USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 1 of 22

PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 22-1619

MARCO A. FERNANDEZ,

Plaintiff – Appellee,

v.

RENTGROW, INC.,

Defendant – Appellant.

Appeal from the United States District Court for the District of Maryland, at Baltimore. James K. Bredar, Senior District Judge. (1:19-cv-01190-JKB)

Argued: October 26, 2023 Decided: September 11, 2024

Before NIEMEYER, QUATTLEBAUM, and RUSHING, Circuit Judges.

Vacated and remanded by published opinion. Judge Rushing wrote the opinion, in which Judge Niemeyer and Judge Quattlebaum joined. Judge Niemeyer wrote a concurring opinion.

ARGUED: Maura K. Monaghan, DEBEVOISE & PLIMPTON LLP, New York, New York, for Appellant. Matthew W.H. Wessler, GUPTA WESSLER PLLC, Washington, D.C., for Appellee. ON BRIEF: Kristin D. Kiehn, Emilia N. Brunello, DEBEVOISE & PLIMPTON LLP, New York, New York; Bonnie Keane DelGobbo, Chicago, Illinois, Joel Griswold, BAKER & HOSTETLER, LLP, Orlando, Florida, for Appellant. Neil K. Sawhney, GUPTA WESSLER PLLC, San Francisco, California; E. Michelle Drake, John G. Albanese, Ariana Kiener, BERGER MONTAGUE PC, Minneapolis, Minnesota; Martin USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 2 of 22

E. Wolf, GORDON, WOLF & CARNEY, CHTD., Towson, Maryland, for Appellee.

2 USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 3 of 22

RUSHING, Circuit Judge:

When Marco Fernandez applied to rent an apartment, defendant RentGrow, Inc.,

sent the property owner a tenant screening report about him. The report inaccurately stated

that Fernandez had “1 Possible Match in OFAC Name Search.” Luckily for Fernandez,

the property manager who reviewed his report did not know what “OFAC” was or read the

section of his report about the possible match, and it did not factor into any variable she

considered when deciding whether to rent an apartment to him.

Nevertheless, Fernandez sued RentGrow for reporting this misleading information

about him and sought to represent a class of similarly situated plaintiffs. The district court

certified a class of individuals who were the subject of a consumer report with a misleading

“possible OFAC match” furnished by RentGrow to a third party. In certifying the class,

the district court rejected RentGrow’s objection that Fernandez and the class members had

failed to demonstrate a concrete injury sufficient to establish Article III standing to sue.

According to the district court, it did not matter that the recipient of a misleading report did

not read or comprehend it; dissemination of the report sufficed to show a concrete injury

in fact.

We disagree. Reputational harm can be a concrete injury, but only if the misleading

information was brought to the attention of a third party who understood its defamatory

significance. The evidence here does not support an inference that any third party read and

understood, or otherwise considered, the inaccurate OFAC information in Fernandez’s

tenant screening report. He therefore has failed to demonstrate a concrete injury sufficient

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for Article III standing. That conclusion requires rethinking class certification, so we

vacate the district court’s certification order and remand for further proceedings.

I.

A.

In 2018, Fernandez returned from a deployment with the U.S. Navy and applied to

rent an apartment in Maryland. The company that owned the apartment complex, Dorsey

Ridge, relied on tenant screening reports created by RentGrow, a consumer reporting

agency. Those reports compiled personal and financial information about each applicant,

including their credit history, rental history, and criminal background. At the top of the

first page, each report stated a screening result—such as accept, reject, or accept with

conditions—based on the approval criteria provided to RentGrow by the property owner.

The first page also identified the “Reasons for Result” and a bullet-point list of “Items to

Review.” J.A. 89. That list flagged potentially relevant records included later in the report.

For example, it might include a bullet point stating that criminal records or rental records

were found.

