(Reuters) – The US Supreme Court on Friday limited the scope of a class action lawsuit against TransUnion in which thousands of people claimed damages after the credit bureau flagged their names that matched them on a government list of suspected terrorists and drug smugglers.
TransUnion had appealed a lower court decision that upheld a jury verdict against the Chicago – based company in the lawsuit and ordered it to pay $ 40 million in damages. The Supreme Court, in a judgment of 5-4, ended up throwing out the jury's verdict, but found that there was insufficient evidence that all the plaintiffs had been harmed by TransUnion's conduct, which means that damages will be reduced. [1
"No concrete damage, no position," wrote Justice Kavanaugh.
There were 8,185 class members in the disputes whose names matched names on the government list. At the trial, it was only established that TransUnion had publicly disclosed that information about 1,853 of them. The other 6332 therefore have no position, Justice Kavanaugh wrote.
The court also found that on two other claims in the lawsuit, none of the plaintiffs other than the lead plaintiff, California-based Sergio Ramirez, could show that they had suffered any
The Court's three liberal courts joined the conservative Justice Clarence Thomas in a dispute .
Justice Thomas wrote that “despite the congressional ruling that such acts deserve redress, the majority decides that TransUnion's actions are so insignificant that the Constitution prohibits consumers from justifying their rights in federal court. The constitution does not do such a thing. "
Credit reporting companies provide information about an individual's borrowing and billing history to lenders and other companies.
TransUnion argued that the lawsuit, which focused on a federal law called the Fair Credit Reporting Act that requires consumer reporting agencies to provide accurate information, should never have been certified as a class action lawsuit.
Mr. Ramirez and other consumers were incorrectly identified by TransUnion as possible security threats.
Mr. Ramirez sued in federal court in 2012 after an incident last year at a Nissan car dealership. When the retailer conducted a credit check with TransUnion, the report noted that Ramirez's names seemed to partially match two names on a federal government list of people banned from doing business in the United States due to national security concerns. None of them were Mr. Ramirez.
Although his wife was able to buy a vehicle, Ramirez said he was embarrassed and shocked and ended up canceling an overseas holiday over concerns over the list. After requesting a copy of his credit file, TransUnion sent him a separate mail stating that his name was matched with two on the list.
The trial found that the mailing that mentioned the match incorrectly stated that such a report was not part of the actual credit report that creditors or employers would see when it was actually part of it. TransUnion claimed that just sending mailings was not a concrete injury.
A 2017 jury awarded the class a total of approximately $ 60 million to the class as a whole, including $ 52 million in punitive damages. The San Francisco-based 9th U.S. District Court in 2020 upheld the jury's ruling but reduced the damages to about $ 40 million.
The business community has long tried to limit class actions, which can lead to large payments to the plaintiff. and their lawyers. TransUnion was supported in the case by various business groups such as the U.S. chambers of commerce and companies including The Home Depot Inc., eBay Inc., Facebook Inc. and Alphabet Inc. & # 39 ;s Google LLC.