Frank Cruz-Alvarez is a Partner with Shook, Hardy & Bacon L.L.P. in the firm’s Miami, FL office, and Britta Stamps is an Associate in the firm’s Kansas City, Mo office. Mr. Cruz-Alvarez is the WLF Legal Pulse’s Featured Expert Contributor on Civil Justice/Class Actions.


The Supreme Court will soon decide whether unnamed class members who suffered no actual injury have standing to recover for claims of statutory violations of the Fair Credit Reporting Act (“FCRA”). Following the Ninth Circuit’s decision to affirm Trans Union LLC v. Ramirez, TransUnion asked the high court to weigh in on class action standing and punitive damages issues.  While focused on violations of FCRA, this case could have far-reaching implications for class action practitioners.

In the underlying case, plaintiff Sergio Ramirez went to a car dealership with his wife and father-in-law to purchase a vehicle.  But when the dealership ran a credit report on Ramirez, the credit report indicated that Ramirez’s name matched a name on the Treasury Department’s Office of Foreign Assets Control (“OFAC”) list of people with whom U.S. companies cannot do business. As a result, Ramirez’s wife purchased the vehicle instead of Ramirez, Ramirez was embarrassed in front of his family, and he canceled an upcoming trip to Mexico. Ramirez soon contacted TransUnion about the OFAC list “match” on his credit report. He then received two separate mailings from TransUnion, one of which indicated that his name was a “potential match” to a name on the OFAC list and advised him to contact TransUnion with any questions. After Ramirez again contacted TransUnion about the potential match, the OFAC alert was excluded from all future TransUnion credit reports for Ramirez.

Ramirez sued TransUnion, alleging violations of FCRA because TransUnion failed to ensure the maximum possible accuracy of the information in its credit reports, failed to provide consumers with all information in their files upon request, and provided the OFAC list information in a letter sent separately from his credit file.  Ramirez sought statutory and punitive damages on behalf of himself and a class that included everyone who received a letter during the class period from TransUnion indicating their name was a potential match to one on the OFAC list.

The district court certified the class over objections that the absent class members lacked standing and that Ramirez was not typical of the class.  Following the Supreme Court’s decision in Spokeo Inc. v. Robins (also an FCRA case), TransUnion unsuccessfully moved to decertify the class. In a rare example of a class action going to trial, the case proceeded to a jury trial and ended with a verdict overwhelmingly in favor of Ramirez and the class.  The jury not only found for the class on all claims, but awarded each class member $984.22 in statutory damages and an additional $6,353.09 in punitive damages. To put those figures in perspective, the statutory damages were barely $15.00 shy of the $1,000 maximum statutory damages allowed under FCRA, and the punitive damages totaled approximately 6.5 times the statutory damages. In sum, the total verdict amounted to over $60 million.

On appeal, the Ninth Circuit affirmed almost all aspects of the case. Finding the punitive damages amount to be unconstitutionally excessive, the Ninth Circuit reduced the award from the 6.5:1 ratio of punitive damages to statutory damages down to a 4:1 ratio. But the majority held that every class member had standing, and affirmed the remainder of the damages awarded to the class. Judge McKeown’s dissent points out the inconsistencies between the majority’s conclusion on standing and Supreme Court precedent, which TransUnion leveraged in its cert petition to convince the Supreme Court to clarify the issue.  

TransUnion asked the Supreme Court to consider two questions: (1) “[w]hether 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”; and (2) [w]hether a punitive damages award that is multiple times greater than an already-substantial classwide award of statutory damages, and is orders of magnitude larger than any actual proven injury, violates due process.” While the Supreme Court chose to consider the first question presented, it declined to take up the punitive damages issue. Class action defendants will have to wait for another opportunity to convince the Supreme Court to cap punitive damages in class actions.

Since the 2016 Spokeo decision, class action defendants across the country have urged courts to apply Spokeo’s requirement that a class member’s injury be both “concrete and particularized” in order for Article III standing to exist.  As TransUnion pointed out, other appellate courts have held that individuals who never had their credit report information disseminated to third parties cannot establish standing under Article III based on the bare fact that a credit reporting agency’s database contained inaccurate information.  See, e.g., Owner-Operator Indep. Drivers Ass’n, Inc. v. U.S. Dep’t of Transp. 879 F.3d 339 (D.C. Cir. 2018); Gubala v. Time Warner Cable, Inc., 846 F.3d 909 (7th Cir. 2017); Braitberg v. Charter Commc’ns, Inc., 836 F.3d 925 (8th Cir. 2016). And where consumers received a report containing inaccurate information but suffered no other impact, other circuits have rejected attempts to certify a similar class. See, e.g., Flecha v. Medicredit, Inc., 946 F.3d 762 (5th Cir. 2020); Huff v. TeleCheck Servs., Inc., 923 F.3d 458 (6th Cir. 2019); Dreher v. Experian Info. Sols., Inc., 856 F.3d 337, 347 (4th Cir. 2017). This circuit split created the perfect storm for the Supreme Court to grant cert and settle the issue.  

Specific to the FCRA, TransUnion emphasized in its cert petition that Ramirez stipulated that less than 25% of the 8,814 class members had their credit report disseminated to a third party during the class period, and offered no evidence that any other class member was impacted by the OFAC alert. Those class members may not have even opened the letter from TransUnion, much less suffered any further injury beyond the bare statutory violation. But this case could reach other statutory violations beyond the FCRA. It is easy to imagine a number of statutes under which many – or all – absent class members suffer no actual injury from a violation. One such recent example is the Eleventh Circuit’s decision in Muransky v. Godiva Chocolatier, Inc. (we wrote about that decision for WLF here), which held that a Fair and Accurate Credit Transaction Act violation, without more, did not confer standing to certify a class alleging statutory violations. Whether the high court chooses to extend any ruling beyond the FCRA remains to be seen, but TransUnion’s cert petition subtly invites a decision applicable to statutory violations beyond strictly the FCRA.

The U.S. Chamber of Commerce supported TransUnion’s cert petition as an amicus, describing the case as an opportunity for the Supreme Court to put an end to the popular strategy of seeking big settlements from defendants on behalf of large classes who experienced a statutory violation but no cognizable injury. On the other side, Ramirez’s counsel James Francis hopes the high court takes this chance to highlight the serious and widespread injuries consumers face when credit reporting agencies violate the FCRA. But the addition of Justices Brett Kavanaugh and Amy Coney Barrett since Spokeo’s more narrow ruling may signal good news for class action defendants. Longtime Supreme Court advocate Paul Clement is set to argue this case on behalf of TransUnion, teeing up what is sure to be one of the more exciting class action cases the Supreme Court has considered in several years.