The federal courts have been struggling for several years to clarify Article III standing law. Is it enough that a plaintiff satisfy the elements of a federal consumer protection statute? Is it enough that a data breach have happened? Or, must the plaintiff show that they have actually been damaged or that there is a substantial risk that they will be damaged? On October 28, 2020 the Eleventh Circuit handed down a sharply split en banc decision applying the U.S. Supreme Court’s Article III standing decision, Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016). The court held directly held that it is not enough that a statutory violation have occurred. Even though defendant Godiva Chocolates violated the Fair and Accurate Credit Transactions Act (“FACTA”), the Court held that the named class plaintiff lacked standing to bring the action because he did not allege any concrete injury.
The named plaintiff brought a proposed class action against Godiva following his visit to a store where he alleged his printed receipt included the last four digits of his credit card number and the first six digits of his account number in violation of FACTA. FACTA prohibits retailers from printing more than the last five digits of the customer’s card numbers on receipts. The parties to the case entered into a proposed settlement for the FACTA violations. After the settlement in principal the U.S. Supreme Court decided Spokeo, drawing objections to the proposed settlement for the plaintiff’s lack of standing.
In applying Spokeo the Eleventh Circuit en banc vacated the district court’s order (and a prior Eleventh Circuit panel opinion) approving the settlement. It opined the plaintiff has “done his best to argue that the statutory violation alleged carries with it both harm and risk of harm—and does so every time. But, the emperor still has no clothes; the bare procedural violation the plaintiff alleges is just as bare as it ever was.” The Eleventh Circuit determined there is no intrinsic worth in a FACTA compliant receipt that would render a noncompliant receipt by itself a concrete injury. And, the plaintiff put forward no facts to suggest he treated the noncompliant receipt any differently than other receipts. Next, the Court examined whether there was a “substantial risk” of harm in the future. The Eleventh Circuit found the risk of identity theft “remote.” Because the plaintiff alleged only a statutory violation and no concrete injury, he had no standing to bring the claim on behalf of the proposed class.
This application of Spokeo gives teeth to the Article III standing requirement of a concrete injury in the Eleventh Circuit–especially in class actions alleging bare violations of federal statutes. A complaint simply alleging violation of a consumer protection statute, or any federal statute, should not pass constitutional muster absent facts showing a real injury. This is an important decision which clarifies the law in the Eleventh Circuit; however, the opinion generated a number of dissenting opinions—which ran over twice the length of the majority opinion. Given the number of consumer statutory claims, and the number of data breach claims, the standard for Article III standing may reach the Supreme Court again.
The case is Dr. David S. Muransky v. Godiva Chocolatier Inc. et al., case number 16-16486, in the U.S. Court of Appeals for the Eleventh Circuit. Please contact Gregory C. Cook if you have questions.