Spokeo’s Potential (and Unanticipated) Impact on Class CertificationBy now, most litigators and in-house counsel have at least some familiarity with the Supreme Court’s decision in Spokeo, Inc. v. Robins, which reiterated that Article III standing requires an “injury-in-fact” that is both particularized and concrete. Since Spokeo, injury-in-fact challenges have become routine and are particularly prevalent in defending statutory class actions. The results, however, have been mixed, often inconsistent, and sometimes even contradictory. Unfortunately, Spokeo has not been the “silver bullet” for defending statutory class actions that some in the defense bar hoped for.

Nevertheless, the frequency with which defendants raise Spokeo arguments has had an important, but rarely discussed, impact: The near certainty that a defendant will raise a Spokeo argument often prompts plaintiffs to come forward with robust, individualized allegations of injury. But while such allegations of specific harm may help a plaintiff survive a Spokeo standing challenge, they can be difficult to prove and could ultimately undermine a plaintiff’s ability to certify a class down the road.

Courts’ Varying Approaches to Spokeo

As you may recall, at the time, Spokeo was heralded by some in the defense bar as sounding the death knell for statutory-damages class actions. Defendants across the country attempted to leverage Spokeo’s holding that “bare procedural violations,” without more, were insufficient to confer Article III standing, raising injury-in-fact challenges in motions to dismiss or for summary judgment in countless class actions.

We wish that we could report that Spokeo, in fact, became the class action panacea that some in the defense bar had hoped it would be. But 15 months in, the results have been mixed. On the one hand, some courts have understood Spokeo as requiring, regardless of the statutory violation at issue, a careful examination of the factual allegations to determine whether the alleged violation resulted in real, concrete harm that is actual or imminent, not speculative. For instance, recently in Groshek v. Time Warner Cable, Inc., the Seventh Circuit affirmed dismissal of an FCRA claim alleging that a form that the plaintiff had signed authorizing Time Warner to obtain his credit report did not include a “clear and conspicuous” enough disclosure. The court concluded that the plaintiff had not alleged any “concrete” injury because the plaintiff failed to allege that he did not understand the form or that he would not have signed the form had Time Warner provided the correct disclosure.

Other courts, however, have taken a less fact-intensive approach, focusing instead on whether the specific statutory provision at issue protects a concrete interest, such that the mere violation of that provision automatically results in an Article III injury, even where the plaintiff has not alleged any specific harm. Perhaps the best example of this approach is found in the Eleventh Circuit’s (oft criticized) decision in Church v. Accretive Health, Inc., which concluded that the defendant’s failure to provide an adequate debt validation notice as required by the FDCPA was, by itself, a sufficiently concrete injury, even though the plaintiff had not alleged that she was harmed or prejudiced in any way.

Still others, such as the Ninth Circuit on remand in Spokeo, have adopted more of a hybrid approach, evaluating first whether the statutory provision at issue protects some concrete interest and, if it does, then determining whether the alleged violation actually harmed (or created a material risk of harm to) that interest.

In short, how a Spokeo standing challenge will be analyzed—and whether that challenge will ultimately prevail—varies from court to court, judge to judge, and case to case. The only certainty, as the Supreme Court admonished in Spokeo, is that “a bare procedural violation,” such as a slight delay, “divorced” from even the slightest allegation of actual or threatened harm, does not confer Article III standing. Of course, by now, most plaintiffs’ attorneys are aware of this and are increasingly unlikely to bring a suit based only on an alleged “bare procedural violation.” For instance, recently in Ben-Davies v. Blibaum & Assocs., P.A., the plaintiff avoided dismissal of her FDCPA claims by relying on allegations of “intangible harms that affect[ed] her personally,” including “emotional distress, anger, and frustration.”

Spokeo’s Potential Impact on Class Certification

The increasing savviness of the plaintiffs’ bar in crafting complaints that will survive a Spokeo standing challenge has an important downside. In many instances, plaintiffs are forced to allege individualized injuries to satisfy Article III, such as the emotional injuries alleged in Ben-Davies. But in circuits that require that each class member have standing (e.g., Second, Eighth, D.C.), alleging individualized injuries could significantly undermine a plaintiff’s ability to later certify a class. The Ninth Circuit’s decision on remand in Spokeo is a good example of this issue.  In finding Article III standing, the court relied on the plaintiff’s assertions that he was unemployed and that “Spokeo’s inaccurate reports have ‘caused actual harm to [his] employment prospects’ by misrepresenting facts that would be relevant to employers, and that he suffers from ‘anxiety, stress, concern, and/or worry about his diminished employment prospects’ as a result.” But those injuries are necessarily individualized and may not have been suffered by other putative class members. To determine injury in the case will necessarily require individualized inquiries, which could preclude a finding of both commonality and predominance.

At least a few lower courts have already found that allegations of individualized injury present an insurmountable obstacle to class certification. In Britts v. Steven Van Lines, Inc., for instance, the Northern District of Ohio denied class certification where determining whether each class member was sufficiently injured under Spokeo from the defendant’s alleged “Truth in Leasing” violations would require individualized inquiries. And in Legg v. PTZ Insurance Agency, Ltd., the Northern District of Illinois denied class certification for similar reasons. As other cases progress, time will tell whether plaintiffs’ strategy of pleading specific, individualized harm to avoid dismissal under Spokeo will ultimately undercut the ability to certify a class.