On 25 June 2021, the U.S. Supreme Court issued its decision in TransUnion LLC v. Ramirez, clarifying the nature of the harm sufficient to establish Article III standing to maintain a Fair Credit Reporting Act (FCRA) claim. After Ramirez, plaintiffs seeking to pursue FCRA class litigation must establish concrete harm that is more than just speculative, and they must do so for all class members with the requisite type of evidence called for at each particular stage of litigation. The impact of the holding in Ramirez will likely extend to class standing issues beyond the FCRA context.Read More
The D.C. Circuit Court of Appeals recently reaffirmed its position that a plaintiff can establish Article III standing (federal court subject matter jurisdiction) based solely on the risk of potential future harm following a data breach involving his or her personal information. The decision continues the split between the federal circuit courts of appeals regarding the issue.
In re Office of Personnel Management arose out of an alleged 2014 data breach of the eponymous office (the “OPM”). The plaintiffs, current and former federal employees and their unions, sought to represent a putative class of individuals whose personal information, including social security numbers, addresses, and birth dates, was allegedly exposed in the breach. The plaintiffs asserted that certain putative class members had experienced financial fraud or identity theft as a result of the breach and that other members faced the “ongoing risk that they … will become victims of financial fraud and identity theft in the future.” The district court ruled that the plaintiffs lacked standing to sue, holding that the putative class members who had allegedly experienced financial fraud had not pleaded facts demonstrating that the fraud was traceable to the OPM, and that the members who had only pleaded risk of future injury did not plausibly allege that such injury was either substantial or clearly impending.Read More
By David D. Christensen and Matthew N. Lowe
The Ninth Circuit recently clarified in In re Hyundai and Kia Fuel Economy Litigation that district courts must carefully scrutinize class settlements to ensure that they satisfy each of the prerequisites of Rule 23, especially for Rule 23(b)(3) classes, and that courts cannot substitute the fairness of a settlement for the proper certification analysis. Of particular note, the court emphasized the need to analyze whether potential material differences in the applicable states’ laws preclude certification of a nationwide settlement class.
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The Ninth Circuit recently limited the availability of diversity jurisdiction for certain cases with claims involving mortgage loan modifications. Specifically, in Corral v. Select Portfolio Servicing, Inc., the Ninth Circuit held that, where the plaintiff-borrower “seeks only a temporary stay of foreclosure pending review of a loan modification application … the value of the property or amount of indebtedness are not the amounts in controversy.” — F.3d —-, 2017 WL 6601872, at *1 (9th Cir. Dec. 27, 2017). Rather, to satisfy the amount in controversy requirement in such cases, parties must demonstrate that the value of the temporary delay in foreclosure exceeds $75,000, “such as the transactional costs to the lender of delaying foreclosure or a fair rental value of the property during pendency of the injunction” (in addition to any compensatory damages plaintiffs may be seeking). Id. at *5.
The Ninth Circuit has opined, again, on whether a statutory violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681, et seq.—by itself—constitutes a concrete injury for Article III standing purposes. Last year, in Spokeo, Inc. v. Robins, the United States Supreme Court vacated and remanded the Ninth Circuit’s original opinion on the issue. Although the Ninth Circuit had reviewed the plaintiff’s allegations for existence of a particularized injury, it had not separately analyzed whether they described a sufficiently concrete injury. In Spokeo, the Supreme Court ruled that “a bare procedural violation [of a federal statute], divorced from any concrete harm,” does not suffice to “satisfy the injury-in-fact requirement of Article III.” But the Court declined to define a “bare procedural violation” in favor of allowing the Ninth Circuit to first consider the question. Now that the Ninth Circuit has done so, the Supreme Court may take up the question once more.
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Affirming the dismissal of a qui tam lawsuit based on certifications made to the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”), the U.S. Court of Appeals for the Ninth Circuit recently held that neither entity is an officer, employee, or agent of the United States. Therefore, demands or requests for payment made to these entities are not claims under 31 U.S.C. § 3729(b)(2)(A)(i) of the False Claims Act. United States ex rel. Adams v. Aurora Loan Services, Inc., — F.3d —-, 2016 WL 697771 (9th Cir. Feb. 22, 2016).