How Intangible Harms Can Result in Tangible FCRA Damages in California’s Post-Spokeo Landscape

By Elizabeth A. Sperling and Alex P. Pacheco

Although the Supreme Court’s decision in Spokeo, Inc. v. Robins was initially hailed by defense counsel as a new bulwark against consumer litigation alleging purely technical violations of consumer protection statutes, the initial enthusiasm for Spokeo-based defenses and motions to dismiss has been tempered by recent decisions limiting Spokeo’s reach. Spokeo has by no means shut the door on plaintiffs who allege no tangible, real-world harm from Fair Credit Reporting Act ("FCRA") violations. Indeed, the Supreme Court emphasized that allegations of intangible injuries could satisfy the concreteness prong of Article III injury in fact. (Spokeo, Inc. v. Robins (2016) 136 S.Ct. 1540, 1549.) The Court’s suggestion that, in certain circumstances, the violation of a statutory right may alone suffice to constitute an injury in fact, appears to have opened the door for plaintiffs to establish standing by alleging violations of privacy rights under FCRA. Plaintiffs have successfully established standing under FCRA by alleging risks of harm that they claim result from inaccurate credit reporting.

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Because the FCRA allows consumers to recover statutory and punitive damages for willful violations (15 U.S.C. § 1681n), the opening left by Spokeo makes it possible for a class or plaintiffs to receive damages awards without ever having to allege or prove that the named plaintiff or any class member suffered actual harm. This is precisely what happened recently when a California federal jury awarded over $60 million to a class of consumers who had been inaccurately identified by TransUnion as individuals on a federal list of terrorists and narcotics traffickers. While the named plaintiff had arguably suffered tangible harm from this inaccuracy, the critical steps to the court’s concreteness analysis were that he had at least suffered a material risk of real harm and that his individual standing satisfied the standing requirement for the entire class. (Ramirez v. TransUnion, LLC (N.D.Cal., No. 12-CV-00632-JSC) 2016 WL 6070490, *4-5.)