The US Supreme Court heard oral argument in TransUnion, LLC v. Ramirez¹ on Tuesday, March 30, 2021 on how absent class members establish standing in federal court. Standing is the first requisite for entry through the courthouse doors, yet reasonable minds differ on what this basic principle entails when considering the weight of absent class members who must stand with their representative as a collective. Switching focus to this specific representative, the question then became whether Ramirez suffered injury and experiences over and above the rest of his class such that his experiences were too atypical to serve as an adequate class representative.

Questions of absence are avoided for good reason; truth is rarely proven by the lack of another fact. If you do not have a marriage certificate, you are not married. Yet, if inaccurate information falls into a database, does it make a sound? Sergio Ramirez need not speculate as to his answer. When his name was improperly matched to one on a terrorist list maintained by the Department of the Treasury’s Office of Foreign Assets Controls (OFAC) during a joint credit check, a car dealership denied any sale to Mr. Ramirez and his wife jointly, ultimately selling the car to Mrs. Ramirez only.

When Ramirez contacted TransUnion, LLC (TransUnion), the credit reporting agency that created the report, it initially denied that there was an OFAC alert associated with his name. Thereafter, Ramirez requested his own copy of the report to review, after which he received a copy of the report with a page of instructions on how to dispute the inaccurate information, and a “Summary of Rights” under the Fair Credit Reporting Act (FCRA). Thereafter, TransUnion sent a second letter confirming the OFAC match. After submitting a written request in March 2011, Mr. Ramirez’s OFAC alert was removed.

Ramirez filed a putative class action in federal court against TransUnion, alleging that the company violated the FCRA by failing to “follow reasonable procedures to assure maximum possible accuracy” of consumer information, and by providing incomplete disclosures about the ensuing errors. There were 8,185 class members in the litigation whose names matched those on the government list, yet the facts developed at trial established that TransUnion publicly revealed that information on only 1,853 members. Still, the District Court certified the entire class of 8,185.

The jury ruled in favor of the class on all claims, awarding US$8 million in statutory damages and US$52 million in punitive damages. After the Ninth Circuit affirmed,² the Supreme Court granted certiorari as to the limited questions of whether class members whose false information was not accessed by third parties lacked Article III standing, having suffered no “concrete injury” and suffered no “material risk of harm to their concrete informational interests,” and whether Mr. Ramirez’s unique and concrete injuries make him an “atypical” claimant unable to serve as class representative.

For TransUnion, Mr. Paul Clement argued that Ramirez does not adequately represent the harm felt by the class. Mr. Clement urged the Court to adopt a typicality standard whereby the named plaintiff has to have injuries and experience typical of the class, not just claims arising under the same statutory scheme. Justice Sotomayor asked pointedly, if Rule 23(a)(3) requires the claims and defenses to be typical, how is Mr. Ramirez not “as typical a claimant as one could imagine with respect to the law at issue?” If the FCRA was intended to protect against inaccurate consumer information, Justice Sotomayor stated, surely Mr. Ramirez is the archetype plaintiff. Mr. Clement responded succinctly, arguing that under Spokeo,³ one must have injury in fact, not just injury in the law, to have Article III Standing. If there is an injury in the law by misreporting an OFAC alert on one’s credit report, but that risk of injury is unlinked to anything else, counsel for TransUnion asserts there has been no injury. Justice Alito’s questioning hinted at his personal leanings on the matter, asking why the approximately 25 percent of individuals who had information disclosed to third-parties would not be worried about such disclosure, just as Mr. Ramirez was.

Appearing on behalf of the Respondent, Mr. Samuel Issacharoff built off of these concerns, arguing that being labeled a potential OFAC match is “the scarlet letter of our time,” “banishing individuals from the marketplace.” Given the ready accessibility of the credit files containing the designation, Mr. Issacharoff argued that potential harm to one’s economic reputation provides an inferred remedy without proof of damages. Honoring the statutory scheme, he urged the Court to find that the question is not whether a concrete injury formed in the context of this statutory violation, but whether there was a material risk of being harmed that Congress sought to deter by creating a cause of action.

Further, because the credit files in question were actually downloaded millions of times per month, Mr. Issacharoff argued that the absent class members faced a material risk of injury sufficient to meet the Court’s standard in Spokeo. Providing additional insight into his thinking, Justice Alito told Plaintiff’s counsel that his argument may be persuasive for the 25 percent that had information sent to third-parties, but that he was having trouble seeing any harm from those that did not have their information published. Other Justices expressed a similar concern.

Mr. Issacharoff argued that there has never been a requirement of identity of damages amongst class members. Just as with antitrust cases, Mr. Issacharoff argued, two persons will have the same claims or defenses regardless of how much they individually have at stake. In closing, Mr. Issacharoff argued that this Court has never, and should not now, remove jurisdiction for retrospective damage claims when Congress created a private cause of action and statutory remedies for effected individuals to bring suit and recover.

The Supreme Court’s decision could profoundly impact class action lawsuits forward. The decision is expected by June, and we will closely monitor that decision and how it will impact our clients moving forward.

1. Docket No. 20-297. ↩
2. Ramirez v. TransUnion LLC, 951 F.3d 1008 (9th Cir. 2020). ↩
3. Spokeo, Inc. c. Robins, 578 U.S. __ (2016). ↩