TransUnion v. Ramirez: U.S. Supreme Court Curtails Frivolous Class-Action Litigation

Date: July 13, 2021

Supreme Court

“No concrete harm, no standing”

In an important victory for small businesses, the U.S. Supreme Court recently curtailed “no-injury” class-action lawsuits. The NFIB Small Business Legal Center supported the defendant in this case and successfully argued in its brief that plaintiffs must be able to prove an actual injury to assert a claim in court.


In TransUnion LLC v. Ramirez, the Supreme Court considered whether plaintiffs in a class-action lawsuit must have suffered an actual injury to be certified in the class.

In 2002, TransUnion began using a program to flag the credit reports of individuals listed by the government as threatening national security—including terrorists, drug traffickers, and serious criminals. When a business opted into TransUnion’s program, the program would run a cross-check of only the person’s first and last name against the government’s list of individuals. If there was a match, TransUnion placed a “potential match” notation on the individual’s credit report. Unsurprisingly, the program produced many false positives.

Sergio Ramirez, the named plaintiff in this case, was unable to purchase a car based on his credit report containing the “potential match” notation. Ramirez sued TransUnion, alleging three violations of the Fair Credit Reporting Act (FCRA), a consumer protection statute. Ramirez claimed TransUnion did not use reasonable procedures to ensure accurate information in his file, did not send him all information in his file, and failed to send him the FCRA summary of rights form. Ramirez sought to certify a class of 8,185 people who similarly did not receive all information in their credit files during a certain period.

The U.S. District Court certified the class and the parties stipulated that only 1,853 members of the class had their reports published to third parties during this same period. Nevertheless, the District Court held that all 8,185 members of the class had standing to sue, and a jury awarded over $7,000 to each member of the class, for a total exceeding $60 million. The Ninth Circuit Court of Appeals affirmed. TransUnion filed a petition for certiorari in the U.S. Supreme Court, which the Court granted.

NFIB Small Business Legal Center Joins to Represent Small Business Interests

The SBLC joined the U.S. Chamber of Commerce in filing an amicus brief supporting TransUnion. NFIB’s amicus argued that all members of a class-action lawsuit must have suffered a concrete injury, even for technical statutory violations, and that the District Court’s lenient approach to standing in consumer protection cases harms the judicial system and businesses by allowing unharmed individuals to participate in class actions. This approach has caused a flood of class-action litigation, hampering judicial efficiency and shaking down businesses more willing to settle than face protracted lawsuits.

SCOTUS Agrees with SBLC Brief

On June 25, 2021, the Supreme Court issued a decision, which held that plaintiffs must suffer “concrete harm” from a defendant’s statutory violations in order to have standing to sue in federal court. As the Court stated, “[n]o concrete harm, no standing.”

The Court concluded that only those 1,853 class members having their wrongful credit report information distributed to third parties suffered a concrete harm sufficient to establish standing to sue. This was due to the “close relationship” between the dissemination of wrongful information to third parties, and the tort of defamation at common law. Because the remaining 6,332 class members did not have their wrongful credit report information disseminated to third parties, they did not suffer a concrete harm.

Future Impact

For small businesses, the importance of this case can hardly be overstated. The Court has now made clear that technical violations of the FCRA will not provide the concrete harm required for standing.

But the more important question is to what extent the Court’s rationale applies to future lawsuits based on mere technical or procedural violations. There are other consumer protection statutes, like the Fair Debt Collection Practices Act and Telephone Consumer Protection Act, as well as other laws, where Congress has created a private right of action for statutory violations. The Court’s decision in TransUnion should limit the category of individuals who can sue based on these types of violations.


Updated July 9, 2021

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.

Learn More

Or call us today

© 2001 - 2023 National Federation of Independent Business. All Rights Reserved. Terms and Conditions | Privacy