WASHINGTON (Reuters) – The US Supreme Court on Tuesday signaled that it could narrow the scope of a class action lawsuit against TransUnion in which thousands of people sought damages after the credit bureau’s names match those on a government list of suspected terrorists and individuals had marked drug dealers.
FILE PHOTO: A general view shows the entrance doors of the US Supreme Court building in Washington, the United States, Nov. 4, 2020. REUTERS / Jonathan Ernst
The judges heard arguments in TransUnion’s appeal against a lower court ruling that upheld a jury’s verdict against the Chicago-based company in a class action lawsuit ordering it to pay $ 40 million in damages. Credit bureaus provide lenders and other businesses with information about a person’s borrowing and billing history.
The legal question before the Supreme Court is whether the lawsuit, which centered on a federal law called the Fair Credit Reporting Act, required consumer reporting agencies to provide correct information, should ever have been certified as a class action lawsuit. The case gives judges an opportunity to further downgrade class actions by demanding stricter criteria for plaintiffs to join, a goal of the business community.
The lead plaintiff, a Californian man named Sergio Ramirez, and other consumers have been mistakenly identified as potential security threats by TransUnion.
During the arguments, some judges said there was insufficient evidence that all class members suffered a “specific injury” as was required when filing such a lawsuit. There were 8,185 class members in the lawsuit whose names matched names on the government list. At the trial, it was only found that TransUnion had publicly disclosed this information on 1,853 of them.
“I think you have a good argument about the 1,853 … but I’m more concerned about 6,632 whose information has essentially not been published,” Conservative Judge Brett Kavanaugh told plaintiffs’ attorney Samuel Issacharoff.
Conservative Justice Samuel Alito questioned TransUnion attorney Paul Clement about his claim that no harm was done to most of the class.
“The class members whose information has been shared with others must have been cause for concern, haven’t they?” Asked Alito.
The judges could potentially send the case back to the lower courts for further litigation over how many plaintiffs could potentially seek damages.
Ramirez sued in federal court in 2012 after an incident the previous year at a Nissan dealership. When the dealership conducted a credit check with TransUnion, the report found that Ramirez’s name partially matched two names on a federal government list of people banned from doing business in the United States due to national security concerns. Ramirez was not a person.
Although his wife was able to purchase a vehicle, Ramirez said he was embarrassed and shocked and canceled an overseas vacation due to concerns about the list. After TransUnion requested a copy of his credit file, it sent him a separate mailing noting that his name matched two on the list.
The lawsuit found that the mailing mentioning the game incorrectly stated that such notification was not part of the actual credit report that creditors or employers would see if it were actually part of it.
TransUnion argued that simply sending the mailings does not constitute a specific violation.
A jury awarded approximately $ 60 million in damages to the entire class in 2017, including punitive damages of $ 52 million. The San Francisco-based 9th U.S. Court of Appeals upheld the jury’s verdict in 2020, but reduced the damage to about $ 40 million.
The business community has long sought to contain class action lawsuits, which can result in large payouts to plaintiffs and their attorneys. In this case, TransUnion is supported by various groups of companies such as the US Chamber of Commerce as well as companies such as The Home Depot Inc, eBay Inc, Facebook Inc and Google from Alphabet Inc.
Reporting by Lawrence Hurley; Adaptation by Will Dunham