Supreme Court docket Expands Spokeo’s Article III Jurisdiction Necessities – Litigation, Mediation, and Arbitration


  • The US Supreme Court has overturned a US $ 40 million class action lawsuit under the Fair Credit Reporting Act (FCRA) against TransUnion, one of the Big Three credit bureaus.
  • The Supreme Court overturned an earlier decision by the U.S. Court of Appeals for the Ninth District in a 5: 4 ruling that 6,332 of the 8,185 certified class action plaintiffs do not have Article III status because TransUnion did not share their credit reports with third parties during the relevant period Period.
  • The Supreme Court ruling has far-reaching implications for both FCRA litigation in particular and class actions in general, with the potential to resolve a split between appellate courts on data infringement and ransomware class actions.

In the case of TransUnion LLC v. Ramirez, the US Supreme Court overturned $ 40 million in collective damages under the Fair Credit Reporting Act (FCRA) against TransUnion, one of the Big Three credit bureaus. The 5-4 decision, issued on June 25, 2021, has far-reaching potential implications for future class certification and FCRA litigation. While the court’s decision was not due to a data breach or ransomware event, it seems likely that it will reverberate in class action lawsuits against cyberattacks that are initiated without any actual harm (such as identity theft or financial loss).


Lead plaintiff Sergio Ramirez represented a certified class of 8,185 consumers who were on TransUnion’s OFAC Name Screen Alert list (OFAC list). This database identifies a consumer’s name as a “potential match” with a name on a list of terrorists, drug traffickers, and other serious criminals maintained by the Office of Foreign Assets Control (OFAC). Ramirez found out about the OFAC list when a salesman at a car dealership told him that he could not buy a vehicle because his name was on a “terrorist list”.

A jury decided in favor of Ramirez and a group of consumers whose names were on the OFAC list and who had also received two letters from TransUnion, one with no information on the OFAC list and another with the OFAC information contained, however, waived a summary of rights required by the FCRA. The U.S. Court of Appeals for the Ninth District upheld the award in the relevant part.

Supreme Court decision

Reversing the Ninth Ward, the Supreme Court ruled that 6,332 of the 8,185 certified class action plaintiffs were not eligible for Article III despite being on TransUnion’s OFAC list because TransUnion did not share their credit reports with third party companies during the relevant period. To arrive at that conclusion, the court relied on Spokeo, Inc. v. Robins, 578 US 330, 340, and concluded that no harm was done to these group members that was sufficiently “specific” for Article III to apply procure. Following this legal analysis under Article III, a claimant must identify a close historical or civil analogue for his alleged harm. Physical, financial and reputational damage are considered to be concrete injuries within the meaning of Article III. In analogy to the defamation offense, which requires a “publication” of the defamatory statement, the court ruled that TransUnion did not disclose the credit reports of 6,332 class plaintiffs to third-party companies during the relevant period; is required under Article III.

As for the FCRA claims based on TransUnion’s letters to the class plaintiffs, the court ruled that all 8,185 class plaintiffs were not eligible for Article III because the plaintiffs failed to provide evidence that a single class plaintiff other than Ramirez opened the mail or was confused and desperate, or relied on the information in any way. The court found that even if the letters were technical violations of the FCRA, these mere procedural violations could not be continued without proof of specific damage.

Possible effects

The Supreme Court ruling will have far-reaching implications for both FCRA litigation in particular and class actions in general.

As a potential boon to companies facing class action lawsuits in the future, federal courts could more closely examine whether the class claimants have identified a historical or common law analog for the infringement they are alleging. While this investigation does not require an “exact duplicate in American history and tradition,” it is not an “open invitation to federal courts to relax Article III based on contemporary, evolving beliefs about what types of lawsuits should be tried in federal courts.” . “Unless group members can demonstrate the type of physical, monetary or reputational damage traditionally associated with common law criminal offenses, companies should consider ongoing appeal under Article III. TransUnion is particularly likely to be deployed in cases that These class action lawsuits are often only brought because the attacked company sends a notice required by state law to report a data breach. The courts are divided as to what constitutes a detectable violation in these circumstances TransUnion supports those courts that have said that just receiving a data breach letter is not enough to open the doors to a federal courtroom without identity theft or economic damage.

On the other hand, as Judge Clarence Thomas suggests in his dissent, successful challenges to Article III filing could simply shift class actions to state courts that do not have Article III requirements for position, such as California and Michigan. In this regard, Judge Thomas notes that the majority opinion could be a hollow victory for TransUnion as it ensures that state courts have exclusive jurisdiction over this type of class action lawsuit. While Judge Thomas has valid concerns, such an outcome raises the question of whether Congress can create a plea that must be raised outside of Article III courts, as the plea protects claimants who are not in litigation under Article III . Class-action defendants faced with federal lawsuits in state courts should consider whether this argument provides a helpful defense.

With respect to FCRA litigation, the court’s decision is an open call for defendants to file a standing challenge in cases where plaintiff’s credit report has not been disclosed to potential creditors. In fact, the court rejected the plaintiffs’ argument that the inaccurate OFAC information was “published” internally at TransUnion and to the vendors who printed and sent the mailings the class plaintiffs received sufficient to confer their powers.

However, the court also offered plaintiffs a fig leaf by raising the possibility (without ruling the question) that a consumer could suffer specific harm in the form of emotional or psychological harm simply by viewing inaccuracies in their own credit report. This type of psychological harm, the argument goes, is analogous to that suffered by victims of intentional emotional distress.

Since the defendant in the present case was a credit reporting agency, the effects of the court ruling on credit reporting agencies and creditors are less clear. For example, the Court has had no reason to consider whether the provision of credit information about consumers to credit bureaus constitutes publication of the information in a manner sufficient to give legitimacy. Nonetheless, the court notes that providing information to credit bureaus may not be sufficient as the defamation historically required evidence that the defendant “actually brought an idea to someone else” and thus “that the document was actually read and not only”. It is not clear that information submitted to credit reporting agencies is actually read by everyone unless it is published as a credit report and distributed at the request of the consumer or a potential lender.

In summary, the Supreme Court ruling in the TransUnion LLC v Ramirez case provides additional fodder to challenge and undo class certification. It remains to be seen, however, whether this will simply shift class actions to state courts with lower eligibility requirements.

The content of this article is intended to provide general guidance on the subject. You should seek expert advice regarding your specific circumstances.

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