Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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The United States Supreme Court has repeatedly declined to resolve a question that has sharply divided the Circuits: whether a class may be certified even though it contains uninjured members. See e.g., Tyson Foods, Inc. v. Bouaphakeo et.al., 136 S. Ct. 1036, 1050 (2016). On March 30, 2021, the Supreme Court heard argument on related issues in TransUnion LLC v. Ramirez, No. 20-297, a case with potentially significant implications for parties embroiled in class action lawsuits.The question certified by the Supreme Court was: “Whether either Article III or Federal Rule of Civil Procedure 23 permits a damages class action when the vast majority of the class suffered no actual injury, let alone an injury anything like what the class representative suffered.”Case BackgroundRamirez v. TransUnion arose in 2011, when Sergio Ramirez visited a California car dealership with his wife and father-in-law looking to buy a car. The dealership pulled Mr. Ramirez’s credit report and informed him that they could not sell him a car because Mr. Ramirez’s name was on a “terrorist list.” Mr. Ramirez’s TransUnion credit report indicated that Mr. Ramirez’s name was a match to one listed on a database maintained by the Treasury Department’s Office of Foreign Assets Control (“OFAC”), which identifies terrorists, individuals who pose threats to national security, and international drug or weapons traffickers. Mr. Ramirez was “embarrassed, shocked, and scared.”The next day, Mr. Ramirez requested a copy of his credit report and received two separate mailings from TransUnion: the first mailing included his credit file along with a summary of rights required by law, and the second was a letter, unaccompanied by an additional summary of rights, alerting Mr. Ramirez that his name “is considered a potential match to information listed on the [OFAC] database.” After receiving the mailings, and out of an abundance of caution, Mr. Ramirez cancelled an upcoming vacation. Mr. Ramirez brought suit against TransUnion, alleging three violations of the Fair Credit Reporting Act (“FCRA”). Mr. Ramirez alleged that TransUnion failed to maintain reasonable procedures to assure maximum possible accuracy of the information about him when preparing a consumer report, violated obligations to consumers to provide “all” information upon request (because the OFAC information came to him in a separate mailing) and violated its obligation to provide consumers with a summary of their rights. The Northern District of California certified the case as a class action that included everyone who, in a six-month period, requested and received a copy of their credit report, sent in two contemporaneous but separate mailings, and showing that the individual’s name was a potential match to a name on the OFAC list.At trial, the jury heard only Mr. Ramirez’s story. Mr. Ramirez introduced no evidence that anyone else in the class suffered a credit denial or other adverse consequence as a result of the OFAC name-match appearing on their credit report. Mr. Ramirez stipulated that more than 75% of the members of the class never even had a credit report showing a potential name match disseminated to a third party during the relevant class period. Nevertheless, the jury found for the class on all claims and awarded statutory and punitive damages totaling over $60 million.On appeal, a divided Ninth Circuit held for Mr. Ramirez and found that the entire class had standing, because the “material risk of harm” conferred standing on even the members of the class whose credit reports were not disseminated to third parties.The Written ArgumentsIn the weeks prior to the Supreme Court argument, TransUnion, Mr. Ramirez and a number of amici — including the Chamber of Commerce — submitted briefs to the court.TransUnion argued that the lower court erred in certifying the class for at least two reasons. First, uninjured class members did not have Article III standing, as there was no evidence that any class member other than Mr. Ramirez even opened and read the mailings from TransUnion, let alone experienced any injury on account of information in the mailings regarding an OFAC name match. Second, TransUnion argued that Mr. Ramirez was an atypical class member with a uniquely sympathetic experience, as compared to other class members who TransUnion alleged “suffered at most a technical violation and some minor confusion in the privacy of their own homes.”Mr. Ramirez argued that all class members were injured because all members suffered a material risk of harm given that TransUnion made the reports available to creditors and employers and the OFAC information in the reports was both highly sensitive and distressing in nature. Furthermore, Mr. Ramirez argued that he was typical of the class as defined and that it was of no consequence that he suffered additional concrete harm as a result of TransUnion’s mailings.  