Sometimes it is utterly astonishing just how quickly time flies. It seems like only yesterday that the Supreme Court of the United States had granted certiorari in a case from the Ninth Circuit then-called Robins v. Spokeo, Inc. The question presented to the Supreme Court was “[w]hether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.” The Court’s resolution of the appeal, decided in the interim between Justice Scalia’s death and the filling of the seat left vacant by his passing, did not provide the clear answer to that question expected by lawyers. Instead, the Court concluded that bare procedural violations of trivial matters that do not cause actual, concrete harm to the rights of the plaintiff fail to satisfy the requirements for standing under Article III of the U.S. Constitution.
While, on first blush, that may seem simple, it has proven anything but. As Judge David Hamilton put it best, in one of the cases we will discuss today, “The Court told us that standing requires ‘concrete’ injury but that ‘intangible injuries can nevertheless be concrete.’ This Delphic instruction raised more questions than it answered.”
Aside from the practical problems of applying Spokeo, there was a procedural curiosity that arose. The Supreme Court issued its Spokeo, Inc. v. Robins opinion on May 16, 2016. Straight away, it became apparent that overzealous defense attorneys had made a grave error in their haste to see Spokeo as a win. A month and a half after the decision, we covered the issue in a post and, by year’s end, had published a piece on the issue in Litigation Commentary & Review. The fundamental issue is that Article III of the U.S. Constitution only governs the jurisdiction of federal courts; state courts are subject to the jurisdiction created by the laws and constitutions of their own states. What that means is that there are circumstances in which a case that would otherwise be appropriate for treatment in federal court but is shown the exit due to lack of standing can still be brought in state court. The import of that reality is that many defendants, who often prefer federal courts to state courts, were inadvertently closing the federal courthouse doors on themselves. All plaintiffs needed to do was recognize this fact and start filing cases in state court instead of federal court.
Those of you familiar with federal removal procedures may have the gut-level reaction that merely filing in state court does not mean the case cannot later be removed by a defendant to federal court. You are correct. But you are missing a crucial detail if your analysis stopped there: that the burden of demonstrating a court’s jurisdiction rests on the proponent of the jurisdiction. When a case is filed in federal court, the burden then rests with the party who chose that forum—i.e., the plaintiff. If, however, the case is removed to federal court, then the burden rests with the defendant. What then happens if the defendant raises a Spokeo challenge to standing? Well, the champion for jurisdiction has abdicated its role. And, unless the plaintiff foolishly opts to become the champion, the case should be immediately remanded to state court.
In May, we discussed two cases from the Seventh Circuit, Collier v. SP Plus Corp. and Bryant v. Compass Group USA, Inc., dealing with that issue. In the last two weeks, the Seventh Circuit has twice again addressed Spokeo standing issues. The two cases show precisely how the decision of a plaintiff to file first in state court can completely shift the playing field. Last week, the court issued its decision in Thornley v. Clearview AI, Inc. There, the plaintiff filed a putative class action in Illinois state court, invoking relief under the Illinois’s Biometric Information Privacy Act. The defendant removed to federal court under CAFA jurisdiction. The plaintiff voluntarily dismissed the action as a matter of right and re-filed in state court, narrowing the relief sought. The defendant again removed to federal court, and the plaintiff filed a motion to remand “in which she asserted that the violation of section 15(c) she described was only a ‘bare procedural violation, divorced from any concrete harm,’ and thus did not support Article III standing.” The district court agreed and ordered remand. The defendant appealed.
On appeal, the Seventh Circuit began by recognizing precisely the issue at hand:
I’d be remiss if I did not feel a bit of warmth for the court’s apparent classification of me as “a civil procedure buff,” for I most certainly do love the posture and attending procedural machinations at play.
Finding that the plaintiff had sufficiently tailored her complaint to allege only bare procedural violations actionable in Illinois courts but not federal courts, the court affirmed remand, closing:
This week, the court once more addressed a Spokeo challenge in Smith v. GC Services Limited Partnership. Unlike the Thornley plaintiff, the Smith plaintiff did not have the benefit of several years of accrued wisdom since Spokeo to guide the decision of whether to file in state or federal court, with his case having been filed just two months after Spokeo. For our purposes, it merits note only that Smith, like Thornley, determined that there was no concrete harm sufficient to meet standing under Spokeo. But, unlike Thornley, the result was dismissal of the claim. The reason was because it was initially brought in federal court, so it was the burden of the plaintiff to prove standing, not the defendant.
These two cases stand in stark contrast to each other and provide an excellent basis to see why a plaintiff may well be wise to file in state court if asserting a statutory violation. Although the Thornley plaintiff was overt in using Spokeo to avoid federal court—“It is no secret to anyone that they took care in their allegations, and especially in the scope of the proposed class they would like to represent, to steer clear of federal court. But in general, plaintiffs may do this.”—the choice to file in state court may be used even more innocuously as a safeguard against defendants wasting time with a motion to dismiss on Spokeo grounds, because doing so would simply result in remand. It also helps to ensure a potential soft landing out of federal court.
Join us again next time for further discussion of developments in the law.
Sources
- Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014) (O’Scannlain, J.), vacated and remanded on cert., 136 S. Ct. 1540 (2016).
- Spokeo, Inc. v. Robins, 578 U.S.___, 136 S. Ct. 1540 (2016) (Alito, J.).
- Collier v. SP Plus Corp., 889 F.3d 894 (7th Cir. 2018) (per curiam).
- Bryant v. Compass Grp. USA, Inc., 958 F.3d 617 (7th Cir. 2020) (Wood, C.J.).
- Thornley v. Clearview AI, Inc., 984 F.3d 1241(7th Cir. 2021) (Wood, J.).
- Smith v. GC Servs. Ltd. P’ship, 986 F.3d 708 (7th Cir. 2021) (Easterbrook, J.).
- Colin E. Flora, Short-Sighted Invocation of Spokeo v. Robins May Lead to Exclusive Jurisdiction for Statutory Claims in State Courts, Hoosier Litig. Blog (July 1, 2016).
- Colin E. Flora, Is the Defense Bar Inadvertently Creating Exclusive State Court Jurisdiction for Statutory Damages Cases by Invoking Spokeo, Inc. v. Robins?, 9 Litigation Commentary & Rev. 11 (Jan./Feb. 2017).
- Colin E. Flora, Seventh Circuit Addresses Attempt by Plaintiff to Seek Remand on Spokeo-Standing Grounds, Hoosier Litig. Blog (May 8, 2020).
- Colin E. Flora, Challenging Adequacy of Amount in Controversy After Removal Under CAFA, Hoosier Litig. Blog (Dec. 4, 2020).
*Disclaimer: The author is licensed to practice in the state of Indiana. The information contained above is provided for informational purposes only and should not be construed as legal advice on any subject matter. Laws vary by state and region. Furthermore, the law is constantly changing. Thus, the information above may no longer be accurate at this time. No reader of this content, client or otherwise, should act or refrain from acting on the basis of any content included herein without seeking appropriate legal or other professional advice on the particular facts and circumstances at issue