March 22, 2019 at 11:00 am Leave a comment

Last night I got around to reading a deceptively important decision that the US Supreme Court issued on Monday. Humor me on this one, I’ll explain why it’s important in a second.

Frank v. Gaos involved the settlement of a lawsuit in which the plaintiffs allege that Google violated the federal Stored Communications Act when it provided third-parties with information about the search terms used to get to their sites. Google settled the lawsuit because it believed that under existing law a Party that could show that Google violated the statute had automatic standing to sue.

But before the settlement was finalized, the Supreme Court decided both Spokeo, Inc. v. Robins in which the court held that someone claiming to have been harmed had to demonstrate a “concrete injury” even when the statute gave people the right to sue for violating it. On Monday, the Supreme Court once again cited Spokeo, Inc. in holding that the plaintiffs in the case against Google had to prevent more evidence that they were actually harmed by Google’s actions.

So why is this such a big deal? Because just about every federal consumer statute to which your credit union is subject creates statutory standing. Remember those lawsuits claiming plaintiffs were harmed because credit unions didn’t have proper signage on their ATM’s?

So is Spokeo’s standing a good things? Credit unions are advocating for federal data security standards being imposed on merchants. Unless the Supreme Court clarifies Spokeo, it’s quite possible that even if Congress gives credit unions the right to sue for merchant violations they won’t be able to demonstrate adequate harm to bring lawsuits.

How does all this get resolved? Sooner or later I expect state legislatures to start filling in the standing gap. The Constitution was designed to minimize the types of cases that could be brought in federal court. States, in contrast, are free to devise their own standing requirements for their own state laws.

See you Monday.


Entry filed under: General.

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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