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Supreme Court rules Spokeo not done with privacy lawsuit

The high court rules a lawsuit over false information can continue -- if the appellate court finds the bad intel caused concrete harm.

Joan E. Solsman/CNET

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The US Supreme Court kicked a contentious privacy lawsuit back to a lower court on Monday, essentially telling the 9th US District Court of Appeals it hadn't answered all the necessary questions when ruling that people search engine Spokeo had harmed a user by displaying inaccurate information.

In a 6-2 decision, the Supreme Court said the lower court hadn't considered whether Thomas Robins, the plaintiff, had suffered "concrete" harm when Spokeo showed information that he was a wealthy, married 50-year-old with children and a masters degree, none of which was true.

Robins sued Spokeo in 2010, saying the information made him appear overqualified when he applied for jobs.

That might make it strong enough for a court to hear the lawsuit, but Associate Justice Samuel Alito in the majority opinion wrote the 9th Circuit failed to say so when it ruled on the case in 2014. Alito said the harm doesn't have to be tangible, like a specific amount of lost income.

"Although tangible injuries are perhaps easier to recognize, we have confirmed in many of our previous cases that intangible injuries can nevertheless be concrete," Alito wrote.

Privacy experts have described the case as an acid test for when and how consumers can sue companies over privacy violations. If the court said the intangible harms Robins described in his lawsuit were inadequate, it could have made it much tougher for anyone to sue under civil rights and privacy statutes.

Instead, "the court clearly recognized that intangible privacy harms are actionable," said Joel Reidenberg, director of the Center on Law and Information Policy at Fordham Law School.

Compared with the waves the case was expected to make in the world of privacy laws, Monday's decision was a ripple.

Robins relied on the Fair Credit Reporting Act of 1970 in his lawsuit, suing Spokeo on behalf of himself and anyone else whose profile contained false information. The law is meant to protect reputations by making it illegal to spread false information on a variety of topics, from a person's credit history to his general character.

A California federal court initially threw Robins' suit out, but the 9th Circuit said he should have another chance to pursue it. Spokeo appealed to the Supreme Court.

In a statement Monday, Spokeo said Robins hadn't made the case the company caused him concrete harm and was ready to keep fighting.

"Spokeo looks forward to the chance to continue advocating against no-injury class action lawsuits that threaten American businesses and the overall economy," it said.

Jay Edelson, the lead attorney for Robins, said he was pleased with the decision. His biggest fear was that Spokeo's argument that Robins had to prove he was tangibly harmed by the false information would win out.

"The Supreme Court flatly rejected that," he said.

Associate Justice Ruth Bader Ginsburg, who dissented along with Associate Justice Sonia Sotomayor, said Robins had already made the harm done to him crystal clear.

"Robins complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market," Ginsburg wrote. She went on to quote a group of law scholars who'd filed a friend-of-the-court brief in the case, who'd written, "An applicant can lose [a] job for being overqualified; a suitor can lose a woman if she reads that he is married."

Reidenberg, the privacy law expert, said he thought the dissent was spot on.

The evidence for a concrete harm is spelled out in Robins' lawsuit, he said, calling the majority ruling, "an invitation to the 9th circuit to rewrite the opinion with more verbiage."