In 2011, Sergio Ramirez and his wife were trying to buy a car. During the transaction, the dealership ran a credit check on the couple with TransUnion.
TransUnion found that Ramirez's name matched a terrorist's on a watchlist maintained by the Treasury Department's Office of Foreign Assets Control (OFAC). Because of this, the dealership refused to sell a car to him. His wife had to buy the car under her name.
Ramirez asked TransUnion for a copy of his credit report. He received one that didn't contain the OFAC warning. The company later sent Ramirez a copy that contained the OFAC notice, but the two individuals on the watchlist had different middle initials and dates of birth.
TransUnion did not provide Ramirez a means with which to challenge the information in his credit report. So, he hired a lawyer to get the incorrect data expunged.
In 2012, Ramirez filed a potential class-action suit alleging that TransUnion violated the Fair Credit Reporting Act. The suit was later determined to include more than 8,200 members. A court ruled in favor of the class and ordered TransUnion to pay each person in the suit $984 in statutory damages and $6,350 in punitive damages.
TransUnion tried to appeal the case, arguing that Ramirez's situation was "non-representative," as most of the other members did not experience specific harm due to the behavior of the company. In Feb. 2020, the Court of Appeals for the Ninth Circuit upheld the lower court's decision, but it did cut the punitive damages TransUnion was required to pay per member by roughly half.
TransUnion later tried to take the case to the Supreme Court. In its petition, the company argued that Article III of the Constitution and the Federal Rules of Civil Procedure should bar a class from suing unless every single member could demonstrate an actual injury.
On Dec. 16, 2020, the Supreme Court agreed to review the case. Oral arguments are scheduled for Mar. 20.
Facebook, Google and eBay, along with three trade associations – the Computer Communications Industry Association, the Internet Association and the Technology Network – filed a "friend-of-the-court" brief or an amicus brief in the TransUnion LLC v. Ramirez case. (Related: Samuel Alito: Protecting free speech is major challenge for Supreme Court.)
In their brief, the big tech companies described themselves as "proven innovators that continue to generate valuable technology through significant investments in research and development," and that are "especially susceptible to abusive, no-injury class action litigation similar to the matter before the Court."
Big tech is interested in the case because they want the Supreme Court to rule that if a person couldn't specifically prove how their violation of the law actually hurt them, then that person should not be allowed to join a class-action suit.
"Permitting these abusive no-injury class action lawsuits has a particularly negative effect on [big tech] due to the broad scale of their operations," the brief stated.
The cases wherein people are allowed to join class-action suits against big tech are already very limited as it is. If the Supreme Court were to rule in big tech's favor and raise the evidentiary bar, it would be almost impossible for people to be compensated if companies like Facebook and Google were to commit crimes.
There were instances where people have won in class-action suits against big tech.
In January, Facebook reached a settlement with around 1.6 million members of a class-action suit in Illinois over violating the state's Biometric Information Privacy Act. This law makes it mandatory for firms that collect or use consumer data to provide clear disclosures and mechanisms for opting out. The 1.5 million members of the suit would receive around $340 each.
The amicus brief cited Facebook's settlement with Illinois as an example of a lawsuit that should not have been allowed to happen.
"No plaintiff alleged that he or she had suffered any harm from Facebook's technology," the brief stated, arguing that Facebook's tagging feature constituted as an opt-out mechanism since people could remove tags.
The Supreme Court's decision, including its ruling on the amicus brief, is expected to come out in May or June.
Learn more about the legal actions Facebook, Google and other big tech companies are involved in by reading the latest articles at TechGiants.news.