FCRA Opinion: Ramirez v. Trans Union, LLC

The 9th Circuit Court of Appeals issued an opinion in Ramirez v. Trans Union, LLC this week. This case is important because it deals with willful conduct under the Fair Credit Reporting Act (FCRA) and the available punitive damages. The case involved Trans Union inaccurately including information that the consumer was on a terrorist watch list. The district court stated:

Plaintiff was denied an auto loan after Defendant provided an inaccurate consumer report to a car company, Dublin Nissan (“Nissan”), on or about February 27, 2011. (Id. ¶¶ 48-49, 55.) The consumer report Defendant provided to Nissan included an OFAC alert, suggesting that Plaintiff is listed as a specially designated or blocked person. (Id. ¶¶ 52-53.) Defendant created the OFAC alert by using a “name only” matching system comparing Plaintiffs name against OFAC’s database. (Id. ¶¶ 15-16.) Defendant included the alert because two names similar to Plaintiff’s are in the OFAC database: “Sergio Humberto Ramirez Aguirre” and “Sergio Alberto Cedula Ramirez Rivera.” (Id. ¶ 54.) Plaintiff, in fact, is not an individual included on the OFAC list, and is not related to either of the two individuals in the database. (Id. ¶ 54.)

The Ninth Circuit ultimately found Trans Union’s conduct to be willful:

Had this case been filed before the Third Circuit’s decision in Cortez, we might have been faced with a difficult question as to willfulness. But in light of Cortez, we have no difficulty upholding the verdict. TransUnion was provided with much of the guidance it needed to interpret its obligations under the FCRA with respect to OFAC alerts in 2010 when Cortez was decided. 617 F.3d at 695. Despite this warning, TransUnion continued to use problematic matching technology and to treat OFAC information as separate from other types of information on consumer reports. In doing so, it ran an unjustifiably high risk of error. The jury’s verdict is consistent with the law and supported by substantial evidence. Accordingly, we affirm the district court’s denial of TransUnion’s motion for judgment as a matter of law or a new trial. See Harper v. City of Los Angeles, 533 F.3d 1010, 1021 (9th Cir. 2008) (“A jury’s verdict must be upheld if it is supported by substantial evidence, which is evidence adequate to support the jury’s conclusion, even if it is also possible to draw a contrary conclusion.” (quoting Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002))).

And as the the damages:

“When a punitive damage award exceeds the constitutional maximum, we decide on a case-by-case basis whether to remand for a new trial or simply to order a remittitur.” Southern Union Co. v. Irvin, 563 F.3d 788, 792 n.4 (9th Cir. 2009). This litigation has already spanned a number of years, and we do not think a new trial would bring to light any new evidence that might permit a ratio higher than 4 to 1. We therefore reverse the district court’s judgment regarding punitive damages, vacate the punitive damages award, and remand with instructions to reduce the punitive damages to $3,936.88 per class member, which represents four times the statutory damages.

Overall, this is a good result for consumers and hopefully will lead to higher accuracy in credit reports.