Today's Other SCOTUS Decisions

The Supremes heard arguments this term in First American Financial Corp. v. Edwards, a lawsuit filed by an Ohio homeowner against her bank because it got kickbacks for steering her to a specific title company. She didn’t suffer any harm from the wheeling and dealing by the bank and title company but sued for monetary damages because what they did violated a federal law. She would have been entitled to just a couple thousand dollars, but First American Financial challenged her right to sue the company at all, saying that even though it might have violated a federal law, Denise Edwards suffered no harm from it; she would have paid the same amount for title insurance regardless.

After the Ninth Circuit ruled in Denise Edwards’ favor, the bank appealed to the Supreme Court which took the case. This caught the attention of the tech company illuminati. Facebook, LinkedIn, Zynga, and Yahoo joined forces to file a brief [pdf] in the case urging the Supreme Court not to allow people to sue them for breaking federal laws when those people suffered no actual injury. Specific federal laws that folks tend to get these companies on are the Electronic Communications Act, the Wiretap Act and the Stored Communications Act — all laws designed to protect the privacy of your communications. The tech companies would have loved for those types of class action lawsuits to go away.


Interestingly, Google did not join in, even though it’s currently embroiled in one of these exact types of cases: a class action lawsuit filed by people whose personal communications were sucked up from unprotected Wi-Fi by Google’s Street View cars. Instead, the tech mafia name-checked In Re: Facebook Privacy Litigation, a class action lawsuit filed by Facebook users alleging that the social network had violated a federal privacy law by leaking information about users to advertisers (ultimately dismissed). They wrote in their brief that the Ninth Circuit’s “erroneous ruling” was of “particular concern” to them “because permitting these types of ‘no-injury’ lawsuits (often class actions with great attendant expense and burden)” could have “significant negative impacts on [them] due to the broad-scale nature of their operations,” noting that they interact with millions of “mostly non-paying” users per day.

In other words, there are a lot of people out there who could potentially sue them. They argued that allowing those millions the ability to team up with class action lawyers when they’d suffered no harm could subject the companies to damages demands that are “potentially bankrupting,” and that the fear of such an outcome forces them to settle otherwise baseless suits. (Ahem.)

So the tech corp. crowd was hoping the Supreme Court would reverse the Ninth Circuit and rule that Denise Edwards could not in fact sue her bank for violating the Real Estate Settlement Procedures Act, since she suffered no harm. Instead, the Court decided to reverse its decision to take the case. “The writ of certiorari is dismissed as improvidently granted,” said the opinion [pdf] issued Thursday.

“Apparently the case didn’t have the questions they wanted to answer,” said Justin Brookman who heads up the privacy division at the non-profit Center for Democracy and Technology.

He expressed some relief that SCOTUS didn’t make a decision on the case, given the fact pattern. Denise Edwards really didn’t suffer any kind of harm (beyond some moral indignation), but the types of cases the tech firms hoped the Supreme Court’s decision would make go away involve “intangible” privacy harms. There’s no economic or security injury, but rather harm to a person’s right to privacy. ‘No-injury’ should be in a different basket that ‘privacy injury,’ but a broad ruling from the Supreme Court might have made it much harder for plaintiffs to file lawsuits for violation of their privacy.

“It’s probably a win [for privacy],” says Brookman.

The Supreme Court on Thursday struck down a federal law called the Stolen Valor Act which prohibits a person from falsely claiming that he has been awarded a military honor.

The case involved Xavier Alvarez who was an elected member of the Three Valleys Municipal Water District Board in Pomona, California. In 2007 Alvarez said at a public water district board meeting that he was a retired Marine, had been “wounded many times,” and had been “awarded the Congressional Medal of Honor” in 1987.

In fact, he had never served in the United States armed forces.

In defending the law, the Obama administration had argued that “military awards serve as public symbols of honor and prestige, conveying the nation’s gratitude for acts of valor and sacrifice; and they foster morale… and esprit de corps within the military. False claims to have received military awards undermine the system’s ability to fulfill these purposes” and “make the public skeptical of all claims to have received awards….”

But Alvarez’s lawyers contended that the First Amendment freedom of speech protected “exaggerated anecdotes, barroom braggadocio, and cocktail party puffery.”

His lawyers said that there was no evidence that false claims undermined the integrity of military medals, and to the extent they do affect their integrity, the government “should encourage counter-speech or legislate against actual fraud,” – and Alvarez wasn’t accused of fraud, only of false speech.