Today, the United States Supreme Court granted a writ of certiorari in Trans Union LLC v. Ramirez. At issue is an eight-figure judgment obtained by a certified class of consumers for statutory and punitive damages based on violations of the Fair Credit Reporting Act (“FCRA”), which was upheld by a divided Ninth Circuit panel. The Supreme Court’s order accepts the following Question Presented for review: “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.”

The litigation arises out of the named plaintiff’s car shopping experience. When Ramirez submitted a credit application, the car dealership allegedly received an erroneous alert from a consumer reporting agency indicating that Ramirez matched with the Treasury Department’s Office of Foreign Assets Control (“OFAC”) database—a list of individuals with whom American businesses are forbidden to transact. In his ensuing lawsuit, Ramirez alleged that this erroneous report violated the FCRA and caused him a concrete and personalized injury, including in the form of personal embarrassment in front of his wife and father-in-law at the dealership.   

At issue is the Ninth Circuit’s affirmance of the district court’s class certification order and the jury’s resulting judgment in favor of the class. The defendant’s argument focuses on the fact that the certified class was not limited to consumers who (like Ramirez) had inaccurate OFAC information disseminated to potential lenders. Instead, a majority of class members were recipients of file disclosures, conveyed privately to each of them, that reflected inaccurate OFAC matches.  Their OFAC matches were never reported to any third parties.

In its petition for a writ of certiorari, the defendant argued that absent class members who did not experience a public disclosure of their inaccurate credit information lack standing, as reflected in the D.C. Circuit’s decision in Owner-Operator Indep. Drivers Ass’n, Inc. v. U.S. Dep’t of Transp., 879 F.3d 339 (D.C. Cir. 2018). In addition, the defendant asserted that allowing these “uninjured” absent class members to be part of the class was improper because Ramirez’s claim was not “typical” of the class.  In the defendant’s view, and inconsistent with Rule 23’s class certification requirements, “the Ninth Circuit found no problem with a trial focused on Ramirez’s ‘unique circumstances’ to the exclusion of any ‘story of the absent class members.’” Pet. at 3.

The Supreme Court declined to take up a second question presented related to due process and excessive punitive damages. But the Supreme Court’s grant of certiorari on the first question presented sets up what may prove to be a seminal opinion on class action procedure, both for purposes of the Article III standing of absent class members and Rule 23’s class certification standards. We will continue to report on the case here as it proceeds before the Supreme Court.