In Kelly v. RealPage, Inc., the Third Circuit held that a small subclass of consumers could proceed on their class action against RealPage based on the company’s failure to provide them with required third-party information in credit reports.  In issuing the decision, the court is one of the first Circuit Courts to squarely address the scope of what constitutes an “informational injury” in the wake of the Supreme Court’s recent decision in Transunion LLC  v. Ramirez, 141 S. Ct. 2190 (2021).

The two lead plaintiffs in the case were denied apartment rental leases after RealPage, Inc., a consumer reporting agency, provided their prospective landlords with false information.  For one plaintiff, RealPage reported that he had obtained two convictions for driving while intoxicated and another conviction for driving with an outdated vehicle registration tag.  For the other plaintiff, RealPage had reported that he was previously evicted from an apartment and was currently facing a civil action for possession.

Both plaintiffs sought to have RealPage correct the errors but were unable to do so.  They then initiated a putative class action against RealPage, alleging, among other things, violations of Section 1681g of the Fair Credit Reporting Act.  They sought to represent a class of consumers who had received reports from Real Page between September 2017 and November 2019.  The general putative class (about 2.2 million consumers) alleged that they received reports from RealPage, but that RealPage failed to provide them with a list of third-party vendors who provided RealPage with the information contained within the reports.  The plaintiffs also moved to certify a “Direct Requests” subclass, which consisted of individuals in the general class who received a rental report from RealPage through a direct request to RealPage.  The “Direct Requests” subclass consisted of 16,659 consumers.

The district court found that the plaintiffs had standing to sue, but denied certification of both the general class and the subclass.  The district court explained that neither class was ascertainable because making that determination would require review of each individual file, which, the court stated was “not administratively feasible.”

Relying on Spokeo, Inc. v. Robins, 578 U.S. 330, 342 (2016), the Third Circuit affirmed the district court’s conclusion on standing, explaining that “RealPage’s failure to disclose source information was cognizable as an ‘informational injury.’”

The court rejected RealPage’s contention that the classes failed to establish that they suffered a concrete injury under the new parameters established in Transunion.  Specifically, Real Page argued that the plaintiffs could not state an informational injury because they had alleged only a “bare procedural violation” and had “identified no downstream consequences” from RealPage’s failure to disclose third-party information.  In rejecting RealPage’s argument, the court explained that the plaintiffs had suffered an injury because (1) the FCRA required RealPage to disclose the sources of the information it gathered, (2) RealPage’s omission of third-party information led to “adverse” affects on the plaintiffs in that it impaired their ability to obtain information cure their credit issues, and (3) RealPage’s failure to disclose information it obtained from third parties frustrated of Congress’s goals of empowering consumers to obtain and correct inaccurate information in their credit reports.

As to the ascertainability of the classes, the Third Circuit agreed with the district court that the general putative class was not ascertainable.  However, it rejected the district court’s conclusion that the “Direct Requests” subclass was not ascertainable.

The Third Circuit explained that the district court misconstrued precedent on the administrative feasibility of ascertaining the subclasss.  The court explained that class members could be identified “even if it require[d] review of individual records with cross-referencing of voluminous data from multiple sources.”  To that end, the court explained, “[v]erifying whether there is public record information in the file requires only an examination of the face of Rental Reports that are indisputably in RealPage’s possession[.]”

The decision reflects a growing trend among the Circuit Courts of Appeal that TransUnion is narrow and does not necessarily eliminate federal class actions premised only on technical violations of federal statutes.  The decision also reflects that ascertainability of putative classes has real limits but that class plaintiffs will not fail to meet it simply because it would require examination of many files.