Many laws designed to protect individuals from corporate abuses rely in part on the imposition of “statutory damages.” This typically means that if the plaintiff can show a violation of the law, there is some minimum amount of money that must be awarded. These are exceptions to the general rule that a plaintiff’s recovery is limited to the amount of actual damages proven.
Statutory damages are an important part of the enforcement mechanisms in the Fair Debt Collection Practices Act (“FDCPA”), Fair Credit Reporting Act (“FCRA”), Real Estate Settlement Procedures Act (“RESPA”), Truth in Lending Act (“TILA”) and many other consumer protection laws. This is because the availability of statutory damages acts as a deterrent to violations of the law that are destructive, but whose economic impact on any individual may be difficult to prove or speculative. For example, where a statute such as the FCRA or FDCPA gives a consumer the right to receive certain information, a company’s failure to comply might not give rise to any provable “actual” damages. Enforcement of those rights then depends upon statutory damages.
The United States Supreme Court was presented with a far-reaching challenge to statutory damages in the recent case Spokeo v. Robins. In that case, the plaintiffs in a class action had alleged that a web site used for personal investigations and background checks had violated the Fair Credit Reporting Act by failing to maintain procedures to ensure accuracy of its reports. The plaintiff class sought statutory damages under the FCRA. The defendant argued that because the plaintiff had not shown any “actual damages,” he lacked “standing” to bring the lawsuit under Article III of the Constitution–even though the FCRA itself provides for a cause of action that seeks only statutory damages. Without standing, the plaintiff’s case could not be maintained.
The Spokeo case was on appeal from the United States Court of Appeals for the Ninth Circuit, which had held that violation of the FCRA itself was enough of an “injury” to satisfy the Article III standing requirements. The United States Supreme Court disagreed in part, finding that the Ninth Circuit had failed to correctly analyze whether a “concrete” injury had been adequately alleged by the plaintiff. The Court remanded the case for a new determination of this issue.
On its face, the Spokeo decision might appear harmful to the interests of consumers, given that many important protections in the FCRA, FDCPA, RESPA and TILA are only effectively enforceable through statutory–not actual–damages. However, within the Court’s opinion are indications that those protections remain viable. For example, the opinion acknowledges that a consumer’s injury need not be “tangible” in order to provide a basis for Article III standing. It also notes that “risk of real harm” can satisfy the injury requirement for standing. This is an especially important note in the context of statutes giving consumers the right to accurate information, where the failure to provide that information creates a real risk of harm.
In the coming months and years, it is expected that many corporations will rely on and attempt to expand on Spokeo to constrain consumer rights. Vigilant consumer advocates should be cognizant of this and work to ensure that the courthouse doors are not closed to their clients.
One thought on “Spokeo v. Robins/Westbrook Law of Grand Rapids, Michigan”
Easy to check out, easy to read…heck I had fashioned to leave a commment!