The “Items to Review” list would also state whether an individual was a “possible

match” to a person on the United States Treasury Department’s Office of Foreign Assets

Control’s (OFAC’s) list of specially designated nationals who threaten America’s national

security. Individuals on the OFAC list are terrorists, drug traffickers, or other serious

criminals, and it is generally unlawful for United States companies to transact business

with them. See 31 C.F.R. pt. 501, App. A (2024). At the relevant time, RentGrow flagged

an individual as a “possible match” if their first and last name matched, or were each within

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one or two characters of, a name on OFAC’s list. Although RentGrow noted possible

matches in its screening reports, that designation did not affect the screening result—i.e.,

accept, reject, or accept with conditions.

When Fernandez applied for an apartment, Dorsey Ridge requested and received a

tenant screening report about him from RentGrow. Fernandez’s report recommended that

Dorsey Ridge reject his application because his “criminal history does not meet property

requirements.” J.A. 89 (capitalization omitted). Among the “Items to Review,” the report

listed: “premium national criminal records found” and “1 possible match in OFAC name

search.” J.A. 89 (capitalization omitted). Later pages of the report detailed California

criminal records supposedly connected to Fernandez, and the last section of the report

identified the “possible” OFAC match: Mario Alberto Fernandez Santana of Zapopan,

Mexico, who was born seven years before Fernandez and linked to a drug trafficking

organization. Dorsey Ridge denied Fernandez’s application. But two days later, after

Fernandez explained that the criminal records did not belong to him, Dorsey Ridge

approved his application.

B.

Fernandez subsequently sued RentGrow for violating the Fair Credit Reporting Act

(FCRA),

et seq. His complaint asserted an individual claim based on

RentGrow’s criminal record reporting procedures, which is not at issue in this appeal.

Relevant here, Fernandez also brought an individual and class claim alleging that

RentGrow willfully failed to “follow reasonable procedures to assure maximum possible

accuracy” of OFAC information included in tenant screening reports. 15 U.S.C.

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§ 1681e(b). For this claim, the complaint sought statutory and punitive damages. See id.

§ 1681n(a)(1)(A), (2).

During discovery, RentGrow deposed Porsche Kemp, the senior property manager

for Dorsey Ridge who reviewed tenant screening reports, including Fernandez’s. Kemp

explained that her standard business practice, and that of leasing agents under her

supervision, was to review only the screening result on the first page of the report if the

recommendation was “accept.” Only if the report recommended to reject or conditionally

accept a tenant’s application would Kemp or an agent read more. Kemp did not know if

she had ever looked at the section of a screening report about OFAC potential matches and,

when questioned about OFAC information, admitted she was not “sure what OFAC is.”

J.A. 215. She was not aware if the landlord had any policy about whether apartments could

be rented to people who appear on the OFAC list. Regarding Fernadez in particular, Kemp

recalled that his application required further review because of criminal record information

in his screening report, not because of “OFAC possible match information.” 1 J.A. 214.

After discovery, RentGrow moved for summary judgment and Fernandez moved to

certify the class. The district court decided both motions in a single opinion, denying

summary judgment and granting class certification. As an initial matter, the court

addressed RentGrow’s argument that Fernandez lacked standing to sue in light of the

Supreme Court’s recent decision in TransUnion LLC v. Ramirez,

(2021).

1 The record contains no testimony from Suzanne Whatley, the leasing agent who dealt most directly with Fernandez during his application process. Fernandez testified that Whatley did not mention the OFAC list possible name match to him. 6 USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 7 of 22

The court concluded that Fernandez had demonstrated a concrete injury because his

inaccurate OFAC alert was provided to a third party, which caused a reputational harm

analogous to defamation. In the court’s view, Fernandez did not need to show that anyone

at Dorsey Ridge actually read and understood the OFAC alert to demonstrate a concrete

injury; dissemination of the misleading report was enough. And even if such a showing

were required, the court reasoned, because Dorsey Ridge paid RentGrow for the tenant

screening report, a jury could conclude that Kemp “did in fact see the alert and simply

forgot.” Fernandez v. RentGrow, Inc.,

, 189 n.11 (D. Md. 2022). Further,

the court concluded that all purported class members had standing because each one “had

allegedly inaccurate information ‘furnished’ to a third party.”

