Yesterday, the Supreme Court heard oral argument (pdf) (audio) in TransUnion, LLC v. Ramirez, a Fair Credit Reporting Act case in which a federal court entered a class-wide judgment awarding statutory damages for two practices that TransUnion ended years ago.

The case boils down to two issues:

  1. Can “risk” of harm confer Article III standing on all members of a class when the challenged policy has ended and the risk never materialized for the overwhelming majority of the class?  And, if so, how much of a “risk” is needed?
  2. Can a class representative satisfy Rule 23(a)’s typicality requirement when he experienced a distinct and exceptionally severe injury as compared to other class members?

The Justices asked difficult questions of both the parties and the Office of the Solicitor General, which participated in the argument as an amicus curiae supporting the plaintiff on the question of standing but suggesting that the case be remanded to the Ninth Circuit to reconsider the typicality question.  It is difficult to predict how the Court will rule.  Although some observers believed that the Court would focus its attention chiefly on typicality—which is the position the Solicitor General’s office urged—the argument suggested that the Justices are just as focused on the question of Article III standing.

At a minimum, the Court seems poised to confirm that all members of a class—not just the named representative—must have Article III standing to obtain a judgment in their favor.  In fact, the respondent conceded as much.

Members of the Court will likely also use this case as an opportunity to clarify its prior holding in Spokeo Inc. v. Robins, in which it ruled that a bare violation of a statute, without other accompanying harm, is not an injury in fact. (Our firm, including Archis, represented Spokeo; and the two of us, along with our colleagues, filed an amicus brief (pdf) in support of TransUnion.)


Under federal law, U.S. companies are forbidden to do business with certain persons who are believed to threaten the security of the United States.  The Treasury Department’s Office of Foreign Assets Control (OFAC) maintains a list of these individuals, which includes suspected terrorists and narcotics traffickers.

TransUnion offers, as part of its credit-reporting services, to identify individuals whose first and last names match those of someone on the OFAC list to assist companies in complying with the law. TransUnion does not guarantee that an OFAC alert on a credit report means that the person is actually on the OFAC list, just that the individual shares a name with someone who is.

Respondent Sergio Ramirez has the same first and last name as an individual on the OFAC list.  When he attempted to purchase a car, the dealership pulled his credit report from TransUnion, saw the OFAC notation, and declined to sell him the car.  Ramirez was humiliated in front of his wife and father-in-law and cancelled an upcoming vacation because he feared being on a “terrorist” list would make traveling difficult.

Procedural History

Ramirez filed a class action against TransUnion, alleging two sets of FCRA violations.  First, he asserted that TransUnion violated FCRA’s disclosure requirements because, when individuals asked for their credit file, TransUnion notified them that they were a potential OFAC match in a separate letter.  In other words, while TransUnion sent all of the information that FCRA requires it to disclose, it did so in two envelopes instead of one, allegedly in violation of 15 U.S.C. § 1681g(a)(1) and § 1681g(c)(2).  Second, Ramirez asserted that TransUnion failed to maintain “reasonable procedures to assure maximum possible accuracy” of its credit reports, in violation of 15 U.S.C. § 1681e(b).

The district court certified a class of all individuals who had received a letter from TransUnion informing them that they were potential OFAC matches.  It is undisputed that credit reports were not disseminated for 6,332 of the 8,185 class members. Therefore, the fact that TransUnion had marked them as an OFAC match was not provided to a third party.

The case proceeded to a full jury trial, where Ramirez’s testimony about the embarrassment he experienced at the car dealership played a starring role.  The jury awarded each class member $984.22 in statutory damages and $6,353.09 in punitive damages

Facing a $60 million damages award, TransUnion appealed, challenging both Ramirez’s suitability as a class representative, given his exceptionally bad experience (one not shared by other class members), and the standing of the absent class members.

The Ninth Circuit affirmed.  Although it reduced the punitive damages award, it otherwise upheld the class-wide judgment.  Ramirez, it said, was sufficiently typical of the class because his legal claim was the same as and arose out of the same circumstances as the other class members.  According to the court, the fact that his injury was far more severe than other class members played no part in Rule 23’s typicality analysis.  The court of appeals also held that the 6,332 class members whose credit reports were not provided to others had standing because, in the court’s view, they faced a material risk that their credit reports with the OFAC alert would be disseminated to others.

