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Establishing Standing On FCRA Claims Post-Transunion LLC v. Ramirez

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On June 25, 2021, the United States Supreme Court issued its opinion in TransUnion LLC v. Ramirez. The court's decision addressed whether plaintiffs had Article III standing to pursue a class action lawsuit; the answer seems simple – no concrete harm, no standing. However, the effect of this decision on class action claims is complex.

What Are The Requirements For Class Action Lawsuits?

Under Federal law, a class action lawsuit allows one or more members of a class to sue as a representative(s) on behalf of all members only if the following requirements are met:

  1. Naming all the affected people as plaintiffs wouldn’t make sense;
  2. There are questions of law or fact common to the class;
  3. The claim or defense of the representative parties are typical of the claims or defenses of the class; and
  4. The representative parties will fairly and adequately protect the interests of the class.

TransUnion LLC v. Ramirez Background

In February 2012, Sergio Ramirez brought suit on behalf of himself and a proposed class of similarly situated individuals alleging violation of the Fair Credit Reporting Act (FCRA). Ramirez alleged that in 2011, he was attempting to purchase a new car when the dealership denied the sale after noting that his TransUnion credit report was flagged with an OFAC Advisor Alert. An OFAC Advisor Alert essentially puts an individual's life on hold. It alerts those running your credit that you may have ties to targeted countries, drug traffickers, arms deals, or other suspected terrorists.

Unfortunately, TransUnion’s process for placing OFAC Advisor Alerts on individuals’ credit reports created a lot of false positives. The jury returned a verdict for Ramirez and the class, including statutory and punitive damages of more than $60 million. TransUnion appealed, challenging the class members’ Article III standing.

The Ninth Circuit affirmed the judgment in part, holding that all class members did have Article III standing sufficient to recover damages. TransUnion's petition for writ of certiorari was granted by the Supreme Court, confirming that the question of whether all class members had Article III standing was present.

What Is Article III Standing?

Article III of the Constitution requires that the plaintiff must prove the following to bring a case:

  1. The plaintiff has suffered concrete injury;
  2. That the injury is fairly traceable to actions of the defendant; and
  3. It is likely that a favorable decision will redress the injury.

What Is A Concrete Injury?

Determining what a concrete injury is confusing and not exactly straightforward even when looking at Supreme Court decisions directly discussing “concrete injury.” For example, in Spokeo, Inc. v. Robins, the court found that just because others may suffer particularized injuries of the same sort does not render the injury a generalized grievance because there is not a concrete injury. The most simplified way to describe a “concrete injury” is that it must be an “actual injury.” For example, if someone says they were injured during a car accident, saying they could have but didn’t get whiplash does not constitute an actual injury. However, getting whiplash is a concrete injury.

Determining what defines a concrete injury is difficult. Indeed, it varies depending on the case's circuit. For example, the Third Circuit found that hackers accessed over twenty thousand employees' personal financial information, including names, social security numbers, dates of birth, and bank account information. However, the court found that the injury was too speculative because the hackers would have to read, copy, and understand the personal information; therefore, there was no concrete injury. In comparison, the Third Circuit did find a concrete injury where the plaintiffs alleged a violation of the FCRA because there was an actual injury based on the violation of a statute. However, things get sticky because Ramirez found that while there was a violation of the FCRA, there was no concrete injury.

The Supreme Court Decision

In Ramirez, the court found that Congress could authorize any citizen to bring a statutory damages suit against virtually any defendant who violated any federal law absent the concrete harm requirement. Such a view of Article III would be against Constitutional precedent. Here, the court found that Ramirez had an actual injury because of the receipt of deficient mailings concerning his credit report. Further, the court determined that just because the members could have been harmed, there is no actual injury because the possibility of injury in the future does not rise to an actual injury.

Justice Kagan, Beyer, and Sotomayor joined Justice Thomas's dissent, opining that "Congress is better suited than courts to determine when something causes a harm or risk of harm."

Implications Of TransUnion LLC v. Ramirez On Future Cases

Ramirez will impact all consumer claims in the future because it opens up more room for Article III standing challenges. Moreover, states with a more lenient view on what constitutes a concrete injury may see a substantial increase in class action lawsuits because plaintiffs will search for plaintiff-friendly jurisdictions.

Consumer Claim Attorney In New York

Navigating a consumer claim, regardless of if it is a single plaintiff or a class action lawsuit, requires an experienced and knowledgeable attorney. If a business has harmed you in the course of their business, call Law Office of Simon Goldenberg at (888) 301-0584 or contact us online. The attorneys at Law Office of Simon Goldenberg, are prepared to assist you in any matters concerning protecting your rights with regard to consumer claims.