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TransUnion v. Ramirez

Supreme Court Doubles Down on Article III Standing Requirements after Spokeo

ArgumentMarch 30, 2020
DecisionJune 25, 2021
Opinion BelowNinth Circuit Court of Appeals
Petitioner BriefTransUnion LLC
Respondent BriefSergio L. Ramirez

Case Decision

On June 25, 2021, the Court ruled that only 1,853 class members, including Sergio Ramirez, had standing to sue TransUnion for failing to take reasonable procedures to assure the maximum possible accuracy of each report under the Fair Credit Reporting Act. And that only Sergio Ramirez had standing on the claims against TransUnion for failing to provide a complete credit report and for failing to provide a summary of rights with each report.

Facts of the Case

Sergio L. Ramirez was unable to purchase a car after his credit check, conducted by TransUnion, revealed that Mr. Ramirez’s name matched a name listed on the United Sates Department of the Treasury’s Office of Foreign Assets Control (“OFAC”)’s list of Specially Designated Nationals. Individuals on the OFAC list are prohibited from transacting business in the United Sates for national security reasons. When the dealership told Mr. Ramirez that his name potentially matched one on the OFAC list, he was told that he was on a “terrorist list” in front of his wife and father-in-law who accompanied him to the dealership.

The dealership then refused to conduct any business with Mr. Ramirez and advised him to contact TransUnion to resolve any issues related to the OFAC list match. Mr. Ramirez requested his credit report from TransUnion and received two packages on separate days. In the first, Mr. Ramirez received his credit report, instructions on how to dispute any mistakes, a summary of rights, but no indication of matching a name on the OFAC list. In the second package, TransUnion sent Mr. Ramirez a letter telling him he matched a name on the OFAC list. Unlike the first package, this letter did not contain a summary of rights nor mechanisms to correct any mistakes. Concerned about appearing on the OFAC list, Mr. Ramirez canceled an international vacation he had planned with his family.

It would later be discovered that TransUnion had sent this OFAC letter to 8,184 other consumers who also requested copies of their credit reports. All of these OFAC alerts, including Mr. Ramirez’s, turned out to be incorrect. Of these 8,185 class members, only 1,853 had the erroneous report sent to a third party.

Legal Claims

Consequently, Mr. Ramirez sued TransUnion, on behalf of himself and the 8,184 other consumers, alleging that TransUnion violated the Fair Credit Reporting Act (“FCRA”) in three ways. The first is that TransUnion violated 15 U.S.C. § 1681e(b) by failing to “follow reasonable procedures to assure maximum possible accuracy . . .” because TransUnion’s determination of OFAC matches was premised on basic, low-grade name-matching software. The second is that when TransUnion did not include the OFAC letter with the first package, it violated the FCRA’s requirement that TransUnion disclose all information in the consumer’s file at the time of the request. See 15 U.S.C. § 1681g(a)(1). And, finally, that TransUnion willfully failed to provide the consumers a summary of rights when it sent the second package containing only the OFAC letter. See 15 U.S.C. § 1681g(c)(2).

Procedural History

At the trial court level, the jury found in favor of the class of 8,185 on all three of these claims. The jury awarded each class member $984.22 in statutory damages (near the $1,000 max as allowed under the FCRA) and $6,353.08 in punitive damages per class member; together these sum to over $60 million.

TransUnion appealed to the Ninth Circuit and made three arguments as to why the jury verdict should be vacated. The two relevant arguments were i) that only Mr. Ramirez had Article III standing to bring a claim against TransUnion and ii) that the district court should not have certified the class because Mr. Ramirez’s claims were not typical of the class’s claims, as required by Rule 23 of the Federal Rules of Civil Procedure. The Ninth Circuit ultimately affirmed the district court on both of these points but effectively reduced the punitive damages awards to $3,936.88 per class members (reducing the total damages award to roughly $40 million). TransUnion appealed once more, filing its petition for writ of certiorari on September 8, 2020. The Supreme Court granted the petition on December 16, 2020.

Question in the Case

The question presented in the case is whether either Article III or Rule 23 permits a damages class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered.

The Supreme Court Decision

The Supreme Court ruled in favor of TransUnion in the case. The majority opinion, written by Justice Kavanaugh, held that only 1,853 class members, including Sergio Ramirez, had standing to sue TransUnion for failing to take reasonable procedures to assure the maximum possible accuracy of each report under the Fair Credit Reporting Act. It further held that only Sergio Ramirez had standing on the claims against TransUnion for failing to provide a complete credit report and for failing to provide a summary of rights with each report.

