A Collateral Attack on Class Action Lawsuits

It’s pretty well established that whatever its heresies in terms of same-sex marriage or Obamacare the conservative majority on the Supreme Court is intensely and predictably loyal to corporate interests. Sometimes that’s obvious, as in Citizens United. Sometimes it is less obvious. That’s the situation with a case illuminated for us at Ten Miles Square in a web exclusive by Gilad Edelman.

The case involves a man who has sued the “people search engine” Spokeo.com for getting his personal information wrong. Spokeo responds that the plaintiff shouldn’t have “standing” to sue because the mistake didn’t injure him. And the plaintiff responds that he has automatic standing under the Fair Credit Reporting Act. If the Court sides with Spokeo, the implications could be much broader than the case, since it would likely be holding that Congress cannot create standing unless there is a tangible and identified injury. And that, sports fans, would represent a collateral but very real attack on the viability of class action law suits, those hardy vehicles for deterring bad corporate behavior. There’s no question Court conservatives have been signaling they’d welcome the opportunity to smite class action suits:

In recent years, the Roberts Court has made it much harder to bring class actions, most notably in a pair of 5-to-4 decisions from 2011 upholding mandatory class-action arbitration waivers in consumer contracts and raising the bar for groups to form a class. While Spokeo is technically about standing, anxiety over class actions is a prominent theme in Spokeo’s briefs, as well as the many supporting briefs filed by technology giants (including Facebook and Google), media companies (including NPR and Time, Inc.), and industry groups. They argue that letting people join together without making them show that they all suffered an actual loss is a dangerous idea: Thanks to the reach of modern communication technologies, it will lead to classes of millions of plaintiffs. In this telling, the combination of class action lawsuits and statutory damages allows cunning plaintiffs’ lawyers to terrorize corporations into settling frivolous suits with the threat of billions in damages. As Justice Antonin Scalia put it in the 2011 arbitration case, “Faced with even a small chance of a devastating loss, defendants will be pressured into settling questionable claims.”

As Edelman says, this is “the Supreme Court’s most important injury case you’ve never heard of.” Check it out to inform yourself.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.