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Ramirez v. Trans Union, LLC

United States District Court, N.D. California

November 7, 2017

TRANS UNION, LLC, Defendant.



         Plaintiff Sergio Ramirez filed this class action alleging that Defendant Trans Union violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., through its OFAC Name Screen Alert. The OFAC Name Screen Alert or OFAC Alert is a service Trans Union provides to its customers which identifies persons whose names match individuals (known as Specially Designated Nationals or SDNs) on the United States government's list of terrorists, drug traffickers, and others with whom Americans are prohibited from doing business. After a jury returned a verdict in Plaintiff's favor and awarded statutory and punitive damages of more than $60 million, Trans Union moved for judgment as matter of law, or in the alternative, for new trial. (Dkt. No. 321.) Having considered the briefs and having had the benefit of oral argument on October 5, 2017, the Court DENIES Trans Union's motion. The jury's verdict was supported by substantial evidence and there is no basis to set aside the award of statutory and punitive damages.


         Following a weeklong trial, the jury reached a verdict in favor of Plaintiff and the class and awarded over $60 million in statutory and punitive damages. The jury found in Plaintiff's favor on all three claims under the FCRA: that over a six-month period in 2011 Trans Union violated three FCRA requirements: (1) that credit reporting agencies establish “reasonable procedures” to ensure the “maximum possible accuracy” of information provided about consumers under 15 U.S.C. § 1681e(b); (2) that credit reporting agencies “clearly and accurately” disclose “all information in the consumers file at the time of [a] request” under § 1681g(a), and (3) that credit reporting agencies provide a statement of consumer rights with each such disclosure under § 1681g(c). Plaintiff argued, and the jury apparently agreed, that Trans Union's name-only matching protocol was not a reasonable procedure designed to ensure the maximum possible accuracy of consumer information, and that Trans Union's disclosure of OFAC information to consumers violated Section 1681g by failing to disclose OFAC information to consumers simultaneously with their consumer reports and by failing to provide a statement of consumer rights with the separately furnished OFAC disclosure. The jury also concluded that Trans Union's conduct was willful.

         Trans Union challenges the jury's verdict on multiple grounds. First, Trans Union contends that it is entitled to judgment as a matter of law because the evidence does not support a finding of a willful violation of any of the three FCRA prongs at issue in this case. Next, Trans Union argues that it is entitled to a new trial because Plaintiff's counsel made improper and prejudicial arguments and statements during trial. Finally, Trans Union insists that the statutory and punitive damages verdicts must be set aside because they are excessive and unconstitutional. None of these arguments is persuasive.

         A. Trans Union's Motion for Judgment as a Matter of Law

         A Rule 50(b) motion for judgment as a matter of law is appropriate when the evidence permits only one reasonable conclusion, and that conclusion is contrary to that of the jury. Martin v. Cal. Dep't of Veterans Affairs, 560 F.3d 1042, 1046 (9th Cir. 2009). The court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor, EEOC v. Go Daddy Software, Inc., 581 F.3d 951, 961 (9th Cir. 2009), and the court “may not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). 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 possible to draw a contrary conclusion.” Pavao v. Pagay, 307 F.3d 915, 918 (9th Cir. 2002).

         First, as to the Section 1681(e)(b) reasonable procedures claim, Trans Union maintains that there was no willful violation because it did its best and the OF AC Name Screen Alert was exactly that-a name-only match, which is what their customers asked them to provide. The trial record includes substantial evidence from which a jury could have reached a contrary conclusion, including but not limited to the following:

• Trans Union used name-only matching logic, disregarding middle names, dates of birth, social security numbers, places of birth, and all other available identifying information, to associate Ramirez and all other class members with the OF AC list throughout the class period.
• Trans Union's name-only matching procedure for OF AC information contrasted with its procedures for non-OFAC credit reports; to associate information with a consumer on a non-OFAC credit report Trans Union required additional identifying information, such as address, date of birth, or social security number.
• The two other credit reporting agencies (Experian and DealerTrack) that screened Mr. Ramirez against the OF AC list in February 2011 were able to accurately report that he was not a match to the OF AC SDN List.
• Trans Union had repeated notice of problems with its OF AC procedures between 2005 and 2011, including the Cortez action, consumer inquiries, and communications from the United States Department of Treasury.
• Despite all the problems and notwithstanding the Cortez decision, Trans Union did not consider using a vendor other than Accuity, or stopping the sale of OFAC information.
• Trans Union cannot identify a single instance in which its OF AC Alert product identified someone actually on the OF AC list.
• For each person who contacted Trans Union to dispute the OF AC information, Trans Union performed a manual review and removed the OFAC Alert.
• Trans Union removed Mr. Ramirez's OF AC Alert when it received a handwritten note from him saying “please get me off the of ac list.”

