By: Amy Wong
Summary: The Supreme Court’s holding in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), significantly narrows the ability of consumer class action plaintiffs who have no real world injury to assert claims in federal court.
Key Takeaway: The Supreme Court’s holding significantly curtails class actions in federal court, especially for consumer classes premised on statutory violations without real injuries. In the absence of concrete injury, plaintiffs are now precluded from suing in federal court. Going forward, we can expect to see state courts, which are not bound by the federal rules of justiciability, adjudicate more consumer class actions filed under federal statutes.
The TransUnion Case
Sergio Ramirez filed a putative class action against TransUnion under the Fair Credit Reporting Act (FRCA) for falsely flagging him and 8,185 consumers as part of the Department of the Treasury’s Office of Foreign Assets Control (OFAC) list of terrorist and serious criminals. Among other claims, Plaintiffs alleged that TransUnion failed to ensure the accuracy of credit files and caused damages to all 8,185 flagged individuals.
Before trial, the parties stipulated that only 1,853 class members had their misleading credit reports containing OFAC alerts provided to third parties. Id. at 2197. After trial, a jury awarded each class member—even those class members whose credit reports were not provided to third parties—statutory and punitive damages for a total award of more than $60 million. Id. at 2202.
In a 5-4 opinion, the Supreme Court found that while the 1,853 class members suffered reputational harm, the 6,332 class members who did not have their credit reports provided to a third party suffered no concrete harm. Id. at 2209. The Court rejected the class members’ argument that their consumer reports with an OFAC alert could have been disseminated as too speculative and lacked the requisite concreteness to confer standing. Id. at 2212. The Court emphasized that, in assessing concreteness, courts must decide whether the alleged harm is similar to traditionally recognized harm, such as physical and monetary harms, as well as reputational harms, disclosures of private information, and intrusions of privacy. Id. at 2204.