THE SUPREME COURT AND STANDING,
PART II: TRANSUNION
By
Prof. Anthony Michael Sabino
In the opening installment of this two-part article on the Supreme Court’s continuing evolution of standing, we set forth the doctrine’s foundational maxims, including Spokeo v. Robins, and then turned to the first of two fresh landmarks, California v. Texas. Today we analyze TransUnion LLC v. Ramirez, 594 U.S. ___ (No. 20-297) (June 25, 2021), the second of these newest precedents, and the one some might argue (with good reason) is the more significant of the duo.
Law Abiding Citizen
TransUnion’s facts relate a rather pedestrian set of circumstances. Sergio Ramirez and his wife decided to purchase a new car from a Nissan dealership near their California home. As a routine part of the sale, the dealership requisitioned a credit report from TransUnion, one of the “Big Three” credit reporting agencies in the United States. The agency’s printout linked Ramirez to the watch list of terrorists, drug traffickers, and serious criminals maintained by the Treasury Department’s Office of Foreign Asset Control (“OFAC”). Forced to complete the purchase in his spouse’s name, Ramirez subsequently demanded an explanation from TransUnion.
The credit reporting agency first sent Ramirez a copy of his credit report, accompanied by a summary of his legal rights, which he was entitled to under the federal Fair Credit Reporting Act. Yet this initial mailing failed to enclose the faulty OFAC alert. In a subsequent letter, TransUnion enclosed the incorrect special notice, but omitted the required consumer rights summary. Ramirez then commenced suit on behalf of himself and over 8,000 individuals allegedly damaged by similarly defective credit histories. The Ninth Circuit affirmed a jury verdict awarding all the class members monetary relief (albeit after somewhat reducing a punitive damage award), and thereafter the matter came before the Supreme Court for review.
Standing and Separation of Powers
The paramount question before the TransUnion Court was whether or not each and every class member had standing. In order to resolve that issue, the majority almost immediately bifurcated the class into two components. The first subset, including Ramirez, were allegedly victims of erroneous OFAC alerts sent to creditors. The remaining class members, numbering over 6,000, claimed injury from defective credit reports internalized within the credit reporting agency’s database, yet never circulated to third parties.
Writing for the Court, Justice Kavanaugh first expounded on the role of standing in the constitutional scheme. The doctrine’s purpose, he explained, is to restrict the federal judicial power to resolving only actual cases and controversies. See U.S. Const., Art. III, sec. 2. The majority succinctly pronounced that federal courts are confined to adjudicating only real controversies with real impact on real persons. Moreover, throughout every phase of litigation, plaintiffs must maintain a personal stake in the outcome.
As established by a legion of high Court precedents, most especially Spokeo, complainants must demonstrate that they have suffered a concrete, particularized injury, that the defendant is the likely cause of that harm, and that the injury can be judicially redressed. And as to what injuries can be most readily categorized as concrete, TransUnion postulated that traditional physical and monetary harms are the most obvious, while certain intangible injuries, such as reputational harm and privacy violations, might also qualify.
Here the high tribunal drove home the following imperative: separation of powers not only animates the maxims of standing, it likewise requires federal judges to respect legislation promulgating statutory prohibitions, and their accompanying enforcement mechanisms. Notably, a cogent parenthetical commented Congress has made that task more arduous over the last five decades, for reason of the legislators’ proclivity to enact “many novel and expansive causes of action.”
Notwithstanding any judicial deference to legislative prerogatives, Justice Kavanaugh explains that separation of powers does not authorize Congress to “simply enact an injury into existence, using its lawmaking power to transform something that is not remotely harmful into something that is.” Left unrestrained, “Congress could authorize virtually any citizen to bring a statutory damages suit against virtually any defendant who violated virtually any federal law.” Such an “expansive understanding of Article III would flout constitutional text, history, and precedent,” usurp the Executive Branch’s discretion as to what violations to prioritize and which lawbreakers to pursue, and, finally, empower unharmed parties and their attorneys to bring suit, a prospect to be avoided, indicated the majority, since private litigants are not accountable to the people, and, unlike elected officials, are not motivated to serve the public good.
TransUnion unequivocally proclaimed that the federal courts remain obligated to “independently decide whether a plaintiff has suffered a concrete harm under Article III.” In sum, the high Court reiterated that an injury in law is not an injury in fact, and, therefore, it remains the obligation of each and every plaintiff in a particular action to demonstrate concrete harm.