.

The district court then denied RentGrow’s motion for summary judgment on the

merits of the FCRA claim and certified the following class:

All individuals who were the subject of a consumer report (1) furnished by [RentGrow] to a third party between April 23, 2017 and May 24, 2019 at 7:28 a.m. and (2) which reported OFAC/SDN information indicating a possible match, and (3) where there is not also a match between the (a) date of birth, (b) address, or (c) social security number associated with the subject of the report and the corresponding information regarding the person on the OFAC/SDN List.

(emphasis omitted). As the court ticked through each of the certification

requirements in Federal Rule of Civil Procedure 23, it rejected RentGrow’s

counterarguments premised on the view that, to establish standing, each class member

would have to prove that a leasing agent read and understood the OFAC alert in the class

member’s screening report. According to RentGrow, that inquiry undermined

ascertainability, commonality, typicality, superiority, and predominance. See Fed. R. Civ.

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(a), (b)(3). Given its ruling rebuffing RentGrow’s conception of concrete injury for

Article III standing, the district court rejected RentGrow’s objections to each requirement

and certified the class.

C.

RentGrow petitioned this Court for permission to appeal the class certification

order, which we granted. See Fed. R. Civ. P. 23(f). We have jurisdiction,

(e), and review the district court’s decision to certify a class for abuse of discretion,

In re Zetia (Ezetimibe) Antitrust Litig.,

, 233 (4th Cir. 2021). “A district court

per se abuses its discretion when it makes an error of law or clearly errs in its factual

findings.” Thorn v. Jefferson-Pilot Life Ins. Co.,

, 317 (4th Cir. 2006).

Whether a plaintiff has Article III standing is an issue of law that we review de novo. South

Carolina v. United States,

(4th Cir. 2019).

II.

Article III of the United States Constitution empowers federal courts to decide

“Cases” and “Controversies.” U.S. Const. Art. III, § 2. Standing to sue is a doctrine rooted

in the traditional understanding of this limitation on federal-court jurisdiction. The

“irreducible constitutional minimum of standing” requires a plaintiff to show (1) that he

suffered an injury in fact that is concrete, particularized, and actual or imminent; (2) that

the injury is fairly traceable to the challenged action of the defendant; and (3) that the injury

would likely be redressed by judicial relief. Lujan v. Defs. of Wildlife,

, 560–

561 (1992). This case implicates the requirement of a concrete injury in fact.

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Importantly, a plaintiff does not “automatically satisf[y] the injury-in-fact

requirement” whenever a statute like the FCRA “grants a person a statutory right and

purports to authorize that person to sue to vindicate that right.” TransUnion,

(internal quotation marks omitted). “Article III standing requires a concrete injury

even in the context of a statutory violation.” Spokeo, Inc. v. Robins,

(2016). Accordingly, “[o]nly those plaintiffs who have been concretely harmed by a

defendant’s statutory violation may sue that private defendant over that violation in federal

court.” TransUnion,

.

The strictures of Article III standing apply with no less force in the context of class

actions. Although “[e]very class member must have Article III standing in order to recover

individual damages,” TransUnion,

, we have analyzed standing in the

early stages of a class action “based on the allegations of personal injury made by the

named plaintiffs,” Baehr v. Creig Northrop Team, P.C.,

, 252 (4th Cir. 2020)

(internal quotation marks omitted). A plaintiff must demonstrate standing “with the

manner and degree of evidence” required at the relevant “stage[] of the litigation.” Lujan,

. Because RentGrow moved for summary judgment, Fernandez cannot rest

on mere allegations but must set forth evidence which, viewed in his favor, would establish

the elements of Article III standing. See id.; Baehr, 953 F.3d at 253. And “[s]tanding is

not dispensed in gross”; therefore, regardless of Fernandez’s standing to pursue his

individual criminal records claim (which is not on appeal), he must also demonstrate that

he suffered a concrete injury from RentGrow’s alleged failure to employ reasonable

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procedures to ensure the accuracy of the OFAC information in his report. Davis v. Fed.

