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 If the court rules for Pasadena, California-based Spokeo and finds
that a consumer lawsuit cannot proceed when the plaintiff cannot
show he is being harmed, it could curtail a recent wave of class
action cases against online companies.
Google Inc, Facebook Inc, eBay Inc and Yahoo Inc filed court papers
backing Spokeo, a people search website.
If similar cases are allowed to proceed against other companies, any
user of their services who alleges a legal violation based only on a
technical violation of a federal statute could "pursue a
multi-billion dollar statutory damages claim despite the lack of
injury," the brief said.
The case gives the conservative-leaning Supreme Court another chance
to limit class action litigation as it has in a series of rulings
including a major 2011 victory for Wal Mart Stores Inc.
"We think this case presents the opportunity ... to close the door
on non-injury class actions," said Jason Matthes, Spokeo's general
counsel.
Facebook, Google and Yahoo have all faced similar lawsuits over
violations of different federal laws. As many online companies have
millions of users, a case can quickly snowball into a multimillion
dollar class action.
Without class action status, a case involving an individual
plaintiff presents a much smaller risk to a company.
Kate Todd, an attorney with the U.S. Chamber of Commerce's legal
arm, called the Spokeo dispute an example of plaintiffs' lawyers
"pushing the boundaries" of the types of cases that can be pursued.
In the Spokeo case, plaintiff Thomas Robins sued in California on
behalf of himself and a potential class under the Fair Credit
Reporting Act, which requires consumer reporting agencies to provide
correct information. There is a maximum $1,000 penalty per
violation.
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Robins, who was unemployed when he sued in 2010, had claimed his
Spokeo entry had damaged his job-seeking prospects because it
contained inaccurate information. The entry, for example, said
Robins has a graduate degree, which he called incorrect.
"In today's age, consumers are increasingly concerned about their
online reputation," said Robins' attorney, Jay Edelson, whose firm
specializes in suing tech companies for privacy violations.
The high court is currently considering two other class action
cases. One involving claims against advertising firm Campbell-Ewald
Co was argued last month.
The other, concerning a lawsuit against food producer Tyson Foods
Inc, will be argued on Nov. 10.
(Reporting by Lawrence Hurley; Editing by Will Dunham)
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