More Than 6,000 Class Members Excluded From TransUnion FCRA Lawsuit in Supreme Court Decision

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The US Supreme Court has reduced the size of the Class in a Fair Credit Reporting Act (FCRA) class action lawsuit against TransUnion, saying that more than 6,000 people originally included in the Class did not suffer concrete harm in order to warrant damages.

The court ruled 5-4 on Friday, June 25, that the number of people in the Class eligible for damages after being mistakenly labeled terrorists by TransUnion should be reduced from 8,185 to 1,835, reversing a Ninth Circuit ruling, Law360 reports. The Class had previously been awarded millions of dollars in statutory damages following a jury trial and had the support of the Federal Government.

Lead Plaintiff Sergio Ramirez initially filed the class action lawsuit after he was barred from buying a car due to TransUnion telling lenders that he potentially matched two entries in the US Department of the Treasury’s Office of Foreign Assets Control’s database of criminals and terrorists, Law360 reports. In the claim, he argued that TransUnion did not ensure accuracy as required by the FCRA.

In 2017, a California federal jury ruled that TransUnion had willfully violated the FCRA and it awarded $8.1 million in statutory damages and $52 million in punitive damages to Ramirez and 8,184 others.

Last year, TransUnion argued that the Class lacked standing, with few Class Members suffering concrete harm, and that many in the Class should not be eligible for the damages. The Ninth Circuit rejected that argument, but did reduce the payout.

Then, in December, the Supreme Court decided to take the case to consider whether a class could be certified by a federal court even if the majority of members hadn’t experienced concrete injuries.

The justices concluded that only those who had their incorrect credit reports supplied to a third-party business could demonstrate harm had standing in the claim, which was a total of 1,853 people.

“To have Article III standing to sue in federal court, plaintiffs must demonstrate, among other things, that they suffered a concrete harm,” Justice Brett Kavanaugh wrote in the judgement. “No concrete harm, no standing.”

Kavanaugh’s majority opinion was joined by Chief Justice John Roberts and Justices Samuel Alito, Neil Gorsuch, and Amy Coney Barrett.

Justice Clarence Thomas, joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan, wrote a dissent saying that his colleagues blocked the Class from vindicating misdeeds in federal court that Congress though they were worthy of redress, Law360 reports.

“Ultimately, the majority seems to pose to the reader a single rhetorical question: Who could possibly think that a person is harmed when he requests and is sent an incomplete credit report, or is sent a suspicious notice informing him that he may be a designated drug trafficker or terrorist, or is not sent anything informing him of how to remove this inaccurate red flag? The answer is, of course, legion: Congress, the President, the jury, the District Court, the Ninth Circuit, and four Members of this Court,” Justice Thomas wrote.

A member of counsel for TransUnion, Stephen Newman of Stroock & Stroock & Lavan LLP, told Law360 that the majority’s opinion was likely to “have broad implications for class certification practice nationwide.”

“It also will improve American businesses’ ability to serve their customers and workers efficiently, with reduced litigation burden,” he said.

TransUnion is facing other legal action over the same issue. In August, a US citizen and military contractor filed a class action lawsuit alleging that his TransUnion credit report unfairly associates him with terrorists. Ahmed Al-Shaikli says that he is in no way a terrorist and, in fact, is a US citizen who served as a US military contractor. Despite this fact, his TransUnion credit report was allegedly associated with terrorists on the US Office of Foreign Assets Control (OFAC) watch list.

Have you ever had any inconsistencies reported on your credit report? Let us know in the comments section!

Ramirez is represented by Samuel Issacharoff, John Soumilas, Jim Francis and Lauren KW Brennan of Francis Mailman & Soumilas PC, Robert H. Klonoff, Elizabeth J. Cabraser, Michael W. Sobol, Ian R. Bensberg, John D. Maher, Andrew R. Kaufman and Jason L. Lichtman of Lieff Cabraser Heimann & Bernstein LLP and Andrew J. Ogilvie and Carol M. Brewer of Ogilvie & Brewer LLP.

TransUnion is represented by Paul D. Clement, Erin E. Murphy, Matthew D. Rowen and Andrew C. Lawrence of Kirkland & Ellis LLP and Julia B. Strickland, Stephen J. Newman and Christine E. Ellice of Stroock & Stroock & Lavan LLP.

The federal government is represented by Nicole F. Reaves, Elizabeth B. Prelogar, Brian M. Boynton, Malcolm L. Stewart, Charles W. Scarborough and Jack Starcher of the U.S. Department of Justice, and Mary McLeod, John R. Coleman, Laura M. Hussain and Ryan Cooper of the Consumer Financial Protection Bureau.

The TransUnion FCRA Class Action Lawsuit is TransUnion LLC v. Sergio L. Ramirez, Case No. 20-297, in the Supreme Court of the United States.

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