Silha v. ACT, Inc., No. 15–1083.

CourtUnited States Courts of Appeals. United States Court of Appeals (7th Circuit)
Writing for the CourtKANNE, Circuit Judge.
Citation807 F.3d 169
Parties Cathlene SILHA, et al., Plaintiffs–Appellants, v. ACT, INC. and the College Board, Defendants–Appellees.
Docket NumberNo. 15–1083.
Decision Date18 November 2015

807 F.3d 169

Cathlene SILHA, et al., Plaintiffs–Appellants,
v.
ACT, INC. and the College Board, Defendants–Appellees.

No. 15–1083.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 18, 2015.
Decided Nov. 18, 2015.


807 F.3d 170

Larry D. Drury, Attorney, Chicago, IL, for Plaintiffs–Appellants.

807 F.3d 171

Michael L. Resis, Attorney, Eric Samore, Molly Arranz, SmithAmundsen, LLC, Chicago, IL, Robert N. Hochman, Robert Jason Burch, Theodore R. Scarborough, Jr., Sidley Austin LLP, Chicago, IL, for Defendants–Appellees.

Before BAUER, KANNE, and ROVNER, Circuit Judges.

KANNE, Circuit Judge.

Every year, millions of high school students take the American College Test ("ACT") and Scholastic Aptitude Test ("SAT") with the ultimate aim of gaining admission to a college or university. To advance this goal and as part of the examination process, some student test-takers authorize the relevant testing agencies to "send" or "share" their personally identifiable information ("PII") with educational organizations through an information exchange program Plaintiff-appellants, a group of former participants in the information exchange programs, allege that they were harmed because the testing agencies did not disclose that the students' PII was actually sold to the educational organizations for profit. We hold that plaintiff-appellants' claims lack standing under Article III of the Constitution and therefore affirm the judgment of the district court.

I. BACKGROUND

ACT, Inc. and The College Board ("Defendants") are national testing agencies that administer the ACT and SAT college entrance exams, respectively, for a fee. When a student signs up to take a test, obtain some of the student's PII, including name, home address, gender, birthdate, high school, email address, and phone number, along with other identifiers.

In connection with the examinations, Defendants offer optional programs to facilitate the exchange of information between student test-takers and educational organizations, which include colleges and universities, scholarship organizations, and government agencies. ACT's program is called the Education Opportunity Service, and The College Board's program is called the Student Search Service. To participate in ACT's program, students must affirmatively respond "Yes" to authorize ACT to "send" certain PII—name, address, gender, high school, email address, racial/ethnic background, and intended college major—to participating educational organizations. Similarly, to participate in The College Board's program, test-takers must affirmatively respond "Yes" to authorize The College Board to "share" or "send" certain PII—name, address, sex, birthdate, school, grade level, ethnic group, email address, and intended college major—to participating educational groups. Both information exchange programs are optional and free of charge to participants. Both programs disclose the categories of information released, as well as the types of educational organizations that may receive this information.

On January 23, 2014, a group of former information exchange program participants—Cathlene Silha,1 Arie Wolf, Karoline Kamzic, and Elyse Stevens ("Plaintiffs")—filed a putative class action complaint against Defendants. They alleged that Defendants deceived them and the putative class by concealing the sale or licensing of students' PII under the cover of the information exchange programs.

807 F.3d 172

Specifically, Plaintiffs claimed that Defendants sold or licensed their PII for a profit of at least $.33 per student, per buyer. Plaintiffs relied on several theories of relief, including unfair and deceptive business practices, breach of contract, invasion of privacy, and unjust enrichment. The district court's jurisdiction (apart from the Article III standing issue to which we will turn) was proper pursuant to 28 U.S.C. § 1332(d)(2).

Defendants responded on March 28, 2014, by filing motions to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and for failure to state a claim under Rule 12(b)(6).

On September 2, 2014, the district court granted Defendants' motions to dismiss under Rule 12(b)(1), finding that Plaintiffs did not fulfill their burden of establishing Article III standing. The district court addressed each of the Plaintiffs' three theories of injury: "(1) the examination fee paid to take the ACT and SAT tests; (2) the diminished value of Plaintiffs' PII based on Defendants' sale, licensing, and distribution of this information; and (3) the fees that third parties paid to Defendants for Plaintiffs' PII." Silha, et al. v. ACT, Inc. and The College Board, No. 14 C 0505, slip op. at 3 (N.D.IL. Sep. 2, 2014).

First, the district court rejected the alleged harm of examination fees because there was no "causation—a fairly traceable connection" between Defendants' conduct and Plaintiffs' injury. Id. The district court found that Defendants' sale of Plaintiffs' PII "did not cause" Plaintiffs to pay the examination fees because Plaintiffs paid those fees to take the examinations and eventually gain admission to college. Id.

