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Class-Action Settlement Approved in TransUnion v. Ramirez Article III Standing Case

Article III Standing The case was reassigned to the district court and that court approved a motion outlining the class-action settlement after the Supreme Court’s ruling last year that part of the class did not have Article III standing to sue.

07/29/2022 1:45 P.M.

4 minute read

A California district court has granted the plaintiff’s motion seeking approval of a class-action settlement in TransUnion v. Ramirez after the U.S. Supreme Court issued a ruling regarding the issue of Article III standing last June.

How Did We Get Here?

Ramirez filed a class-action lawsuit on behalf of himself and a putative class alleging that over a six-month period in 2011, TransUnion violated three FCRA requirements providing that credit reporting agencies (CRAs) must:

  • Establish “reasonable procedures” to ensure the “maximum possible accuracy” of information provided about consumers under 15 U.S.C. Section 1681e(b);
  • “Clearly and accurately” disclose “all information in the consumers file at the time of [a] request” under Section 1681g(a), and
  • Provide a statement of consumer rights with each such disclosure under Section 1681g(c).

After a jury returned a verdict in the Ramirez’ favor, TransUnion appealed, and the 9th Circuit Court of Appeals affirmed the verdict except for the punitive damages. The parties appealed again.

The case implicates issues of Article III standing and the appropriateness of class certification under Federal Rule of Civil Procedure 23 in class-action litigation. ACA  filed an amicus brief supporting TransUnion for the Supreme Court’s consideration in the case.

The key holding by the Supreme Court in its 2021 opinion was that of the original 8,185 class members, “the 6,332 class members whose credit reports were not provided to third-party businesses did not suffer a concrete harm and thus do not have standing as to the reasonable-procedures claim.”

On the other hand, the court held that the 1,853 class members for whom TransUnion provided credit reports to a third-party had Article III standing because they suffered an injury to their reputation.

Noting that “standing is not dispensed in gross,” the court emphasized that it is the plaintiff’s burden to establish that each class member has Article III standing in order to recover individual damages.

After issuing its decision, the U.S. Supreme court sent the case back to the U.S. District Court for the Northern District of California for further proceedings.

The parties in the case participated in mediation and reached a class-wide settlement. Ramirez then filed a motion seeking the district court’s approval of the proposed terms of the settlement. The court granted Ramirez’s motion.

Settlement Terms

TransUnion will establish a settlement fund for the class under the agreement approved by the court, and the settlement administrator will establish a website and toll-free phone number for updates.

The settlement agreement narrows the class to those individuals whom TransUnion either concedes had Office of Foreign Assets Control (OFAC) data provided about them to a third party or those who submit a claim form and demonstrate that they had OFAC data provided to a third party.

The OFAC Name Screen Alert or OFAC Alert is a service TransUnion provides to its customers that identifies persons whose names match individuals—known as Specially Designated Nationals—on the U.S. on the government’s list of terrorists, drug traffickers, and others with whom Americans are prohibited from doing business, according to the court’s opinion and background on the case.

These modifications to the class are directly in response to the Supreme Court’s order, which held that only “class members whose credit reports were provided to third-party businesses suffered a concrete harm and thus have standing as to the reasonable-procedures claim” and that no “class members other than the named plaintiff Ramirez suffered a concrete harm” for purposes of the disclosure claims.

Attorneys’ Fees

There are two options for attorneys’ fees in a class-action settlement with a settlement fund for all the class members.

Courts may employ either the lodestar method (calculated by multiplying the number of hours the prevailing party reasonably expended on by a reasonable hourly rate for the region and for the experience of the lawyer) or the percentage-of-recovery method to determine whether the requested fees are reasonable.

The 9th Circuit has established a benchmark of 25% of the settlement fund for attorneys’ fees calculations under the latter method. The settlement agreement provides for a maximum award of $4.5 million to class counsel, which is half of the settlement amount.

Motions for attorneys’ fees are due by Oct. 2 and a final approval hearing for the settlement will be Dec. 15.

ACA’s Take

The Supreme Court’s decision in TransUnion provides helpful guidance regarding what constitutes a concrete harm for the purposes of determining whether a plaintiff has Article III standing. The class-action proceedings show further implications of the case and reenforce the fact that Article III standing continues to be a hot issue in the courts as consumers, collectors, and their attorneys endeavor to apply the Supreme Court’s ruling to the situations before them.

Related Content from ACA International:

Breaking News Member Alert: U.S. Supreme Court Says Class Lacked Standing in TransUnion v. Ramirez FCRA Class-Action Case

TransUnion v. Ramirez: What Does it Mean?

ACA Cast: Implications of TransUnion v. Ramirez on Standing for Class Certifications and Class Actions

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