         Second, Trans Union argues that Plaintiff failed to prove a willful violation of either Section 1681g(a) and (c)(2). It maintains that its disclosure attempted to comply with the Third Circuit Court of Appeal's decision in Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010), and argues that nothing in the statute requires all the required information to be delivered simultaneously; to the contrary, the statute suggests that only one disclosure of rights is required per request. In any event, Trans Union argues they had no intent to violate the FCRA. The trial evidence, however, fully supports a contrary conclusion. For example, the evidence supports the following findings:

• Ramirez requested a copy of his Trans Union file, and received his file or “personal credit report” which identified itself as the response to his request, and contained no reference whatsoever to OFAC.
• The form of the “personal credit report” was the same for all class members in 2011, and like the form sent to Ms. Cortez in 2005, omitted OFAC information.
• Trans Union sent Mr. Ramirez and all other class members a separate letter regarding the OFAC record that “is considered a potential match” to the consumer's name. The letter is not identified as a file disclosure, and says that the requested personal credit report “has been mailed to you separately.” The letter also states that it is being provided as a “courtesy, ” and does not inform the consumer that the OFAC information can be disputed if inaccurate.
• Trans Union continued to disclose this information separately because it concluded that it was technologically infeasible to do it all at once, but it never sought outside expert assistance with the issue and it was ultimately able to solve the infeasibility issue six months later.
• Since it introduced the product in 2002, Trans Union has had the capability to incorporate OFAC information into the credit reports sold to customers.
• Trans Union did not begin to disclose OFAC information to consumers in any manner until 2011, and never considered stopping sales of OFAC alerts to third parties.
• Trans Union misrepresented the content of its separate OFAC letter in a communication to the United States Department of Treasury, falsely claiming that it instructed consumers about their right to dispute OFAC information.

         Trans Union's motion for judgment as a matter of law is therefore DENIED. Substantial evidence supports the jury's conclusion that Trans Union willfully violated 15 U.S.C. §§ 1681e(b), 1681g(a), and 1681g(c).

         B. Trans Union's Motion for New Trial

         Under Rule 59, a court has the discretion to grant a new trial “for any reason for which a new trial has heretofore been granted in an action at law in federal court.” Fed.R.Civ.P. 59(a)(1)(A). The grounds for a new trial include: (1) a verdict that is contrary to the weight of the evidence; (2) a verdict that is based on false or perjurious evidence; or (3) to prevent a miscarriage of justice. Molski v. M.J. Cable, Inc., 481 F.3d 724, 729 (9th Cir. 2007) (quotation marks and citation omitted). Erroneous evidentiary rulings and errors in jury instructions are also grounds for a new trial. See Ruvalcaba v. City of Los Angeles, 64 F.3d 1323, 1328 (9th Cir. 1995). A new trial should be granted where, after “giv[ing] full respect to the jury's findings, the judge on the entire evidence is left with the definite and firm conviction that a mistake has been committed” by the jury. Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1365 (9th Cir. 1987).

         Trans Union insists that it is entitled to a new trial because of counsel's improper statements during closing argument and improper questioning of witnesses regarding the Cortez case.

         First, Trans Union maintains that Plaintiff's counsel's references to unnamed executives sitting in tall buildings was inflammatory as was other language regarding Trans Union's failure to call a trial witness and a statement suggesting that although only 25 percent of the class applied for credit during the class period, the effect of Trans Union's OFAC Alert on these individuals beyond the six-month class period is unknown. Trans Union's objections to these statements are unpersuasive. As an initial matter, to the extent that Trans Union took exception to Plaintiff's counsel's remarks, defense counsel should have objected and sought appropriate relief from the Court. See Bird v. Glacier Elec. Coop., Inc., 255 F.3d 1136, 1148 (9th Cir. 2001). In the absence of “a contemporaneous objection or motion for a new trial before a jury has rendered its verdict, ” a new trial is warranted [only] where the integrity or fundamental fairness of the proceedings in the trial court is called into serious question.”[1]Id. Further, in evaluating the likelihood of prejudice from the comments, the court considers “the totality of circumstances, including the nature of the comments, their frequency, their possible relevancy to the real issues before the jury, the manner in which the parties and the court treated the comments, the strength of the case, and the verdict itself.” Hemmings, 285 F.3d at 1193. A new trial ...

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