Today’s post looks at standing and the recent US Supreme Court decision in Transunion v. Ramirez, No. 20–297 (U.S. Decided June 25, 2021). The case arose out of the Fair Credit Reporting Act which regulates the consumer reporting agencies and also creates a cause of action for consumers to sue and recover damages for certain violations.  Defendant below is a credit reporting agency that in 2002 began offering an add-on product called
Name Screen Alert. When a business subscribed, TransUnion would conduct its ordinary credit check of the consumer, and it would also use third-party software to compare the consumer’s name against a list maintained by the federal government of terrorists, drug traffickers, and other serious criminals. If the consumer’s first and last name matched the first and last name of an individual on OFAC’s list, the Court noted that TransUnion would place an alert on the credit report.  The company did not compare information other than names, and would indicate that the consumer’s name was only  a “potential match.”

A putative class sued alleging the company failed to use reasonable procedures to ensure the accuracy of their credit files because of this Screen Alert.  The class included members whose information was given to third parties and members whose credit reports were not given to others.  The District Court ruled that all class members had Article III standing on each of the  statutory claims. The jury returned a verdict for the plaintiffs and awarded each class member statutory damages and punitive damages. A divided panel of the Ninth Circuit affirmed in relevant part.

The standing issue loomed large.  Article III confines the federal judicial power to the resolution of “Cases” and “Controversies” in which a plaintiff has a “personal stake.” Raines v. Byrd, 521 U. S. 811, 819–820. To have Article III standing to sue in federal court, a plaintiff must show, among other things, that the plaintiff suffered concrete injury in fact. Lujan v. Defenders of Wildlife, 504 U. S. 555, 560–561. And in a discussion of potentially great significance, the Court offered some guidance on what injury counts as a “concrete harm.” Central to assessing concreteness is whether the asserted harm has a “close relationship” to a harm “traditionally” recognized as providing a basis for a lawsuit in American courts. Spokeo, Inc. v. Robins, 578 U. S. 330, 340. That inquiry asks whether plaintiffs have identified a close historical or common-law analogue for their asserted injury. Physical or monetary harms readily qualify as concrete injuries under Article III, and various intangible harms—like reputational harms—can also be concrete.

Importantly, the Court noted that Article III standing requires a concrete injury even in the context of an alleged statutory violation.  The Court thus again rejected the proposition that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. The majority thus rejected Justice Thomas’ view (seen in a sprinkling of lower court opinions) that injury in law is an injury in fact. The Court recognized a difference between a statutory cause of action to sue a defendant over the defendant’s alleged violation of federal law, and the plaintiff’s suffering concrete harm because of the defendant’s violation of federal law. Article III grants federal courts the power to redress harms that defendants cause plaintiffs, not a freewheeling power to hold defendants accountable for legal infractions.

Applying that reasoning to the class claims, the Court had no trouble concluding that the 1,853 class members whose credit reports were given to others suffered a concrete harm that qualifies as an injury in fact.  As to the other 6332 class members, the mere existence of inaccurate information, absent dissemination, traditionally has not provided the basis for a lawsuit in American courts. The plaintiffs cannot demonstrate that the misleading information in the internal credit files itself constitutes a concrete harm.  As to the “risk” that the information could be disseminated in the future, while material risk of future harm can satisfy the concrete-harm requirement in the context of a claim for injunctive relief to prevent the harm from occurring, at least so long as the risk of harm is sufficiently imminent and substantial, see Spokeo, 578 U. S., at 341–342, here the mere risk of future harm, without more, cannot qualify as a concrete harm in a suit for damages. The 6,332 plaintiffs did not demonstrate that the risk of future harm materialized. Nor did those plaintiffs present evidence that the class members were independently harmed by their exposure to the risk itself. The risk of future harm did not supply the basis for standing.

The Court had no occasion to address whether and when such plaintiffs may sue in state courts, and also declined to address typicality under Rule 23, noting that, “In light of our conclusion about Article III standing, we need not decide whether Ramirez’s claims were typical of the claims of the class under Rule 23.” However, the Court did direct that on remand, the Ninth Circuit may consider in the first instance whether class certification is appropriate in light of  the conclusion about standing.  And it clearly is not appropriate.  The majority has made clear that every class member needs to establish Article III standing for every claim made and every remedy sought. Mere risks of future injuries may not be concrete enough for Article III standing for damages claims. And these have clear implications for typicality and for the predominance of individual issues.