Companies in Silicon Valley have recently seen a rash of consumer class action suits filed against them where the companies have broken the law, but the plaintiffs may have difficulty proving that they suffered a harm that can be quantified or otherwise reduced to bodily injury or loss of private property rights. These class actions are frequently brought solely for damages that are provided for in statutes, without a showing of actual damages. These claims are therefore referred to as actions for statutory damages.
Businesses, however, have recently begun claiming that without a showing of economic loss, bodily injury or loss of property rights, plaintiffs lack jurisdiction in federal court to try to recover statutory damages – even where the a company has flagrantly violated federal law and even where the statute provides for damages without a showing of actual damages. In other words, these businesses claim that there is no “case or controversy” as required by Article III of the U.S. Constitution.
But this defense-of-the-month is profoundly wrong. Both before and after 1787, when the Constitution was promulgated, courts in England and America widely recognized that plaintiffs could assert any number of types of claims, even without a showing of what we would now call “actual damages,” including:
- A claim for assault, even where the defendant swung a hatchet and “did no other harm.”
- A claim for battery consisting of an allegation of unlawful touching, whether “accompanied with pain . . . [or] attended with none.”
- A claim for trespass, even if the property had not been harmed or the owner had not been damaged in any way.
- A slander claim without economic damage.
- A holder of property rights denied entry to inspect for waste, even though the holder had no damages since no waste had occurred.
- A claim for denial of voting rights, even though candidate for whom the plaintiff intended to vote won anyway.
- A claim for a de minimis diversion of a watercourse, even though the plaintiff had not suffered any actual damages.
Unscrupulous businesses, in their attempts to evade their responsibilities under various federal consumer-protection statutes, have latched onto language discussing “injury” in several of the U.S. Supreme Court’s decisions. But the Supreme Court’s standing cases do not teach that actual or consequential damages must be an element of every cause of action, or that harm must be of a certain kind or certain degree to generate a “case or controversy”; rather, those cases teach that a sufficient nexus must exist among plaintiff, defendant, and injury for a case to be justiciable. In other words, the standing question is not one of “bad enough,” but of “close enough.”
Nevertheless, these unscrupulous businesses have beaten a path to the U.S. Supreme Court, where they are trying to convince the Court to strip consumers of rights long provided by Congress that consumers take for granted. These protections include rights to privacy, rights to credit-card disclosures when opening an account or receiving monthly billing statements, and rights to receive proper disclosures when buying a car or a home. Our entire system of consumer protection rests on individual consumers having the ability and incentive to go into federal court and sue over improper conduct by businesses before someone gets seriously injured by the conduct.
Right now, however, a case is before the United States Supreme Court that has great potential to undermine enforcement of almost every consumer law by private parties. Spokeo, Inc. v. Robins (a link to the Court of Appeals decision can be found here) involves a people-search website, Spokeo, which posts information in its search engine about individuals. Spokeo does not necessarily update or verify the information that it provides on individuals. Robins filed a class action against Spokeo under the Fair Credit Reporting Act for violating his privacy. Robins claimed that incorrect information about him provided by Spokeo damaged his ability to find a job because Spokeo indicated that Robins had a graduate degree, when in fact he did not.
“No Harm, No Foul”? Hardly!
Defendants in class actions strive to undermine class action suits in whatever way they can because they are facing significant payout if they lose and they would have to change their ways by no longer violating the law. One way that these defendants attack class actions is by asserting that no demonstrable economic loss or physical injury or property loss has been suffered by the participants in the class, and therefore the door to federal court should be slammed shut in their faces. The result, of course, is that the defendant would not be held liable for any wrongdoing, regardless of how much proof there is to show that the defendants violated the law.
Contact A New York Consumer Class Action Lawyer
While it is yet to be determined how the Supreme Court stands on the issue of class actions brought solely for statutory damages, consumers who suffer harm must band together as a class to get the justice they deserve when a company violates the law or makes misrepresentations. Contact a consumer class action lawyer at the Bromberg Law Office, P.C. today to schedule an appointment.