An obscure Supreme Court ruling is a cautionary tale of federal power

The civic shock of the Jan. 6 insurrection still roils Congress, but its sources and meaning go deep into the core of our government and its relationship to society. Given the political tumult, it would be easy to miss a tremor sent out by the Supreme Court. 

Late this term, the Court signaled through a privacy case that the arrangements of governmental power laid out in the Constitution are subject to ongoing violation. Our constitutional disorder, like tectonic plates on a slow-motion collision, may have something to do with recent political earthquakes. 

TransUnion v. Ramirez seems like anything but a case about federal power. An auto dealer would not sell plaintiff Sergio Ramirez a car because credit bureau TransUnion had indicated to the dealer that he might be on a list of people the government believes are drug kingpins and terrorists. TransUnion had not taken basic steps like comparing the birthdates of listed people against those with similar names, arguably violating the Fair Credit Reporting Act (FCRA), which requires credit bureaus to “follow reasonable procedures” to assure maximum possible accuracy in their reports. 

Ramirez sued for himself and 8,184 others recognized in TransUnion’s files as potential matches to the government’s bad-guy list. But only 1,853 of that group were portrayed as a potential bad guy to recipients of credit reports. The rest were only treated badly somewhere in TransUnion’s files.

Ramirez still has a case, the Court held, but not so the 6,000+ class-members whose potential bad-guy status did not get published. They lack standing to sue because nothing actually harmful happened to them. Dealing with their complaint in federal courts would violate the requirement originating in Article III of the Constitution that federal courts deal only with real “cases or controversies.” Justice Brett Kavanaugh, for a five-justice majority, wrote pithily: “No concrete harm, no standing.”

That knocked privacy law professors Danielle Citron and Daniel Solove out of their chairs. They wrote in the Boston University Law Review Online that Ramirez was “a major blow to the enforcement of privacy laws in the federal courts,” “wrong and troubling on many levels,” and “severely flawed.” Justice Clarence Thomas was a little more circumspect, but his leading dissent argued that Congress can indeed create cases or controversies simply by creating statutory rights such as the FCRA’s right to an accurate credit file.

The question of whether Congress can create new rights is important. Are legal rights and wrongs timeless concepts that the framers incorporated into the Constitution? Or did the framers give Congress the power to define right and wrong, for the federal courts to administer? Those are big questions about where the power is in our society.

The small-d democratic answer, exalting the will of voting majorities, is that Congress has the power to say what is harm, and thus, what is a case or controversy. The small-r republican answer focuses on ensuring against any hereditary aristocracy or monarch.

We do not have aristocracy as practiced in the old days, but we do have a cadre of highly educated, wealthy elites who populate the halls of power. They live very different lives from the bulk of the population, they earn and invest well enough to surpass inflation, and they generally have progressive values. It is possible to share those attributes (as I do) and see how rejection of elites may have animated President Trump’s election in 2016 and his strong run in 2020.

Our country is unrepublican in spirit. Congress is more elitist than democratic. We are far from the decentralized governmental system power built into the Constitution. It was never thought that Congress would be in the business of defining and defending private parties’ rights against each other or designing intricate regulatory systems. Those things were the province of the states, according to the original design of the Constitution. States run by far more accessible legislators were supposed to be our national centers of gravity. Think of Ramirez as an improvisation required by the distended state of federal power.

After Ramirez, congressional power is curtailed. The concept of legal harm will be treated as pre-existing the Constitution the way property did. (The framers provided for property protection in the Constitution without defining it or inviting Congress to do so.) Any cause of action Congress purports to create must have its roots in common law harms — legal standards that have risen up from below rather than coming down from above. The federal courts will not recognize rights or harms that Congress creates from whole cloth.

That rankles Citron and Solove. The common law, they say, is “like a mutt . . . cobbled together in a more eclectic and ad hoc manner, almost bric-a-brac in nature.”

That is a fair charge, but the same cobbling is a risk with statutes. Congress amended the FCRA more than 30 times between 1978 and 2018. Regulators routinely vary and hone their interpretations of statutes and their own regulations, while their enforcement choices follow political winds. All that makes legislation and regulation a bric-a-brac of its own, from the perspective of legal non-elites.

There are good arguments on both sides of Ramirez. One way to explain the outcome is to take it as a signal from the Supreme Court’s majority that power arrangements in our country are out of balance. The imbalance may be part of what infects our current politics. The federal government has seized so much authority over the last century that one can conceive of Jan. 6 as a profoundly inarticulate and otherwise wrongful counter-insurrection by Americans drunk on disinformation.

There is no time for seismology during an earthquake, but study we must. In Ramirez, the Supreme Court may be telling us that power is too remote from the people.

Jim Harper is a nonresident senior fellow at the American Enterprise Institute (AEI), where he focuses on privacy issues, and select legal and constitutional law issues.