Last Friday, the Supreme Court reversed the class-wide judgment in TransUnion LLC v. Ramirez (pdf), concluding that the lower courts had not properly applied the Court’s holding in Spokeo Inc. v. Robins and that the vast majority of the class members failed to satisfy the injury-in-fact requirement for Article III standing.  (Our firm, including the three of us, represented the petitioner in Spokeo, and we filed an amicus brief (pdf) in support of TransUnion.)

The Court’s holding has enormous practical significance for defendants facing class actions seeking statutory damages.  The Court reinforced Spokeo’s core holding that Congress’s creation of a cause of action with a statutory-damages remedy does not by itself satisfy Article III.  Instead, a plaintiff (and in a class action, each class member) must show a concrete harm resulting from the statutory violation in order to pursue a damages action in federal court.  The Court also provided important guidance for applying Article III’s concrete-injury requirement to damages actions based upon claimed risks of future harm that never materialized.


Federal law forbids U.S. companies from doing 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.

Plaintiff Sergio Ramirez sued TransUnion on behalf of a class of 8,185 individuals alleging violations of the Fair Credit Reporting Act (FCRA), which regulates consumer reporting agencies that compile and disseminate personal information about consumers.  Ramirez asserted two categories of FCRA violations.  First, he claimed that TransUnion had failed to use reasonable procedures to ensure the accuracy of class members’ credit files, which included statements that the member was a “potential match” to a name on the OFAC list.  Second, he claimed that the formatting of the mailings that TransUnion used to inform members about the potential match violated FCRA.

Ramirez, the sole named plaintiff, found out about his potential match while attempting to purchase a car, causing him to suffer difficulty in obtaining an auto loan and embarrassment in front of his family, and leading him to cancel a planned vacation out of concern about the alert.  But none of the other class members submitted any evidence of harms of this kind, and the evidence showed that only 1,853 of the 8,185 had their credit reports referencing the “potential” OFAC match disseminated to potential creditors.

The district court certified the class and ruled that each member of the class had Article III standing for both categories of FCRA claims.  After a trial, the jury returned a verdict in favor of the class and the district court entered a class-wide judgment.  The Ninth Circuit affirmed in relevant part, holding that all members of the class had Article III standing to recover damages for the alleged FCRA violations.  The Ninth Circuit also concluded that, despite Ramirez’s uniquely distressing situation, Ramirez’s claims were typical of the class’s claims for purposes of satisfying Federal Rule of Civil Procedure 23(a)(3).

The Court’s Opinion

In an opinion by Justice Kavanaugh, the Supreme Court reversed the Ninth Circuit by a 5-4 vote.  (Justice Kavanaugh’s opinion was joined by Chief Justice Roberts and Justices Alito, Gorsuch, and Barrett.) The Court held that only plaintiffs and class members who are concretely harmed by a defendant’s statutory violation have Article III standing to seek damages.

The Court began with principles of Article III standing.  Building on its prior opinion in Spokeo, the Court reaffirmed that in order to satisfy Article III’s requirement of injury in fact, a plaintiff must establish a concrete injury—in other words, an injury that (in Spokeo’s words) is “real, and not abstract.”  And the Court reaffirmed that the requirement to establish concrete injury is not relaxed in the context of statutory violations.  As the Court emphasized, “an injury in law is not an injury in fact.”  Instead, only “those plaintiffs who have been concretely harmed by a defendant’s statutory violation may sue that private defendant over that violation in federal court.”

The Court also confirmed that “Congress’ creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide whether a plaintiff has suffered a concrete harm.”  Quoting from an opinion by Sixth Circuit Judge Sutton, the Court explained that “even though ‘Congress may elevate harms that exist in the real world before Congress recognized them to actionable legal status, 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.’”  To determine whether the concrete-harm requirement is satisfied, the Court instructed (quoting Spokeo) that courts should “assess whether the alleged injury to the plaintiff has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing a basis for a lawsuit in American courts.”

Applying those principles, the Court first made clear that every class member—not just the named plaintiff—must satisfy Article III’s standing requirement in order to recover damages.  (As we noted in our report on the oral argument, this preliminary holding was not surprising, given that Ramirez conceded as much.)

