The U.S. Supreme Court’s recent decision in TransUnion v. Ramirez is the latest in a line that keeps on shrinking so-called “Article III standing”—the ability to bring a legal claim in federal court. Standing rules, ostensibly “neutral” and procedural, have long been used to limit individuals’ and public interest groups’ ability to use courts to remedy harms caused by corporate and government power. But TransUnion goes farther than any prior decision.
In theory, the same logic the Court used to kick thousands of TransUnion’s plaintiffs out of court should make it harder, perhaps impossible, for corporations to enforce various forms of so-called “intellectual property” (IP) against competitors and the public. By marshaling TransUnion to challenge the enforceability of some IP rights, we might squeeze a small glass of lemonade from TransUnion’s lemons. These challenges could force courts into a difficult and possibly productive dilemma: either conclude that TransUnion’s stingy view of standing reduces the power and value of IP, or conclude that it does not, and thereby qualify and confine the decision. That confinement could, in turn, limit the harm TransUnion does to the rest of our law.
But embracing TransUnion to undermine TransUnion is risky, and trusting courts to apply it even-handedly may be pollyannaish. I intend this piece not as a manifesto but as an invitation to ponder what to do with TransUnion.
TransUnion’s Internal Logic
In TransUnion, thousands of plaintiffs sued the credit bureau TransUnion for falsely labeling them as potential terrorists in their credit reports. Their suit was brought under the Fair Credit Reporting Act, a 1970 federal statute that provides individuals with a private right of action to seek monetary damages from entities that introduce errors into credit reports. TransUnion responded by challenging the plaintiffs’ Article III standing.
In a 5-4 majority decision written by Justice Kavanaugh, the Supreme Court agreed, mostly, with TransUnion and dismissed the claims of a majority of those plaintiffs. It did so on the theory that they lacked standing because they lacked an “injury in fact that is concrete, particularized, and actual or imminent.” No one disputed that the plaintiffs’ credit reports contained actual, particular errors, but in the Court’s eyes, the mere fact of these errors did not constitute an injury sufficiently “concrete” to create standing. The Court acknowledged that Congress had intended to empower people just like these to go to court to get their credit reports corrected—and to collect compensation for their trouble—but it determined that “Congress’s creation of a statutory prohibition or obligation and a cause of action does not relieve courts of their responsibility to independently decide whether a plaintiff has suffered a concrete harm under Article III.” Congress “may not simply enact an injury into existence,” said TransUnion.
Which harms are “concrete” enough to support a valid legal claim in federal court, according to TransUnion? Only those with “close historical or common-law analogues,” “most obvious[ly] traditional tangible harms, such as physical harms and monetary harms.” “Various intangible harms can also be concrete,” gestures the Court, vaguely. An erroneous credit report? Not “concrete,” unless already disclosed to a third party. (TransUnion concluded that disclosure of erroneous information to third parties sufficiently resembled the ancient tort of defamation to cause a “concrete” injury.) Other intangible “injuries with a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts”? Maybe.
Both as a matter of constitutional interpretation and as a matter of justice, the decision is misguided, as other commentators have incisively explained. (Justices Thomas and Kagan, too.) TransUnion keeps the doors of federal courts open to remedying harms to property and capital while closing them to remedy harms to non-physical, non-monetary interests such as knowledge, dignity, and privacy—interests more vital than ever in the age of informational capitalism. TransUnion reduces federal courts’ already-eroded ability to provide justice to plaintiffs without power.
TransUnion’s Logic Threatens Many Intellectual Property Claims
The logic of TransUnion—that Congress “may not simply enact an injury into existence” and that only injuries with “close historical or common-law analogues” suffice to confer Article III standing—should theoretically bind everyone.
Consider that Congress has enacted into existence protections for certain IP rights—patents, copyrights, trademarks, and trade secrets, especially. These are intangible assets imbued with some, not all, of the attributes of real property. IP provides its holders with exclusive rights to control and profit from information protected by the IP right—useful inventions in the case of patents, creative works in the case of copyrights, and so on. The vast majority of valuable IP is owned by valuable corporations (and, indeed, constructs much of corporations’ value).
Many IP claims involve straightforward, uncontroversially “concrete” monetary harms, such as when a competitor defendant copies an originator plaintiff’s commercial product and captures the plaintiff’s market. But not all do. In various federal IP statutes, Congress has provided IP rights holders with additional rights to use federal courts for redress of contrived non-monetary injuries. Under TransUnion, these rights may no longer be enforceable.
