Banking and Finance Law Daily Consumer’s brief opposes TransUnion’s appeal to Supreme Court over $40M damages award
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Thursday, November 12, 2020

Consumer’s brief opposes TransUnion’s appeal to Supreme Court over $40M damages award

By Nicole D. Prysby, J.D.

The consumer argued that all members of the class suffered the same injury as the named plaintiff and that the lower court’s punitive damages award fell within established parameters.

The consumer who alleged that TransUnion LLC, Inc. incorrectly placed terrorist alerts on the credit reports of thousands of consumers filed a brief in response to TransUnion’s petition requesting that the U.S. Supreme Court take up the case. After the U.S. Court of Appeals for the Ninth Circuit affirmed an $8 million statutory damages award in the class action against TransUnion, but decreased a $52 million punitive damages to $32 million for the company’s Fair Credit Reporting Act (FCRA) violations, TransUnion filed a petition asking the Supreme Court to review whether the statutory and punitive damages were commensurate with any injury suffered by the plaintiff class, as opposed to the injury suffered by the named class representative. In his Nov. 6, 2020, brief, the consumer argued that, contrary to TransUnion’s "mischaracterization," every member of the class suffered the same injuries stemming from each of TransUnion’s FCRA violations. For example, every class member was falsely told by TransUnion that he or she might be on a government list of terrorists and other national security threats. The consumer also argued that the Ninth Circuit’s ratio of 4:1 for punitive to statutory damages falls comfortably within the requirements of Due Process recognized by the Court (Trans Union LLC, Inc. v. Ramirez, Case No. 20-297).

In the underlying case (Ramirez v. TransUnion LLC) the Ninth Circuit affirmed an $8 million statutory damages award in a class action against TransUnion, which allegedly had incorrectly placed terrorist alerts on the credit reports of thousands of consumers, but decreased a $52 million punitive damages award to $32 million for the company’s FCRA violations. TransUnion filed a petition asking the Supreme Court to review whether the statutory and punitive damages were supportable and/or commensurate with any injury suffered by the plaintiff class, as opposed to the injury suffered by the named class representative (see Banking and Finance Law Daily, Sept. 14, 2020).

TransUnion has argued that although the named plaintiff claimed an inaccurate credit report hindered his effort to secure credit and caused other injury, the majority of the class of thousands that he sought to represent never had a credit report disseminated to any third party, let alone suffered a denial of credit or other injury anything like the class representative. TransUnion contended that the trial court let the class proceed on the theory that the absent class members all suffered Article III injury. According to the credit bureau, "[h]aving heard only about the named plaintiff’s entirely atypical injuries, the jury awarded the entire class statutory damages near the statutory maximum and then awarded classwide punitive damages that dwarfed the statutory damages," and the majority of a three-judge panel of the Ninth Circuit "then affirmed across the board, save for minimally trimming the punitive damages award."

In the Respondent’s Opposition Brief, the consumer stated that the lower courts correctly decided standing, class certification, and damages issues. Contrary to TransUnion’s "mischaracterization," the consumer argued, every member of the class suffered the same injuries stemming from each of TransUnion’s three FCRA violations. For example, every class member was falsely told by TransUnion that he or she might be on a government list of terrorists and other national security threats. Class members were denied the full disclosures required, when TransUnion sent them a document that purported to be their entire credit report, but containing no mention of the terrorist list entries. The appellate court accordingly concluded that every class member had standing and that the named plaintiff was typical of the class. As to TransUnion’s assertion that the vast bulk of the class suffered no harm, the consumer argued the relevant harm for standing purposes is not the sale or publication of a credit report containing a terrorist record, it is the risk of significant injury of that inaccurate information being reported. The consumer also argued that TransUnion’s alleged circuit split on the issue of standing simply reflects varying facts of different cases and is not a split on any legal rule.

The consumer pointed out that at trial, the district court offered TransUnion the opportunity to craft a jury verdict form that apportioned statutory damages based upon whether a report had been sold to a third party, and it declined, waiving the issue.

TransUnion’s second issue on appeal was that the award of punitive damages was excessive. The consumer argued that the Ninth Circuit’s ratio of 4:1 for punitive to statutory damages falls comfortably within the requirements of Due Process recognized by the Supreme Court. Also, the facts of the case justify the punitive damages award; for years, TransUnion was warned that, in the words of the court of appeals, it was "flippant[ly] placing terrorist alerts on consumer credit reports."

Attorneys: James A. Francis (Francis Mailman Soumilas, PC) for Sergio L. Ramirez. Andrew J. Ogilvie (Brewer & Ogilvie LLP), Paul D. Clement, Erin E. Murphy, and Matthew D. Rowen (Kirkland & Ellis LLP) and Julia B. Strickland, Stephen J. Newman, and Christine E. Ellice (Strook & Strook & Lavin LLP) for TransUnion LLC.

Companies: TransUnion LLC

MainStory: TopStory FairCreditReporting GCNNews SupremeCtNews

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