TransUnion LLC v. Ramirez: “Concrete Harm” Requirement Clarified in Consumer Class Actions

Harris Beach PLLC

On June 25, 2021, the United States Supreme Court issued its decision in TransUnion v. Ramirez, holding that consumer class action claims under the Fair Credit Reporting Act (FCRA) must allege the actual spread of misleading information to third parties in order to establish standing to assert a claim. The decision supplements the Supreme Court’s May 2016 decision, Spokeo, Inc. v. Robbins, further restricting the circumstances where a statutory violation can form the basis for a claim.

Spokeo left open the question of whether the FCRA violation at the center of that case constituted a “concrete” harm, noting only that such a determination should consider whether the alleged injury bears “a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.” In TransUnion, the Supreme Court answered that question, holding (in a 5-4 decision) that a class member who has not suffered a harm similar to those recognized at common law cannot recover damages for a statutory claim. The putative class members in TransUnion fell into two groups: (1) those whose potential status as a national security threat was shared with third parties; and (2) those who were merely flagged in TransUnion’s internal records. The Court concluded that only the former group could demonstrate concrete harm in the form of reputational damage because the transmission of information to potential creditors was similar to the tort of defamation. As to the latter group, the Court specifically rejected the notion that consumers whose information was not shared with third parties had standing to assert a claim based upon a risk of future harm. The Court determined that such potential future harm is too speculative to form the basis for Article III standing.

Like Spokeo, the Supreme Court’s decision in TransUnion has substantial implications for the defense of consumer class action claims outside those created by the FCRA, including class action favorites like the Fair Debt Collections Practices Act (FDCPA) and the Fair and Accurate Credit Transactions Act (FACTA). Courts will now undoubtedly give heightened scrutiny to standing issues in putative class actions predicated upon technical statutory violations. This decision will also significantly impact the analysis at the class-certification stage since it is now clear that the basis for standing must be proven on a class-wide basis. As the dissenting opinion notes, the ruling also has implications that go beyond the scope of Spokeo and could potentially affect claimants under a wide-range of statutory rights created by Congress.

Read the entire Supreme Court decision in TransUnion LLC v. Ramirez.

The attorneys at Harris Beach are prepared to assist business in any matters regarding defending against consumer or class action claims.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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