26 August 2016

"No injury" case rejected by Supreme Court - Class actions in the US

This article was written by Peta Stevenson and James Emmerig.

US Courts have interpreted Article III of the US Constitution as imposing a requirement that, in order to establish standing to bring a claim at federal level, plaintiffs must demonstrate that they have suffered an “injury-in-fact”. A lingering question has been whether some actual harm to a plaintiff must be demonstrated, or whether a claim can be brought on the basis of a mere procedural violation of a federal statute. In last year’s Review, we discussed a pending decision of the US Supreme Court, which was anticipated to provide clarity on this question.

That decision, Spokeo, Inc. v. Robins, No. 13-1339 (U.S. 2016), was issued by the US Supreme Court on 16 May 2016. The decision has clarified that a plaintiff in federal litigation must demonstrate an injury-in-fact that is both “particularized” to the plaintiff and sufficiently “concrete” to establish standing.

The decision is likely to have a mixed impact on US class actions. It offers class action defendants some increased protection against “no-injury” claims for statutory damages based on a bare procedural violation of statute where no actual loss is suffered. It should also generate an increased number of challenges to class certification where there is a lack of concrete injury common to class members.

However, the decision falls short of requiring that harm can only be established by a “real world injury” to the plaintiff, leaving open the possibility that, in certain circumstances, intangible harm (or even the “risk of real harm”) provided for in statute may be sufficiently concrete and may support a carefully pleaded claim.

Want to know more?

The Review: Class Actions in Australia 2015/2016 examines key class action decisions from July 2014 to June 2015 as well as current proposals for reform. It provides an analysis of how these decisions are likely to affect future proceedings for both plaintiffs and defendants, and also looks at emerging trends in class action regimes around the world. 

This is the fifth annual report released by King & Wood Mallesons’ Class Actions & Regulatory Investigations Practice, which has worked on some of the largest and most complex class action matters in Australia.

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