Article III – Consumer Financial Services Watch

“No Concrete Harm, No Standing:” U.S. Supreme Court’s Decision Solidifies Standing Requirements for Fair Credit Reporting Act Claims

Jul 01 2021

By: Andrew C. Glass, Brian M. Forbes, Gregory N. Blase, and R. Nicholas Perkins

On 25 June 2021, the U.S. Supreme Court issued its decision in TransUnion LLC v. Ramirez, clarifying the nature of the harm sufficient to establish Article III standing to maintain a Fair Credit Reporting Act (FCRA) claim.[1] After Ramirez, plaintiffs seeking to pursue FCRA class litigation must establish concrete harm that is more than just speculative, and they must do so for all class members with the requisite type of evidence called for at each particular stage of litigation. The impact of the holding in Ramirez will likely extend to class standing issues beyond the FCRA context.

The Door May Be Open, but the Ride Isn’t Free: Seventh Circuit Allows Data Breach Class Action to Survive Pleading Stage but Signals Tough Road Ahead for Plaintiffs

May 09 2018

By Andrew C. Glass, David D. Christensen, and Matthew N. Lowe

In Dieffenbach v. Barnes & Noble, Inc.,[1] the Seventh Circuit allowed a data breach class action to survive the pleadings stage, including a challenge to the plaintiffs’ standing. At the same time, the Court indicated that the plaintiffs may have a tough time proving their claims on the merits or establishing that class certification is warranted. That warning may put the brakes on this action as well as others brought on a similar theory of liability.

Risky Business: Whether an Increased Risk of Harm Supports Legal Standing in Data Breach Class Actions Continues to Divide Federal Courts of Appeals

Mar 26 2018

By: Andrew C. Glass, David D. Christensen, and Matthew N. Lowe

Every data breach class action in federal court must confront a threshold question: has the plaintiff alleged a sufficient “injury in fact” to establish Article III standing? The inquiry frequently focuses on whether a plaintiff has standing simply by pleading an increased risk of future injury from the theft of personal identifying information (PII). This is because many named plaintiffs do not––because they cannot––allege any present harm. The federal courts of appeals continue to weigh in on the issue of whether allegations of possible future harm suffice for Article III purposes. But far from providing clarity or consensus, recent appellate decisions have reached differing conclusions, which appear highly dependent on the nature of the facts alleged in each case.[1]

Dismissing FDCPA Lawsuit, Sixth Circuit Calls Out Congress for Creating Statutory Remedies Where No Harm Has Occurred

Mar 12 2018

By Andrew C. Glass, Gregory N. Blase, Roger L. Smerage, and David A. Mawhinney

The Sixth Circuit Court of Appeals recently ended a Fair Debt Collection Practices Act (“FDCPA”) lawsuit because the plaintiffs could not show that the allegedly offending letter had caused them actual harm. In Hagy v. Demers & Adams,^[1] the Sixth Circuit held that the plaintiffs lacked standing to sue a law firm for its technical FDCPA violation, namely failing to identify itself as a debt collector in a letter to the plaintiffs. Debt collectors will likely applaud the practical and sensible approach the Sixth Circuit applied in Hagy. The decision is remarkable, however, for its constitutional rebuke of Congress. Reminding the legislative branch that it lacks general police powers to create statutory remedies where no actual harm exists, the Sixth Circuit’s decision suggests — without specifically stating — that the statutory damage provision of the FDCPA may be unconstitutional. Read More

Ninth Circuit Ruling Rejects FACTA Suit under Spokeo, Avoiding Circuit Split

Feb 28 2018

By Andrew C. Glass, Gregory N. Blase, and Roger L. Smerage

The Ninth Circuit recently held in Bassett v. ABM Parking Services, Inc. that a plaintiff cannot establish Article III standing to maintain a Fair and Accurate Credit Transactions Act (“FACTA”)[1] claim merely by pleading that a business printed a credit card expiration date on the plaintiff’s receipt.[2] In so ruling, the Ninth Circuit followed similar rulings by the Second and Seventh Circuits, avoiding a potential circuit split. As explained below, the Bassett decision is the latest in a growing majority of cases in the wake of Spokeo, Inc. v. Robins[3] that demand a plaintiff allege actual harm to maintain a FACTA damages claim—even one for statutory damages based on an alleged willful violation.

Standing to Sue under the Fair and Accurate Credit Transactions Act after Spokeo

Jan 12 2018

By: Andrew C. Glass, Gregory N. Blase, and Roger L. Smerage

After paying for groceries with a credit card or debit card, the clerk hands the receipt to the customer. In addition to the last four digits of the card number, it contains the first digit. Or perhaps it contains the first six digits. Or maybe the expiration date. Is this a concrete injury that provides the customer standing to sue the grocery store?

That is the question federal courts have grappled with since the Supreme Court decided Spokeo, Inc. v. Robins[1] in May 2016. The Fair and Accurate Credit Transactions Act (“FACTA”)[2] regulates retailers’ conduct in printing card number information on customers’ receipts and provides a private right of action for alleged violations. But, as discussed below, a customer may not have standing to sue in federal court or even in certain state courts just because a violation may have occurred.

Federal Courts Follow Two Approaches Post-Spokeo When Analyzing Standing

Jan 30 2017

By Andrew C. Glass, Gregory N. Blase, Ryan M. Tosi, Lindsay Sampson Bishop, and Roger L. Smerage

From the January 27, 2017 issue of the Washington Legal Foundation’s LEGAL BACKGROUNDER, Vol. 32 No. 3, with permission from the Washington Legal Foundation (WLF).

Last term, in Spokeo, Inc. v. Robins, the United States Supreme Court issued a much-anticipated opinion on Article III standing. The Court reiterated that to establish standing at the pleading stage, a plaintiff must allege an injury-in-fact that is both particularized and concrete. In other words, a plaintiff bringing suit upon an alleged statutory violation may not establish standing by merely alleging “a bare procedural violation, divorced from any concrete harm.”

Much has been written about Spokeo in the intervening months. Some members of the plaintiffs’ bar have lauded the decision as purportedly protecting consumer rights; some members of the defense bar have suggested Spokeo may signal the end of statutory class actions. Yet, to date, courts have not taken a uniform, bright-line approach in applying Spokeo to civil litigation asserting statutory causes of action, including those styled as putative class actions. Even still, courts have begun to develop two apparent schools of thought on how to analyze standing under Spokeo, resulting in increasingly divided case law across the country.

This article analyzes a few notable decisions applying each of these two approaches and considers the possibility that courts may begin to apply a third, “hybrid” approach.

To read the full article, click here.

Tag:Article III