March 2, 2020

Ninth Circuit reduces punitive damages from $52 million to $32 million (Ramirez v. TransUnion LLC)

In this published opinion, the Ninth Circuit reduced a punitive damages award from roughly $52 million to roughly $32 million.  Even that reduced figure represents one of the largest sums of punitive damages that has ever survived a Ninth Circuit appeal. 

In this class action against credit reporting agency TransUnion, the plaintiffs alleged that TransUnion incorrectly placed terrorist alerts on the front page of their credit reports and send confusing and incomplete information about the alerts and how to remove them.  A jury awarded punitive damages in the amount of $6,353.08 per class member, for a total of $52 million.  That resulted in a 6.45 to 1 ratio of punitive to compensatory damages.

The Ninth Circuit rejected most of TransUnion's arguments on appeal but concluded that the award of punitive damages is constitutionally excessive, primarily because the defendant's conduct, although "egregious," did not involve health or safety and was not the result of intentional malice, trickery, or deceit.  The court determined that the 4 to 1 is the maximum ratio permitted by due process on the facts of this case.  Accordingly, the court directed the district court to modify the judgment to reduce each class member's award of punitive damages to $3,936.88.  Judge Murguia wrote the opinion, joined by Judge Fletcher.  Judge McKeown dissented.