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Thursday, November 12, 2015

Can You Sue a Tech Company for Posting Inaccurate Information About You?

Posted By on Thu, Nov 12, 2015 at 3:24 PM

NEIL R./FLICKR
  • Neil R./Flickr

A case that could have major repercussions for the tech industry and online data is before the U.S. Supreme Court, and Silicon Valley is on edge.

In 2010, Thomas Robins of Vienna, Virginia, filed a suit against Spokeo.com, a Pasadena-based “data brokerage firm” that sells people’s personal information, which it mines mostly from public records and online sources. As KQED reports, Robins alleged that Spokeo misrepresented him in an online profile, listing him as middle-aged, with a Master’s degree and a six-figure income. In reality, he was in his mid-20’s and unemployed.

Robins said the misrepresentation hurt his career prospects. So he sued.

Spokeo argued that the burden of proof was on Robins to demonstrate that he’d suffered damages as a result of the bogus profile, but the low court thought otherwise. Spokeo appealed, and the U.S. Court of Appeals for the 9th Circuit affirmed the first ruling. Spokeo kept fighting, and last week, arguments went before the U.S. Supreme Court.

Four tech giants — Facebook, eBay, Yahoo, and Google — have filed a brief in which they warn of a lucrative niche market for data watchdogs:

If the Ninth Circuit’s rule stands, plaintiffs may pursue suits against amici even where they are not actually harmed by an alleged statutory violation, and in certain circumstances, seek class action damages that could run into the billions of dollars. 

In a nutshell, tech companies worry that anyone aggrieved by inaccurate personal information online can then sue the companies that published that information, even if no tangible harm was suffered. This poses an obvious threat to an industry where fact-checking, if it happens at all, is largely contingent on individual users.  

In addition to filing “baseless” lawsuits, pissed-off people could also launch class action suits on behalf of millions of other “similarly situated” users, and seek billions of dollars in damages. And they’re almost certain to get payouts, as the tech companies note:

The attendant expense of litigating such actions and the potential for punitive damages or burdensome injunctive relief creates a strong incentive to settle even the most baseless suits, rewarding plaintiffs (and their attorneys) for filing meritless strike suits in circumstances where no one has been harmed.

Interestingly, media companies are also uneasy about the Spokeo case. Time, Inc. filed its own brief, declaring that media companies “have, by necessity, become technology companies,” and that "the fear of large civil damages awards, and the mere cost of waging a defense against numerous specious claims, inhibits the development of content by media companies, and thus indirectly chills speech.”

So, does Robins have a case?

According to Technology Legal Edge, a blog that covers technology and privacy law globally, (and is likely biased towards tech), the case is similar to Clapper vs. Amnesty International (2013), a lawsuit regarding government surveillance in which SCOTUS ruled that "respondents cannot manufacture standing merely by inflicting harm on themselves based on their fears of hypothetical future harm that is not certainly impending." 

Per Technology Legal Edge:

Under Clapper, Mr. Robins’ alleged future harm to his employment prospects and related anxiety – similar to plaintiffs’ fear that they could be harmed by a bad actor who may utilize their financial information post-data breach – will likely not suffice to confer standing.
 
No matter how the court rules — which it's expected to do in June — Silicon Valley is on tenterhooks, and a verdict either way will set a precedent for future data suits.


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Jeremy Lybarger

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