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January 08, 2021 Practice Points

SCOTUS to Review Ninth Circuit Holding on Injury Standards for Class Members to Establish Standing

The Court granted certiorari to consider “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.”

By David Singh and Neeckaun Irani


In Ramirez v. TransUnion LLC, a 2–1 Ninth Circuit panel held that all Rule 23 class members must have Article III standing at final judgment to recover monetary damages. Although the Ninth Circuit has made similar determinations at earlier stages of litigation, Ramirez marked the first time the Ninth Circuit has addressed the issue at the final judgment stage.

TransUnion is an American consumer credit reporting agency which collects and aggregates information on over a billion consumers in over thirty countries. In the early 2000s, TransUnion began a program which matched names of persons to the United States government’s list of Specially Designated Nationals (SDN). SDNs include terrorists, drug traffickers, and others with whom persons in the United States are prohibited from doing business pursuant to the Treasury Department’s Office of Foreign Assets Control (OFAC) regulations. TransUnion began this matching program in order to help businesses avoid penalties resulting from engaging in business with SDNs.

At the request of the named plaintiff, Sergio Ramirez, a car dealership obtained Mr. Ramirez’s TransUnion credit report. The dealership told Ramirez they would not sell him a car because the report indicated he was on a terrorism watch list. Mr. Ramirez, on behalf of himself and a putative class, filed suit alleging TransUnion violated the Fair Credit Reporting Act (FCRA) by placing false OFAC alerts on consumers’ credit reports and later sending misleading and incomplete disclosures about the alerts.

The United States District Court for the Northern District of California certified a class of “all natural persons in the United States . . . to whom Trans Union sent a [similar letter to that of Ramirez] . . . regarding the [OFAC Database].” This class definition resulted in a putative class of 8,000 individuals who alleged they had improperly been listed with terrorist-type alerts. The class was certified and a jury trial returned a verdict in the Plaintiffs favor for over $60 million in statutory and punitive damages for three willful violations of the statute.

TransUnion moved for judgment as a matter of law, or in the alternative, for a new trial, remittitur, or an amended judgment. The district court denied the motion. TransUnion appealed to the Ninth Circuit. Among other things, TransUnion argued that not all class members had standing because not all class members actually had their credit reports disclosed.

Although the Ninth Circuit agreed with TransUnion in principle that all class members must satisfy Article III standing requirements at the final judgment stage, it found that that the evidence established that all class members had standing. Specifically, the Ninth Circuit found the class members had suffered a concrete injury because (1) of the severity and nature of the inaccuracy, (2) the risk of sharing the information with its third-party vendor which was made worse by TransUnion’s failure to follow its normal data storage procedures, and (3) the reports were easily available to potential creditors or employers at a moment’s notice, even without the consumers’ knowledge in some instances. The Ninth Circuit held that, although not all class members actually had their credit reports disclosed to third parties, the statutory violations and material risk of disclosure were sufficient to establish a concrete injury-in-fact sufficient for Article III standing purposes.

SCOTUS Grants TransUnion’s Petition for Certiorari

On June 24, 2020, the Ninth Circuit granted a motion to stay their mandate pending TransUnion’s petition for a writ of certiorari to the Supreme Court. On September 2, 2020, TransUnion filed its petition requesting that the Supreme Court consider two questions:

  1. 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.
  2. Whether a punitive damages award that is multiple times greater than an already substantial classwide award of statutory damages and is orders of magnitude larger than any actual proven injury, violates due process.

In its petition, TransUnion argued that the “mere receipt of the ‘potential match’ mailing” should not have given every class member standing. TransUnion noted Ramirez did not even attempt to establish that the class members had read the letter, let alone establish any type of subsequent suffered harm. Moreover, “while having an inaccurate report actually sent to a potential creditor certainly could hinder someone in obtaining credit, that could happen only if a report was actually disseminated to a third party—which concededly did not occur for more than 75% of the class.” TransUnion argued that the only “harm” for the vast majority of the class, albeit insufficient to establish a justiciable concrete injury, was the potential to open the mailing and being “shock[ed] and confus[ed].”

TransUnion further emphasized that the Ninth Circuit’s decision created a “roadmap for abuse” of statutory damages provisions and the class action device. Specifically, TransUnion highlighted the potential for abuse where statutory damages cases, which often lack a cap on defendant’s liability, can “obviate the need to prove compensatory damages, which tend to be individualized and thus less suited to class treatment.” Thus, leading many defendants to consider it economically prudent to settle rather than litigating valid defenses.

On December 16, 2020, the Supreme Court granted certiorari limited only to question 1.


In Spokeo v. Robins, 136 S. Ct. 1540 (2016), the Supreme Court held that Article III standing requires a concrete injury and that an allegation of a violation of a statutory right is insufficient injury to qualify for standing. However, since Spokeo, dozens of federal courts have often inconsistently applied the Supreme Court’s reasoning in determining what degree of harm, or threat or likelihood of harm, is sufficient to be deemed concrete. Ramirez marks the latest decision in the evolution of Article III standing requirements in the class action context post-Spokeo. The Ninth Circuit chartered new waters by holding that, although early in a litigation, such as at the motion to dismiss stage, only the named plaintiff needs to establish Article III standing, every class member needs standing to recover damages at the final judgment stage. For the first time, the Supreme Court (which now has three different justices since Spokeo) will consider the application of Spokeo to an entire class. Moreover, the Supreme Court will continue to provide clarity on the contours of class-wide liability and how “representative” a named plaintiff must be.

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David Singh is a partner and Neeckaun Irani is an associate at Weil, Gotshal & Manges LLP in Silicon Valley, California.

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