The Chamber of Commerce submitted a brief in support of TransUnion, arguing that the uninjured class members lacked Article III standing and Mr. Ramirez was atypical of the class. As argued by the Chamber of Commerce, “an affirmance [of the Ninth Circuit’s holding] would embolden [enterprising] lawyers to seek out atypical clients in order to leverage their uniquely sympathetic experiences into a multimillion-dollar damages award or settlement — all based on technical statutory violations and all without having to show that the class they represent has suffered concrete injuries that the members could have brought in court themselves.” In such a scenario, an atypical plaintiff pursuing statutory damages may be able to garner a remedy disproportionate to the actual harm suffered by the vast majority of the class.  The Oral ArgumentsAt oral argument, the Justices took up the issues of whether, given that the majority of class members never had their credit reports disseminated to third parties, the class should have been certified, and whether Mr. Ramirez was typical of the class.Justices Alito, Gorsuch, Kavanaugh, and Barrett signaled skepticism toward the idea that class members whose credit reports were not disseminated had Article III standing, given that they may not have even known that their credit reports contained an OFAC alert, let alone suffered consequences akin to those suffered by Mr. Ramirez. As argued by counsel for TransUnion, members of the class whose credit reports were not disseminated should have “brok[en] out the champagne, not [broken] out a lawsuit.” Similarly, Justice Barrett asked whether, for these class members, there had been “no harm, no foul,” and Justice Kavanaugh analogized that “inaccurate information [fell] into a database,” but didn’t make a sound.Chief Justice Roberts offered potentially conflicting observations on the standing issue. He opined that class members whose credit reports were not disseminated had “sufficient standing to at least [clear their credit reports] up,” even if their “damages aren’t terribly significant . . .” However, he also asked what the concrete injury would be in a hypothetical case where Congress passed a law providing statutory damages to anyone driving within a quarter mile of a drunk driver but a suit was brought by a plaintiff who, for days, was unaware of his or her proximity to the drunk driver. Justice Thomas took a different approach, asking simply whether counsel for Mr. Ramirez agreed that all members of the class were required to have standing; counsel conceded that they were.Although most of the Justices focused primarily on the injury and standing questions, Justices Breyer and Sotomayor focused their questions on typicality. While they suggested that Mr. Ramirez’s claims were typical of the class, the two Justices noted that if TransUnion believed Mr. Ramirez’s injuries to be atypical, TransUnion should have so argued at trial, where the jury heard only from Mr. Ramirez. Assistant Solicitor General Nicole Reaves similarly honed in on typicality, arguing that all class members had standing, but that the Court should remand the case for a determination of whether Mr. Ramirez’s injuries were (and therefore Mr. Ramirez was) typical of the class.ImplicationsTransUnion presents an extreme case—the vast majority of class members arguably suffered no injury, while the named plaintiff suffered atypical and significant injury. Of broader interest, however, the Court’s decision may offer insight into how the Court as presently constituted will approach the issue of standing and class certification for uninjured class members. TransUnion may also address for the first time the implications for class certification where the class representative experienced a materially different, and more severe, injury than all or most other class members. Morrison & Foerster will continue to follow this case.

