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Justices return to standing after Spokeo

Nearly five years ago, the Supreme Court decided Spokeo v. Robins, the case of a Virginia man who alleged that an internet database company violated the Fair Credit Reporting Act when it published inaccurate information about him. The justices ruled that to have standing – that is, a legal right to sue – it is not enough to simply allege that a statute has been violated. Instead, a plaintiff must show an injury that is both concrete and particularized, even if it is not necessarily a tangible one. On Tuesday in TransUnion v. Ramirez, the justices will consider how these requirements apply to class actions.


The Treasury Department’s Office of Foreign Assets Control publishes a list of people – known as Specially Designated Nationals – with whom U.S. companies may not do business, because they are believed to pose threats to the country’s national security or economy. TransUnion, one of the three major credit-reporting agencies in the United States, offered a product known as “OFAC Name Screen” to notify businesses running a credit check if a person’s first and last names match a name on the OFAC list.

The case now before the Supreme Court began 10 years ago, when Sergio Ramirez and his wife went to a Nissan dealership in Dublin, California, to buy a car. After the couple completed a credit application, a credit check revealed that Ramirez’s name matched two names on the OFAC list – neither of which was actually Ramirez. Based on the alert, the dealer recommended that Ramirez’s wife purchase the car only in her name, which the couple opted to do. Ramirez later said that he was “embarrassed, shocked, and scared” to have the OFAC alert revealed in front of his wife and her father, who was also with them at the car dealership.

Ramirez contacted TransUnion the day after his visit to the car dealership to ask for a copy of his credit report. Ramirez received the credit report in the mail, in an envelope that also contained a summary of his rights. In a second envelope, Ramirez received a letter (without a summary of rights) indicating that his name was “considered a potential match” to those in the OFAC database. Because of concerns about the possible effect of the OFAC alert, Ramirez canceled a planned trip to Mexico. After Ramirez contacted TransUnion again, the OFAC alert was removed from Ramirez’s credit reports going forward.

Ramirez went to federal court in California, where he filed a class action alleging that TransUnion had willfully violated the Fair Credit Reporting Act by placing the erroneous OFAC alerts on consumers’ credit reports and by sending misleading and incomplete mailings, like the kind he received, containing the OFAC alerts. Ramirez asked the district court to certify a class of consumers who received two separate mailings about their credit report and the OFAC alert in the mail during the first half of 2011 – just over 8,000 people in total.

TransUnion asked the district court to reject Ramirez’s proposed class certification. The company argued that although some class members may have suffered the kind of injury required by the Constitution to be able to sue, there was nothing in the definition of the class to ensure that all of them did. Just receiving two letters from TransUnion, the company contended, is not, without more, a real injury, especially when there is no guarantee that a recipient even opened the letters. TransUnion also contended that the unusual circumstances of Ramirez’s case, in which he learned about the OFAC alert when he was with his wife and father-in-law at a car dealership, meant that he could not satisfy the requirement, imposed by the federal rules governing class actions, that the claims of the class representative be typical of the class’s claims.

The district court rejected TransUnion’s arguments and certified the class. It then put the case on hold until the Supreme Court issued its decision in Spokeo, but then allowed the case to continue to trial. A jury awarded each of the 8,184 class members almost all of the statutory damages that FCRA allows – just under $1,000 apiece – and over $6,000 per class member in punitive damages, a total verdict of over $60 million.

TransUnion appealed to the U.S. Court of Appeals for the 9th Circuit, which reduced the punitive damages award but upheld the jury’s verdict, resulting in an award of more than $40 million. TransUnion then asked the Supreme Court to take up the case, which the justices agreed to do late last year.

Arguments of the parties

TransUnion contends that every member of a class must have standing. But in this case, TransUnion stresses, the only thing that the class members have in common is that they were sent mailings indicating that they were a “potential match” to a name on the OFAC list, without any evidence that they even opened and read the mailings at all. Nothing in the Supreme Court’s cases, TransUnion concludes, indicates that someone has suffered an injury that will allow him to sue “if the information is disclosed but provided in the wrong-colored envelope or (as here) in two envelopes rather [than] one.”

Even if all class members could show an injury, TransUnion continues, the class still cannot continue in its current form because Ramirez’s injury – the embarrassment of being told he was a match in front of family members and having to cancel a vacation – is “wildly atypical” compared with other class members, who “suffered at most a technical violation and some minor confusion in the privacy of their own homes.”

TransUnion closes by cautioning that the 9th Circuit’s ruling “offers a roadmap for generating outsized awards: find a plaintiff who has suffered real injuries, forgo proving up actual damages, and instead seek statutory and punitive damages on behalf of a substantial class who suffered only a foot fault; repeat.”

Ramirez lobs his own accusations back at TransUnion, telling the justices that what the company is really looking for is “a do-over for strategic choices that went awry.” At trial, Ramirez says, TransUnion never objected to Ramirez’s testimony, it didn’t submit testimony from other members of the class, and it “agreed to a process in which the jury awarded a single amount of statutory damages to every class member.”

But in any event, Ramirez continues, the class was correctly certified. First, he emphasizes, all of the class members suffered the same injury: being “falsely designated terrorists by TransUnion” – not getting two envelopes when they should have received one. Such an injury is analogous to defamation in the early English and American law, Ramirez suggests – which, the Supreme Court indicated in Spokeo, makes an intangible injury more likely to qualify as the kind of “concrete” harm needed for standing.

Second, Ramirez observes, his claim was indeed typical of those of the class. Ramirez accuses TransUnion of taking a “Goldilocks” approach – arguing, in essence, that a class representative’s claims can’t be too strong or too weak — that no court has ever endorsed. But, Ramirez counters, all that is required is that the claims be similar, which they are. Ramirez stresses that he was not seeking damages for the denial of credit or the embarrassment that he suffered at the Nissan dealership. Instead, he makes clear, all of the claims in the case arise from how TransUnion treated all of the class members.

“Friends of the court” weigh in

The United States filed a “friend of the court” brief that stakes out a middle ground. Acting U.S. Solicitor General Elizabeth Prelogar agrees with Ramirez that class members have standing to bring their claims. But the United States urges the justices to invalidate the 9th Circuit’s ruling and send the case back for another look because it didn’t consider whether Ramirez’s claims were truly typical of the class in light of his injuries.

Reflecting the high stakes, the dispute attracted roughly a dozen “friend of the court” briefs on each side of the case. In a brief supporting TransUnion, the Retail Litigation Center warns the justices that a ruling for Ramirez could open the floodgates to other class actions alleging that corporate defendants violated federal and state laws, even if class members were not injured. Such lawsuits, the RLC cautions, can lead to “a deprivation of due process for defendants and extortive settlements to avoid potentially existential liability.”

On the other side of the case, the Electronic Frontier Foundation paints a very different picture in its brief supporting Ramirez. It tells the justices that companies like Google and Facebook collect massive amounts of data that “can be used to reveal a user’s most intimate and sensitive personal information and secrets.” As the volume of information that is collected increases, EFF writes, the “risks associated with the unfettered assembly of such data” also increase, with “serious consequences for many consumers” in areas ranging from housing and employment to immigration. The rule advanced by TransUnion and its supporters, EFF concludes, “would hamstring consumers’ ability to hold companies accountable for the injuries caused by companies’ failures to properly handle consumers’ sensitive data.”

This post was originally published at Howe on the Court.

Recommended Citation: Amy Howe, Justices return to standing after Spokeo, SCOTUSblog (Mar. 29, 2021, 12:24 PM),