Second, the district court rejected the claimed injury of diminished value of PII because Plaintiffs failed to "allege that they have the ability to sell their personal information or that Defendants' conduct foreclosed them from entering into a ‘value for value transaction’ relating to their PII." Id.

Third, the district court rejected the alleged injury of fees paid by third parties for Plaintiffs' PII because "a plaintiff's injury must be based on the plaintiff's loss, not the defend-ant's gain." Id. at 4. The district court found that the Plaintiffs' had not alleged that "they suffered an economic loss, [only] that [Defendants] profited." Id.

Subsequently, on September 22, 2014, Plaintiffs moved to alter or amend the district court's judgment, pursuant to Federal Rules of Civil Procedure 59(e) or 60(b)(6). At the same time, Plaintiffs sought leave to amend their original complaint in response to the district court's dismissal for lack of injury. The proposed amended complaint included new allegations that Plaintiffs had the opportunity to sell their PII. Plaintiffs also sought to add a new claim under the Illinois Right of Publicity Act.

On December 15, 2014, the district court denied Plaintiffs' motion, concluding that nothing in the proposed amended complaint would plausibly establish injury in fact. Furthermore, the district court found that Plaintiffs' proposed right to publicity claim was time-barred. This appeal followed.

II. ANALYSIS

We review a district court's...

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  • United States ex rel. Conroy v. Select Med. Corp., 3:12-cv-00051-RLY-DML
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • September 30, 2016
    ...the court accepts all well-pleaded allegations as true and draws all reasonable inferences in the plaintiff's favor. Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir.2015) (citing Apex Dig., Inc. , 572 F.3d at 443–44 ). By contrast, a factual challenge asserts that notwithstanding a formally......
  • Nava v. Dep't of Homeland Sec., Case No. 18 C 3757
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • January 24, 2020
    ..., 794 F.3d at 691 ; Apex Digital, Inc. v. Sears, Roebuck & Co. , 572 F.3d 440, 443-44 (7th Cir. 2009) ; see also Silha v. ACT, Inc. , 807 F.3d 169, 174 (7th Cir. 2015) (stating that "when evaluating a facial challenge to subject matter jurisdiction under Rule 12(b)(1), a court should use Tw......
  • Dinerstein v. Google, LLC, No. 19 C 4311
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 4, 2020
    ...at 5–6), arguing that Mr. Dinerstein has not adequately alleged a basis for standing in his amended complaint. Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir. 2015). In reviewing such a challenge, the court must accept all well-pleaded factual allegations as true and draw all reasonable in......
  • City of Chi. v. Barr, Case No. 18 C 6859
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 19, 2019
    ...complaint. See FED. R. CIV. PRO. 12(b)(1). Defendant asserts a facial challenge to Chicago's Amended Complaint. See Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015) (noting that in evaluating a challenge to subject matter jurisdiction, a court must first determine whether a defendant h......
  • Request a trial to view additional results
362 cases
  • United States ex rel. Conroy v. Select Med. Corp., 3:12-cv-00051-RLY-DML
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Southern District of Indiana)
    • September 30, 2016
    ...the court accepts all well-pleaded allegations as true and draws all reasonable inferences in the plaintiff's favor. Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir.2015) (citing Apex Dig., Inc. , 572 F.3d at 443–44 ). By contrast, a factual challenge asserts that notwithstanding a formally......
  • Nava v. Dep't of Homeland Sec., Case No. 18 C 3757
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • January 24, 2020
    ..., 794 F.3d at 691 ; Apex Digital, Inc. v. Sears, Roebuck & Co. , 572 F.3d 440, 443-44 (7th Cir. 2009) ; see also Silha v. ACT, Inc. , 807 F.3d 169, 174 (7th Cir. 2015) (stating that "when evaluating a facial challenge to subject matter jurisdiction under Rule 12(b)(1), a court should use Tw......
  • Dinerstein v. Google, LLC, No. 19 C 4311
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 4, 2020
    ...at 5–6), arguing that Mr. Dinerstein has not adequately alleged a basis for standing in his amended complaint. Silha v. ACT, Inc. , 807 F.3d 169, 173 (7th Cir. 2015). In reviewing such a challenge, the court must accept all well-pleaded factual allegations as true and draw all reasonable in......
  • City of Chi. v. Barr, Case No. 18 C 6859
    • United States
    • United States District Courts. 7th Circuit. United States District Court (Northern District of Illinois)
    • September 19, 2019
    ...complaint. See FED. R. CIV. PRO. 12(b)(1). Defendant asserts a facial challenge to Chicago's Amended Complaint. See Silha v. ACT, Inc., 807 F.3d 169, 173 (7th Cir. 2015) (noting that in evaluating a challenge to subject matter jurisdiction, a court must first determine whether a defendant h......
  • Request a trial to view additional results

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