On Friday morning, the Supreme Court issued its eagerly awaited opinion in TransUnion LLC v. Ramirez (No. 20-297). Justice Kavanaugh delivered the opinion of the Court, with which four Justices concurred; Justices Thomas, Breyer, Sotomayor, and Kagan dissented.

As we previously reported here, the Supreme Court granted a writ of certiorari in Ramirez to review the question of “[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.” The litigation arose when the named plaintiff submitted a credit application to a car dealership. The 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. Ramirez alleged that this erroneous report violated the Fair Credit Reporting Act (FCRA) and caused him a concrete and personalized injury, including in the form of personal embarrassment. The Ninth Circuit affirmed the district court’s class certification order and the jury’s resulting judgment in favor of the class.

At oral argument on March 30, 2021, TransUnion focused 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 the recipients of file disclosures, conveyed privately to each of them, that reflected allegedly inaccurate OFAC matches. Those matches were never reported by TransUnion to any third parties (i.e., banks, car dealerships, or employers).

The Court’s landmark opinion clarifies that “an asserted informational injury that causes no adverse effects does not satisfy Article III” and that “[a]n injury in law is not an injury in fact.” Simply stated, “[no] concrete harm, no standing.” Of the 8,185 class members on behalf of whom the section 1681e(b) (inaccurate reporting) claim was pursued, the Court held that only the 1,853 whose reports were actually provided to end users had standing to sue for alleged inaccuracies in the reporting of OFAC information. The remaining 6,332 class members whose reports were never disseminated to third parties lacked standing to sue because they suffered no concrete harm. Despite the fact that there may be a statutory violation of FCRA, the Court held,“[t]he mere presence of an inaccuracy in an internal credit file, if it is not disclosed to a third party, causes no concrete harm. […] A letter that is not sent does not harm anyone, no matter how insulting the letter is. So too here.”

The Court rejected Ramirez’s argument that inaccurate information in TransUnion’s database presented a concrete “risk of future harm” for which relief was available. The Court also rejected Ramirez’s novel argument that TransUnion had “published” class members’ reports internally to TransUnion employees in such a manner that would confer standing to those individuals whose reports were not provided to end users.

As to Plaintiff’s section 1681g claim, concerning the format of TransUnion’s private file disclosures to class members, the Court found that no class member other than Ramirez had standing to pursue relief because there was no evidence that any of them had suffered a concrete harm. In so holding, the Court suggested that Ramirez failed to meet his burden of demonstrating that any class member had even opened the envelopes containing the disclosures, much less suffered any harm as a result of their transmittal and receipt.

The Court closed by reversing the judgment of the Ninth Circuit, remanding the case for further proceedings and expressly calling into question whether certification of any class was appropriately granted in the first place: “On remand, the Ninth Circuit may consider in the first instance whether class certification is appropriate in light of our conclusion about standing.”

Beyond its clear application to cases brought under the Fair Credit Reporting Act, this decision has important ramifications for Article III standing, as well as related class certification issues, across the spectrum of consumer protection and privacy-related lawsuits.

For one, the Supreme Court continues to build on its guidance from Spokeo v. Robins, 136 S. Ct. 1540 (discussed here) by further clarifying that a plaintiff cannot rely on an alleged technical violation of a federal statute as a substitute for actual, concrete harm. The Court highlighted the distinction between “Congress’s creation of a statutory prohibition or obligation” and Article III’s distinct injury-in-fact requirement for standing, explaining that federal courts have a “responsibility to independently decide whether a plaintiff has suffered a concrete harm under Article III[.]” Here, the 6,332 class members whose reports were never disseminated to third parties did not suffer a concrete harm and therefore lacked Article III standing.

Although the Court did not officially vacate the lower court’s class certification decision or reach the Rule 23 issues presented by the parties, this decision also suggests that class certification is not appropriate where the class representative has failed to satisfy his or her burden as to commonality and typicality of the injuries allegedly suffered by the class representative and each class member. This is especially true where the injuries alleged to have been suffered by the class representative are dissimilar to those of the majority of the class.

Finally, this decision underscores that “[e]very class member must have Article III standing in order to recover individual damages,” and that a class representative cannot rely on a series of mere inferences to support a finding of concrete harm.