The Now-Traditional Argument About Non-Traditional Harms—No Answer In Sight

Our colleague Erik Zimmerman reported in an earlier post the memorable declaration from defense counsel in TransUnion, LLC v. Ramirez, 594 U.S. 413 (2021): when a legal violation results in no harm, those involved should “break out the champagne,” not “break out a lawsuit.”

In TransUnion, decided in 2021, the Supreme Court grappled with a question that has vexed federal courts in recent years: how much leeway should plaintiffs have to bring federal suits based on “intangible harms”? Article III courts have been redressing obvious harms to person and pocketbook since the founding. But can the courts entertain a case when the plaintiffs did not suffer those clear-cut traditional injuries but claim instead that they were hurt in a more “intangible” way? For example, does a plaintiff suffer a “concrete” injury when a debt collector sends the plaintiff’s sensitive personal information to a mail vendor for that vendor to populate the information into a form letter that will be mailed to the plaintiff? What if the transmission of the plaintiff’s personal information violates a federal statute? Such questions feature prominently and repeatedly in the early motion-to-dismiss skirmishes waged at the beginning of any class action.

As Erik Zimmerman explained, TransUnion gave cause to celebrate to both innovative plaintiffs and tradition-reliant defendants. The Court limited the types of intangible harms that federal courts can redress. But in distinguishing cognizable harms from non-cognizable ones, the Court eschewed bright lines in favor of a standard that has no clear boundaries as this year begins. Erik’s suggestion to both sides remains sound: keep the refreshments on ice until the lower courts flesh out TransUnion’s implications.

After a few years of fermentation, we can begin to distinguish TransUnion’s notes.

For plaintiffs in some cases, TransUnion’s grapes have soured. For example, in Hunstein v. Preferred Collection and Management Services, Inc., 48 F.4th 1236 (2022), an en banc decision from the Eleventh Circuit in the fall of 2022, the majority—over a stinging dissent by Judge Kevin Newsom—held that a plaintiff lacked standing to sue a debt collector that communicated the plaintiff’s sensitive medical information to a third-party mail vendor.

According to the Hunstein majority, the plaintiff could not bring a claim under the Fair Debt Collection Practices Act because the harm he allegedly suffered (the disclosure of his private information to the mail vendor) was not sufficiently “concrete” to constitute a cognizable harm under TransUnion. In TransUnion, the Supreme Court instructed courts to gauge “concreteness” by analyzing whether the plaintiff’s injury has a “close relationship” to “a harm traditionally recognized as providing a basis for a lawsuit in American courts.”  But that instruction came with a caveat: the plaintiff’s harm need not be an “exact duplicate” of the “historical or common-law analogue.”

The Hunstein majority found a traditional comparator: the public disclosure of private facts, a tort at common law. But the majority concluded that the plaintiff’s injury failed to resemble that common-law injury in one “necessary” respect: the public-disclosure tort concerned only public disclosures, while the plaintiff’s private information was disclosed only to the mail vendor. Because this disclosure was not “public,” the majority held that the plaintiff’s harm was not concrete under TransUnion’s historical test.

In dissent, Judge Newsom reasoned that the plaintiff alleged a harm “similar in kind” to the common-law comparator, even if the two are not “identical in degree.” And, drawing on TransUnion’s caveat, Judge Newsom concluded that similarity in kind is “close enough” for Article III standing.

The nuanced disagreement between the Hunstein majority and dissent points up a pivotal open question about TransUnion’s “close relationship” standard. As Judge Newsom explained, “The majority and I disagree about how close is ‘close enough.’” Although that disagreement is “narrow,” it is also “profound.” It means that a plaintiff’s threshold ability to sue may depend on the minutiae surrounding a single element of a centuries-old tort.

Hunstein is not near the end of the story. In other recent cases, courts have delivered sobering decisions that dashed the hopes of defendants who expected TransUnion’s tradition-focused test to short-circuit class actions based on novel injuries.

For example, there’s Wakefield v. ViSalus, Inc., 51 F.4th 1109 (9th Cir. 2022), a decision from the Ninth Circuit a month after Hunstein. There, a certified class claimed to have received unwanted robocalls from a company promoting weight-loss products. A jury found that the company placed over 1.8 million robocalls in violation of the Telephone Consumer Protection Act. Since the TCPA sets statutory damages at $500 per call, the plaintiffs received a damages award of $925.2 million. While remanding for the district court to assess the constitutionality of that award, the Ninth Circuit held that, under TransUnion, a concrete injury had landed on the plaintiffs upon their receipt of unwanted robocalls.

Even more striking than the amount of the award is the extent to which Wakefield’s analytical approach differs from Hunstein’s. Although the Eleventh Circuit parceled out the elements of the common-law comparator, prepared to conduct a scrupulous element-by-element comparison to determine whether the plaintiff’s harm was similar to the common-law harm in every respect, the Ninth Circuit was content to let the common-law comparison speak for itself. Wakefield rested its comparative analysis on a single sentence: “the receipt of unsolicited phone calls closely resembles traditional claims for invasions of privacy, intrusion upon seclusion, and nuisance.”  It is difficult to imagine two analytical approaches more different from each other than those on display in Hunstein and Wakefield. Yet both opinions apply TransUnion’s test.

The circuits have begun to coalesce on one side of the spectrum or the other. In December 2022, the Tenth Circuit agreed with Hunstein’s reasoning in another FDCPA case. See Shields v. Pro. Bureau of Collections of Md., Inc., 55 F.4th 823 (10th Cir. 2022). The Seventh Circuit followed suit in October 2023. See Nabozny v. Optio Sols. LLC, 84 F.4th 731 (7th Cir. 2023). The Second Circuit, however, recently approached the issue more like the Ninth Circuit in Wakefield. In Bohnak v. Marsh & McLennan Companies, Inc., 79 F.4th 276 (2d Cir. 2023), the Second Circuit held that the plaintiff suffered an injury like the harm caused by the traditional public-disclosure tort when the plaintiff’s personal information was disclosed to “an unauthorized malevolent actor” during a data breach. The court reached that conclusion without wrestling with the question that divided the Eleventh Circuit in Hunstein: how many people must view the information for the harm to be similar to the injury caused by the public-disclosure tort?

Though the tradition-bound concrete-harm requirement goes to the mat at the beginning of almost every class action standing on a statutory violation, modern technology, or data privacy, the exact contours of this now-traditional aspect of class-action litigation remain difficult to discern.

The Supreme Court has some pruning to do. Maybe we shall see that in the next vintage.