GrandeLaw360, New York (February 16, 2016, 10:45 PM ET) –U.S. Supreme Court Justice Antonin Scalia’sunexpected death on Saturday creates a clear opening for the high court to split evenly on whether consumers can sue companies for technical statutory violations without alleging an actual injury, in a ruling that would preserve uncertainty and divergent standards nationwide for businesses and plaintiffs alike.
The sudden passing at age 79 of Justice Scalia, who sat on the bench’s 5-4 conservative majority,threw into disarray the fate of several of the Supreme Court’s most high-profile cases, including ones involving hot-button topics like affirmative action, abortion, immigration and class action standards.
One case that is likely to be impacted by Justice Scalia’s absence is the closely watched dispute between Spokeo and Thomas Robins, a consumer who sued the “people search engine” for allegedly violating the Fair Credit Reporting Act by falsely reporting that he was wealthy and had a graduate degree when in fact he was struggling to find work.
During oral arguments in November, the high courtappeared to be dividedon whether to uphold the Ninth Circuit’s finding that plaintiffs do not need to allege actual injury to maintain statutory class action claims, with Justice Anthony Kennedy in the middle of the traditional split between conservative and liberal justices.
“The unexpected death of Justice Scalia could have a very significant effect on the outcome of Spokeo,”Sheppard Mullin Richter & Hampton LLPpartner David Almeida said. “If history is any guide, Justice Scalia was poised to be a reliable vote in favor of reversing the Ninth Circuit’s ruling in Spokeo and thus one of the crucial votes in a 5-4 majority holding that Congress cannot confer standing in the absence of an injury-in-fact.”
If Justice Kennedy sides with the conservatives, as his questioning during oral arguments indicated he may, Justice Scalia’s passing would plunge the court into a 4-4 tie and force the justices either to issue a decision without precedential value affirming the Ninth Circuit or to relist the dispute to be heard again next term.
Either way, the divide would leave both plaintiffs and businesses to continue to wade through an uncertain legal landscape when it comes to liability for a wide range of alleged privacy and data security violations, attorneys say.
The standing issue is an important one for businesses such as Facebook Inc.,Google Inc. and Yahoo Inc., which filed an amicus brief with the high court in June 2014 arguing that allowing the Ninth Circuit’s ruling to stand would open the floodgates to a barrage of “no injury” class actions.
“This is a question that is becoming more significant across the country, with pretty substantial businesses facing these issues, and a split will result in them being stuck in the same spot that they have been in for years,”Foley & Lardner LLP partner Joseph Jacquot said. “It means that businesses are going to face different precedent from circuit to circuit, which is difficult to manage when you have a nationwide business platform, and it may make litigation gravitate toward those circuits that have more lax standing rules.”
Up until Saturday, the fate of the Spokeo case rested largely on Justice Kennedy, according to attorneys who have studied the transcripts and audio recordings from the Nov. 2 oral arguments session.
Judging by the tone of the questions posed by Chief Justice John Roberts as well as Justices Samuel Alito and Scalia, the three seemed to be aligned in their belief that standing should be limited to those who can show an actual concrete injury rather than those who can allege a mere statutory violation, as the four liberal justices seemed to hold.
“There’s been a lot of reporting about whether Justice Kennedy is going to side with the four liberal justices in establishing a broader right of action for consumers under the FCRA or the four conservative justices and limit standing to injury in fact,”Podhurst Orseck PA partner Roy Altman said.
Justice Kennedy appeared to tip his hand slightly during oral arguments by indicating his concern about Congress’ power to create a cause of action that would allow consumers to sue in situations where they can’t prove an actual injury, according to Altman.
“That suggested to me that Justice Kennedy is likely to side with the other conservatives in finding that the FCRA does not allow for consumers to sue under the statute without proving injury in fact,” Altman said.
If the forecast is accurate, Justice Kennedy would have been the fifth vote to overturn the Ninth Circuit —a majority that would evaporate without Justice Scalia’s vote, attorneys noted.
Without a majority, the decision of the lower court would be affirmed by an evenly divided court in a ruling that would have no precedential value, meaning the status quo the Supreme Court had hoped to address by taking up the dispute in April would remain unchanged.
“The spilt among the circuits would remain, which makes it likely that someone will bring another suit to the Supreme Court and we may see Spokeo 2 come up in 2017 or 2018,” said Lewis S. Wiener, co-chair of the Telephone Consumer Protection Act defense practice at Sutherland Asbill & Brennan LLP.