Written By ESR News Blog Editor Thomas Ahearn
On March 30, 2021, the Supreme Court of the United States (SCOTUS) heard oral arguments in the case of TransUnion LLC v. Ramirez that involved alleged violations of the Fair Credit Reporting Act (FCRA) to consider whether either Article III of the United States Constitution or Federal Rule of Civil Procedure 23 permit damages in class action lawsuits when most of the class suffered no actual injury or any similar to the class representative.
In TransUnion LLC v. Ramirez, a California man named Sergio Ramirez could not buy a car after TransUnion mistakenly told a car dealership on a credit report that his name matched two names on the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) list of suspected terrorists and criminals with whom U.S. companies are barred from doing business. Ramirez sued TransUnion on behalf of more than 8,000 people.
“The Supreme Court on Tuesday seemed to favor a middle-ground approach in a dispute over the rules that limit when consumers can bring class-action lawsuits against corporations. Some justices suggested that an 8,000-member class action against TransUnion, one of the country’s three major credit-reporting companies, should be significantly narrowed — but not tossed out entirely,” according to an Argument Analysis on SCOTUSblog.com.
“Does the case boil down to a matter of ‘no harm, no foul,’ as some justices put it during Tuesday’s oral argument, because there is no evidence that every member of the class suffered the kind of real harm that gives them a legal right to sue, known as standing, even if a federal law was technically violated? After over 90 minutes of debate, it appeared that some justices might be ready to split the difference,” wrote analysis author Amy Howe.
“Even some of the court’s more conservative justices seemed to agree with Ramirez that, at least when it came to the roughly 1,800 class members whose personal information was given to someone else, it was not a matter of ‘no harm, no foul’… broaching the issue of the potential remedy if the Supreme Court were to agree that the district court should have certified a smaller class instead,” Howe explained in her analysis about the hearing.
“But despite several justices’ apparent sympathy for the class members whose personal information was actually disclosed, some of the same justices seemed dubious that other members of the class had suffered real harm when their information had not been disclosed,” Howe wrote in the post titled ‘Justices appear inclined to curb standing in credit-reporting class action’ that followed her previous post on the background of the case.
“The question in the case is whether the lower courts should never have allowed it to proceed as a class action lawsuit.” The post titled ‘Justices appear inclined to curb standing in credit-reporting class action’ authored by Amy Howe – which was originally published at Howe on the Court – is available on SCOTUSblog.com at www.scotusblog.com/2021/03/justices-appear-inclined-to-curb-standing-in-credit-reporting-class-action/.
The class action lawsuit against TransUnion has a long history. In 2017, a federal jury in California awarded a record $60 million in damages after finding that TransUnion violated the FCRA by awarding each of the 8,185 class members $984.22 in statutory damages and $6,353.08 in punitive damages. In 2020, an appeals court held that the punitive damages award was excessive and reduced the award to $3,936.88 per class member.
On May 16, 2016, the Supreme Court ruled in a related case on whether consumers must prove a “concrete injury” in class action lawsuits. The ruling in the case of Spokeo, Inc. v. Robins found that consumers must prove “an injury in fact” in class action lawsuits for alleged “bare” violations of a federal statute such as the FCRA. The case involved a man who filed a lawsuit against an online “people search engine” for alleged FCRA violations.
The FCRA 15 U.S.C § 1681 was enacted by Congress in 1970 to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRAs), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information.
Employment Screening Resources® (ESR) – a leading global background check firm ranked the #1 screening provider by HRO Today in 2020 – offers FCRA compliant background checks and complimentary white papers about “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA.” To learn more about ESR, visit www.esrcheck.com.
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