Supreme Court Agrees to Hear Spokeo: Class Action Attorneys Shudder

Nick Fishman

Supreme Court Agrees to Hear Spokeo Case

Should a consumer who has not been harmed by a statutory violation be entitled to bring a claim on behalf of themselves or a class of individuals? That is the question that the United States Supreme Court has agreed to consider by granting the petition for writ of certiorari in Spokeo, Inc. v. Robins, No. 13-1339 (U.S.) I know, this sounds like I’m setting you up for one of the most boring posts I’ve ever written, but stick with me. Whether you know it or not, this question matters to employers more than you might know.

Case Background

In July 2010, Thomas Robins on behalf of a class of similarly situated individuals, alleged that inaccurate information on Spokeo’s website was a “willful” violation of the Fair Credit Reporting Act (FCRA). Spokeo was initially successful in arguing that the plaintiff’s claims were without merit since Robins, while admittedly unemployed, had not suffered any “actual or imminent harm”—a required element of a cause of action under the statute. Read more about that decision almost two years ago here.

Robins alleged that his Spokeo profile included a laundry list of inaccuracies: wrong age, wrong marital status, and wrong photo. Not all of the information was negative or even unflattering. Interestingly, the website reported that he had a graduate degree (he did not), that his economic health was “very strong” and that his “wealth level” was in the “top 10%”—all false, according to the plaintiff.

In an earlier post on this case, my colleague Angela Preston offered the following: “Call me crazy, but if I found out that a website was misleading the world into thinking I was a member of the highly paid, elite, upper echelon of society, I might not complain. But Robins made a good point—while being financially stable is not considered a negative (at least by most people), it doesn’t exactly help your job prospects to have a web site touting your great wealth.  The unemployed Robins claimed that the inaccurate information was costing him jobs, ‘causing actual harm to Plaintiff’s employment prospects” as well as “anxiety, stress, concern and/or worry about his diminished employment prospects.'”

Class Actions Have Become Epidemic

For the last several years, class action attorney’s have been having a field day going after employers for technical violations of the Fair Credit Reporting Act as it applies to their employment background screening practices. In the process, they have been extracting millions from employers or in most cases, employers’ insurance companies who were too scared about massive judgments against their clients.

The problem is that in many cases, the consumers that were “harmed”, really weren’t impacted in any way. For instance, Whole Foods was targeted for included extraneous language on their authorization forms. If the allegations are true, should that language be there? No, it shouldn’t be. The real question though, is whether any one was actually harmed by that extraneous language. That form could have gone out to tens of thousands of candidates, and under the current rules, employers can be held accountable to each of those candidates whether or not they were harmed.

Find Someone Else to Kick Around

If the court rules in favor of Spokeo, and I sincerely hope it does, plaintiff’s attorney’s will have to find a new punching bag. The size of their classes would be considerably smaller which we all know means that there are less dollars involved. It also means that insurance companies might be less likely to settle out of fear and force these attorneys to actually prove their cases. More time on a case, means less money in their pockets. See where I’m going with this?

Now, lest you think I am against employers or background screening companies being held accountable for FCRA violations– far from it. Employers need to get this right. I am not opposed to the Federal Trade Commission pursuing claims when laws are violated or for consumers who have truly been harmed to pursue their legal rights. What I am against is opportunistic vultures that exploit the system and drive away in their Porsche’s while the people they represent, that were supposedly “harmed” get very little in the process and employers are left carrying the bag for minor violations.

Editor’s Note:

The author wishes to apologize in advance to Porsche who admits that he wants one very bad and is just jealous:)

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Nick Fishman
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Nick Fishman

Nick Fishman is the co-founder of EmployeeScreenIQ, a leading, global employment background screening provider, and serves as the company’s executive vice president and chief marketing officer. He pioneered the creation of EmployeeScreen University, the #1 educational resource on employment background checks for human resources, security and risk management professionals. A recognized industry expert, Nick is a frequent author, presenter and contributor to the news media. Nick is also a licensed private investigator in the states of Ohio and Texas.
Nick Fishman
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