Election Comm’n,

(2008) (internal quotation marks omitted).

A.

To be concrete, an injury must be “real, and not abstract.” Spokeo,

(internal quotation marks omitted); see

(explaining the injury “must actually

exist”). Traditional tangible injuries, like physical harm and monetary harm, are the most

obvious. But intangible injuries, although perhaps more difficult to recognize, can also be

concrete.

. We evaluate whether an alleged injury is concrete by assessing

whether it “has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing a

basis for a lawsuit in American courts.” TransUnion,

(quoting Spokeo,

). “That inquiry asks whether plaintiffs have identified a close historical

or common-law analogue for their asserted injury.”

The Supreme Court has applied these principles to the statutory harm asserted here:

failure to “follow reasonable procedures to assure maximum possible accuracy” of the

OFAC information in a plaintiff’s credit file. 15 U.S.C. § 1681e(b). In TransUnion, the

Supreme Court held that “publication to a third party of a credit report bearing a misleading

OFAC alert” concretely injures the subject of the report.

. That injury

bears a close relationship to “the reputational harm associated with the tort of defamation,”

which is a harm traditionally recognized as providing a basis for a lawsuit in American

courts.

“Under longstanding American law, a person is injured when a defamatory

statement that would subject him to hatred, contempt, or ridicule is published to a third

party.”

(internal quotation marks omitted). And labelling someone a potential terrorist,

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drug trafficker, or serious criminal—as the erroneous OFAC alerts do—certainly qualifies.

See

.

Importantly, the Supreme Court emphasized that the presence of the same

misleading OFAC alert “in an internal credit file” causes “no concrete harm” if “it is not

disclosed to a third party.”

. “Publication is ‘essential to liability’ in a suit for

defamation.”

at 2209 (quoting Restatement of Torts § 577 cmt. a (1938)). And “there

is no historical or common-law analog where the mere existence of inaccurate information”

amounts to concrete injury. Id. (internal quotation marks omitted). Accordingly, the Court

held that the class members whose misleading credit reports were provided to third-party

businesses suffered a concrete harm and thus had standing to pursue their FCRA

reasonable-procedures claim, but the class members whose misleading internal credit files

were not provided to third-party businesses did not suffer a concrete harm and thus did not

have standing to pursue their claim. See id. at 2200.

Fernandez, like the district court, contends that dissemination of an inaccurate tenant

screening report to a third party is always sufficient to establish a concrete injury for Article

III standing, whether or not the third party read or understood the misleading accusation in

the report. For this reason, Fernandez argues, evidence that Kemp did not review or

consider the OFAC information in his screening report is irrelevant. We think that

argument overlooks the nature of publication, which is “essential” to the reputational harm

on which Fernandez relies to demonstrate a concrete injury with a close relationship to a

harm traditionally recognized as providing a basis for a lawsuit in American courts. Id. at

2209 (internal quotation marks omitted).

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“A defamatory writing is not published if it is read by no one but the one defamed”;

it must be read by someone else. Ostrowe v. Lee,

(N.Y. 1931) (Cardozo,

J.). And publication requires “not only that the defamatory matter be brought to the

attention of a third person but that he understand its defamatory significance.” Restatement

of Torts § 577 cmt. c; see, e.g., id. § 577 cmt. d (“A libel may be published in a foreign

language provided it is understood by the person to whom it is communicated.” (emphasis

added)); Ostrowe,

(“Enough that a writing defamatory in content has been

read and understood at the behest of the defamer.”). As the Supreme Court acknowledged

in TransUnion, the reputational harm of defamation requires “that the defendant actually

‘brought an idea to the perception of another,’” which generally “require[s] evidence that

the document was actually read and not merely processed.”

n.6 (quoting

Restatement of Torts § 559 cmt. a).

