TransUnion LLC v. Ramirez

Background

A group of 8,185 people sued TransUnion, a major credit reporting company. TransUnion used an OFAC Name Screen product that flagged people as “potential match” to names on a U.S. government list of terrorists and serious criminals by comparing only first and last names. The class said those alerts were misleading. The parties agreed that for a seven-month window TransUnion sent the misleading report to third parties for 1,853 class members but not for the other 6,332 people. A jury awarded statutory and punitive damages.

Reasoning

The Supreme Court said people must show a concrete harm to bring a federal damages claim. The Court tied that requirement to harms long recognized by courts, like reputational injury from publishing a false statement. The 1,853 class members who had misleading OFAC alerts actually sent to third parties suffered reputational harm and therefore can sue for damages. But the remaining 6,332 people had the alerts only in internal files and did not show a concrete injury. The Court also held that a mere risk that the files might be shared later does not prove a damages claim. Formatting errors in TransUnion’s mailings did not show harm for most class members.

Real world impact

The decision narrows who can get money in federal court for mistakes by credit reporting companies. Consumers whose misleading reports were actually shared with third parties can seek damages, but people with incorrect information only in internal files generally cannot. Companies may face fewer large class damages claims unless dissemination is shown. The ruling sends the case back to the Ninth Circuit for further proceedings about class certification and damages.

Dissents or concurrances

Some Justices disagreed, saying Congress had created private rights and that the misleading OFAC alerts and the real risk of harm were enough for damages, so most class members should have had standing.