On December 16, 2020, the Supreme Court granted cert. to hear TransUnion v. Ramirez, a Fair Credit Reporting Act (“FCRA”) class action suit that presents the question as to “whether either Article III (of the Constitution) or Rule 23 (of the Federal Rules of Civil Procedure) 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.”
In Ramirez, Ramirez was refused the purchase of a car by a dealership when his credit report incorrectly indicated that his name appeared on a “terrorist list” maintained by the Treasury Department’s Office of Foreign Assets Control (“OFAC List”). Ramirez was able to purchase the car in his wife’s name and TransUnion eventually removed the OFAC alert from future credit reports. Ramirez also alleged that he had to cancel a planned trip to Mexico out of fear that the error would appear again and interfere with his travel.
Ramirez filed a class action suit alleging that TransUnion violated the FCRA and the district court certified a class that included anyone who had received a letter from TransUnion, during a six-month period, indicating that their name was a “potential match” for someone on the OFAC List. Of note, only a portion of the class members’ reports was sent to third-parties. In other words, the vast majority of class members suffered no actual or concrete injury at all. The jury awarded Ramirez and the class more than $60 million in damages, which included punitive damages. On appeal, the Ninth Circuit reduced the award of punitive damages.
This will be the second time in the last few years that the Supreme Court will address “standing” under Article III. In 2016, the Supreme Court in Spokeo v. Robbins decision (another FCRA case) held that mere statutory violations alone to the class representative are not sufficient to establish Article III standing. The Supreme Court is now primed to potentially rule that class members cannot be part of a class or otherwise recover when they have suffered no actual harm at all.