Statutory Class Actions Hang In The Balance At High Court

Authored by Skye Langs and Richard Patch. Originally published in Law360, November 2, 2015.

“On Monday, the U.S. Supreme Court heard arguments in Spokeo Inc. v. Robins, a case that has the potential to fundamentally alter the landscape of class actions based on violations of statutory rights. At issue in Spokeo is whether a plaintiff has Article III standing to sue for a violation of his or her statutory rights, absent proof of any “concrete harm” resulting from the violation. If the petitioner is victorious, plaintiffs will no longer be able to sue for bare violations of a statute unless they can demonstrate that they suffered some real-world harm.

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Ultimately, the Supreme Court’s decision in Spokeo could make it much more difficult for plaintiffs to bring large-scale class actions based on bare violations of the FCRA as well as other similar privacy statutes, such as the Telephone Consumer Protection Act, the Electronic Fund Transfer Act and the Video Privacy Protection Act. Under the status quo, class certification for claims based on statutory violations is a relatively low hurdle because no individualized proof of harm is required. Once a class is certified, defendants are under tremendous pressure to settle in the face of potential exposure in the billions of dollars. A ruling in favor of Spokeo would equalize this imbalance, raise the bar for class certification by requiring common proof of actual, real-world harm, and reduce the risk of large-scale liability to corporate defendants.”

Full article can be found at Law360 (subscription required).