TransUnion LLC v. Ramirez
141 S.Ct. 2190 (2021)
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Rule of Law:
To have Article III standing to sue a private defendant for damages in federal court, a plaintiff must show they suffered a concrete harm from the defendant's statutory violation, which requires more than the violation of a statute alone.
Facts:
- TransUnion LLC, a credit reporting agency, began offering an add-on product called OFAC Name Screen Alert.
- This product compared a consumer's first and last name against a U.S. Treasury Department list of terrorists, drug traffickers, and other serious criminals (the OFAC list).
- If a consumer's name matched a name on the list, TransUnion would place an alert on the consumer's credit file indicating a 'potential match,' creating many false positives.
- Sergio Ramirez attempted to buy a car, but the dealership ran a credit check using a TransUnion report that contained an OFAC alert.
- The dealership's salesman told Ramirez he was on a 'terrorist list' and refused to sell him the car.
- Ramirez was part of a class of 8,185 individuals who had similar misleading OFAC alerts in their internal TransUnion credit files.
- Of the 8,185 class members, 1,853 had their credit reports containing the misleading OFAC alert provided to third parties, such as potential creditors.
- The remaining 6,332 class members had the misleading alert in their internal TransUnion files, but this information was not provided to any third parties during the relevant period.
Procedural Posture:
- Sergio Ramirez filed a class-action lawsuit against TransUnion LLC in the U.S. District Court for the Northern District of California.
- The District Court certified a class of 8,185 members.
- The parties stipulated that only 1,853 class members had their credit reports containing OFAC alerts disseminated to third parties during the class period.
- The District Court ruled that all 8,185 class members had Article III standing.
- After a trial, the jury returned a verdict for the plaintiffs, awarding each class member statutory and punitive damages.
- TransUnion, as appellant, appealed the judgment to the U.S. Court of Appeals for the Ninth Circuit, with Ramirez and the class as appellees.
- A divided panel of the Ninth Circuit affirmed in relevant part, holding that all class members had Article III standing to sue for damages.
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Issue:
Does the mere existence of inaccurate information in a consumer's internal credit file, in violation of the Fair Credit Reporting Act, constitute a concrete injury sufficient to confer Article III standing for a damages claim, absent evidence that the information was disseminated to a third party?
Opinions:
Majority - Justice Kavanaugh
No. To have Article III standing for a damages claim based on a statutory violation, a plaintiff must show they suffered a concrete harm, which is a real-world injury with a close relationship to a harm traditionally recognized in American courts; the mere presence of an inaccuracy in an internal file that is not disclosed to a third party causes no such harm. The 1,853 class members whose misleading reports were sent to third parties suffered a concrete reputational harm analogous to the tort of defamation and therefore have standing. The remaining 6,332 class members, whose reports were not disseminated, did not suffer a concrete injury. The mere risk of future harm is insufficient to support a claim for retrospective damages, and the formatting defects in the mailings were bare procedural violations divorced from any concrete harm. An injury in law is not an injury in fact.
Dissenting - Justice Thomas
Yes. The violation of an individual's private right created by Congress, such as the right to accuracy in one's credit file under the Fair Credit Reporting Act, is a sufficient injury in law to create a case or controversy under Article III. For centuries, the violation of a private legal right was itself an actionable injury without need for further proof of damages. The majority's 'concrete harm' analysis is a modern invention that usurps Congress's power to define legally cognizable injuries. All 8,185 class members had their individual statutory rights violated by TransUnion, which is sufficient for standing. Furthermore, the risk of dissemination was substantial, and the unlawful withholding of information is a recognized informational injury.
Dissenting - Justice Kagan
Yes. The Court transforms standing law from a doctrine of judicial modesty into a tool of judicial aggrandizement by overriding Congress's judgment. Congress is better positioned than courts to identify intangible harms that meet Article III's requirements. The risk that a credit reporting agency would disseminate a credit report was not speculative, and common sense dictates that being falsely labeled a potential terrorist is harmful. While Article III requires a concrete injury even for a statutory violation per Spokeo, courts should defer to Congress’s reasonable determination that a violation causes a real-world harm or risk of harm.
Analysis:
This decision significantly narrows the scope of Article III standing for statutory violations, building upon the Court's ruling in Spokeo, Inc. v. Robins. It establishes a critical distinction between plaintiffs who can show their inaccurate information was disseminated to a third party and those who cannot, making it much harder to certify class actions in data privacy and consumer protection cases. The ruling clarifies that for damages claims, a mere procedural violation or an unrealized risk of future harm is insufficient for standing. This holding effectively requires a harm to materialize before a plaintiff can sue for damages, thereby limiting Congress's power to create private rights of action to enforce regulatory compliance through the courts.
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