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Justices’ View on Credit Reports Carries Impact for Data Claims

March 31, 2021, 9:01 AM

The U.S. Supreme Court’s eventual ruling in a case involving TransUnion LLC credit reports could have implications for consumers’ ability to sue companies in class actions in areas from robocalls to data breaches.

The court’s justices heard oral argument Tuesday in the credit reporting case, whose impact depends on how the court’s eventual decision will focus on the specifics of the case, as opposed to broader questions around the kind of harms consumers must show to bring class claims.

“A lot of that is going to depend on how the court crafts its opinion,” said John Toro, a partner at King & Spalding LLP who works on consumer class actions.

At issue in the case is whether showing the risk of harm from TransUnion’s use of information for credit reports is enough for consumers to bring a lawsuit, even if those risks aren’t realized. That kind of standing issue can come up in lawsuits over other scenarios like cyberattacks, where consumer data such as credit card numbers are exposed but not necessarily used to make fraudulent charges.

If the Supreme Court finds that unrealized risks aren’t enough to sue, then its ruling could limit consumer privacy claims and give “ammo” to companies defending against them, Toro said.

Unrealized Risk

TransUnion appealed to the Supreme Court after it was ordered to pay $40 million to thousands of consumers who were categorized as potential terrorists due to a name-matching system. The lead plaintiff in the suit, Sergio Ramirez, alleged violations of the Fair Credit Reporting Act after the terrorist watchlist designation came up while he was trying to buy a car.

TransUnion takes issue with claims from other consumers in the class whose credit reports showed possible matches with the watchlist but didn’t get disclosed to third parties.

“At this point, it is difficult to tell how the Court will come out,” Kristin Bryan, a senior associate at Squire Patton Boggs, said in an email after the argument. “Some members of the Court at oral argument seemed to be searching for a ruling on a more limited basis, concerning potential evidentiary errors at trial.”

Court Confusion

The TransUnion case is an unusual one, since it’s a class action that involved a jury trial, and it raises “a host of complicated issues” at the intersection of standing to sue and certifying a class, according to Aaron Weiss, a shareholder at Carlton Fields P.A. who focuses on telecommunications law, class actions, and consumer claims.

“The oral argument did little to clarify the issues,” Weiss said in an email. He added that it’s possible the court could make as narrow a decision as possible, perhaps focusing on members of the class whose credit reports were actually disseminated and other procedural issues dealing with evidence and Ramirez’s role in relation to the class.

“The bigger question is what the standing test will be after TransUnion,” said Megan Iorio, counsel at the nonprofit Electronic Privacy Information Center. EPIC submitted a brief in the TransUnion case urging the Supreme Court to hold that people can sue when their privacy rights are violated, regardless of whether they allege that the violation led to other harms.

Lower courts have issued inconsistent rulings since an earlier Supreme Court decision in Spokeo Inc. v. Robins created confusion around what kind of harms are needed for standing to sue under a law like the Fair Credit Reporting Act.

“Based on the questioning today, it is not clear that a coherent standing doctrine will emerge from this case,” Iorio said in an email after the arguments.

The case is TransUnion LLC vs. Ramirez, U.S., No. 20-297, oral argument 3/30/21.

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editors responsible for this story: Kibkabe Araya at; Keith Perine at