The Eighth Circuit Applies Recent U.S. Supreme Court Ruling in Spokeo to Affirm Dismissal

ABSTRACT: The U.S. Court of Appeals for the Eight Circuit affirms a motion to dismiss, ruling that a plaintiff alleging a statutory violation must establish a "concrete injury."

On September 8, 2016 the U.S. Court of Appeals for the 8th Circuit affirmed a motion to dismiss granted by the U.S. District Court for the Eastern District of Missouri in the case of Alex Braitberg, on behalf of himself and others similarly situated, v. Charter Communications, Inc. No. 14-1737. The Court of Appeals applied a recent U.S. Supreme Court decision establishing that plaintiffs alleging a statutory violation must also establish a “concrete” injury, not just a statutory violation, to have standing. 

Facts

Plaintiff filed the lawsuit against Charter in the U.S District Court for the Eastern District of Missouri, and sought class certification on behalf of himself and others similarly situated.  The Complaint alleged that defendant Charter Communications, Inc. inappropriately retained personally identifiable customer information for too long a period of time, in violation of the Cable Communications Act, 47 U.S.C. § 551(e). Plaintiff alleged that Charter inappropriately retained his personal identifying information -- including his address, telephone number and social security number – after he canceled his services with Charter.  Charter’s information retention policy was to retain identifying customer information “indefinitely.”  There was apparently no evidence that Charter made any use or disclosure of the information, but was merely retaining the records.

Plaintiff claimed that Charter’s retention of the information damaged plaintiffs in two ways:  first, via a “direct invasion of federally protected privacy rights,” and, secondly, by depriving plaintiffs of the “full value of the services they purchased from charter.”  Charter’s motion to dismiss attacked Plaintiff’s standing under Article III of the Constitution, standing under the Cable Act and alleged that Plaintiff’s Complaint failed to state a claim because no damages were stated.  Plaintiff’s claim was dismissed without prejudice, and the class certification was denied as moot.

Plaintiff Failed to Show an Injury in Fact.

The Court of Appeals agreed with the District Court and affirmed the ruling on Charter’s motion to dismiss, ruling that Plaintiff failed to properly allege an “injury in fact,” and therefore a controversy sufficient to establish jurisdiction did not exist for this matter.  The Court noted that, to establish standing, a Plaintiff bears the burden at the pleading stage of alleging an injury adequate to establish jurisdiction.  This injury must be both “concrete and particularized.”

Plaintiff argued, in line with prior 8th Circuit decisions, that the statutory violation by Charter in retaining his information constituted a sufficient injury in fact to establish standing under Article III, and that he need not allege an actual injury.  During the pendency of Plaintiff’s appeal, the Supreme Court handed down a new decision in Spokeo, Inc. v. Robins, 136 S.Ct. 1540 (2016) superseding the 8th Circuit decisions. The Spokeo decision establishes that a mere statutory violation does not automatically establish the “injury in fact” requirement for a plaintiff by virtue of the violation.  There must still be a “real,” “existing injury” that is not “abstract.”

Based upon the Supreme Court ruling, the 8th Circuit ruled that Plaintiff did not adequately establish standing, and hence jurisdiction, in this matter.  The statutory violation alleged by Plaintiff established only that a “bare procedural violation” had occurred, and this violation was apparently “divorced from any concrete harm.”  The Court indicated that Charter’s mere retention of the information, without evidence of any real harm (i.e. disclosure), was insufficient to establish an injury

In an attempt to get by the “concrete injury” requirement, Plaintiff argued that he suffered an economic injury stemming from a “diminution in the value of cable services” provided to him.  Plaintiff asserted that he placed value on the protection of his private information from access and use by unauthorized parties, including retention of his information in violation of the act.  The Court disregarded this argument stating that “without a plausible allegation that Charter’s mere retention of that information caused any concrete and particularized harm to the value of the information, Plaintiff has not adequately alleged that there was any effect on the value of the services that he purchased from Charter.”

Conclusion -- Guidance for the Future

The Supreme Court and 8th Circuit rulings establishing that plaintiffs must establish a “concrete and particularized injury” to have standing may help chill future lawsuits proposing damages for statutory violations with only abstract or hypothetical damages.  Going forward, plaintiffs will need to meet this standard to establish standing for controversies involving statutory violations.  Merely establishing that a statute has been violated may not suffice.