The oral argument

At yesterday’s oral argument, the Justices focused most of their questions on when and how a risk of harm—as opposed to actual harm—can amount to an injury in fact. As the Court had explained in Spokeo, a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm,” but statutory violations that result in a “risk of real harm” can be concrete.  The Spokeo Court, which also had been considering “FCRA’s procedural requirements,” explained that not all violations of those requirements “cause harm or present any material risk of harm.

In Transunion, two discrete aspects of what counts as a “material risk of harm” took center stage.  First, because this case is a class action, it presents a unique dilemma:  Some members of the class who were not actually harmed may not even have been aware of the potential for any risk of harm at the time because they did not realize that an OFAC alert was on their credit reports.  Second, because TransUnion has since changed its practices and because 6,332 of the class members never had their credit report disseminated, any risk of harm that might have previously existed had, by the time of final judgment, dissipated entirely.

Justice Gorsuch tackled the first issue in an exchange with TransUnion’s counsel, remarking that “in order to have emotional distress” from a risk of harm, “you have to have knowledge of the thing that would cause the emotional distress.”  Counsel agreed and argued that risk unaccompanied by emotional distress could rarely serve as an injury in fact; the risk would have to be quite high, approaching near certainty, and the potential harm far more serious than an incorrect credit report.  Justice Alito, meanwhile, recalled the Court’s admonition in Spokeo that injuries in fact should have a common-law analogue, and wondered whether there was any common-law analogue where an unknown risk of harm was actionable.

Justice Barrett addressed the second aspect, remarking that if an injury—here, the risk of harm—existed at one point, but later evaporates, the case likely cannot move forward, but courts would call that a mootness problem, as opposed to standing.  Chief Justice Roberts pushed Ramirez’s counsel on this point as well, asking him whether, rather than bringing a lawsuit, litigants shouldn’t feel grateful to have avoided harm when they learn they were exposed to a risk that never materialized.

The Chief Justice also attempted to find an outer limit to Ramirez’s standing theory.  Suppose, he asked Ramirez’s counsel, “Congress creates a cause of action for statutory damages for anyone driving within a quarter mile of a drunk driver.”  Would Article III allow someone to bring a claim under this provision if, several days later and long after the risk had passed, she finds out a drunk driver had been nearby? Ramirez’s counsel replied that it would—essentially conceding that his client’s theory of standing would authorize lawsuits over statutory violations that could never result in actual harm nor a known risk of harm.  As counsel for TransUnion pointed out in rebuttal, if Ramirez’s theory were correct, “everybody [could] bring actions for traffic violations that didn’t actually [result in] any harm.”  That result would open Article III courts “to all sorts of trivial injuries,” when people should actually be “toasting their good luck, not suing the person who posed a risk to them, but didn’t actually injure them.”

The question of typicality received far less attention. Justices Breyer and Sotomayor in particular expressed doubt that Ramirez was “atypical” within the meaning of Rule 23.  They expressed the belief that any unfairness caused by his testimony at trial should have been remedied by objecting to his testimony, countering it with testimony from absent class members—something that defendants will fasten on in future class action trials—or using a verdict form that would allow for different statutory-damages awards.  The other Justices paid comparatively less attention to the typicality issue.  Despite that, the lawyer arguing for the Solicitor General’s office made a powerful case for why Ramirez was an atypical class representative, explaining that whether a representative’s “claim” was typical of the class includes evaluating the representative’s injury.  Further, the lawyer argued that having Ramirez testify about his unusually severe injury told the jury a story that was not “indicative of what happened to other class members,” who “might benefit from that”—when the jury awarded statutory damages—“in a way that they really shouldn’t.”

Final Thoughts

It is hard to deny that Mr. Ramirez himself experienced a real harm—certainly enough to open the doors to federal court.  But the same cannot be said of the many thousands of class members who never had their credit reports disseminated and thus suffered nothing more than a bare procedural violation—which, under Spokeo, is insufficient to confer standing.  Indeed, Ramirez’s theory would open the floodgates to all sorts of claims, including ones where the plaintiff had neither been harmed by a statutory violation nor was even aware of any possible risk of harm to himself or herself.   That limitless theory of jurisdiction seems antithetical to Article III’s requirement that the federal courts can hear only cases involving injuries that are “concrete” and “real,” as the Spokeo Court put it.

That said, how the Justices will rule on this issue, or on the typicality question, is difficult to predict.  Given the timing of this argument, it seems likely that this case will be one of the last decisions of the Term.  We will keep readers posted on the outcome.