Dive Brief:
- The U.S. Supreme Court appeared closely divided as it considered Spokeo Inc's bid to dodge a class action lawsuit for including incorrect information in its database.
- A California citizen filed the suit on behalf of himself and a potential class under the Fair Credit Reporting Act, which requires consumer reporting agencies to provide correct information.
- The case is being closely watched by Silicon Valley companies that face similar claims. The debate centers around whether or not providing incorrect information causes direct harm to citizens.
Dive Insight:
A ruling on the closely watched issue is due by the end of June.
The suit was filed under the federal Fair Credit Reporting Act, which requires consumer reporting agencies to provide correct information. The citizen behind the suit was unemployed when he sued in 2010 and claimed his Spokeo entry contained inaccurate information and therefore damaged his job-seeking prospects.
Spokeo is seeking to have the lawsuit thrown out.
Chief Justice John Roberts was among the conservative members of the court who appeared sympathetic to Spokeo.
"We have a legion of cases that say you have to have actual injury" in order to sue, Roberts said.
If the court finds that the lawsuit cannot proceed, it could stop a recent wave of class action cases against online companies. Facebook, Google and Yahoo have all faced similar lawsuits over violations of different federal laws.
