No Concrete Harm, No Standing: Inside TransUnion v. Ramirez

The Product, the Class, and the Verdict

Beginning in 2002, TransUnion sold an add-on to its credit reports called OFAC Name Screen Alert. When a business opted in, TransUnion ran its ordinary credit check and separately compared the consumer's name against the Treasury Department's Office of Foreign Assets Control list of terrorists, drug traffickers and other serious criminals. A match on first and last name alone produced an alert on the report saying the consumer was a "potential match" to a listed name. As the opinion records, "[a]t that time, TransUnion did not compare any data other than first and last names."

Sergio Ramirez went to a Nissan dealership in Dublin, California to buy a car. The dealership ran a joint credit check on him and his wife, and a salesman told him Nissan would not sell to him because his name appeared on the OFAC database. He sued and sought to certify a class of everyone who had received a particular mailing from TransUnion over a seven-month window in 2011.

The district court certified a class of 8,185 and held that every member had Article III standing. The parties had stipulated before trial that TransUnion provided the credit information of only 1,853 of them, Ramirez included, to third parties during the class period; the internal files of the other 6,332 went nowhere. At trial Ramirez testified about the dealership. He put on no evidence about the experiences of anyone else in the class.

After six days, the jury returned a verdict for the plaintiffs and awarded every class member $984.22 in statutory damages and $6,353.08 in punitive damages — more than $60 million in total. A divided Ninth Circuit affirmed in relevant part, reduced the punitive award to $3,936.88 per member, and brought the total to roughly $40 million. Judge McKeown dissented in part: she would have held that only the 1,853 had standing on the accuracy claim, and that nobody but Ramirez had standing on the mailing claims.

Three Claims, Not One

The suit pleaded three distinct violations of the Fair Credit Reporting Act, and the Court analysed each separately.

• The reasonable-procedures claim under 15 U.S.C. § 1681e(b), which requires an agency preparing a consumer report to "follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates"
• A disclosure claim under § 1681g(a)(1), arising from the format in which TransUnion sent class members the contents of their files
• A summary-of-rights claim under § 1681g(c)(2), arising from the same mailings

The private right of action sits in § 1681n(a), which makes a person who wilfully fails to comply with an FCRA requirement "with respect to any consumer" liable to that consumer. The jury found the violations wilful, which is what unlocked the statutory and punitive figures above.

Certiorari on One Question

TransUnion's petition presented two questions. The first asked whether Article III or Rule 23 permits a damages class action where the majority of the class suffered no actual injury and none like the representative's. The second asked whether a punitive award multiple times greater than a substantial classwide statutory award violates due process. The order granting review is marked "Limited to question 1 presented by the petition," and the docket records the grant on 16 December 2020 in those terms. The due process question was never reached.

Argument was heard on 30 March 2021. The decision issued on 25 June 2021. Justice Kavanaugh delivered the opinion, joined by the Chief Justice and Justices Alito, Gorsuch and Barrett.

Defamation Supplied the Analogue for 1,853

The opening line of the opinion is the holding in five words: "No concrete harm, no standing." For the 1,853 whose reports reached third parties, the Court found the analogue readily. Publication of a defamatory statement to a third party has been actionable in American courts for a very long time, and being labelled a potential terrorist is close enough: "The harm from being labeled a 'potential terrorist' bears a close relationship to the harm from being labeled a 'terrorist.'" TransUnion had argued that a "potential match" is not technically false. The Court answered that the close-relationship inquiry does "not require an exact duplicate."

Dissemination Was the Dividing Line

For the other 6,332 the same alerts sat in files that nobody outside TransUnion saw. Quoting Judge Tatel's framing in Owner-Operator Independent Drivers Association v. Department of Transportation — "if inaccurate information falls into" a file, "does it make a sound?" — the Court answered no. Publication is essential to liability in defamation, and there is "no historical or common-law analog where the mere existence of inaccurate information, absent dissemination, amounts to concrete injury."

Footnote 6 disposes of a theory raised for the first time in the Supreme Court: that TransUnion had published the information internally, to its own employees and to the vendors who printed the mailings. The Court called the argument forfeited and, in any event, unavailing, citing authority that many American courts did not treat intra-company disclosures as actionable publications and that the tort generally requires evidence a document "was actually read and not merely processed."

A Risk That Did Not Materialise

The 6,332 also argued that living with a false terrorist alert in a file held by a company that sells files is itself an injury. The Court separated the two forms of relief. A person exposed to a sufficiently imminent and substantial risk may seek an injunction to stop it; that is what Clapper v. Amnesty International USA involved. Standing must be shown "separately for each form of relief sought," and standing to seek an injunction does not carry over to a claim for retrospective damages.

Counsel for TransUnion offered the illustration the Court adopted: a woman drives home a quarter mile ahead of a driver swerving across lanes, and arrives safely. That is "ordinarily be cause for celebration, not a lawsuit." Had the reckless driver hit her, the collision rather than the antecedent risk would be the injury. Footnote 7 then reserves what may be the theory's next chapter — that knowing you are exposed to a risk can itself cause emotional or psychological harm. The Court "take[s] no position" on it, noting the plaintiffs had not relied on it and could not, since the 6,332 were not shown to be aware of the alerts at all.

The Mailing Claims and the Informational-Injury Theory

The two mailing claims failed for everyone except Ramirez. TransUnion had sent the file contents and the summary of rights in separate envelopes; the class said the format risked their not noticing the OFAC alert and therefore not seeking a correction. The Court held the asserted risk of future harm insufficient for damages for the same reason as before, and added that the plaintiffs "made no effort to explain how the formatting error prevented them asking for corrections."

The United States, appearing as amicus, argued a different theory: that receiving required information in the wrong format is an informational injury of the sort recognised in Federal Election Commission v. Akins and Public Citizen v. Department of Justice. The Court distinguished both. These plaintiffs "did not allege that they failed to receive any required information," only that the packaging was wrong, and "an asserted informational injury that causes no adverse effects does not satisfy Article III."

Two Dissents, Four Justices

Justice Thomas dissented, joined by Justices Breyer, Sotomayor and Kagan. His argument is structural rather than factual: the historical case-or-controversy inquiry turned on whether a plaintiff sued over a violation of a private right owed to him, not on whether a court thought the resulting damage significant. Each duty the jury found breached — reasonable procedures, disclosure of the file, the summary of rights — "is particularized to an individual," and § 1681n(a) makes the agency "liable to that consumer." On that reading the violation was the case.

Justice Kagan wrote separately, joined by Justices Breyer and Sotomayor, and joined the Thomas dissent as well. Her objection is to the direction of the doctrine: the decision "transforms standing law from a doctrine of judicial modesty into a tool of judicial aggrandizement," holding "for the first time, that a specific class of plaintiffs whom Congress allowed to bring a lawsuit cannot do so under Article III." On the risk point she asked why it was speculative "that a company in the business of selling credit reports to third parties will in fact sell a credit report to a third party."

What the Opinion Reserved

The judgment was reversed and the case remanded. The Court declined to decide whether Ramirez's claims were typical of the class under Rule 23, saying the Ninth Circuit "may consider in the first instance whether class certification is appropriate in light of our conclusion about standing." Together with the ungranted second question on punitive damages, the forfeited internal-publication theory in footnote 6 and the emotional-harm theory in footnote 7, that leaves a decision whose reasoning is narrower than its reputation: it resolved the standing of one class on one record, and marked out several routes it did not travel.

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