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Supreme Court isn’t sold on harms of big tech

By Noah Feldman
Bloomberg Opinion

European regulators are cracking down on the big technology companies — witness the 1.49 billion euro ($1.7 billion) fine against Google on Wednesday. At the same time, however, the U.S. Supreme Court is cautiously entering the business of protecting them.

In a decision that on the surface looks minor, but is actually an important signal, the court on Wednesday sent a class-action suit against Google back to the lower courts to determine whether any of the plaintiffs actually had standing to sue.

The justices’ action strongly hinted that a majority thinks the suit should never have been allowed to go forward in the first place. If that’s right, it’s an affirmation of the court’s new constitutional idea that it isn’t enough for Congress to create new legal rights that can be used against tech companies.

There must be what the court calls “concrete” harm to users. That determination, crucially, rests with the Supreme Court, not with Congress.

The upshot is that the court seems to be gearing up to use the technical doctrine of standing to protect tech companies from Congress — just at the moment when Democrats, like Massachusetts senator and presidential hopeful Elizabeth Warren, are starting to go after them.

The details of the case are important not in themselves, but for what they signify about the court’s ambitions and techniques. The case, Frank v. Gaos, involved a lawsuit against Google brought under the Stored Communications Act.

The law says that a service provider can’t “knowingly divulge … the contents of a communication while in electronic storage by that service.”

According to the plaintiffs, Google did exactly that. When a person used Google’s search engine and clicked on one of the resulting links, Google sent the user’s search terms to the server of the entity on which the user was clicking. That, the plaintiffs claimed, was divulging the contents of the user’s search without permission.

Google settled the suit. The Supreme Court originally agreed to take the case to determine whether the settlement was legitimate, because instead of paying the settlement money to users, the deal gave it to the plaintiffs’ lawyers plus six organizations focused on internet privacy.

Yet instead of addressing that issue, the court told the lower courts to go back and reconsider whether the plaintiffs had the authority to bring a lawsuit at all.

That matters because the Stored Communications Act specifically says that users can sue when their rights under the law are violated.

Until recently, many courts assumed that when Congress created a new legal right, the violation of that right was usually sufficient for the affected party to sue.

But in the 2016 case of Spokeo v. Robins, the court, in an opinion by Justice Samuel Alito, said that wasn’t right.

Under the court’s doctrine known as “constitutional standing,” an injury must be “concrete” to qualify for being heard by the courts. In the Spokeo case, Alito said that although it was worth taking seriously Congress’s creation of a new kind of injury, the court should separately make sure that the injury was genuine — not a mere violation of some procedure, which he gave as an example of a fake injury that Congress lacked the power to treat as a real one.

This may sound very obscure, but it matters hugely. In essence, Alito was saying that the courts, not Congress, would have the last word on whether an injury is concrete enough to be the basis for a lawsuit. That gives the courts the power to block suits against tech companies if five justices determine that the injury isn’t concrete enough.

You can see why this is good for tech companies, and bad for regulators and Congress.

Case in point: the Stored Communications Act. By sending the new case back to the lower courts, the justices were signaling that it may not count as a concrete harm if Google just passes along your search query to someone’s server. If the court ultimately goes that way, it would effectively be blocking Congress from outlawing that practice.

Of course, the justices haven’t yet made that determination. But if a majority had thought it was a no-brainer that passing along the search terms was a meaningful harm, as Congress determined it was in the Stored Communications Act, then they wouldn’t have had a strong reason to send the case back.

The bigger picture here has to do with what will happen if Congress or U.S. regulators end up taking a more aggressive, European-style approach to big tech companies — as many Democrats are increasingly encouraging.

Congress can pass laws, but before those laws could be enforced in private civil suits, the courts would have to determine that customers’ or users’ injuries were concrete. That gives the tech companies a potential escape hatch from some forms of regulation.

Clever legislators or regulators could try to find ways around the standing doctrine. But the core idea of constitutional standing is that the courts may only hear lawsuits where someone alleges concrete harm.

Defining down what concrete harm means will always be a win for entities that get sued — like the big tech companies. The Supreme Court may already be taking sides as the legal tech wars are just getting started.

 

Noah Feldman is a Bloomberg Opinion columnist. He is a professor of law at Harvard University and was a clerk to U.S. Supreme Court Justice David Souter. This column does not necessarily reflect the opinion of Minnesota Lawyer, the Bloomberg editorial board or Bloomberg LP and its owners.

 

 

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