Limit Could Curb Growing Trend Of Suits Against Businesses
The Supreme Court last week heard oral arguments in the case Spokeo v. Robins. The Los Angeles Times reported that the case seeks to determine whether “millions of consumers” can “join a class-action suit if a company allegedly violates provisions of a federal law, such as the measures that regulate credit information or prohibit unwanted phone calls and text messages,” or if such litigation is “limited to people who can show they were actually harmed.” The Times said that during oral arguments the justices seemed prepared “to limit mass lawsuits from people who sued after seeing false information about themselves online” as the conservative justices backed the view that such suits “should be limited to people who can show they were hurt in some way by inaccurate online data.” Such a ruling “would block or greatly shrink class-action claims, filed on behalf of millions of people, that have sent a scare through the tech industry.”
The New York Times reported that the primary question in the case is “whether companies that say false but seemingly benign things about consumers may be sued under the Fair Credit Reporting Act.” Justice Sonia Sotomayor “said that many sorts of apparently harmless misinformation could cause damage,” while Justice Anthony Kennedy “suggested that the ubiquity of questionable information in the digital age may require a fresh approach.”
What Happens Next
The Los Angeles Times reported that a decision on the case is expected early next year.
What This Means For Small Businesses
Class-action suits cost small businesses. However, the Supreme Court may soon be offering relief from the growing trend of class-action suits. USA Today reported that the case of Spokeo v. Robins “is one of several on the high court’s docket this fall that will determine how far the conservative majority will go in limiting lawsuits – particularly expensive class actions that result in small individual awards, large legal fees, and multimillion-dollar penalties for corporations.”
Additional Reading
The Washington Post also covered the story.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
