A federal appeals court ruled in San Francisco today that an unemployed Virginia man can go ahead with a lawsuit against a people-search website that he claims published inaccurate information about him.
The 9th U.S. Circuit Court of Appeals said that Thomas Robins' allegations that Spokeo Inc. violated the federal Fair Credit Reporting Act were sufficient to allow a trial on his 2010 lawsuit.
The Spokeo.com site, which describes itself as a "people search engine," was founded in Mountain View in 2006 by four Stanford University graduates and is now headquartered in Pasadena.
It aggregates information from sources such as telephone directories, social networking websites, marketing surveys and real estate listings to create profiles of people.
People can be searched for by name, e-mail address, user name, phone number or residential address. The site does not obtain the subjects' permission to display the listings, but does provide an opt-out process.
Robins, of Vienna, Va., alleged in a lawsuit filed in federal court in Los Angeles in 2010 that his profile gave his correct address and names of siblings, but erroneously said he was married, in his 50s, employed in a professional or technical field and in a wealth level of the "top 10 percent."
He said the alleged inaccuracies damaged his job-hunting prospects and caused him anxiety and stress.
The lawsuit claimed the profile amounted to a consumer report and violated a series of requirements under the Fair Credit Reporting Act, including a mandate to use reasonable procedures to ensure that information about a person is accurate.
Unless Spokeo successfully appeals the ruling, the case now goes back to U.S. District Court in Los Angeles for a possible trial.
Robins' lawyer, Steven Woodrow, said, "This is a tremendous victory for consumers. This allows consumers their day in court."
Woodrow said Robins will seek to have the lawsuit certified as a class action on behalf of an estimated tens of thousands -- and possibly millions -- of people whose profiles have been displayed online on the Spokeo site since 2006.
In addition, the appeals court's reasoning could apply to similar lawsuits filed against other websites, Woodrow said.
Spokeo spokeswoman Vanessa Waite said, "Because this is pending litigation, we aren't able to comment."
The company could appeal to an expanded panel of the 9th Circuit or to the U.S. Supreme Court.
In today's ruling, a three-judge panel unanimously overturned a decision in which U.S. District Judge Otis Wright of Los Angeles dismissed the lawsuit on the ground that Robins lacked standing, or legal authority, to sue under the law because he hadn't adequately alleged any actual harm caused by Spokeo.
The appeals court said the fair credit law is written in a way that provides that a violation of its procedures is in itself a harm.
"The statutory cause of action does not require a showing of actual harm when a plaintiff sues for willful violations ... A plaintiff can suffer a violation of the statutory right without suffering actual damages,"
Circuit Judge Diarmuid O'Scannlain.
The panel noted that another federal appeals court, the Cincinnati-based 6th Circuit, reached a similar conclusion in 2009 in a lawsuit filed by a consumer against a check-verification service.
Spokeo maintains in a statement on its website that it is not a credit reporting agency and says it "works hard to ensure that all of the data on our site is within established guidelines."