Article III Standing

“The ‘law of Art. III standing is built on a single basic idea—the idea of separation of powers.” TransUnion LLC v. Ramirez, 594 U.S. ___ (2021) (slip op., at 1) (quoting Raines v. Byrd, 521 U.S. 811, 820 (1997)). As an idea central to the structure of the Constitution and the judiciary, the Court in TransUnion began where it should—with the text of the Constitution: “Article III confides the federal judicial power to the resolution of ‘Cases’ and ‘Controversies.’” Id. And, “[f]or there to be a case or controversy under Article III, the plaintiff must have a ‘personal stake’ in the case—in other words, standing.”

Sufficiently establishing standing requires that a plaintiff show “(i) that he suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” Id. (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–561 (1992)).

The standing requirement serves as an important check on the judiciary to ensure that they “decide only ‘the rights of individuals.’” Id. (citing Marbury v. Madison, 1 Cranch 137, 170 (1803)). This ensures courts do not adjudicate hypothetical or abstract disputes such that they would be in the business of issuing advisory opinions or exercising legal oversight over the political branches of government.

The Concrete Injury Requirement

The specific issue in this case traces back to the requirement that the injury be “concrete” for all class members.

Concrete harms can be tangible (e.g., physical harms or monetary harms) or intangible (e.g., reputational harms or Constitutional infringements). And sometimes Congress may provide mechanisms that “elevate” certain harms that already exist in the world to legally cognizable concrete injuries that “were previously inadequate in law.” TransUnion LLC v. Ramirez, 594 U.S. ___ (2021) (slip op., at 10). But Congress cannot “‘enact an injury into existence, using its lawmaking power to transform something that is not remotely harmful into something that is.’” Id. (quoting Hagy v. Demers & Adams, 882 F. 3d 616, 622 (CA6 2016). Central to this case seems to be Spokeo, Inc v. Robins’s rejection that “a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” 578 U.S. 300, 341 (2016). In other words, even when a statute grants a potential plaintiff a statutory right and a remedy, Courts must still evaluate whether there exists a concrete injury.

Arguments by the Parties

Petitioner, TransUnion, argues that at best only Ramirez could have suffered a concrete injury sufficient to sustain Article III standing because there was no evidence evincing that any other class member suffered the same embarrassment, confusion, distress, or reliance that he did. And because only Ramirez could have possibly suffered any concrete injury, the rest of the class members did not have standing to sue TransUnion for the statutory violations.

Respondent, Ramirez on behalf of himself and the class, argues that because Congress created statutory rights in the FCRA and provided statutory damages for violations of those rights, each member that had an erroneous OFAC alert on their file and received reports that did not conform to the FCRA had standing to sue TransUnion under the three claims. For the class members, the mere violation of the FCRA was enough to sustain their claim against TransUnion, irrespective of whether anyone else acted any differently than Ramirez.

Court’s Analysis of Each Claim

Reasonable Procedures to Ensure Maximum Accuracy (Claim one)

After detailing the Article III standing principles courts must follow, the Court proceeds to apply those principles to the case at hand. Every member of the class had to establish that it had standing with respect to each of the three claims they alleged.

The Court began with the first claim, that TransUnion violated the FCRA by failing to follow reasonable procedures to ensure maximum accuracy in the reports. The Court said that for the 1,835 individuals whose reports were disseminated to third parties the concrete injury was clear because it was closely related to another injury traditionally recognized in American law—the reputational harm associated with defamation. For each of these class members, it was easy for the Court to see how being flagged as a potential terrorist, drug trafficker, or serious criminal to a third party would impose concrete reputational harms on the class members.

The Court rejected TransUnion’s argument that this was not close enough to defamation because the OFAC alert merely relayed that the individuals were “potential” matches, which was technically true. The Court stated that for these purposes, “the harm from being labeled a ‘potential terrorist’ bears close relationship to the harm from being labeled a ‘terrorist.’” TransUnion LLC v. Ramirez, 594 U.S. ___ (2021) (slip op., at 17).

With respect to the other 6,332 class members who had OFAC alerts in their reports, their reports were never disseminated to third parties. Unlike the class members who had their reports disseminated, these class members did not have an analogous cause of action in American law to point to “‘where the mere existence of inaccurate information, absent dissemination, amounts to concrete injury.”’ Id. (quoting Owner-Operator Independent Drivers Assn., Inc. v. United States Dept. of Transp., 879 F. 3d 339, 344–345 (CADC 2018)). Thus, “[t]he mere presence of an inaccuracy in an internal credit file, if it is not disclosed to a third party, causes no concrete harm.” Id.

