Transunion LLC v. Ramirez

141 S.Ct. 2190 (2021)

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Nature of the Case

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Facts

The Fair Credit Reporting Act seeks to promote “fair and accurate credit reporting” and to protect consumer privacy. The Act requires consumer reporting agencies to “follow reasonable procedures to assure maximum possible accuracy” in consumer reports. It provides that consumer reporting agencies must, upon request, disclose to the consumer “all information in the consumer’s file at the time of the request.” It also compels consumer reporting agencies to “provide to a consumer, with each written disclosure by the agency to the consumer,” a “summary of rights” prepared by the Consumer Financial Protection Bureau. Consumers have a cause of action to sue and recover damages for certain violations. “Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer” for actual damages or statutory damages not less than $100 and not more than $1,000, as well as for punitive damages and attorney’s fees. D is one of the “Big Three” credit reporting agencies, along with Equifax and Experian. D sells consumer reports for use by entities such as banks, landlords, and car dealerships that request information about the creditworthiness of individual consumers. D introduced an add-on product called OFAC Name Screen Alert. OFAC is the U. S. Treasury Department’s Office of Foreign Assets Control. OFAC maintains a list of “specially designated nationals” who threaten America’s national security. Individuals on the OFAC list are terrorists, drug traffickers, or other serious criminals. It is generally unlawful to transact business with any person on the list. D created the OFAC Name Screen Alert to help businesses avoid transacting with individuals on OFAC’s list. D's product generated many false positives. Thousands of law-abiding Americans happen to share a first and last name with one of the terrorists, drug traffickers, or serious criminals on OFAC’s list of specially designated nationals. P learned he was the spawn of evil when he went to buy a Nissan Maxima. P’s credit report, produced by D, contained an OFAC ADVISOR ALERT. A Nissan salesman told P that Nissan would not sell the car to him because his name was on a “ ‘terrorist list.’ ” P’s wife had to purchase the car in her name. D sent Ramirez a mailing that included his credit file and the statutorily required summary of rights prepared by the CFPB. The mailing did not mention the OFAC alert. A second mailing alerted him that his name was considered a potential match to names on the OFAC list. The second mailing did not include an additional copy of the summary of rights. D eventually removed the OFAC alert from P’s file. P sued D. The parties stipulated that the class contained 8,185 members. They also stipulated that only 1,853 members of the class had their credit reports disseminated by D to potential creditors. The jury awarded each class member $984.22 in statutory damages and $6,353.08 in punitive damages for a total award of more than $60 million. The Court of Appeals for the Ninth Circuit affirmed. The court reduced the punitive damages award to $3,936.88 per class member, thus reducing the total award to about $40 million. D appealed.