Of course, when assessing whether a plaintiff’s asserted harm has a “close

relationship” to a harm traditionally recognized as providing a basis for a lawsuit in

American courts, “we do not require an exact duplicate.” Id. at 2209. But the fundamental

nature of reputational harm is “‘loss of credit or fame, and not the insult [itself].’” Id.

(quoting J. Baker, An Introduction to English Legal History 474 (5th ed. 2019)); see also

Blackstone’s Commentaries, Abridged 326 (9th ed.) (Libel); Restatement of Torts § 577

cmt. b. Without a third party reading and comprehending the accusation—which is to say,

without publication—there can be no reputational harm.

The Supreme Court recognized this principle in TransUnion when it rejected the

plaintiffs’ theory that TransUnion published the class members’ information by disclosing

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it to employees within TransUnion or to vendors who printed the mailings the class

members received. See

n.6. The Court insisted on “evidence” that the

class members’ information was “actually read and not merely processed,” evidence that

was “lacking” in both circumstances.

“[P]ublication,” the Court explained, is “a

fundamental requirement of an ordinary defamation claim,” and a theory of harm that

“circumvents” the publication requirement “does not bear a sufficiently ‘close relationship’

to the traditional defamation tort to qualify for Article III standing.”

That is not to say that a plaintiff need show any additional or tangible harm once a

third party has read the misleading information and understood its defamatory significance.

At common law, a person was injured when a false statement “that would subject him to

hatred, contempt, or ridicule” was published to a third party. Milkovich v. Lorain Journal

Co.,

(1990) (internal quotation marks omitted). That reputational injury is

sufficiently concrete to support Article III standing, even though a given cause of action

may require more to state a claim. Cf. Garey v. James S. Farrin, P.C.,

, 922

(4th Cir. 2022) (“[O]ur inquiry ‘focuse[s] on types of harms protected at common law, not

the precise point at which those harms become actionable.’” (quoting Krakauer v. Dish

Network, LLC,

(4th Cir. 2019)). As Fernandez notes, the law of

defamation has traditionally distinguished between communications that are actionable per

se—that is, “irrespective of whether any special harm has been caused to the plaintiff’s

reputation or otherwise”—and communications that create liability only if they cause the

plaintiff “special harm.” Restatement of Torts § 569 cmt. c; see also id. §§ 558, 570, 575;

cf. Spokeo,

. The upshot for our inquiry is that unquantifiable reputational

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harm has “traditionally” been “recognized as providing a basis for a lawsuit in American

courts.” TransUnion,

. But even defamation per se “require[s] evidence

of publication,” without which there could be no concrete harm.

(internal

quotation marks omitted); see Restatement of Torts § 569 cmt. c (explaining that

“publication of any libel is actionable per se” because “publication is itself [the] injury”);

id. § 570 (stating that one who “publishes” slander per se, which attributes any of four

negative traits to another, is liable to the other); cf. Gertz v. Robert Welch, Inc.,

(1974) (“Under the traditional rules pertaining to actions for libel, the existence

of injury is presumed from the fact of publication.”).

Our sister circuits agree with these principles. For example, in Maddox v. Bank of

New York Mellon Trust Co., N.A., the Second Circuit considered a claim that the defendant

bank unlawfully delayed recording the satisfaction of the plaintiffs’ mortgage.

, 59 (2d Cir. 2021). The court held that the plaintiffs had not alleged a reputational harm

sufficient for Article III standing because, although the “misleading record [of their

supposedly unsatisfied mortgage] may have been public and available to all” at the county

clerk’s office, “so far as is known, it was read by no one.”