Consequently, with respect to this first claim against TransUnion, only the class members who had their erroneous credit reports disseminated could establish a concrete injury required to sustain standing.

But standing jurisprudence also supports the idea that a risk of harm could be enough to sustain the concrete injury analysis. And this is precisely what the 6,332 class members who did not have their information disseminated argued. While this theory is supported by Spokeo and Clapper v. Amnesty Int’l USA, 568 U.S. 398 (2013), the risk of harm must be material. And with respect to this point, the Court found TransUnion’s response persuasive.

TransUnion argued “that in a suit for damages [(as opposed to injunctive relief like Clapper)], the mere risk of future harm, standing alone, cannot qualify as concrete harm—at least unless the exposure to the risk of future harm itself causes a separate concrete harm.” Id. (citing Brief for Petitioner 39, n.4; Tr. of Oral Arg. 36.) Finding this persuasive, the Court held that those 6,332 plaintiffs did not present evidence that they “were independently harmed by their exposure to the risk itself—that is, that they suffered some other injury (such as emotional injury) from the mere risk that their credit reports would be provided to third-party businesses.” Id. Further, these class members also failed to establish a likelihood that TransUnion could disseminate those erroneous reports at any moment, undercutting their risk of harm argument. Therefore, the Court found that they failed to establish a material risk of harm under Spokeo and Clapper sufficient to supply a concrete injury.

Providing a Complete Report (Claim two) and Providing a Summary of Rights (Claim three)

The Court resolved the second and third claims together. Each of the 8,185 members of the class sought these claims against TransUnion. Ultimately, the Court held that only Ramirez established a concrete injury under these claims, and that, therefore, only he had standing.

With respect to the second claim—failure to provide a complete credit report—and the third claim—failure to provide a summary of rights along with each report, the Court once again held that these formatting defects have not been shown to cause them “a harm with close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts.” Id. The issue was that aside for Ramirez, no other evidence was introduced to support that the other class members even opened the two mailings, experienced confusion or distress, or even tried to correct for the error in the report. And, therefore, “[w]ithout any evidence of harm caused by the format of the mailings, these are ‘bare procedural violation[s], divorced from any concrete harm.’” Id. (quoting Spokeo, 578 U.S., at 341).

With respect to the risk of future harm, again the Court said that this alone was not enough to support Article III standing for their damages claim, drawing emphasis once more to the fact that there is no evidence in the record that anyone besides Ramirez opened the mailings.

The Court also addressed an argument submitted by the United States as amicus curiae that the plaintiffs suffered “informational harm” through the formatting deficiencies in the mailings, citing relevant authority to that effect. The Court rejected that argument as well. The Court distinguished what TransUnion had done from an informational harm because the plaintiffs in this case did not allege that they failed to receive the required information, only that the information was sent in the wrong format. See Id.

Therefore, the Court rejected that the class members, besides Ramirez, had standing to bring the second and third claims against TransUnion for failing to follow the procedural requirements to providing consumers with their reports.

Finally, the Court found that having resolved the issues at hand through the lens of Article III standing, there was no need to touch the Rule 23 typicality argument. The Court left the decision to reevaluate class certification to the Ninth Circuit.

As a result of the ruling, the Ninth Circuit’s decision that all 8,185 members had standing with respect to all three clams is reversed and the case is remanded for further proceedings.


Justice Thomas, joined by Justice Breyer, Justice Sotomayor, and Justice Kagan dissented. Justice Thomas would give more deference to Congress’s decision to provide statutory rights and remedies for these kinds of violations under the FCRA than the majority did. Drawing on history, Justice Thomas points to the fact that “courts for centuries held that injury in law to a private right was enough to create a case or controversy.” TransUnion LLC v. Ramirez, 594 U.S. ___ (2021) (slip op., at 7) (Thomas, J., dissenting). And seeing that each class member established a violation of his or her private rights under the FCRA, Justice Thomas would have held that each class member had sufficient injury to sue in federal court.

TransUnion v. Ramirez

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About the Author

Brian Trujillo

Brian Trujillo

Brian M. Trujillo is an Associate in Bilzin Sumberg's Litigation Practice Group. During his time at Northwestern Law, he served as an Executive Editor of the Northwestern Journal of Technology and Intellectual Property. He also participated in Northwestern Law's United States Supreme Court Clinic where he had the opportunity to work on cases pending before the U.S. Supreme Court. Brian is the recipient of the Irene V. McCormick Law Scholar award, was Vice President of Outreach of the Latino Law Students Association and Co-President of the Christian Legal Society.

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