Next, in reserving the question whether putative class members must demonstrate standing at the class-certification stage, the Court pointed in a footnote to an Eleventh Circuit decision, Cordoba v. DIRECTV, LLC, that reversed certification of a damages class because individualized issues surrounding class’ members Article III standing “posed a powerful problem under Rule 23(b)(3)’s predominance factor.”  (Our firm represented DIRECTV in Cordoba; Andy Pincus argued the appeal.)  Accordingly, the Court’s opinion signals that the obligation for each class member to demonstrate concrete harm will make it much more difficult for plaintiffs to obtain class certification in statutory damages cases, because the “bare statutory violation” shortcut to satisfying Article III is no longer available.

For the reasonable-procedures claim, the Court held that the 1,853 class members whose credit reports were disseminated to third parties did have standing, concluding that being labeled as a potential terrorist in a report disseminated to third parties sufficiently resembled the harm associated with the common-law tort of defamation.  But the Court held that the remaining 6,332 class members whose credit reports were not disseminated to third parties lacked standing, because in the absence of publication of their information they could not point to any concrete harm akin to defamation resulting from the OFAC alert in their credit files.

The Court also rejected the argument that the 6,332 class members had standing based on a risk of future harm.  It began by explaining that “in a suit for damages, the mere risk of future harm, standing alone, cannot qualify as a concrete harm—at least unless the exposure to a risk of future harm itself causes a separate concrete harm.”  As an example, the Court, echoing a hypothetical posed by the Chief Justice at oral argument, imagined someone driving a quarter of a mile ahead of a reckless driver—where the risk posed by the reckless driver does not materialize and the first driver makes it home safely.  Under those circumstances, the Court explained, the first driver has not suffered a concrete harm under Article III: the failure of the risk to materialize “would ordinarily be cause for celebration, not a lawsuit.”

Turning to the case before it, the Court noted the “fundamental problem” with the class’s future-risk-of-harm argument was that the risk never materialized; the 6,332 class members’ credit reports were not disseminated to third parties and did not result in the denial of credit.  Nor did the class members show independent harm posed by the threat of future harm (such as incurring expenses to prevent the realization of the threat).

The Court also noted that the risk of future dissemination was too speculative to satisfy Article III in any event.  The 6,332 class members did not demonstrate a sufficient likelihood that their credit reports would be disclosed.  They also did not present any evidence that they even knew about the OFAC alerts in their credit files.  As the Court noted, “[i]t is difficult to see how a risk of future harm could supply the basis for a plaintiff’s standing when the plaintiff did not even know that there was a risk of future harm.”

For the second category of claims, about the format of TransUnion’s mailings, the Court concluded that Ramirez alone, and no other class member, had standing.  The Court explained that the class members did “not demonstrate that they suffered any harm at all from the formatting violations,” much less a “harm with a close relationship to a harm traditionally recognized as providing a basis for a lawsuit.”  The Court also rejected the argument advanced by the government that an alleged deprivation of information, without more, could constitute an injury in fact.  Instead, “[a]n ‘asserted informational injury that causes no adverse effects cannot satisfy Article III.’”  The Court further noted that the class members here were not actually deprived of any information to which they were entitled; their complaint instead was “only that they received it in the wrong format.”

In light of its holding on Article III standing, the Court declined to address the Rule 23 typicality issue.  It remanded the case to the Ninth Circuit, including to address whether class certification is appropriate in light of the Court’s standing holding.

Takeaways from the Opinion

TransUnion clarifies several key elements of Article III’s standing requirement.

First, the Court’s decision confirms that Spokeo eliminated the “no injury” class action.  Although Spokeo’s holding was clear, some commentators and lower court judges had seized on Justice Thomas’s concurring opinion in Spokeo—and his subsequent separate opinion in Frank v. Gaos—to express skepticism that the Court would continue to adhere to that holding.

The TransUnion Court’s analysis opens with a detailed explanation of the roots of the real-world injury requirement in Article III’s limitation of federal-court jurisdiction to “Cases” and “Controversies” and in Article II’s allocation of power to the Executive Branch.  The Court explained that “[a] regime where Congress could freely authorize unharmed plaintiffs to sue defendants who violate federal law . . . would infringe on the Executive Branch’s Article II authority.”  That is because, absent “‘an actual case,’” “the choice of how to prioritize and how aggressively to pursue legal actions against defendants who violate the law falls within the discretion of the Executive Branch, not within the purview of private plaintiffs (and their attorneys).  Private plaintiffs are not accountable to the people and are not charged with pursuing the public interest in enforcing a defendant’s general compliance with regulatory law.”

