The Supreme Court has granted certiorari to review a $40 million class action trial judgment for statutory and punitive damages under the Fair Credit Reporting Act, and its forthcoming decision later this Term will likely be the Supreme Court's most important ruling in the consumer financial services space since its 2016 ruling in Spokeo, Inc. v. Robins.
In TransUnion, LLC. v. Ramirez, the Supreme Court agreed to decide the following question posed by TransUnion: "Whether either Article III or Rule 23 permits a damages class action where the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered." In this case, plaintiff Sergio Ramirez alleged that he suffered difficulty in obtaining credit, embarrassment in front of family members, and had to cancel a vacation after an automobile dealer received a credit report incorrectly indicating that his name matched a name found on a list of terrorists and narcotics traffickers with whom U.S. companies may not transact business that is prepared by the Office of Foreign Assets Control. He filed a class action against TransUnion alleging violations of the FCRA. Significantly, it was stipulated by the parties that, unlike Ramirez, approximately 79% of the 8,185 class members did not have a credit report disseminated to a third party during the class period. The court certified the class despite TransUnion's objections that most of the class members lacked standing and that Ramirez was not typical of the class he represented. Unlike the vast majority of class actions, the case proceeded to trial and the jury awarded each class member $984.22 in statutory damages and an additional $6,353.08 in punitive damages. On appeal, the Ninth Circuit, ruling 2-1, upheld class certification, the jury verdict in favor of the class, and the statutory damages amount, but reduced the punitive damages to $3,936.88 per class member.
TransUnion's cert petition forcefully argued that "the Ninth Circuit eviscerated critical Article III, Rule 23, and due process constraints, thereby paving the way for one highly atypical plaintiff to recover massive damages on behalf of thousands of uninjured class members." Given the grant of certiorari in this case and the current composition of the Supreme Court, it can reasonably be anticipated that the Court's decision later this Term will be favorable to TransUnion and to class action defendants generally, and will likely enunciate more rigorous requirements for standing under Rule 23 and Spokeo and for typicality under Rule 23(a)(3).
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