Legal Alert: TransUnion LLC v. Ramirez - High Court Limits Class Standing in Alphabet Litigation (and elsewhere)

Joseph M. Callow, Jr., Jacob D. Rhode, Amanda B. Stubblefield, and Carson E. Miller
06.28.2021

After much anticipation, the Supreme Court issued its opinion in TransUnion LLC v. Ramirez.[1]  In a 5-4 ruling with some strange bedfellows, the majority held that most of the class members in a Fair Credit Reporting Act (“FCRA”) class action did not suffer a concrete harm necessary for Article III standing – and the majority’s “no concrete harm – no standing” analysis modifies and clarifies Spokeo and redefines standing and class definitions in most class action litigation.[2]  This case is a must-read for anyone currently involved in class action litigation and will have far-reaching implications for all types of class action litigation.

The case arose from named-plaintiff Sergio Ramirez’s claim that he was unable to buy a car after TransUnion reported to lenders that he was a potential match on the U.S. Department of the Treasury’s Office of Foreign Assets Control’s database of criminals, drug traffickers, and terrorists (“OFAC Alert”).[3] When Ramirez requested his credit file from TransUnion, the file that TransUnion provided to him did not disclose that Ramirez’s file contained an OFAC Alert.[4]  TransUnion later sent Ramirez a letter disclosing the OFAC Alert, but did not include a “summary of rights” required under the FCRA.[5]

Ramirez then filed a lawsuit against TransUnion, bringing three claims for alleged violations of the FCRA: (1) that TransUnion did not use “reasonable procedures” to ensure the accuracy of his credit file; (2) that TransUnion failed to provide him with all of the information in his credit file upon request; and (3) that TransUnion failed to provide him with a summary of rights with each written disclosure.[6]  Importantly, the FCRA contains a private right of action for consumers to recover actual and statutory damages against “[a]ny person who willfully fails to comply” with the various provisions of the FCRA.[7]

Ramirez also sought to certify a class of all people in the United States to whom TransUnion sent a mailing, between January and July of 2011, which was similar to that received by Ramirez.[8]  Prior to trial, the parties stipulated that there were 8,185 total class members, of which only 1,853 had TransUnion sent incorrect OFAC alerts to third-party lenders.[9]  The district court certified the class, and a jury found TransUnion liable for actual, statutory, and punitive damages of more than $60 million.[10]  On appeal, a divided Ninth Circuit affirmed the verdict, but reduced the punitive damage award, lowering the total class recovery to nearly $40 million.[11]  TransUnion appealed again, and the Supreme Court granted certiorari.

In a 5-4 split, with Justice Kavanaugh writing for the majority (with Chief Justice Roberts and Justices Alito, Gorsuch and Barrett), the Supreme Court reversed the Ninth Circuit, holding that the vast majority of class members did not suffer a concrete harm required for Article III standing.  Specifically, the Court found that only the plaintiffs whose files TransUnion actually sent to third parties had suffered concrete harm under Ramirez’s “reasonable procedures” claim, and that none of the plaintiffs other than Ramirez himself had shown evidence of a concrete harm on the remaining two disclosure and mailing claims.[12]

Pointing to the Court’s 2016 decision in Spokeo, Inc. v. Robins,[13] Justice Kavanaugh reasoned that, even when Congress establishes a statutory right of action, plaintiffs must still show that they were concretely harmed by the defendant’s statutory violation.[14]  Such harms must bear some resemblance to the kinds of harms legally redressable at the founding; i.e., constitutional harms, physical or monetary injury, or recognized intangible harms such as damage to reputation.[15]  And, although Congress may elevate certain harms through statute that would otherwise be insufficient for standing, Justice Kavanaugh reasoned that such harms must “exist in the real world before Congress recognized them to actionable legal status[.]”[16]

