Supreme Court Addresses Concrete Harm, Limits Standing in FCRA Class Action

On June 25, 2021, the U.S. Supreme Court issued its much-anticipated 5-4 ruling in TransUnion LLC v. Ramirez. With Justice Kavanaugh writing for the majority, the Court reversed and remanded to the Ninth Circuit its decision upholding certification of a class of 8,185 consumers who were mistakenly labeled as potential terrorists and drug traffickers by the credit reporting agency TransUnion in violation of the Fair Credit Reporting Act (FCRA).

While the District Court had certified the class and the Ninth Circuit upheld an award of more than $60 million in statutory and punitive damages, TransUnion challenged the award on the basis that the class lacked constitutional standing under Article III to recover.

The Court had “no trouble” concluding that 1,853 class members suffered “a concrete harm that qualifies as an injury in fact” when they were labeled as terrorists or drug traffickers in reports delivered to third parties. Since these class members suffered a harm that was akin to defamation, their injury was one “traditionally” recognized as providing a basis for a lawsuit in American courts.

However, the Court concluded that the remaining class members whose reports were not provided to third parties could not demonstrate a concrete harm. The Court was persuaded that the mere risk of future harm, without more, could not qualify as concrete injury in a suit for damages, and rejected arguments that the entire class had standing to assert claims that TransUnion’s mailings were formatted incorrectly and thus violated applicable law.

In closing, Justice Kavanaugh distilled centuries of Article III jurisprudence into five words: “No concrete harm, no standing.” This opinion and its accompanying dissents will certainly not be the end of disputes concerning constitutional standing in federal courts, but will absolutely be an obstacle to those who would advocate for expanding our understanding of concrete harm and will also likely result in state legislatures and courts continuing to lead in the development of privacy law in this country.

A more in-depth discussion of the Supreme Court’s recent ruling is available on the firm's class action blog, First Class Defense. For more information on class action and privacy litigation, please contact Melanie ConroyDonald Frederico, or Peter Guffin.