Federal Courts Recent Case

Recent Case: Laufer v. Naranda Hotels, LLC

Historically, the Supreme Court has embraced the idea that Congress could broadly define statutory rights, the violation of which creates an injury sufficient to confer Article III standing. But in TransUnion LLC v. Ramirez, the Court severely curtailed Congress’s ability to confer statutory standing, holding that in order to satisfy Article III, plaintiffs needed to show a concrete injury that bore a “close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” Perplexingly, TransUnion purported not to disturb a line of cases dating back to the 1980s that found standing based on “informational” injuries — that is, failures to receive statutorily required information — notwithstanding their facial incompatibility with TransUnion’s apparent requirement of a distinct harm with a historical analogue. That ambiguity has led to a circuit split, with lower courts diverging not only on whether informational injuries can confer standing, but also on why (or why not) such injuries survived TransUnion

Recently, in Laufer v. Naranda Hotels, LLC, the Fourth Circuit joined the melee, holding that a “tester” had standing to bring a claim under the Americans with Disabilities Act (ADA) on the basis of a purported informational injury. In treating informational injuries as a categorical carve-out to TransUnion’s broader thrust, the Fourth Circuit disregarded the tension between informational injuries and the Court’s new requirement of a historically based, concrete harm, missing an opportunity to synthesize the case law by highlighting the “adverse effects” of informational injuries.

The ADA gives persons with disabilities a private right of action to sue for injunctive relief to remedy discrimination. Deborah Laufer is a person with a disability and a self-described “tester” –– an “advocate of the rights of similarly situated disabled persons” who “monitor[s], ensur[es], and determin[es] whether places of public accommodation and their websites are in compliance with the ADA.” In August, 2020, Laufer sued Naranda Hotels in the U.S. District Court for the District of Maryland, alleging that six third-party hotel reservation websites containing listings for one of Naranda’s Baltimore properties lacked the accessibility information required by Department of Justice regulations promulgated pursuant to the ADA. She asserted that this constituted an informational and stigmatic injury. Naranda moved to dismiss for lack of standing.

The District Court granted Naranda’s motion. The court began by acknowledging that the Supreme Court had endorsed “tester” standing in Havens Realty Corp. v. Coleman, a 1982 case where a Black tester, who had no intention to rent, sued for racially discriminatory housing practices under the Fair Housing Act of 1968 after receiving false information about the availability of an apartment. But in subsequent cases, the Court emphasized the necessity of a “concrete” harm apart from a mere statutory violation to confer standing. The thrust of this case law suggested that the “[i]nability to obtain information is sufficiently concrete . . . only when the information has some relevance to the litigant.” Because Laufer “ha[d] no desire to actually use the room reservation website[s],” she lacked standing.

The Fourth Circuit vacated and remanded on the grounds that Laufer had suffered a cognizable informational injury under Article III. Writing for a unanimous panel, Judge King traced the contours of three of the Court’s most significant informational injury cases — Havens Realty, Public Citizen v. U.S. Department of Justice, and FEC v. Akins — and concluded that “all that mattered to the . . . Court . . . was that the plaintiffs sought and were denied information to which they claimed [statutory] entitlement.”

The Fourth Circuit then addressed the elephant in the room: TransUnion. There, the Court denied standing to a group of plaintiffs who had brought a class action against TransUnion for violating the Fair Credit Reporting Act, including by failing to furnish their consumer credit files in the required format. After rejecting the idea that “the format of TransUnion’s mailings caused [the plaintiffs] a harm with a close relationship to [one] traditionally recognized” at common law, TransUnion distinguished Public Citizen and Akins in three ways: (1) those cases had hinged on a failure to receive any information, rather than a receipt of information in the wrong format; (2) those cases involved statutes entitling all members of the public to the information at issue; and (3) the TransUnion plaintiffs had failed to allege any “downstream consequences” or “adverse effects” of failing to receive the information.