Therefore, Justice Kavanaugh wrote, there is an important distinction for standing purposes between a statutory right of action and a plaintiff’s suffering of a concrete harm because of a federal statutory violation, noting “an injury in law is not an injury in fact.”[17]  Applying that standard to the class claims in TransUnion, the majority found that the harm alleged was analogous to a common-law defamation claim, which requires the defendant to publish a defamatory statement to a third party.  Thus, for class members that did not have their credit files actually sent to third parties, no concrete harm existed because the “mere presence of an inaccuracy in an internal credit file, if it is not disclosed to a third party, causes no concrete harm.”[18]  Likewise, for the inaccurate-disclosure and summary-of-rights claims, because TransUnion merely provided incorrect information to class members, the majority found the claims to be for “bare procedural violation[s], divorced from any concrete harm.”[19]

Justice Kavanaugh and the majority pay tribute to Spokeo and clarify its reach in one ominous statement: “Spokeo is not an open-ended invitation for federal courts to loosen Article III based on contemporary, evolving beliefs about what kind of suits should be heard in federal courts.”[20]

In dissent, Justice Thomas, joined by Justices Breyer, Sotomayor, and Kagan in a unique foursome, lamented the majority for largely ignoring the long-standing distinction between plaintiffs seeking to enforce “public rights” and those seeking redress for injury to private rights.[21]  Justice Thomas likewise critiqued the majority for overriding Congressional intent by deeming these FCRA violations as insufficient harm for a federal lawsuit, and limiting rights subject to protection in the federal courts to “money, bodily integrity, and anything else that this Court thinks looks close enough to rights existing at common law.”[22]

We believe that TransUnion will have far-reaching consequences in class litigation and not just in alphabet litigation like FCRA, TCPA, etc.  Going forward, expect federal courts to scrutinize the particularized injuries alleged by plaintiffs in federal statutory claims for host of consumer protection statutes and areas, including data privacy, financial regulation, telemarketing, and employment law.[23]  TransUnion also has the potential to impact issues like class definitions, ascertainability, and class discovery in a host of different cases.  At the same time, we expect plaintiffs to begin filing more federal statutory claims in state courts, which do not all have standing doctrines identical to the federal courts.[24]  Indeed, Justice Thomas predicted as much in footnote 9 of his dissenting opinion, noting that TransUnion might really be “a pyrrhic victory for TransUnion,” as defendants are left unable to remove these types of claims to federal court.[25]

KMK hosted a live webinar on Tuesday, July 13, at 12:00 PM EDT, where they discussed the TransUnion ruling and its impact on class action litigation in more detail. To view the webinar recording please click here.  Please note: CLE credit is only available to those who attended the live webinar.


[1] 594 U.S. ___ (2021).

[2] See Spokeo, Inc. v. Robins, 578 U.S. 330 (2016).

[3] TransUnion, 594 U.S., slip op. at 4-5.

[4] Id., slip op. at 5.

[5] Id.

[6] Id.

[7] Id., slip op. at 3 (quoting 15 U.S.C. § 1681n(a)).

[8] Id., slip op. at 5.

[9] Id., slip op. at 5-6.

[10] Id., slip op. at 6.

[11] Id.

[12] Id., slip op. at 2.

[13] 570 U.S. at 340.

[14] TransUnion, 594 U.S., slip op. at 9.

[15] Id., slip op. at 9-10.

[16] Id., slip op. at 10 (quoting Hagy v. Demers & Adams, 882 F.3d 616, 622 (6th Cir. 2018)).

[17] Id., slip op. at 11.

[18] Id., slip op. at 19.

[19] Id., slip op. at 25 (quoting Spokeo, 578 U.S. at 341).

[20] Id., slip op. at 9.

[21] Id., slip op. at 5-6 (Thomas, J., dissenting).

[22] Id., slip op. at 12.

[23] See Thomas B. Bennett, The Paradox of Exclusive State-Court Jurisdiction Over Federal Claims, 105 Minn. L. Rev. 1211, 1212 (2021).

[24] Id.

[25] TransUnion, 594 U.S., slip op. at 18, n.9 (Thomas, J., dissenting).

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