To bring a lawsuit in federal court, a plaintiff must have Article III standing.1 While commentators perceived federal courts as having generally made it easier for plaintiffs to satisfy standing requirements from the 1950s through the 1970s, the trend has reversed since then.2 As the Court has increasingly emphasized separation of powers as the basis for standing, it has also increasingly emphasized that standing requirements constrain the instances in which federal courts can exercise judicial review.3 Last Term, in TransUnion LLC v. Ramirez,4 the Supreme Court held that some members of a class lacked standing to bring claims under the Fair Credit Reporting Act5 (FCRA) because they lacked a concrete injury when TransUnion erroneously included an alert for creditors that class members were linked to a Treasury Department terrorist database, but had not yet disseminated those files.6 By misconstruing the separation of powers rationale underlying standing doctrine, TransUnion will likely make it more difficult for class action plaintiffs to have their day in federal court. Such a result undermines congressional efforts to keep class actions in federal courts and out of state courts.
In February 2011, Sergio Ramirez went with his wife and father-in-law to buy a car.7 When the dealership ran a credit check on Ramirez, the credit report returned an alert matching Ramirez’s name to those of individuals on the Department of the Treasury’s Office of Foreign Assets Control (OFAC) list of “terrorists, drug traffickers, [and] other serious criminals.”8 As a result, Ramirez’s wife had to buy the car instead.9 A day later, Ramirez asked TransUnion for a copy of his credit file.10 TransUnion then sent him his credit file and a summary of rights, but neither file mentioned the OFAC alert.11 The next day, Ramirez received a separate letter from TransUnion discussing Ramirez’s potential match to names on the OFAC list.12 Concerned, Ramirez canceled an upcoming vacation and spoke with a lawyer.13
In February 2012, Ramirez filed a putative class action against TransUnion, alleging three violations of the Fair Credit Reporting Act: 1) that TransUnion failed to “follow reasonable procedures” to ensure credit files were accurate,14 2) that TransUnion did not include all information — specifically, OFAC matches — in consumers’ credit reports,15 and 3) that TransUnion failed to properly provide a summary of rights.16 Over TransUnion’s opposition, the district court certified a class of all people in the United States “to whom Trans Union sent a letter similar . . . to the March 1, 2011 letter Trans Union sent to [Ramirez] regarding [the OFAC database] from January 1, 2011–July 26, 2011.”17 The parties stipulated that only 1,853 members of this 8,185-person class had their credit reports sent to third parties.18 And the district court held that all class members — even those whose reports were not sent to creditors — had standing.19 Following a trial, the jury found in favor of Ramirez and the rest of the class, awarding statutory damages and significant punitive damages to each class member.20
The Ninth Circuit affirmed in part, vacated in part, and remanded.21 Writing for the panel, Judge Murguia22 held that at the final judgment stage of a class action, a showing of Article III standing was required, but found that each class member in the case had standing.23 The court explained that TransUnion’s violation of the FCRA constituted the type of “concrete injury” necessary for Article III standing for all three of the class’s claims.24 The court then determined that TransUnion’s FCRA violations were “willful,” given that TransUnion had previously been sued over its OFAC alerts in 2005 and, despite a jury verdict against TransUnion, had implemented few changes.25 Next, the court found that Ramirez’s claims were typical of the class’s claims, despite TransUnion’s arguments that Ramirez’s injuries were more severe than those of the class.26 The court then deemed the jury’s punitive damages award unconstitutionally excessive and reduced it.27
The Supreme Court reversed and remanded.28 Writing for the Court, Justice Kavanaugh29 first summarized the elements of Article III standing.30 He discussed standing’s separation of powers basis, explaining that requiring plaintiffs to prove “concrete and particularized injury caused by the defendant that is redressable by the court ensures that federal courts decide only ‘the rights of individuals’” rather than “opine on every legal question” or issue advisory opinions.31 In short, the function of Article III standing is to ensure federal courts “resolve only ‘a real controversy with real impact on real persons.’”32 The Court then analyzed what a “concrete” injury meant under Article III.33 Citing Spokeo, Inc. v. Robins,34 the Court pointed to injuries similar to harms traditionally recognized in American courts as the basis for lawsuits.35 The Court listed “physical harms and monetary harms” as “readily qualify[ing] as concrete injuries under Article III,” as well as “[v]arious intangible harms,” such as “reputational harms, disclosure of private information, and intrusion upon seclusion.”36
The Court then noted that, although Congress’s views on what constitutes a concrete injury could be instructive, Article III was not necessarily satisfied just because Congress created a statutory cause of action.37 Absent judicial analysis, Congress could potentially authorize far too many lawsuits, infringing on the executive branch’s Article II authority.38 This is because “[p]rivate plaintiffs are not accountable to the people and are not charged with pursuing the public interest in enforcing a defendant’s general compliance with regulatory law.”39
