Summary
The Supreme Court held that only plaintiffs who suffered concrete harm from a statutory violation have Article III standing to seek damages in federal court. In this Fair Credit Reporting Act class action, the Court concluded that the 1,853 class members whose misleading credit reports were disseminated to third parties suffered concrete reputational harm, while the 6,332 members whose reports were not disseminated did not. The Court further held that only the named plaintiff had standing for the claims concerning formatting defects in TransUnion's mailings, reversed the Ninth Circuit, and remanded.
Topics
Practice areas
Questions Presented
- Whether plaintiffs who allege violations of the Fair Credit Reporting Act have Article III standing to seek damages without demonstrating a concrete harm.
- Whether the 1,853 class members whose misleading OFAC alerts were disseminated to third parties suffered a concrete injury in fact.
- Whether the 6,332 class members whose misleading OFAC alerts remained undisclosed in internal credit files suffered concrete harm from the mere existence of the information or from a risk of future dissemination.
- Whether the class members had Article III standing to seek damages for alleged defects in TransUnion's mailings when they did not show that the defects caused concrete harm.
Holdings
- Only plaintiffs who have been concretely harmed by a defendant's statutory violation have Article III standing to seek damages against that private defendant in federal court. A statutory cause of action and a violation of a statutory right do not, by themselves, establish injury in fact.
- The 1,853 class members whose credit reports containing misleading OFAC alerts were disseminated to third-party businesses suffered concrete reputational harm and had Article III standing to pursue the reasonable-procedures claim for damages.
- The 6,332 class members whose misleading OFAC alerts were not disseminated to third parties did not suffer concrete harm sufficient for Article III standing to seek damages. The mere existence of inaccurate information in an internal credit file, and a risk of future dissemination that did not materialize or independently cause harm, are insufficient.
- Except for named plaintiff Ramirez, the class members lacked Article III standing to seek damages for alleged defects in TransUnion's disclosure and summary-of-rights mailings because they did not show that the formatting defects caused concrete harm.
Key quotations
“But under Article III, an injury in law is not an injury in fact. 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.” (141 S. Ct. at 2205)
“A letter that is not sent does not harm anyone, no matter how insulting the letter is. So too here.” (141 S. Ct. at 2210)
“No concrete harm, no standing.” (141 S. Ct. at 2215)
Factual background
TransUnion used its OFAC Name Screen product to compare consumers' first and last names against a Treasury Department list of terrorists, drug traffickers, and other serious criminals, generating false-positive alerts. A class of 8,185 consumers alleged that TransUnion failed to use reasonable procedures to ensure accuracy and violated statutory disclosure and summary-of-rights requirements. Only 1,853 class members had credit reports containing the alerts disseminated to third-party businesses during the relevant seven-month period; the other 6,332 had alerts retained only in internal files. The class members also received mailings that separated or omitted required information, although the record showed concrete harm from those formatting defects only for named plaintiff Ramirez.
Procedural history
The Northern District of California certified a class of 8,185 consumers, ruled that all class members had Article III standing, and entered judgment after a jury verdict for the plaintiffs. The Ninth Circuit affirmed in relevant part, holding that all class members had standing on all three claims, while reducing the punitive-damages award. The Supreme Court reversed and remanded, concluding that only some class members had standing and leaving class-certification issues for the Ninth Circuit to consider in the first instance.
Remand instructions
Remand for further proceedings consistent with the standing ruling. The Ninth Circuit may consider in the first instance whether class certification is appropriate in light of the conclusion that only 1,853 class members had standing on the reasonable-procedures claim and only Ramirez had standing on the two mailing claims.