Take copyright’s statutory damages provisions. Through the Copyright Act, Congress has entitled copyright holders to use federal courts to demand tens of thousands of dollars in damages for each copyrighted work infringed by a defendant, even absent any showing of actual financial loss. Yet, as Thomas’s dissent observes, statutory damages have no obvious “historical or common-law analogues”; until Congress’s enactment, copyright holders had to prove actual harm to obtain damages. Thus statutory damages claims may not comport with TransUnion. The economic and cultural ramifications are vast: copyright holders, big and small, regularly use these statutory damages provisions to protect and monetize creative works. (One notorious example: In the 2000s, the Recording Industry Association of America used the Copyright Act’s hefty statutory damages provisions to chill peer-to-peer sharing of copyrighted music. One person was ultimately ordered to pay $675,000 in damages for sharing 31 MP3 files.)
Similar arguments apply, mutatis mutandis, to various other IP enforcement claims that hinge on injuries that Congress enacted into existence, out of thin air. For example, in 1984’s Hatch-Waxman Act, Congress invented a legal mechanism by which brand-name drug companies can litigate patent infringement claims years before any actual infringement or monetary harm begins. (The Court itself deemed this mechanism “highly artificial.”) In the 1990s and 2000s, Congress authorized holders of “famous” trademarks to go to federal court to seek injunctions barring others—even non-competitors—from using famous marks in ways “likely to cause dilution” of the famous marks’ value, “regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.” In 1998, Congress enacted the Digital Millennium Copyright Act, which includes “anti-circumvention” provisions that permit copyright holders to prevent people from peering into “protected” software and electronic devices, regardless of whether any actual harm occurs. In 2016’s Defend Trade Secrets Act, Congress “broadened how harm [to trade secrets] could be conceived and measured,” and “provided nonmonetary remedies to prevent threatened harm”—“even in the absence of actual harm,” as Sharon Sandeen has explained.
There are important nuances here. For instance, some of these claims yield injunctive relief, not damages, and TransUnion suggested, vaguely, that a different legal standard may apply to standing to bring claims for injunctive relief. Moreover, barring IP holders from federal court may simply lead them to bring similar claims in state court. (But state courts lack jurisdiction over many IP claims—in patent, trademark, and copyright law especially—such that losing standing in federal court effectively extinguishes the claim altogether.) However, the big point remains: TransUnion’s radical view of standing threatens the enforceability of a panoply of IP claims.
Should We Capitalize on TransUnion?
Should we proactively raise TransUnion-based arguments to challenge the enforceability of IP claims? Such challenges are practicable. Most anyone—academics, activists, law school clinics—can raise TransUnion-based challenges to plaintiffs’ standing by filing amicus briefs at any level of Article III court—district, circuit, Supreme. All these courts must determine whether the plaintiff has standing throughout every case, even if the parties never raise the issue. Amicus briefs make standing defects harder for a court to ignore.
An amicus brief in one case might attempt to protect employees who quit their jobs from accusations of misappropriating their former employers’ trade secrets. Another might seek to prevent powerful brands from “bullying” small, non-competitor companies via trademark dilution suits.
We could also imagine more structural challenges, to chip away at the immense economic power that IP rights confer. To channel Katharina Pistor, our legal system “codes” capital by assigning legal rights that create, shelter, and grow wealth in the hands of their holders. Congress has worked assiduously to develop IP law into a central “module” of capital’s code, such that those who hold IP rights can currently go to court and, by court order, enjoin competition, extract rents, control employees, and so on. TransUnion could scramble some of that code.
But should we? Unintended, unpredictable consequences lurk. Upsetting copyright’s statutory damages framework, for example, might reduce the imbalance in power between powerful content industries and the rest of us, but also eliminate a tool that some small-time creators use to collect compensation for their labor. Demolishing the Hatch-Waxman framework would unsettle not just “big pharma” but the makers of lower-cost generic drugs, too. And so on.
Also, will courts—especially this Supreme Court—even accept that TransUnion must cut both ways? As Daniel Solove and Danielle Citron have written, in a superb piece that foretells the devastation TransUnion will likely wreak on data privacy, the Court could curtail perturbation of copyright and “countless” other laws through “selective application of [TransUnion’s] logic in these cases or by making questionable distinctions so that only laws the justices dislike are affected.”
Perhaps marshalling TransUnion against IP claims would be a distraction from more important work, including organizing to expand or democratize the Supreme Court. Perhaps agonizing over TransUnion is moot; because standing is a prerequisite of every suit, the hundreds of thousands of civil litigants in federal court every year will undoubtedly contest TransUnion’s meaning—and are already. The ferment will reach every corner of federal civil law, whether we participate or not.
Still, while TransUnion is fresh and lower courts are just beginning to apply it, we have an opportunity to foist an interesting dilemma on the federal courts. Either they agree that TransUnion’s stingy view of standing applies to IP as it does to individuals’ credit reports, or they conclude that it does not. If courts choose the latter route, they will have to qualify and confine TransUnion, and maybe—maybe—in confining TransUnion they will limit the future harm the decision does to our law and our country. I welcome any thoughts on whether the risks of wielding TransUnion are worth taking.