U.S. Supreme Court

Chemerinsky: The SCOTUS sleeper cases of the October 2020 term

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Erwin Chemerinsky. Photo by Jim Block.

The U.S. Supreme Court’s October 2020 term, which ended on July 1, had major rulings that attracted media attention, such as its narrow interpretation of the Voting Rights Act of 1965 and its ruling expanding the protections of the free exercise clause of the First Amendment. There also were some cases that attracted relatively little attention but that have the potential to have significant effects on the work of lawyers and judges throughout the country. Here are two of them.

TransUnion v. Ramirez

The court long has said that Congress can create rights by statute, albeit ones that would not otherwise exist, and the infringement of those rights constitutes a sufficient injury for standing.

In Warth v. Seldin, in 1975, the court observed that “Congress may create a statutory right or entitlement the alleged deprivation of which can confer standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the absence of statute.” But in TransUnion v. Ramirez, the court significantly limited Congress’ power to do this.

TransUnion involved the Fair Credit Reporting Act, which regulates the consumer reporting agencies that compile and disseminate personal information about consumers. The law requires that consumer reporting agencies “follow reasonable procedures to assure maximum possible accuracy” in consumer reports.

It provides that consumer reporting agencies must disclose to consumers all information in their file at the time of request. The act also compels reporting agencies to “provide to a consumer, with each written disclosure by the agency to the consumer,” a “summary of rights” prepared by the Consumer Financial Protection Bureau. Importantly for this case, the Act creates a cause of action for consumers to sue and recover damages for certain violations.

TransUnion creates and sells reports to entities requesting information about consumers’ credit. In 2002, TransUnion introduced a feature that included information maintained by the U.S. Department of Treasury’s Office of Foreign Assets Control, which listed known terrorists, drug traffickers and other serious criminals.

Sergio Ramirez learned the hard way that his name was on this list. When Ramirez visited a car dealership in 2011, his credit check returned an OFAC adviser alert. Seeing Ramirez’s name was on the terrorist list, the car dealer refused to sell to him. Ramirez called TransUnion to request a copy of his credit file, which was mailed. The first mailing, however, did not include the OFAC alert, and the second mailing with the OFAC alert did not include a summary of his rights.

A class action suit was brought on behalf of 8,185 individuals with OFAC alerts in their credit files, including Ramirez, against TransUnion under the Fair Credit Reporting Act for failing to use reasonable procedures to ensure their credit files were accurate. Prior to trial, only 1,853 members had their misleading reports with OFAC alerts provided to third parties during the seven-month period. The internal credit files of the rest of the 6,332 class members were not provided to third parties during that time.

The Supreme Court ruled that the latter group lacked standing to sue, notwithstanding the federal law creating such a right and authorizing suits.

The court reiterated that, to have Article III standing to sue in federal court, plaintiffs must demonstrate that they suffered a “concrete” injury, but imposed a new limit: “What makes a harm concrete for purposes of Article III? As a general matter, the court has explained that ‘history and tradition offer a meaningful guide to the types of cases that Article III empowers federal courts to consider.’ And with respect to the concrete-harm requirement in particular, … courts should assess whether the alleged injury to the plaintiff has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing a basis for a lawsuit in American courts. That inquiry asks whether plaintiffs have identified a close historical or common-law analogue for their asserted injury.”

The court, in a 5-4 decision, applied this to hold that Ramirez lacked standing to sue. Justice Brett M. Kavanaugh wrote the opinion for the court, joined by Chief Justice John G. Roberts Jr. and Justices Samuel A. Alito, Neil M. Gorsuch and Amy Coney Barrett. Justice Clarence Thomas wrote a dissent joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.

Thomas argued that the violation of a statutory right is sufficient for standing: “Statutes creat[e] legal rights, the invasion of which creates standing. And this understanding accords proper respect for the power of Congress and other legislatures to define legal rights … In light of the history, tradition and common practice, our test should be clear: So long as a statute fixes a minimum of recovery … there would seem to be no doubt of the right of one who establishes a technical ground of action to recover this minimum sum without any specific showing of loss.”

