SCOTUS Hands Website Win in False Data Case

(CN) - A divided Supreme Court on Monday held that Internet search engines that post inaccurate information about people cannot be sued unless the errors cause actual harm.

With their 6-2 ruling, the justice threw out an Ninth Circuit ruling in favor of a Virginia man who sued Spokeo.com, a search engine that aggregates information about individuals, after it posted an online profile about him that was rife with errors.

Thomas Robins claimed the Spokeo profile was wrong about his age, his level of education, his employment history and his marital status.

According to his Spokeo profile, Robins' had a graduate degree, was employed and making serious money, and was married with children.

In reality, at the time his profile appeared, he was single, unemployed, and looking for work.

Robins sued Spokeo in 2010, claiming in a class action filed under the federal Fair Credit Reporting Act that the profile hurt his job prospects.

The Act which requires consumer reporting agencies to offer accurate information.

Under its terms, Robins stood to collect damages of up to $1,000 for each error, without having to show they caused him any harm.

U.S. District Judge Otis Wright dismissed Robins's first complaint for lack of standing, and eventually did the same with an amended complaint. The judge found that Robins had failed to show that he had suffered any actual harm.

In February 2014, a Ninth Circuit panel revived the case, holding, in the words of U.S. Circuit Judge Diarmuid O'Scannlain, that "The statutory cause of action does not require a showing of actual harm when a plaintiff sues for willful violations," Judge wrote for the panel.

"When, as here, the statutory cause of action does not require proof of actual damages, a plaintiff can suffer a violation of the statutory right without suffering actual damages," he added.

But Justice Samuel Alito, writing for the majority, held that a person cannot show an injury simply by claiming a "bare procedural violation" of the credit reporting statute.

"Congress' role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right," Alito wrote.

Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, Robins could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III."

But Alito went on to acknowledge, in the very next paragraph of his opinion, that "the risk of real harm" could be enough.

"For example, the law has long permitted recovery by certain tort victims even if their harms may be difficult to prove or measure," he explained. " Just as the common law permitted suit in such instances, the violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury in fact.

" In the context of this particular case, these general principles tell us two things: On the one hand, Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk," Alito said. "On the other hand, Robins cannot satisfy the demands of Article III by alleging a bare procedural violation. A violation of one of the FCRA's procedural requirements may result in no harm."

He concluded: "Because the Ninth Circuit failed to fully appreciate the distinction between concreteness and particularization, its standing analysis was incomplete. It did not address the question framed by our discussion, namely, whether the particular procedural violations alleged in this case entail a degree of risk sufficient to meet the concreteness requirement."

The ruling is considered a positive development for scores of social media and technology firms, who feared that lawsuits over minor mistakes could cost them hundreds of millions in damages.

Justice Ruth Bader Ginsburg wrote a dissent, which Justice Sonia Sotomayor joined. Justice Clarence Thomas wrote a concurring opinion.

In her dissent Ginsburg said Robins had shown he was harmed because Spokeo's inaccuracies created the false impression he was overqualified for work he was seeking or that he might be unwilling to relocate for a job due to family.

"Robins would not qualify, the Court observes, if he alleged a 'bare' procedural violation ... one that results in no harm, for example, "an incorrect zip code," Ginsburg wrote. "Far from an incorrect zip code, Robins complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market.

Quoting from an Amici Curiae brief filed by the Center for Democracy & Technology, Ginsburg continued:

"Spokeo's inaccuracies bore on Robins' 'ability to find employment by creating the erroneous impression that he was overqualified for the work he was seeking, that he might be unwilling to relocate for a job due to family commitments, or that his salary demands would exceed what prospective employers were prepared to offer him.'"

Therefore, she said, " I ... 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.'"

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