Muha et al v. Experian Information Solutions

Muha et al v. Experian Information Solutions

What’s at Stake

Standing is the legal principle that decides who gets to bring a lawsuit. Traditionally, a person who has experienced the violation of a statute has standing to bring a claim for that violation. For example, the Fair Credit Reporting Act (FCRA) says that people can bring claims when a credit reporting agency does not include notices in their reports explaining consumers’ rights. However, in recent years the U.S. Supreme Court has held that in order to sue in federal court, the person alleging the violation must also show that they suffered an injury  distinct from the statutory violation. Following this holding, people who had their rights violated also have to prove they suffered concrete harm beyond the statutory violation before they can go to court. Meanwhile, a company that knowingly broke the law sees no consequences.

This case is about whether California will continue to recognize that having statutory claims is enough to sue in state court or whether it will follow the federal courts and require concrete harm separate from the statutory violation itself to bring a lawsuit.

Summary

The plaintiff-appellants filed two class FCRA complaints against Experian, alleging that the agency had willfully failed to provide them with statutorily required “Summary of Rights” notices in their consumer reports. Notably, the plaintiffs alleged that the Summary of Rights notice failed to contain a statement that the consumers may have additional rights under State law, and that the consumers may wish to contact a State or local consumer protection agency or a State attorney general to learn of those rights. Such notices are required in regulations issued by the Consumer Financial Protection Bureau to improve the accuracy, fairness, and privacy of the information provided by credit reporting agencies. For each “willful” violation of the regulation, the law says that a consumer is entitled to any actual damages resulting from the omission, capped at $1,000. On appeal, the court relied on the analysis in Limon v. Circle K and concluded that the plaintiffs had demonstrated no “downstream  consequences” resulting from the lack of the required notice, and so they “did not suffer an injury in fact under Article III, and therefore, they do not have a beneficial interest under California law” sufficient to demonstrate standing to sue in state court.

Core Legal Problem

We represented the plaintiffs in seeking review in the California Supreme Court. Our petition argued that Limon v. Circle K was wrongly decided by the Fifth Appellate District and that California courts should not import the harsh injury requirements from federal law, particularly from the U.S. Supreme Court’s TransUnion v. Ramirez decision. Among other things, it also explained the importance of allowing people to recover statutory damages when companies break the law even when there were not demonstrable harms separate from the statutory violation.

Unfortunately, our petition for review was denied.