WASHINGTON — The Supreme Court has issued a ruling limiting the scope of a class-action lawsuit against credit reporting company TransUnion related to errors in identifying consumers who might be on terrorism watch lists.
In a 5-to-4 decision, the majority said some of the members of the class whose credit reports falsely tied them to wrongdoing had not suffered concrete injuries giving them standing to sue, notwithstanding a federal law authorizing such lawsuits.
The case, TransUnion LLC v. Ramirez, began when Sergio Ramirez visited a Nissan showroom in California to buy a car, but after the dealership ran a credit check it found his TransUnion credit report said his name matched one on a Treasury Department watch list of terrorists, drug traffickers and other criminals. The dealership declined to sell the vehicle to Ramirez, and instead his wife bought it in her name.
The Allegations
Ramirez filed a class action, arguing TransUnion had violated the Fair Credit Reporting Act, which authorizes lawsuits when agencies fail to “follow reasonable procedures to assure maximum possible accuracy” in their reports.
Ramirez further argued TransUnion had done no more than to match first and last names, meaning that people with common names were often falsely associated with criminal conduct. Justice Clarence Thomas, who joined the dissent, noted that even after an earlier suit over a similar incident the company did not take obvious steps to ensure the accuracy of its reports.
“It did not begin comparing birth dates,” he wrote. “Or middle initials. Or citizenship. In fact, TransUnion did not compare any new piece of information. Instead, it hedged its language saying a consumer was a ‘potential match’ rather than saying the person was a ‘match.’”
Class of More Than 8,000
Ramirez represented a class of 8,185 people whose credit reports included misleading information. A jury has earlier awarded the class more than $60 million, a sum reduced to $40 million by a federal appeals court.
But the majority wrote that only the 1,853 class members whose credit reports were actually provided to businesses were entitled to sue. The others had not suffered the required “concrete harm,” the opinion read.
Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito Jr., Neil M. Gorsuch and Amy Coney Barrett joined the majority opinion in the case.