. “[I]t is self-evident,”

the court reasoned, “that ‘unless the defamatory matter is communicated to a third person

there has been no loss of reputation,’” and the matter has not been “communicated” to a

third person if “‘it is read by no one but the defamed.’”

(first quoting Restatement of

Torts § 577 cmt. b; then quoting Albert v. Loksen,

(2d Cir. 2001)).

Similarly, in Ewing v. MED-1 Solutions, LLC, the plaintiffs sued debt collectors

under the Fair Debt Collection Practices Act for failing to tell a credit reporting agency that

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the plaintiffs contested certain consumer debts.

, 1149 (7th Cir. 2022). When

assessing whether the plaintiffs had suffered a concrete injury, the Seventh Circuit

“focus[ed] on the question of publication because an unpublished statement, even if false

and defamatory, is not injurious.”

. “The essential point, one that has always

been necessary to prove publication,” the court emphasized, “is this: the third party must

understand the defamatory nature of the communication.”

. Because the credit

reporting agency “understood the defamatory significance” of the debt collectors’ reports,

the court held that the plaintiffs had suffered a sufficiently concrete reputational injury. 2

Fernandez counters that when false or misleading information is disseminated to a

third party, we can presume the third party read or used that information. We don’t doubt

that inferences based in customary experience and common sense can be utilized to allege

and even prove publication. For example, Fernandez cites Brian v. Harper, a case where

an alleged defamatory article was published in a newspaper with a “large circulation.”

(La. 1919). The court reasoned that the plaintiff “was not required, in stating

his cause of action,” to allege that the article “was actually read by any one” but could rely

2 The parties also discuss Hunstein v. Preferred Collection & Management Services, Inc.,

(11th Cir. 2022) (en banc). In that case, a plaintiff sued a debt collection agency for violating the Fair Debt Collection Practices Act when the agency disclosed information about his debt to a mail vendor.

. Concluding that the plaintiff lacked standing, the Eleventh Circuit rejected his analogy to the common law tort of public disclosure because there was no evidence that the mail vendor “read and understood” or otherwise “perceive[d]” the plaintiff’s private financial information, much less that the information was communicated “to the public at large” or was “substantially certain” to become “public knowledge.”

at 1246–1247 (internal quotation marks omitted). 15 USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 16 of 22

on “the presumption” that someone read the newspaper, including the defamatory article.

(“It is too well settled to require citation of authority that a libel committed by

publication in a newspaper is accomplished when the publication goes into circulation.”).

Similarly, evidence that businesses “specifically requested and paid for” credit reports

could support an inference that the businesses “viewed those credit reports.” Maddox, 19

F.4th at 65. But none of these cases dispense with the publication requirement; they simply

acknowledge the variety of evidence that can be relevant for proving it.

Nor did TransUnion rule out the possibility that, in the face of evidence to the

contrary, dissemination of a consumer report may not suffice to prove that a third party

perceived certain information therein. There was no doubt in TransUnion that a third party

read and understood the misleading OFAC information included in the credit report for

Ramirez, the named plaintiff. After receiving the OFAC alert, a salesman refused to sell

Ramirez a car because “his name was on a ‘terrorist list.’”

(quoting the

record). The parties stipulated that 1,853 class members (including Ramirez) “had their

credit reports disseminated by TransUnion to potential creditors” during the relevant

period.

. Although they addressed the publication requirement, neither the

parties nor the Court discussed the possibility that the damaging OFAC information in any

of those credit reports was not understood by the potential creditors who received them.

The issue simply was not before the Court. Cf. Webster v. Fall,

(1925)

(“Questions which merely lurk in the record, neither brought to the attention of the court

nor ruled upon, are not to be considered as having been so decided as to constitute

precedents.”).

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As a final point of clarification, we have not addressed the risk of future harm from

the misleading tenant screening reports because Fernandez and the other class members do

not pursue “forward-looking, injunctive relief” but only statutory and punitive damages.

TransUnion,

. A plaintiff must demonstrate standing for each form of

relief sought.

