Supreme Court Blocks Congress on the Right to Sue

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In a 5-4 decision with important implications for class actions and for Congress’s ability to authorize lawsuits of all kinds, the Supreme Court has rejected the idea that violation of a statute can ever be enough grounds for a lawsuit unless it comes with a more concrete “injury in fact” to potential plaintiffs.

Corporate defendants and the corporate bar will rejoice over the outcome, even as the plaintiffs’ bar and progressives will decry it. Somewhat remarkably, Justice Clarence Thomas joined the court’s three liberals in dissent.

His scholarly opinion not only powerfully undercut not only the majority opinion by Justice Brett Kavanaugh but also the structure of modern standing law as it has existed since the 1990s. Thomas considers the law too restrictive of Congress’s ability to create legal cause of action that would let plaintiffs get into court.

The case arose from a series of statutory violations of the Fair Credit Reporting Act by the credit reporting agency TransUnion that took place in early 2000s. In the immediate post-9/11 era, TransUnion started offering an add-on product that purported to tell anyone seeking a report whether the individual in question was on the federal government’s list of terrorists and drug traffickers. Unfortunately, TransUnion only bothered to compare first and last names, not dates of birth, initials or any other details that might very easily have made it clear whether the people were in fact the same ones on the list of the Office of Foreign Assets Control.

TransUnion’s actions led to a class action involving two kinds of plaintiffs. First were the 1,853 whose names were actually reported to some entity that sought their credit reports from TransUnion. The others were 6,332 plaintiffs who were not able to show that their names were sent out to third-party entities but were able to allege that TransUnion had violated their rights under the Fair Credit Reporting Act. They said that, among other things, TransUnion failed to follow reasonable procedures to assure maximum accuracy of credit report information and also failed to inform individuals that their names were being associated with the OFAC list.

At trial before a federal district court, the jury found that all the plaintiffs had been harmed under the law and awarded them all damages. The majority opinion in the Supreme Court, however, reversed the jury’s verdict with respect to the 6,332 plaintiffs who couldn’t show that their credit reports had actually been sent out with the inaccurate OFAC association.

Kavanaugh’s opinion was based on the reasoning that, to have standing to sue in federal court, the plaintiff must have suffered concrete injury. As he pithily put it, “No concrete harm, no standing.”

He concluded that, in the absence of having their information sent out, any injuries suffered by the 6,332 plaintiffs were merely speculative, based on the possibility of harm rather than actual harm. Although Kavanaugh didn’t use this phrase, you could sum up his theory as, “No harm, no foul.”

Kavanaugh further explained that it was up to the Supreme Court, not Congress, to decide whether there had been concrete injury in a given situation. Thus, the fact that Congress makes something an injury under the law is never enough to confer standing. The view of harm and laws passed by Congress, the court said, may be “instructive” but nothing more.

The upshot is that the decision makes it even harder than it already was for Congress to confer rights on individuals by law and then give them the authority to sue in federal court to enforce those rights.

Justice Thomas’s dissent went back to the foundations of the “injury in fact” doctrine — and rather effectively smashed them. His key point was that, from the founding era and even before, courts recognized a distinction between legal injury — what you might call “injury in law” — and injury in fact.

Both were forms of injury that courts were allowed to consider. And Thomas reasoned, very convincingly, that there is no reason to think the Constitution meant to exclude the first kind of harm when it said that the federal courts would have jurisdiction over “cases and controversies.”

The opinion is classic Thomas in its utter contempt for judicially made doctrine that he considers to be inconsistent with the original meaning of the Constitution. Modern constitutional standing doctrine begins with Justice Antonin Scalia’s 1992 decision Lujan v. Defenders of Wildlife, where the court first held that the Constitution required a concrete injury. To Thomas, the last 30 years of standing doctrine should just be thrown on the trash heap of history.

Thomas’s opinion left the court’s three liberals in a funny position. On the one hand, the clearly wanted to join the opinion to emphasize that the majority had gone well beyond even the Lujan precedent by holding, for the first time, that a specific group of plaintiffs whom Congress allowed to sue were barred by constitutional standing.

The liberals also agreed with Thomas that Congress has broad powers to create causes of action for lawsuits, powers the majority was actively constraining. So all three joined Thomas’s opinion.

However, the liberals take precedent much more seriously than Thomas does. So Justice Elena Kagan wrote separately, joined by the other two liberals, to say that she differed from Thomas’s now radical view that any violation of a right created by Congress gives rise to standing. She and the other justices still think there must be a concrete injury as well.

In a prior generation, the court’s great liberals would have stood foursquare with Thomas. But precedent matters to eight of the nine Supreme Court justices. And that’s often a good thing, even when the precedent, as it is here, deviates from what the framers almost surely had in mind.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Noah Feldman is a Bloomberg Opinion columnist and host of the podcast “Deep Background.” He is a professor of law at Harvard University and was a clerk to U.S. Supreme Court Justice David Souter. His books include “The Three Lives of James Madison: Genius, Partisan, President.”

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