The U.S. Supreme Court heard oral arguments on Tuesday morning in a case that primed the nine justices to chip away at the public’s legal ability to sue large corporations.
The case stylized as TransUnion LLC v. Ramirez is based on the credit reporting agency’s years-long use and abuse of a list promulgated by the Treasury Department’s Office of Foreign Assets Control (OFAC). The list identifies known and suspected terrorists, drug traffickers and other high-profile criminals—all of whom are prohibited from participating in the U.S. financial system.
Over the course of several years, TransUnion falsely labeled 8,185 U.S. citizens as terrorists. The class members sued under a law passed by Congress that specifically provides a remedy for victims of false credit reporting and won at both the district and appellate level.
TransUnion appealed to the nation’s high court and was granted certiorari in order to argue that the lead plaintiff, Sergio Ramirez, was an atypical representative of the class under Federal Rule of Civil Procedure 23(a) and that the class members lacked Article III standing under a recent Supreme Court precedent.
Ramirez, as a result of TransUnion’s mistake, suffered an embarrassing episode when he and his wife tried to buy a car—being alerted in front of his family by a car salesman that his name was on “a terrorist list.” In turn, he requested a copy of his credit report and was sent two separate mailings: one of which did not contain any OFAC information; the second of which alerted Ramirez that his name was “considered a potential match.”
The second mailing was not in compliance with federal law and, when pressed by the Treasury Department to account for customer complaints, TransUnion falsely claimed that the second letter had instructions for having a false OFAC match removed from their system.
“Being labeled a potential OFAC match is not a misreported Zip code, it is the scarlet letter of our time,” Ramirez attorney Samuel Issacharoff argued. “It banishes individuals from the marketplace. It is staggering that since 2002, [TransUnion] couldn’t identify a single correct OFAC match despite issuing thousands of OFAC alerts per year.”
But the overwhelming majority of the Supreme Court didn’t appear troubled by those mismatched OFAC list names.
Chief Justice John Roberts told Assistant Solicitor General Nicole Reaves that he didn’t think any class member was wrongly labeled because “potential doesn’t mean actual.”
Justice Clarence Thomas seemed averse to a reading of the law which would result in a class with standing who could bring claims that are ultimately weak on the merits. Issacharoff, somewhat exasperated, said that the statute at issue—the Fair Credit Reporting Act—would clearly provide for standing in that case.
According to TransUnion attorney Paul Clement, Ramirez is “a radically atypical class representative” who could have plead actual damages but instead sought class certification for the 8,184 other people who were sent these dual mailings. At the heart of the company’s argument is that Ramirez was the only class member who testified at trial.
Justice Amy Coney Barrett initially seemed skeptical of TransUnion’s standing argument but later appeared to be leaning against Ramirez’s position by suggesting that the company’s faulty OFAC match list simply amounted to “a bare procedural violation,” and therefore not enough to satisfy “the injury-in-fact requirement of Article III” required by the precedent established in Spokeo v. Robins.
Justice Brett Kavanaugh seemed intent on crafting a limited solution that would satisfy neither party but his line of legal reasoning, citing and effectively extending the logic of Spokeo, clearly worked against the argument advanced by Ramirez’s attorney.
Justice Elena Kagan also grilled all three attorneys involved and was the hardest to read but was decidedly not receptive to the arguments advanced by Issacharoff—though she seemed somewhat against the notion that Ramirez’s testimony alone made him an atypical member of the class.
“He could have had somebody else testify at trial,” Kagan said—offering a series of other scenarios that would have maintained the exact same legal claim without Ramirez testifying at trial. “Who testifies at trial has nothing to do with who the class representative is.” Reaves ultimately conceded that point.
Justice Sonia Sotomayor was the only justice who clearly stood out as taking Ramirez’s side during oral arguments.
The progressive jurist ferreted out from the government a begrudging admission that Ramirez’s legal claims are actually typical of the class—and are the same legal claims entirely. Reaves conceded she was only arguing that Ramirez’s damages are what the government believes to be atypical in this case and that every class member is entitled to some damages—the only real question being how much.
And, when Issacharoff had his turn in front of Sotomayor, the justice asked him to give the court his best understanding of the relevant rule.
“There have been decades of experience under Rule 23(a) and there has never been a requirement of identity of damages among all class members,” Issacharoff said. “There is no basis for distinguishing among the legal claims that are being asserted.”
“Never has this court found Article III to remove jurisdiction for retrospective damage claims when Congress has created the private cause of action,” Issacharoff concluded in summary. “It is difficult to imagine a fact pattern more at the heart of the statutory zone of interest or one that is more uniform across the class. All [of the class members] were listed improperly. Ramirez’s claims were not only typical of the other Sergio Ramirezes, they were identical to a group put in harm’s way by TransUnion’s uniform course of conduct.”
[image via Allison Shelley/Getty Images]
