Are Aggregators of Government-Created Data the Next Target for Large Class Action Lawsuits?

20 July 2015 Legal News: Consumer Financial Services Publication
Authors: Jay N. Varon Jennifer M. Keas Christi A. Lawson Michael D. Leffel

Legal News: Consumer Financial Services

There is little doubt that large class action lawsuits are a content aggregator’s worst nightmare. This especially holds true for those who transact significant amounts of data which may include government-created public records.

In a case before the U.S. Supreme Court, Spokeo, Inc. v. Robins , the personal information pertaining to the plaintiff, Robins, was allegedly inaccurate, stating that he was younger and wealthier than he is, and married when he is not. Under the Fair Credit Reporting Act (FCRA), Spokeo had presumably violated the law merely by putting forward inaccurate information and, as a result, the plaintiff could automatically receive up to $1,000 per instance of inaccurate information in a court judgment.

However, because Robins was not denied a job or turned down for credit due to these reported inaccuracies, there was no “real-world” harm. Without actual harm to himself, Robins should not have standing under the Constitution.

The bottom line: If the Supreme Court rules in favor of the plaintiff, companies that aggregate and own significant amounts of data may be subject to increased class actions.

Foley filed an amicus brief on behalf of the Coalition of Sensible Public Records Access (CSPRA) — an association of companies whose members include Experian Information Solutions, Inc., R.L. Polk & Company, Black Knight® Financial Services, and RELX GroupTM (LexisNexis), among others — to reinforce the notion that actual harm must be shown to move forward with class action lawsuits.

What makes this situation of added concern to CSPRA members and other companies is that the information in which those companies transact is government-created public records, whether a bankruptcy, lien, or divorce document. The companies report those documents as is, yet they have no control over the content of the information and must report it accurately. So when the government creates an error in producing the documents, the amicus brief is arguing that CSPRA companies should have no liability for faithfully reproducing those documents. Yet, if that question has to go to trial and jury to be decided, the pressure to settle over what might be millions in liability may be too great for these companies not to settle early. Not only is that economically destructive, but the Constitution prohibits no-harm lawsuits.

Foley & Lardner LLP Legal News is intended to provide information (not advice) about important new legislation or legal developments. The great number of legal developments does not permit the issuing of an update for each one, nor does it allow the issuing of a follow-up on all subsequent developments.

Joseph W. Jacquot
Jacksonville, Florida

Jennifer M. Keas
Washington, D.C.

Christi A. Lawson
Orlando, Florida

Michael D. Leffel
Madison, Wisconsin

Sean P. Smith
Orlando, Florida

Jay N. Varon
Washington, D.C.

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