If an Internet company publishes false information about you online, can you sue for damages even if you weren't demonstrably harmed?
That, essentially, is the question that hangs in the balance Monday as the U.S. Supreme Court hears arguments in a case that pits online data broker Spokeo against a Virginia man.
Google, Yahoo, Facebook and eBay have all weighed in with support for Spokeo and are watching closely. There's good reason: Which way the court decides could have significant implications for the future of data protection online and the ease with which consumers can sue online service providers.
Billed as a "people search platform," Spokeo aggregates publicly available data about individuals from more than 50 sources and uses proprietary technology to organize it into online profiles. That information is then made available to others for a fee. Spokeo says in its FAQ that it's not meant to be used to determine eligibility for employment or credit or any other purpose covered by the Fair Credit Reporting Act.
It's just that act, though, that Thomas Robins contends Spokeo violated when it published inaccurate information about him.
Whereas the FCRA requires that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates,” Spokeo published numerous falsehoods about Robins, he alleges, misrepresenting his age and wealth as well as his educational, employment and marital status.
Robins was unemployed at the time, and the falsehoods harmed his job prospects, he claimed.
In 2010 Robins filed a class action against Spokeo, seeking the $1,000 allowed by FCRA per violation on behalf of a class that could include millions of people.
A federal district court dismissed Robins’s case in 2011 for a lack of “standing” -- meaning primarily that he could not prove any actual harm -- but a court of appeals last year reversed that decision, arguing that it was enough that Spokeo had violated the FCRA, whether harm resulted or not.
In April, the Supreme Court agreed to hear the case at Spokeo's request.
The stakes are high. Spokeo and its supporters -- including the U.S. Chamber of Commerce as well as many big names in the tech world -- say that if the court weighs in favor of Robins, it will open the flood gates to a deluge of no-injury class action cases against Internet companies.
Privacy groups such as the Electronic Privacy Information Center, on the other hand, argue that consumers' ability to sue over matters like this is essential.
"Plaintiffs can sue in federal court whenever a company misuses their personal information contrary to federal law," EPIC said. "To require that plaintiffs also prove consequential harm caused by the misuse of personal information would undermine the ability of consumers to prevent misuse of their personal information under FCRA and other privacy and consumer protection laws."
Still, today's Supreme Court tends to be conservative, and the "Fantasy SCOTUS" site sponsored by Thompson Reuters predicts a 7-2 vote in favor of Spokeo.
There's no denying that it's a tough case, said Ray Van Dyke, a patent attorney and tech consultant, via e-mail. "Both parties point to the downfall of civilization if they lose."
By analogy, the Digital Millennium Copyright Act requires that providers have a take-down procedure when personal works are abused on their systems, Van Dyke pointed out.
"Diligence is required in this regard for the providers to maintain their 'right' to continue in business by protecting the rights of others," he explained.
Spokeo and other information-gathering services have a similar duty to at least “follow reasonable procedures to assure maximum possible accuracy,” he added. "Penalties should thus accrue for those services failing to meet that strict requirement, thereby providing a remedy against data abuse and negligence."
While Robins and others "should have a venue or means to correct a 'wrong,'” that, in the end, may not be enough to prevail in this case, Van Dyke suggested. The "standing" requirement is needed to prevent unnecessary lawsuits by parties with no or little grounds to sue, he said.
"As much as I personally sympathize with Robins, his harm is too abstract, too inconsequential," Van Dyke said. "Had he been erroneously listed as a felon, then real harm can be shown and standing amply demonstrated."
In 2012, Spokeo agreed to pay $800,000 to settle Federal Trade Commission (FTC) charges that it improperly marketed information to employers and recruiters.
A ruling on the Robins case is expected in the spring.
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