Cathleen Silha v. ACT, Inc.
2015 U.S. App. LEXIS 19996
7th Cir.2015Background
- ACT, Inc. and The College Board run optional, free information-exchange programs (Education Opportunity Service and Student Search Service) that transmit student PII (name, address, school, email, demographics, intended major) to colleges and related organizations when a test-taker consents.
- Plaintiffs (former program participants) alleged defendants secretly sold or licensed their PII for profit (about $0.33 per student per buyer) without adequate disclosure, and asserted claims including unfair/deceptive practices, breach of contract, invasion of privacy, and unjust enrichment.
- District court dismissed under Fed. R. Civ. P. 12(b)(1) for lack of Article III standing, finding plaintiffs failed to allege an injury in fact: (1) exam fees not caused by defendants’ conduct; (2) no loss of ability to sell PII or diminution in PII value shown; (3) plaintiffs alleged defendants’ gain, not plaintiffs’ loss.
- Plaintiffs sought to amend to allege they could have sold their PII or would have conditioned any sale to receive proceeds; district court denied amendment as implausible and time-barred a publicity claim.
- Seventh Circuit reviews de novo, treats the Rule 12(b)(1) dismissal as a facial challenge and applies Twombly/Iqbal plausibility standards to standing allegations; it affirms dismissal for lack of Article III standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Injury in fact (standing) | Plaintiffs were harmed because defendants sold/licensed PII without disclosure, depriving plaintiffs of value. | Plaintiffs received the same transmission and benefits they consented to; allegations show defendants’ gain, not plaintiffs’ loss. | No standing — plaintiffs failed to allege a concrete, particularized injury. |
| Causation for exam fees | Plaintiffs contend fee was tied to program and defendants’ undisclosed sale; disclosure would have changed their decision. | Exam fees were paid to take exams/seek college admission, not caused by PII sale. | No causation — payment of exam fees not fairly traceable to defendants’ alleged conduct. |
| Lost economic value / conditioned sale theory | Plaintiffs infer they would have negotiated payment for their PII if informed. | No factual allegations showing plaintiffs could or would have negotiated or received proceeds. | Implausible/inadequately pleaded — inference not reasonably drawn from complaint. |
Key Cases Cited
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (standing requires concrete, particularized injury)
- Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., 528 U.S. 167 (standing elements described)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (two-step plausibility analysis)
- McNamara v. City of Chicago, 138 F.3d 1219 (7th Cir.: plaintiffs no better off gives no standing)
- Remijas v. Neiman Marcus Grp., LLC, 794 F.3d 688 (7th Cir. standard for de novo review of jurisdictional dismissal)