Supreme Court makes it harder to sue ‘people search’ websites for getting information slightly wrong

The Supreme Court on Monday shielded online databanks and “people search” companies from class-action lawsuits arising from the posting of minor mistakes.

The justices in a 6-2 ruling set aside, for now, a class-action suit against Spokeo Inc., a Pasadena-based provider of online personal profiles that are based on publicly available data.

The company was sued by Thomas Robins, who was surprised to see his Spokeo profile describe him as married, with children, affluent, in his 50s and holding a graduate degree. None of this was correct, he said.

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His suit relied on the Fair Credit Reporting Act, which calls for damages of up to $1,000 for reporting inaccurate information about a person’s creditworthiness.

The Spokeo case raised alarms for online providers of information, including Facebook and Google, because of the possibility of class-action lawsuits. If the claim by Robins had been upheld, he could have served as the lead plaintiff representing a huge class of people who could make the same claim. The other online giants feared a wave of mass lawsuits based on alleged errors.

Consumer-rights advocates argued that the federal law was designed to punish companies which recklessly reported information that damaged people and their reputations.

In Monday’s opinion, the high court gave Spokeo a partial victory. It set aside a ruling by the 9th Circuit Court of Appeals which cleared Robins to sue as a plaintiff in a class action, and it told judges to take a harder look at whether he could show the “concrete and particularized” injury that is required for standing.

“Not all inaccuracies cause harm or present any material risk of harm,” said Justice Samuel A. Alito, speaking for the court in Spokeo vs. Robins. “An example that comes readily to mind is an incorrect ZIP code. It is difficult to imagine how the dissemination of an incorrect ZIP code ... could work any concrete harm.”

The decision does not end the case. It will now go back to the lower courts where the lawyers for Robins can try to show that the errors in his profile hurt or damaged him personally.

Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented, saying they would have allowed Robins’ suit to proceed.

“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,” Ginsburg said.

Spokeo said it was pleased the court rejected the view that any misstatements of facts could trigger a class-action claim. “The court’s standard will make it much harder to turn individual cases like this one into million-member class actions,” the company said in a statement.

Jay Edelson, a class-action lawyer from Chicago who filed the suit for Robins, said he was gratified the court will allow suits to proceed when a plaintiff can point to a real injury.

“This is, in our opinion, an easy question to answer, and we are very confident that Robins—and his class—will ultimately get to present to their case to a jury,” he said.

Los Angeles lawyer Stephen J. Newman, who mostly represents companies, said the decision “is about as good a result as the defense bar could have anticipated. Clearly the majority of the court, left and right, is troubled by the abuse of the class-action process from cases seeking massive statutory damages untethered from any showing of actual harm,” he said.

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UPDATES:

10:57 a.m.: The article was updated with reaction from Spokeo.

This article was originally published at 10:20 a.m.