Supreme Court Decides TransUnion LLC v. Ramirez

On June 25, 2021, the U.S. Supreme Court decided TransUnion, LLC v. Ramirez, holding that class members who had inaccurate information placed in their credit file as a result of unreasonable credit investigation procedures violating the Fair Credit Reporting Act (FCRA), but never had that information distributed to third parties, had not suffered a concrete injury in fact sufficient to create Article III standing to sue for damages. The Court further held that their receipt of communications from the credit reporting agency in a format inconsistent with FCRA requirements also did not qualify as a concrete injury in fact.

Sergio Ramirez was inaccurately reported as a potential match to a name on a list of suspected terrorists and criminals when he sought credit to buy a car. Ramirez sued the credit reporting agency, TransUnion, LLC, claiming that it had failed to employ reasonable procedures to ensure accuracy in violation of the FCRA. He also claimed TransUnion violated technical formatting requirements when it responded to his request for the information in his credit file. He sought to represent a nationwide class of all people who TransUnion had improperly associated with a name on the watch list and then communicated with in the statutorily improper format. Of the 8,185 people in the class, only 1853 had “had their credit reports disseminated by TransUnion to potential creditors.” The district court certified the requested class and held a jury trial producing a judgment for the class against TransUnion for statutory and punitive damages. The Ninth Circuit affirmed in relevant part, holding that all members of the class had Article III standing.

The Supreme Court reversed by a 5-4 vote. The Court explained that Article III’s case-or-controversy requirement means that a plaintiff’s injury must be “concrete,” which, for intangible harms, requires the harm have “a close relationship to a harm traditionally recognized as providing a basis for a lawsuit in American courts.” Thus, although “Congress may ‘elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law,’” it “’may not simply enact an injury into existence, using its lawmaking power to transform something that is not remotely harmful into something that is.’”

Applying this standard to the reasonable procedures violation, the Court held that those class members whose credit reports had been sent to potential creditors “suffered a harm with a close relationship to the harm associated with the tort of defamation,” and therefore had standing. The class members whose inaccurate information never left their file, however, did not have standing because the mere existence of undistributed inaccurate information was not the type of harm traditionally redressed by American courts. Rather, they had suffered only a “risk of future harm,” and had presented no evidence “that they suffered some other injury (such as emotional injury) from the mere risk that their credit reports would be provided to third-party businesses.” Standing to sue for damages cannot be based on the existence of a material risk of future harm.

As to the claim for technical violation of FCRA formatting requirements, the class had not demonstrated “that they suffered any harm at all from the formatting violations.” Rather, these were “bare procedural violations, divorced from any concrete harm,” and could not support standing. To the extent the formatting violation could be characterized as an “informational injury,” it was one without any adverse effects and could not satisfy Article III’s concrete injury in fact requirement.

The Court therefore reversed and remanded for a determination of whether a class could be certified in light of its determination that most of the class lacked standing.

Justice Kavanaugh authored the opinion of the Court, joined by Chief Justice Roberts and Justices Alito, Gorsuch, and Barrett. Justice Thomas authored a dissent, joined by Justices Breyer, Sotomayor, and Kagan. Justice Kagan authored a dissent, joined by Justices Breyer and Sotomayor.