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American Booksellers Association v. Barnes &amp; Noble, Inc.


Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and pro

Penelope Preovolos

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy mat

Claudia Vetesi

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Associate

Lena is an associate in the Litigation Department in Morrison Foerster’s San Francisco office. Lena’s practice focuses on commercial and class actions litigation, with an emphasis on false advertising, unfair competition, and antitrust. Lena regularly counsels clients in the food and beverage, dietary supplement, cosmetics, retail, and technology sectors.











Lena Gankin

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Relief for the Unharmed: Supreme Court Considers Whether Article III & Rule 23 Permit Certification Where Most Class Members are Uninjured (Ramirez v. TransUnion)

Relief for the Unharmed: Supreme Court Considers Whether Article III & Rule 23 Permit Certification Where Most Class Members are Uninjured (Ramirez v. TransUnion)

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The United States Supreme Court has repeatedly declined to resolve a question that has sharply divided the Circuits: whether a class may be certified even thoug

The Ninth Circuit recently issued an opinion holding that district courts usually need not engage in rigorous analysis under the predominance inquiry of Rule 23(b)(3) before certifying a settlement class. In Jabbari v. Farmer,[1] the Ninth Circuit affirmed the district court’s certification of a settlement class that asserted both a federal claim and state law claims, rejecting objectors’ protests that differences in state law claims precluded certification. The Ninth Circuit’s decision clarifies what the court recognized was a “blurred” standard under its prior decisions and confirms that a more relaxed predominance analysis applies when certifying a settlement class.Case BackgroundShahriar Jabbari alleged that Wells Fargo’s pattern of setting unachievably high sales quotas induced its employees to open multiple accounts in his and others’ names without their consent. The account then allegedly incurred fees, which were charged to the customers. The complaint alleged that because customers were unaware the new accounts existed, they did not pay the fees, resulting in calls from debt collectors seeking to collect on the unpaid fees. The nonpayment allegedly harmed the customers’ credit.Jabbari sued Wells Fargo in the Northern District of California in a putative class action, alleging violations of the federal Fair Credit Reporting Act (FCRA) and Electronic Fund Transfer Act; California statutory law; Arizona statutory law; and common law. The parties reached a class action settlement after a motion to dismiss was filed in the district court. But a group of objectors entered the fray, arguing that the court should not certify a settlement class due to differences in various state law claims asserted in the complaint. The district court certified the settlement class, however, and rejected the objectors’ arguments, remarking that because FCRA claim was “equally applicable in all states,” any differences among state laws did not preclude certification of the settlement class. Several objectors to the class settlement appealed to the Ninth Circuit.Ninth Circuit’s DecisionThe Ninth Circuit affirmed the district court’s certification of the settlement class. The court noted that although variations in state law can “complicate” the predominance analysis under Rule 23(b)(3), the Circuit’s previous decisions drew distinctions between the predominance inquiry required when certifying a class for trial and certifying a settlement class. For example, in Hanlon v. Chrysler Corp., the court affirmed certification of a settlement class that involved different states’ consumer protection laws without a choice-of-law analysis.[2] But another Circuit decision seemingly took a different tack. In Mazza v. Am. Honda Motor Co.,[3] the Ninth Circuit reversed a district court’s certification of a trial class in because the district court had applied California law despite material differences with the laws of other states.Recognizing that the line between Hanlon and Mazza was “blurred,” the Ninth Circuit sought to clarify the settlement-class predominance inquiry using its en banc decision in Hyundai. There, the district court had certified a class for settlement, finding that common questions predominated regarding the accuracy of Hyundai’s fuel-economy statements for its cars. A three-judge panel of the Ninth Circuit initially reversed, faulting the lack of a proper choice-of-law analysis and conflicting state laws. But the en banc Court of Appeals reversed, holding that for a settlement class, the district court “need not inquire whether the case, if tried, would present intractable management problems.” In addition, the full Ninth Circuit held that, despite any variance in state law, the common questions that the district court identified were sufficient to satisfy the predominance requirement for a settlement class.Applying Hyundai, the Ninth Circuit in Jabbari found that the district court did not abuse its discretion in certifying a settlement class. The court held that foregoing a choice-of-law analysis—already approved in this context in Hyundai—“applie[d] with even greater force” where the class was unified by a claim under federal law. In particular, the court reasoned that the FCRA claim was subject to collective proof, such as by showing Wells Fargo systematically and willfully obtained consumer reports unlawfully. Finally, the court held that the district court did not commit reversible error in finding that the FCRA claim would best drive the case to resolution, stating that district courts need not assess in a predominance inquiry the importance of every claim a class might assert.Key TakeawaysThe Jabbari decision confirms that, for settlement classes, courts can conduct a less stringent predominance inquiry and that settling parties now have one less theory favored by professional objectors to worry about. Would-be objectors will now have less fodder for attacking a district court’s predominance analysis. In particular, where a federal claim unifies the class, the existence of other possible state-law claims (even those subject to material differences) will likely not undermine certification for settlement, provided that the unifying claim can drive the resolution of the litigation. This makes sense given the judicial preference for settling cases, following a general trend across the circuits of narrowing the paths to object to (and in some cases, improperly thwart)[4] class action settlements.[1] 2020 WL 4046029 (9th Cir. Jul. 30, 2020).[2] 150 F.3d 1011 (9th Cir. 1998).[3] 666 F.3d 581 (9th Cir. 2012).[4] See, e.g., Pearson v. Target Corp., No. 19-3095, 2020 WL 4519053 (7th Cir. Aug. 6, 2020) (prohibiting private payments to settle objections to a class action settlement, what the court deemed colloquial “objector blackmail,” and ordering disgorgement of such payments).

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Ninth Circuit Confirms No Choice-of-Law Analysis Necessary to Certify Settlement Class

Ninth Circuit Confirms No Choice-of-Law Analysis Necessary to Certify Settlement Class

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The Ninth Circuit recently issued an opinion holding that district courts usually need not engage in rigorous analysis under the predominance inquiry of Rule 23

