v. Donna Karan Int’l, Inc., No. 14 Civ. 740, 2017 WL 2191605 (S.D.N.Y. May 17, 2017); Devorah Cruper-Weinmann v. Paris Baguette America, ____ F.Supp.3d ____, 2017 WL 398657 (Jan. 30, 2017).


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