Opinion analysis

Supreme Court Friday Significantly narrowed class actions against TransUnion, One of the top three credit reporting companies in the country. The court ruled by 5 votes to 4 that approximately 1,800 people whose personal information was provided to others have the legal right to sue them for claiming that TransUnion failed to follow due process, but the information of approximately 6,000 other people were not disclosed. The ruling will significantly reduce the $40 million judgment against TransUnion, which is also a victory for the wider business community because it may further restrict class actions under consumer protection law: the court made it clear that even if Congress has The cause of action, the mere fact of violating the law does not alone provide the right to sue in federal court.

Friday’s ruling TransUnion v Ramirez When Sergio Ramirez, a Californian, tried to buy a car, a dispute occurred. The car dealer conducted a credit check, and the result falsely indicated that Ramirez was on the list of suspected terrorists with whom the American company was prohibited from doing business. When Ramirez later followed up with TransUnion, which provided credit reports, TransUnion once again sent two emails to Ramirez, indicating that his name “potentially matches” with the two names on the terrorist watch list. Ramirez argued that these emails did not comply with the “Fair Credit Reporting Act.”

Ramirez went to federal court where he sued TransUnion on behalf of approximately 8,000 other consumers who were identified as potential matches and received a similar set of emails within six months of 2011. The jury sided with consumers and ordered TransUnion to pay more than $60 million in damages, but the Federal Court of Appeals later reduced the verdict to $40 million. TransUnion argued that the case should not be allowed to proceed as a class action because there is no guarantee that every class member will suffer the kind of harm required by the constitution to bring a lawsuit, but the lower court rejected this argument and the Supreme Court agreed to accept it last year. case.

Justice Brett Kavanaugh emphasized when writing for the majority that the constitution requires that the plaintiff who filed a lawsuit in the federal court has a “personal interest” in this case. He explained that in order to prove such an interest, the plaintiff must prove the injury “caused by the defendant and remedied by the court”. Kavanaugh went on to say that such a requirement guarantees that the court will only deal with “real disputes that have a real impact on real people.” Kavanaugh pointed out that there are different types of injuries that can constitute the specific injuries needed to “stand up”-that is, the legal right to sue. Kavanaugh observed that physical and financial injuries are the most common and obvious injuries, but intangible injuries, such as damage to the plaintiff’s reputation or disclosure of private information, are also eligible.

Although Congress sometimes passes regulations to give someone “reasons for litigation” when violating federal laws, Kavanaugh writes that this alone is not sufficient to give the plaintiff the right to file a lawsuit in federal court. “Only those already Specific injury Kavanaugh emphasized that if the defendant violates statutory regulations, the private defendant may be sued in federal court for the violation. Kavanaugh believes that the opposite conclusion would interfere with the Constitution’s separation of powers in two ways: it would violate the court’s requirement to resolve only actual “cases” and “disputes,” and it would interfere with the executive branch’s decision on when and how to implement federal laws.

Kavanaugh then turned to the plaintiff’s claims in this case. As he said, TransUnion did not do enough to ensure that “the alert that marked them as potential terrorists was not included in their credit file”. Kavanaugh wrote that assuming that the plaintiff was right that TransUnion was not doing enough, the 1,853 members whose credit reports had actually been sent to the company suffered the kind of specific harm that gave them the right to sue. However, Kavanaugh went on to say that the other 6,332 class members were not harmed in this way. During the dispute in this lawsuit, TransUnion did not send their credit information to anyone, and the inaccurate information in the internal files of the class members will not bring them the kind of specific harm of the right to sue.

The court concluded that, with the exception of Ramirez, none of the plaintiffs had the right to sue for the other two claims for damages because they believed that the format of the email sent to them by TransUnion was incorrect and therefore violated federal law. . Cavano emphasized that apart from Ramirez, no other plaintiffs indicated that they even opened the email, let alone suffered harm.

In view of Friday’s ruling, the court sent the case back to the lower court for new proceedings. Kavanaugh suggested that, among other things, the lower courts may consider whether it is appropriate to proceed with the case as a class action “according to our conclusion on the status of the litigation.”

Justice Clarence Thomas opposed, Justice Stephen Breyer, Justice Sonia Sotomayor, and Justice Elena Kagan also disagreed. “Although Congress believes that such misconduct should be corrected, most people believe that TransUnion’s behavior is so insignificant that the Constitution prohibits consumers from defending their rights in federal court,” Thomas lamented. “The Constitution does not have such a thing.” In fact, Thomas believes that the court has long held that damage to “private rights”-such as the rights granted to individuals by law-is sufficient to allow litigation to proceed, and this is what class members are doing. What this case demonstrates: the controversial federal law imposes obligations on consumers on behalf of credit reporting agencies, and these obligations are violated here.

Kagan wrote a separate objection, and Breyer and Sotomayor joined. She complained that most people “transform the current law from the principle of judicial humility to a tool for judicial strengthening”, insisting for the first time that “the specific categories of plaintiffs allowed by Congress to initiate litigation cannot do so under the Constitution.” Kagan pointed out that she disagrees with part of Thomas’ objection: his argument is that as long as the individual rights set by Congress are violated, the plaintiff should have the legal right to sue.Supreme Court ruling Spokeo v Robbins Kagan emphasized that the constitution requires specific injuries. But in practice, she stated that her views “should lead to the same results as Justice Thomas’ method, except for extremely unusual cases.”

This article is Originally published in Howe on the Court.