The Ninth Circuit recently issued an opinion addressing standing and willfulness under the Fair Credit Reporting Act (FCRA). In Ramirez v. TransUnion,[1] the Ninth Circuit affirmed a jury verdict and punitive damages award, although it reduced those damages by a third. The court held for the first time that “each class member must have standing to recover damages,” but also found that the class members’ standing need not be demonstrated at the class certification stage and that the class members had standing even if their credit reports had not been shared with any third party. In addition, the court looked to a prior court ruling against the defendant involving the same issues in finding the violations were willful and warranted the award of punitive damages.Case Background Sergio Ramirez alleged he was unable to buy a car because his credit report indicated he was on an Office of Foreign Assets Control (OFAC) terrorist watch list. TransUnion sent Ramirez a report without this information and with a conflicting letter indicating his name did match a name on the watch list. It turns out he was not on the watch list, but someone else with the same first and last name was on that list.In 2012, Ramirez filed a lawsuit against TransUnion in the Northern District of California, seeking to represent a nationwide class of consumers whom TransUnion had falsely identified as being on the terrorist watch list, alleging willful failure to use reasonable procedures to prevent false positives and related claims. The court certified a class, and a jury then ruled against TransUnion on all claims, awarding the class approximately $8 million in statutory damages and $52 million in punitive damages. TransUnion appealed to the Ninth Circuit.Ninth Circuit DecisionStandingFor the first time, the Ninth Circuit announced that “every member of a class certified under Federal Rule of Civil Procedure 23 must satisfy the basic requirements of Article III standing at the final stage of a money damages suit when class members are to be awarded individual monetary damages.”[2] The court found that each of the 8,185 class members had standing regardless of whether a third party accessed their credit reports. Judge McKeown agreed that all members of a damages class should have standing at trial, but she dissented in part because no evidence in the record supported finding a “serious likelihood of disclosure.”Willful Violation and PunitivesThe Ninth Circuit rejected TransUnion’s arguments that its conduct was based on reasonable but mistaken interpretations of the statute. The panel relied heavily on an earlier Third Circuit decision addressing the same product, where that court rejected TransUnion’s argument that the product was not covered by the FCRA and explained how to reduce false matches. As the Ninth Circuit explained, “TransUnion was provided with much of the guidance it needed to interpret its obligations under FCRA with respect to OFAC alerts back in 2010,” but “[d]espite this warning, TransUnion continued to use problematic matching technology and treat OFAC information as separate from other types of information on consumer reports.”[3] The court relied on TransUnion’s failure to implement the Third Circuit’s guidance in finding the FCRA violations were willful.The Ninth Circuit characterized TransUnion’s delay in making policy changes as “reprehensible”[4] in affirming the award of punitive damages. The court found the amount of the award was constitutionally excessive, though, and reduced it from $52 million to $32 million.TransUnion’s petition for rehearing en banc was denied on April 8, 2020.[5] On April 15, 2020, the court stayed its mandate for 90 days pending TransUnion’s filing of a petition for writ of certiorari.[6]Key TakeawaysStanding. The court emphasized that its decision did not change the showing required at class certification It noted that “district courts and parties should keep in mind that they will need a mechanism for identifying class members who lack standing at the damages phase.”[6]  Defendants should consider how this analysis impacts arguments in opposing class certification.Willful Violations and Punitives. The court’s analysis underscores the importance of staying on top of court rulings, particularly at the appellate level. Although TransUnion had made some changes to its OFAC notifications in accordance with the Third Circuit’s Cortez decision, under the facts of this case, the Ninth Circuit appeared to find its actions to be too little too late. Courts and juries rarely award punitive damages in FCRA suits,[7] but the prior appellate ruling and hot button terrorist watch-list topic appears to have made this case the exception.­­­­­­­­­­­­­­­[1] Ramirez v. TransUnion LLC, 951 F.3d 1008, 1016 (9th Cir. 2020).[2] Id. at 1017.[3] Id. at 1032.[4] Id. at 1037.[5] Ramirez v. TransUnion LLC, No. 17-17244, 2020 U.S. App. LEXIS 11100, at *2 (N.D. Cal. Apr. 8, 2020).[6] Ramirez v. TransUnion LLC, No. 17-17244, 2020 U.S. App. LEXIS 12024, at *1 (N.D. Cal. Apr 25, 2020).[7] Austin Krist, “<a href="https://columbialawreview.org/wp-content/uploads/2016/02/December-2015-10-Krist-CORRECTED.pdf">Large-Scale Enforcement of the Fair Credit Reporting Act and the Role of the State Attorneys General</a>,” Columbia Law Review, Vol. 115:2311, p. 2322 (characterizing punitive damages awards in FCRA suits as “rare”).

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Ninth Circuit Addresses FCRA Standing Analysis and Emphasizes Importance of Remedial Measures

Ninth Circuit Addresses FCRA Standing Analysis and Emphasizes Importance of Remedial Measures

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The Ninth Circuit recently issued an opinion addressing standing and willfulness under the Fair Credit Reporting Act (FCRA). In Ramirez v. TransUnion,[1] the Ni