The Fourth Circuit interpreted TransUnion’s discussion of informational injuriesto mean that in cases involving a “fail[ure] to receive any required information,” plaintiffs need not allege “‘downstream consequences’ and ‘adverse effects’” to attain standing. In the course of this discussion, the court did not address the bearing, if any, of TransUnion’s analogical test on informational injuries. Instead, it highlighted that TransUnion contained “no statement or even suggestion . . . that the Court was reconsidering” Havens Realty. These observations convinced the court that tester standing was alive and well, and that Laufer’s purported informational injury satisfied Article III. The court thus did not reach her alternative claim of stigmatic injury.

The TransUnion Court’s transformation of standing from a “doctrine of judicial modesty into a tool of judicial aggrandizement” has left lower courts grasping to consistently apply standing law to informational injuries. The Fourth Circuit’s solution — a full-throated embrace of tester standing — failed to recognize the friction between the Court’s informational-injury cases and TransUnion’s broader rule, and in so doing missed an opportunity to focus the law on the negative consequences that might arise from failing to receive statutorily required information.

Two aspects of the Fourth Circuit’s reasoning are difficult to reconcile with TransUnion. First, the Fourth Circuit avoided TransUnion’s analogical test, implicitly treating it as inapplicable to informational injuries. This is a fairly simple issue to resolve, however, if one considers TransUnion’s qualification that “[c]hief among” sufficiently concrete intangible injuries are those closely related to traditional harms. In other words, TransUnion’s historical test could be read to apply to some but not all intangible injuries. Given that theCourt appeared to treat informational injuries as their own category of harm, one could credibly argue that such injuries need not be justified by history to confer standing.

Second, even if TransUnion’s “chief among” language renders its historical rule inapplicable to informational injuries, the Fourth Circuit brushed aside TransUnion’s statement that an “asserted informational injury that causes no adverse effects” or “downstream consequences” does not satisfy Article III. The court’s narrow reading of this language ignores its tension with Havens Realty and its progeny, where the Court observed that an injury “may exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing.’”

Other circuits have tried and failed to reconcile TransUnion’s description of informational injuries with these older cases. For instance, the Second and Tenth Circuits have read “downstream consequences” and “adverse effects” to require a subsequent use for any information sought. This reading reconciles TransUnion with both Public Citizen, which involved a nonprofit that sought information from the Department of Justice so that it could more fully participate in the process for selecting judicial nominees, as well as Akins, which involved a group of citizens who sought information that could inform their voting decisions. But as the Fourth Circuit correctly noted, this interpretation is inconsistent with Havens Realty, which“squarely rejected any . . . use requirement.”

Instead, looking beyond use, Laufer should have considered the undercurrent of discrimination that taints ADA claims as an “adverse effect” that occurred concurrently with the hotel’s failure to provide the statutorily required information. This would square TransUnion with Havens Realty, where the tester-plaintiff received false information as a result of racial bias. Since ADA claims like Laufer’s can only be brought by persons “subjected to discrimination on the basis of disability,” such claims, like those in Havens Realty, are tainted by prejudice. In this way, all of the Court’s major informational-injury cases are compatible with TransUnion: the intended use of the information in Public Citizen and Akins and the bias in Havens Realty (and in Laufer’s ADA claims) were each “adverse effects” — that is, distinct, concrete harms accompanying a statutory violation. So far, one judge has taken such an approach, which has the benefit of preserving tester standing in some form while hewing closely to TransUnion’s thrust.

As of March 2023, three circuits have concluded that testers have standing, and three have concluded that they do not. The Fourth Circuit, for its part, concluded that Laufer had suffered an informational injury cognizable under Article III by reading TransUnion narrowly. But in reality, “tester . . . standing is a square peg that does not want to fit into the round hole of modern standing doctrine,” thus requiring doctrinal innovation, like a focus on “adverse effects,” to preserve. The necessity of such judicial innovation highlights how TransUnion has “aggrandize[d] the judicial role, minimize[d] the legislative power, and ultimately undermine[d] the ability of the federal courts to enforce many laws.”