The majority’s clear rejection of the contrary arguments set forth in the dissents leaves no doubt that Spokeo’s requirement of concrete, “real world” injury is here to stay—and alleging a statutory violation is not enough to satisfy Article III.  Plaintiffs will have to meet the “concrete harm” test laid out in Spokeo and reaffirmed in TransUnion.

Second, the Court’s application of the concrete-harm standard provides guidance that should eliminate sharply divergent approaches in the lower courts.

Some lower courts have been receptive to arguments that Spokeo did not meaningfully change the law of standing, and they have concluded that Congress’ creation of a “substantive” (as opposed to “procedural”) right and a cause of action to enforce that right makes any alleged violation of the statutory right a concrete harm.  But the TransUnion Court did not limit the applicability of the requirement that plaintiffs demonstrate that they suffered real-world harm—making clear that the obligation applies across the board to all claims.  Indeed, some lower courts had found the FCRA’s “reasonable procedures” requirement to be substantive, and concluded that it therefore was unnecessary to determine whether the plaintiffs had demonstrated real-world injury.  The Supreme Court’s analysis squarely rejects that approach, instead requiring an assessment of whether each class member demonstrated real-world injuries from the alleged violation.

The Court’s application of its standard also demonstrates that injuries must both be “real” and resemble harms traditionally actionable in courts. Moreover, by rejecting the claims asserted by class members whose credit reports were not distributed to third parties and the mailing-format claims asserted by all class members, the Court made clear that the Article III standard has real teeth.

Third, some lower courts have relied heavily on risk-of-harm theories in upholding plaintiffs’ standing. TransUnion’s analysis significantly limits plaintiffs’ ability to use this “work-around” to satisfy Article III in the context of damages claims.  If the risk never materialized and has ended by the time the lawsuit is filed, then plaintiffs must demonstrate that they suffered harm from the risk itself—in terms of expenditures to avoid the risk or other real-world injuries.  And TransUnion makes clear that, in addition, the risk must be a serious one in order to establish standing: the Court quoted Judge McKeown’s statement in her dissenting opinion in the court of appeals that “[b]ecause no evidence in the record establishes a serious likelihood of disclosure, we cannot simply presume a material risk of concrete harm.”

Fourth, even when a named plaintiff is able to satisfy the TransUnion standard, putative class actions will face significant challenges in obtaining class certification—much less a class-wide damages award.  If proof of injury is individualized, which will be true in many cases, that reality frequently will make it impossible for the class to show that common issues predominate.  And, separately, when a defendant is able to show that most class members will be unable to satisfy Article III, courts may be reluctant to grant certification.

All of that said, we do not expect plaintiffs’ lawyers to give up on class actions seeking statutory damages under federal statutes.  Some, including Justice Thomas in his dissent, speculate that such cases will be brought in state court instead.  But plaintiffs’ lawyers will face multiple obstacles in moving their cases to state court.

To begin with, many state courts follow federal standing precedent.  In those state courts, TransUnion is likely to preclude actions barred in federal court.

Next, the Court’s grounding of the real-world harm requirement in Article II gives defendants a new argument in opposing cases in state court.  To the extent a lawsuit would intrude upon Article II’s allocation of authority to the Executive Branch, separation-of-powers principles—combined with principles barring states from interfering with the Constitution’s allocation of authority—would preclude state courts from entertaining the claim.  There also will be serious questions whether Congress intended to authorize state courts to adjudicate claims that the Constitution bars from federal court, given that Congress legislates against settled background legal principles, including constitutional limits on federal court jurisdiction.

Finally, the Supreme Court’s personal jurisdiction cases, such as Bristol-Myers Squibb Co. v. Superior Court of California, likely limit state courts’ power to entertain claims of absent class members who are nonresidents unless the court can exercise general jurisdiction over the defendant.  So any cases brought in state courts will be much more limited than those permissible in federal court.

In sum, TransUnion provides defendants with significant new arguments for defeating the no-injury class actions that Spokeo prohibited.