Article III of the U.S. Constitution limits federal courts’ jurisdiction to actual cases and controversies only.  When a plaintiff seeks to sue in federal court despite having suffered no actual injury, the Constitution’s case or controversy requirement is not satisfied and the case cannot proceed.  In other words, when a plaintiff has suffered no injury, he or she lacks standing to sue in federal court.

This principal was central to the U.S. Supreme Court’s recent decision in Spokeo, Inc. v. Robins.  In that case, the high court considered whether Plaintiff Thomas Robins satisfied the case or controversy requirement where he alleged that Spokeo committed a mere technical violation of a consumer protection statute (in this case, the Fair Credit Reporting Act or “FCRA”), but where Plaintiff did not allege any actual harm.

Plaintiff alleged that Spokeo disseminated false information on the Internet related to his wealth and education, causing him to fear that potential employers would rely on inaccurate information when evaluating his applications for employment.  Spokeo countered that Plaintiff’s fear that potential employers would rely on inaccurate information, without more, did not constitute actual harm.

A district court judge ruled in 2010 that Plaintiff lacked standing to sue in federal court because he suffered no actual injury.  In 2014, the Ninth Circuit reversed, ruling that the alleged FCRA violation amounted to an actual injury.

On Monday, in a 6-2 decision written by Justice Samuel Alito, the Supreme Court ruled that Article III requires allegations of concrete injury, notwithstanding the alleged FCRA violation.  While the Court reaffirmed that “[t]he violation of a procedural right granted by statute can be sufficient in some circumstances to constitute injury-in-fact,” the majority held that “Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right[.]”

“Article III standing requires a concrete injury even in the context of a statutory violation[,]” Justice Alito wrote.  “For that reason, [Plaintiff] could not … allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.”

While the decision is not a panacea to the wave of consumer protection suits being filed against FinTech companies, the Court’s endorsement of a concrete injury standard bodes ill for plaintiffs bringing “gotcha” statutory lawsuits.