June 23, 2016 | By RGR Marketing Blog

How Will Spokeo, Inc. v. Robins Affect Class Action Lawsuits?

Even without Scalia’s conservative pro-business presence being felt in the U.S. Supreme Court, a six-to-two decision was handed down last month that radically changes the potential for large corporations to be exposed to class action litigation.

The ruling in the case, Spokeo v. Robins, was highly anticipated as it is expected to have wide-ranging and deep ramifications on the ability of plaintiffs to sue a corporation or large company on the grounds of a statutory violation, without being able to prove actual real world harm was done to them.

Such cases can potentially result in either multi-million and even billion dollar settlements or judgments against companies. In fact, the pressure of the potential of such a judgment is generally enough to get a company to the bargaining table for a more reasonable settlement.

In this case, the Supreme Court sided with the defendant, Spokeo, Inc., affirming the concept that without a demonstrable real world harm being suffered by the plaintiff, there were no grounds for the class action litigation. This decision will most likely alter the landscape of class action lawsuits in a radical manner.

The Case Itself and No-Injury Class Actions

The typical genesis of a class action lawsuit involves a plaintiff coming forward with allegations of statutory wrongdoing by a large company or corporation.

While the plaintiff themselves has suffered no real, actual harm from this wrongdoing, they (or more likely, their law firm) can demonstrate that there is a technical violation and that they represent a class of other similar people who may or may not have been harmed or suffered as a result of this statutory wrongdoing.

Spokeo v. Robins was just such a case, brought under the Fair Credit Reporting Act and alleging that Spokeo did not follow the statutorily required credit reporting procedures, though they suffered no harm as a result. The court sided with the defendant in a move that will benefit large companies throughout the U.S.

The Impact to Class Action Lawsuits

The ruling of the Supreme Court in this case will have wide-ranging effects for class action litigation brought under multiple federal laws. These laws include the Video Privacy Protection Act, the Real Estate Settlement Procedures Act, the Telephone Consumer Protection Act, the Fair Credit Reporting Act, and the Truth in Lending Act.

Opinions vary regarding the overall affect this ruling may have on class-action litigation, in which a real harm can be proven to have been done to the plaintiff representing the class. But without real world harm occurring to at least the representative plaintiff, class actions will likely not get very far through the court system in the years to come.

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