The Court then evaluated whether the class members had standing to sue under the FCRA.40 For the reasonable-procedures claim, the Court held that the 1,853 class members whose reports were sent to third parties had standing since their injuries resembled defamation.41 However, the other 6,332 class members lacked standing because their information was not disseminated, so they lacked the essential element of publication in a traditional defamation suit.42 The Court rejected the argument that the inaccurate but internally maintained files created a risk of future harm.43 It suggested that relief could have been appropriate if the plaintiffs had sought injunctive relief and if the harm had been “sufficiently imminent and substantial,” but that, since the plaintiffs asked for damages, they needed to show that the harm actually materialized.44 Because the 6,332 class members did not demonstrate the likelihood that their information would be disseminated, that the risk of harm materialized, that they were independently harmed by the risk of harm itself, or that they even knew about the issue, they therefore did not meet the concrete injury requirement.45 The Court next dispensed with the disclosure and summary-of-rights claims for failing to show a relationship between the formatting violation and a harm traditionally recognized as providing a basis for lawsuits in American courts.46 The Court also rejected the argument, made by the United States as amicus curiae, that the plaintiffs had suffered an “informational injury” because the plaintiffs received information in the wrong format, rather than failing to receive any required information.47 In short, the Court concluded, “[n]o concrete harm, no standing.”48
Justice Thomas dissented.49 First, Justice Thomas discussed the history of Article III standing, distinguishing between lawsuits asserting a plaintiff’s own private rights and lawsuits based on public rights — alleging violations of a duty owed to an entire community.50 Whereas lawsuits based on public rights historically required plaintiffs to make an additional showing of individualized harm in order to sue, lawsuits based on plaintiffs’ private rights did not.51 In this case, Justice Thomas argued that since the statutory provisions at issue detailed duties owed to consumers, “each class member established a violation of [their] private rights” and therefore had standing.52 Justice Thomas criticized the Court for taking the “power to create and define rights” away from Congress.53 Finally, he argued that, by deciding what did or did not constitute a “real injury,” the majority had delved into policy judgments better suited for Congress and juries.54
Justice Kagan also dissented.55 She critiqued the majority’s standing analysis as circumventing the separation of powers rationale underlying the case-or-controversy requirement of Article III, since the analysis second-guessed Congress’s role in determining new rights.56 Justice Kagan also argued that, contrary to what the majority noted, it was not speculative to say that a company in the business of selling information to third parties would in fact sell information to third parties.57 Finally, Justice Kagan argued that “Congress is better suited than courts” to assess harms and risk of harms, even if, in “highly unusual” cases, courts could override those determinations “when but only when Congress could not reasonably have thought that a suit will contribute to compensating or preventing the harm at issue.”58
TransUnion appears to be a straightforward application of Article III standing principles — after all, if “concrete injuries” are the outer limit of Congress’s authority to create statutory rights, then plaintiffs should not be able to satisfy Article III standing simply by citing to laws that Congress itself created as proof of concrete injuries.59 But by misinterpreting the separation of powers rationale underlying standing doctrine, TransUnion will likely make it more difficult for class action plaintiffs to have their day in federal court, undermining congressional efforts to keep class actions in federal courts and out of state courts.
As Justice Kavanaugh noted, “[t]he ‘law of Art. III standing is built on a single basic idea — the idea of separation of powers.’”60 Standing confines courts to their traditional role as antimajoritarian protectors of individuals and minorities, and prevents courts from telling the political branches how to serve majority interests.61 One of the three elements of standing is “injury in fact.”62 This element requires plaintiffs to show “[they] suffered ‘an invasion of a legally protected interest’ that is ‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’”63 When someone directly affected by a law seeks to challenge it, they usually have standing because “there is ordinarily little question that the action or inaction has caused [them] injury.”64 The injury-in-fact requirement thus prevents courts from adjudicating “abstract questions of wide public significance” more appropriate for the political branches.65 Courts thereby also avoid interfering with resource-allocation considerations inherent to the President’s role in enforcing laws.66
Modern standing doctrine has thus developed in light of these separation of powers concerns. Before Lujan v. Defenders of Wildlife,67 it was generally accepted that statutes create rights and the violation of those rights confers standing.68 But in Lujan, the Court ruled that in a “citizen suit” or public rights case, a mere legal injury — a violation of the statute, absent some extralegal injury — is insufficient for purposes of standing.69 Of particular concern to the Court was that citizen-suit provisions could allow courts to review executive inaction when it is the Executive’s duty to “take Care that the Laws be faithfully executed.”70 More recently, in 2016, the Court in Spokeo, Inc. v. Robins held that Article III standing is not automatically satisfied through a violation of a statutory right.71 Instead, a plaintiff must show that they suffered an injury in fact that is both “concrete and particularized.”72 Moreover, “[i]n determining whether an intangible harm constitutes injury in fact, both history and the judgment of Congress play important roles,” but “Article III standing [still] requires a concrete injury even in the context of a statutory violation.”73 The Court in Spokeo also explained that standing doctrine prevents courts from “usurp[ing] the powers of the political branches.”74 Justice Thomas expanded on this point, noting that limitations on judicial power “preserve separation of powers by preventing the judiciary’s entanglement in disputes that are primarily political in nature” but that “[t]his concern is generally absent when a private plaintiff seeks to enforce only his personal rights against another private party.”75 In TransUnion, Justice Kavanaugh similarly drew on these separation of powers rationales. By requiring plaintiffs to establish a “concrete and particularized injury,” federal courts are properly constrained under Article III to “their . . . function in a limited and separated government,” thereby avoiding “publicly opin[ing] on every legal question.”76 This prevents federal courts from infringing on Article II powers.77
Yet the conclusions reached in TransUnion fail to serve these broader purposes of standing doctrine. The claims Ramirez brought on behalf of himself and the class under the FCRA were not “hypothetical or abstract disputes”78 — they were specific, private, and concrete causes of action authorized by Congress.79 Moreover, they do not threaten the President’s Article II authority. After all, “Article II empowers the President to enforce public federal rights in [their] capacity as the representative of the public,” not “to enforce private rights held by private individuals.”80 Unlike in Lujan, here Congress did not “convert the undifferentiated public interest in executive officers’ compliance with the law into an ‘individual right’ vindicable in the courts” and thus “transfer from the President to the courts the Chief Executive’s . . . duty to ‘take Care that the Laws be faithfully executed.’”81 Instead, Congress created a separate cause of action for individuals affected directly by credit reporting agencies.82 Standing in cases involving private individuals bringing private claims is easily met to ensure proper separation of powers.
While framed as the responsible exercise of federal judicial power, the Court’s cabined view of Article III will likely lead to the continued retrenchment of the federal judiciary in the class action context. TransUnion follows a line of modern cases undermining plaintiffs’ ability to have their day in court.83 The Roberts Court has upheld strict arbitration provisions,84 made Rule 23’s certification requirements more demanding,85 and raised the requirements for class damages models.86 By misconstruing the separation of powers rationale underlying the concrete injury requirement, TransUnion makes it harder for class action plaintiffs to vindicate their federal rights in federal courts.
Moreover, TransUnion may push more class actions into state courts, contravening congressional efforts to the contrary. From the mid-1990s until the mid-2000s, there was a perception that plaintiffs abused class actions, harming both class members with legitimate claims and defendants acting responsibly.87 Many critiques centered on state class actions: concerns that state judges would not strictly apply the procedural requirements governing class actions, thus failing to protect due process rights,88 or that plaintiffs’ attorneys would file nationwide class actions in small-town venues, believing that those courts would be more likely to certify their classes or award larger verdicts.89 Still other criticisms revolved around alleged “false federalism” issues, wherein “state courts adjudicating multistate class actions [would] apply their own law,” ignoring the interests and laws of other states.90
The aftereffects of state courts’ perceived lax class certification drew criticism, as well: by too easily certifying a class, state courts handed plaintiffs a powerful tool to force settlement negotiations in frivolous lawsuits.91 Other criticisms centered on state/federal jurisdictional tactics: for example, in state law suits, by choosing a class representative to destroy complete diversity,92 plaintiffs could prevent defendants from removing the case to federal court,93 or by bringing claims that were below $75,000,94 plaintiffs could ensure their cases failed to meet the amount-in-controversy requirement for removal.95
In response, Congress passed the Class Action Fairness Act96 (CAFA). CAFA expanded federal jurisdiction for class actions. Under CAFA, if a class action has 100 or more class members,97 federal courts have jurisdiction over the case if at least one class member is diverse from at least one defendant, and if more than $5 million in total is in controversy.98 Thus, CAFA made it much more difficult for plaintiffs to keep cases in state court and out of federal court. In April 2007, a little over two years after CAFA went into effect, the Federal Judicial Center reported that CAFA “had its intended effect of bringing more state-law . . . class actions into federal district courts.”99
Against this backdrop, TransUnion may move class actions from federal courts back into state courts.100 After all, Article III standing is a jurisdictional limit on federal courts.101 The Court’s holding in TransUnion thus means that federal courts lack the ability to vindicate the rights of those 6,332 class members, not that those class members lack the ability to obtain relief in state courts.102
In TransUnion, the Supreme Court misconstrued the separation of powers rationale for Article III standing doctrine. In doing so, the Court has likely made it more difficult for class action plaintiffs to bring their claims in federal court, undermining congressional efforts to keep class actions in federal court. The result is a new rule, requiring a showing of standing at an undefined point in litigation for otherwise passive class members, threatening to undermine the economies of scale of class actions103 or to push these kinds of class actions into state court.104