Ramirez v. Trans Union, LLC

Background

Sergio L. Ramirez brought a class action alleging that Trans Union, LLC violated the Fair Credit Reporting Act (FCRA) through its OFAC Name Screen Alert. The service identifies people whose names match individuals on the United States government’s list of Specially Designated Nationals, including terrorists, drug traffickers, and others with whom Americans are prohibited from doing business.

A jury returned a verdict for Ramirez. The Ninth Circuit affirmed the verdict except as to punitive damages, and the Supreme Court later reversed the Ninth Circuit’s conclusion that all class members had standing under Article III of the Constitution. The Supreme Court sent the case back to the district court. After mediation, the parties reached a class-wide settlement. The court had previously granted preliminary approval.

Settlement Class and Payment Terms

The settlement class consists of 1,853 people whom Trans Union identified before trial as having received a credit report containing OFAC data that was delivered to a third party, plus 147 valid claimants from a group of 6,332 other people who submitted proof that OFAC data was published to a third party during the class period. The total settlement class therefore contains 1,939 members.

Trans Union must establish a $9,000,000 settlement fund. The money will be distributed proportionally among class members after court-approved fees, costs, administration expenses, and Ramirez’s award are deducted. Based on the approved claims, the estimated payment to each class member is more than $2,200. Any remaining funds will first be redistributed to qualifying class members; if redistribution is not possible, the remaining funds will go to Inclusiv and the Consumer Federation of California.

Notice, Claims, and Objections

The settlement administrator mailed notice and claim forms to class members and emailed notice to 5,241 people for whom it found email addresses. It also created a settlement website and operated a toll-free hotline. Of 305 claims submitted by people in the non-stipulation group, 147 were found valid and 158 were disallowed. The administrator also received 420 claims from people who were not eligible because they were not on a class list.

No class member objected to the settlement, the request for attorney’s fees and costs, or Ramirez’s service award. No government entity objected or sought to intervene after receiving notice required by the Class Action Fairness Act.

Final Settlement Approval

The court considered whether the settlement was fair, adequate, and reasonable under Federal Rule of Civil Procedure 23. It found that continued litigation would involve a new trial, possible class decertification, efforts to replace Ramirez as class representative, and additional appellate costs. The court also considered the substantial discovery, motion practice, trial, and appeals that had already occurred; the experience and views of class counsel; the settlement amount; the absence of objections; and the likely certainty of recovery under the settlement.

The court examined factors used to identify improper collusion in class settlements. Although the requested attorney’s fees represented a significant percentage of the $9 million fund, the request was less than counsel’s lodestar—the total produced by multiplying reasonable hourly rates by reasonable hours worked. The court found no improper fee arrangement and noted that the settlement was non-reversionary, meaning funds would not return to Trans Union. The court concluded that the settlement resulted from arms-length negotiations and was not the product of collusion.

The court also amended the release for settlement class members. The original language appeared to release a broader group of claims, but the parties stipulated at the hearing that the release would be limited to claims arising from or related to the facts alleged in the litigation concerning the class claims. Ramirez’s separate release remained broader and covered known and unknown claims that could have been asserted.

Attorney’s Fees and Costs

The court approved $4,200,723.90 in attorney’s fees. Class counsel reported a total lodestar of $6,468,006.75, based on 9,076.5 hours of attorney and paralegal work. The approved fee represented 65 percent of the lodestar. The court found the requested hourly rates and hours reasonable in light of the trial, appeals, Supreme Court proceedings, risks undertaken on a contingency basis, and result achieved for the class.

The court also awarded $299,276.10 in litigation costs, including investigation, filing fees, travel, transcripts, subpoena service, expert witnesses, mediation, and administrative expenses. It approved settlement-administration costs of no more than $85,000.

Service Award and Disposition

The court approved Ramirez’s $75,000 service award, inclusive of his individual damages recovery. It stated that the amount had previously been approved and that there was no reason to change that decision.

Judge Jazqueline Scott Corley granted Ramirez’s motion for final approval of the parties’ class action settlement. The court also granted Ramirez’s motion for attorney’s fees and costs and awarded the specified fees, costs, administration expenses, and service and individual settlement award. The parties were ordered to file a proposed judgment by December 20, 2022, and class counsel was required to file and post a post-distribution accounting.