TransUnion v. Ramirez limits the ability to sue to enforce federal statutes creating rights to where it is an injury recognized historically or at common law. Consider standing to sue under the federal Freedom of Information Act. It creates a statutory right to all documents possessed by the federal government unless they fit into one of nine categories of exceptions.

It authorizes standing to sue when documents are withheld. It is a statute that creates a right, albeit a right that did not exist at common law. After the court’s decision in TransUnion is such standing allowed to enforce this statute? Or to pick an even more extreme example, what about the provisions of the Fair Labor Standards Act that prohibit child labor?

They, too, create a federal statutory right where none existed historically or at common law. At the very least, TransUnion is going to cause defendants sued for violating countless federal statutes to argue that there is no standing because the right was not traditionally protected.

Americans for Prosperity Foundation v. Bonta

Under California law, the California Attorney General’s Office is responsible for enforcing state laws regulating charitable fundraising. The California Attorney General has required that charities, in renewing their registration with the state, file copies of their Internal Revenue Service Form 990, along with any attachments and schedules.

On Form 990, the federal government requires organizations to disclose the names and addresses of donors who have contributed more than $5,000 in a particular tax year. Conservative not-for-profit groups brought a challenge based on the First Amendment.

The issue before the Supreme Court was whether it violated freedom of association, because of the possible chilling effect of disclosure, for California to require that charities turn over to the state the document they already must give to the federal government.

The court in a 6-3 decision declared the California law unconstitutional. Roberts wrote an opinion that was joined in full by two justices (Kavanaugh and Barrett) and in part by three justices (Thomas, Alito and Gorsuch). Although all six justices agreed that the law was unconstitutional, they disagreed about the level of scrutiny to be applied. Roberts said that the test is “exacting scrutiny.”

He wrote: “We have since settled on a standard referred to as ‘exacting scrutiny.’ Under that standard, there must be ‘a substantial relation between the disclosure requirement and a sufficiently important governmental interest.’” The court contrasted exacting scrutiny with strict scrutiny, with the latter but not the former requiring that the government use the least restrictive alternative.

By contrast, Thomas concurred in the judgment and said that strict scrutiny should be used. Alito, joined by Gorsuch, concurred in the judgment, and rejected needing to choose between strict scrutiny and exacting scrutiny. He wrote: “I am not prepared at this time to hold that a single standard applies to all disclosure requirements. And I do not read our cases to have broadly resolved the question in favor of exacting scrutiny.”

Writing for the majority, Roberts said that there was no evidence that the disclosures to the attorney general did anything to help regulate charities. At the same time, though, the court expressed great concern that association would be chilled if donors’ identity were disclosed. The court dismissed as irrelevant the fact that California keeps this information secret and that it is the same information that already must be given to the federal government.

Sotomayor wrote a dissent, joined by Breyer and Kagan. Sotomayor said that the court was abandoning its prior decisions, which required some proof that association was actually chilled. She expressed great concern that this will put many other disclosure requirements in jeopardy.

This the crucial question: What will be the impact on other disclosure requirements? Roberts is explicit that proof is not necessary that contributions are actually chilled. But without requiring some proof it would appear that any disclosure requirement is constitutionally vulnerable.

California just was requiring submission of a form already being provided to the federal government. Why, then, isn’t that federal disclosure requirement also unconstitutional? Will this put campaign disclosure laws in jeopardy? Again, this is likely to lead to a great deal of litigation challenging all forms of disclosure requirements that are found in many different types of laws.

Erwin Chemerinsky is dean of the University of California at Berkeley School of Law. He is an expert in constitutional law, federal practice, civil rights and civil liberties, and appellate litigation. He’s the author of several books, including The Case Against the Supreme Court (Viking, 2014). His latest book is The Religion Clauses: The Case for Separating Church and State, written with Howard Gillman (Oxford University Press, 2020).

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