A Class Without Standing
Returning to the case at bar, Justice Kavanaugh first reminds that standing is not dispensed in gross; rather, in a class action such as the matter at hand, each putative plaintiff “must maintain a personal stake in the dispute at all stages of the litigation.” Satisfying that mandate posed “no trouble” for the subgroup of plaintiffs, typified by Ramirez, whose credit reports, including erroneous OFAC alerts, were put in the hands of various businesses. Their harm was closely analogous to the well-known tort of defamation, and thus sufficiently concrete to bestow standing.
But for the other, over 6,000 class members, the majority opined they are “a different story.” Their credit readouts, while fraught with misleading OFAC alerts, were never disseminated to potential creditors. With defamation again serving as a touchstone, Justice Kavanaugh concluded that the “mere presence of an inaccuracy in an internal credit file, if it is not disclosed to a third party, causes no concrete harm.” The high Court accordingly ruled that this subclass, comprising some two-thirds of the plaintiffs, lacked standing.
Now turning to certain additional causes of action, advanced on the basis of the deficient second mailings the credit reporting agency routed to Ramirez and his fellows, the majority handily disposed of those claims by once more differentiating the class members. For those, like Ramirez, who had actually ready TransUnion’s defective correspondence, the harm inflicted upon those plaintiffs was concrete enough to earn them standing. In sharp contradistinction, the other 6,000-plus class denizens failed to demonstrate concrete injury, for reason that they had “presented no evidence” they had so much as opened the envelopes containing the second notifications, much less read them. Quoting directly from Spokeo, the supreme bench held fast to its maxims that Article III standing does not flow from bare procedural violations, untethered from concrete harm.
For its summation, TransUnion reiterated its core holdings: Ramirez and approximately one-third of his class fellows had demonstrated concrete harm, and, thereby, standing, each rooted in the credit reporting agency’s issuance of mistaken special alerts to third parties; the remaining two-thirds of the class, being unable to show cognizable injury, had failed to satisfy standing’s prerequisites. And in a pithy turn of phrase, sure to resonate for years to come, Justice Kavanaugh proclaimed “[n]o concrete harm, no standing.”
A Surprising Dissent
But there is a deal more to be said here regarding TransUnion. Our discussion is incomplete until we examine the dissent, and not merely because this new landmark was decided by a slim 5-4 majority, nor because the Justices were divided, more or less, along the popular conception of ideological lines. It is because the minority found a robust voice in Justice Thomas, who previously was just as vigorous as part of the coalition espousing the foundational Spokeo holding barely five years prior.
Demonstrating a dedication to separation of powers equal to that espoused by the majority, the august jurist criticized today’s holding as an affront to those ideals, because it “relieve[s] the legislature of its power to create and define rights.” Quoting a statement made over two centuries ago by the legendary Justice Story, the learned dissent contended that, when the Legislative Branch devises a cause of action for a statutory violation, the infraction itself imports damage to the plaintiff, thereby justifying admittance to the federal forum.
Acknowledging that the majority had coined “a pithy catchphrase” summarizing standing, the esteemed Justice offered a pungent denouement; who could possibly think these plaintiffs suffered a concrete harm, and thereby satisfied the test for standing? “Congress, the President, the jury, the District Court, the Ninth Circuit, and four Members of this Court.”
Only time will tell which of these sagacious and pointed declarations shall outshine the other. But, as stated at the outset of today’s writing, we believe that, given its dedication to separation of powers, as so amply displayed by both the majority and dissenting opinions, combined with the absence of the political overtones which marred California v. Texas, TransUnion shall emerge as the more reliable of the high Court’ two newest additions to its standing jurisprudence.
Conclusion
Now for our own coda. Since the dawn of the Republic, the axioms of standing have worked to maintain the separation of powers. The doctrine never has been, nor ever shall be, a stagnant concept. To the contrary, it continually evolves, that process sometimes accelerated by Congress’ enactment of novel statutory obligations, and concomitant causes of action to enforce same. Given such, California v. Texas and TransUnion, significant as they may be, are no more than the Supreme Court’s latest iterations of standing’s vital precepts. And they shall surely not be the last. To be sure, good news for our system of ordered liberty.
Prof. Anthony Michael Sabino, partner, Sabino & Sabino, P.C., is also a Professor of Law, Tobin College of Business, St. John’s University. Anthony.Sabino@sabinolaw.com.