Ramirez v. Trans Union, LLC

Background

Sergio L. Ramirez brought a class action alleging that Trans Union violated three requirements of the Fair Credit Reporting Act through its OFAC Name Screen Alert: using reasonable procedures to ensure maximum possible accuracy, clearly and accurately disclosing information in consumers’ files, and providing a statement of consumer rights with those disclosures. The district court previously certified a class of 8,185 individuals. After a weeklong trial, a jury found for Ramirez and the class and awarded more than $60 million in statutory and punitive damages. The Ninth Circuit affirmed the verdict except for reducing punitive damages. The Supreme Court later held that 6,332 class members whose credit reports were not provided to third-party businesses lacked standing for the reasonable-procedures claim, and that the class members lacked standing for the disclosure claims because they had not suffered concrete harm. The case returned to the district court for further proceedings.

Settlement Terms

After mediation, the parties reached a class-wide settlement. The proposed Settlement Class includes the 1,853 individuals Trans Union had identified as having credit reports containing OFAC data provided to a third party, along with members of the remaining group of 6,332 who submit a claim showing that OFAC data was published to a third party during the class period.

Trans Union must establish a $9 million settlement fund. The agreement permits Class Counsel to request up to $4.5 million in attorneys’ fees and costs and provides for a proposed $75,000 individual settlement and service award for Ramirez. Estimated notice and administration costs are $70,000. After those amounts, each Settlement Class member will receive a proportional share of the remaining fund. Based on counsel’s estimated claim rate, the expected payment was approximately $2,000 per qualifying claimant, although the exact amount depended on participation and court approval.

Court’s Analysis

The court concluded that the modified settlement class responded to the Supreme Court’s standing ruling and granted preliminary approval of the Settlement Class. At this stage, the court evaluated whether the settlement appeared potentially fair and whether it was likely to receive final approval under Federal Rule of Civil Procedure 23. The court found that the parties had engaged in substantial discovery, motion practice, trial, and appeals, supporting a finding that the settlement resulted from serious, informed, and non-collusive negotiations.

The court found no obvious deficiency that prevented preliminary approval. It also found that class members would receive the same proportional distribution, while deferring judgment on whether Ramirez’s $75,000 service award was appropriate until final approval. The court determined that the expected recovery and the risks and costs of continued litigation—including possible class decertification, a new trial, and potential costs exceeding $1 million—supported preliminary approval.

The court approved the revised notice plan, which provided different notices for members who would receive payment without submitting a claim and those who needed to submit a claim proving publication to a third party. The court found the plan sufficient to give class members notice and an opportunity to object. It also deferred deciding the appropriate attorneys’ fees and litigation costs, requiring Class Counsel to submit a fee motion with detailed billing records and itemized costs.

Order

The court granted Plaintiff’s motion for preliminary approval of the class action settlement. It modified the class definition, appointed Continental DataLogix, LLC as settlement administrator, ordered Trans Union to provide updated address information and make an initial $30,000 deposit, and directed the administrator to issue class notice. The order set November 18, 2022, as the deadline for objections, December 1, 2022, as the deadline for the motion for final approval, and December 15, 2022, as the final approval hearing. The order did not grant final approval of the settlement or decide the final amount of attorneys’ fees, costs, or Ramirez’s service award.