While a substantial and imminent risk of future harm may satisfy the

concreteness requirement when a plaintiff seeks injunctive relief, it does not in a suit for

damages.

at 2210–2211. Thus, Fernandez must show that a third party read and

understood, or otherwise considered, the misleading OFAC information in his screening

report; a future risk of publication does not suffice.

B.

We now apply these principles to assess whether Fernandez, the named plaintiff,

has demonstrated a concrete injury from the misleading OFAC possible match included in

his tenant screening report. Fernandez appears to contend that, because Dorsey Ridge paid

RentGrow for his tenant screening report, we can infer that a Dorsey Ridge representative

read or utilized everything in that report. But the evidence of Dorsey Ridge’s standard

practice and the specific circumstances surrounding Fernandez’s report do not support that

inference, they contradict it.

Regarding standard practice, a number of undisputed facts are relevant. To begin,

an OFAC possible match does not affect the screening result—accept, reject, or accept with

conditions—in an applicant’s report. We mention this fact not because a plaintiff must

show that the misleading OFAC information caused him to be denied an apartment or

resulted in any other harm in addition to the reputational injury of unjustly being labeled a

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terrorist or drug trafficker. Rather, we mention this fact because even if no one at Dorsey

Ridge read and understood the OFAC match information in Fernandez’s report, that

misleading information nevertheless could have caused him concrete harm if it negatively

factored into an assessment which Dorsey Ridge considered. But that is not the case here.

Further, Kemp’s testimony undermined any presumption that, because Dorsey

Ridge paid for tenant screening reports, a representative would have read and understood

everything in those reports, including OFAC information. To the contrary, Kemp testified

that her standard practice, and that of leasing agents under her supervision, was to review

only the screening result on the first page of the report if the recommendation was “accept.”

Even for reports with a “deny” or “accept with conditions” result that required closer

scrutiny, Kemp testified that she did not know if she had ever looked at the section of a

screening report about OFAC potential matches. Indeed, Kemp—the senior property

manager for Dorsey Ridge—admitted she was not even “sure what OFAC is.” J.A. 215.

As for Fernandez’s tenant screening report in particular, no evidence suggests that

anyone at Dorsey Ridge read the OFAC section at the end of the report falsely stating he

might be linked to a drug trafficking organization or read and understood the defamatory

significance of the “1 possible match in OFAC name search” listed on the first page of the

report. Kemp recalled that Fernandez’s application required further review because of

criminal records in his screening report, not because of “OFAC possible match

information,” and that she would have “reviewed the screening to see what came back on

the criminal” record information. J.A. 214–215, 344. Fernandez testified that Whatley,

the leasing agent he dealt with most directly, never mentioned the OFAC list possible

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match to him. And of course, if Kemp did not know what OFAC was, she could not

understand the defamatory significance of a “possible match in OFAC name search.” The

final section of Fernandez’s report gave details about the supposed match, stating that he

might be linked to a “drug trafficking organization.” J.A. 97 (capitalization removed).

While the defamatory import of those details would be apparent to anyone who read that

section of his report, the evidence of Dorsey Ridge’s standard practice and its review of

Fernandez’s application in particular indicates that no one did.

For these reasons, we cannot agree with the district court’s speculation that perhaps

“the individual(s) who reviewed Mr. Fernandez’s rental application did in fact see the

[OFAC] alert and simply forgot.” Fernandez, 341 F.R.D. at 189 n.11. As the party

invoking federal jurisdiction, Fernandez “bear[s] the burden of demonstrating that [he has]

standing.” TransUnion,

. And at summary judgment, a plaintiff must

demonstrate standing with evidence, not mere allegations or “unsupported speculation.”

Smith v. Schlage Lock Co., LLC,

, 486 (4th Cir. 2021) (per curiam) (internal

quotation marks and brackets omitted); see also Lujan,

; Humphreys &

Partners Architects, L.P. v. Lessard Design, Inc.,

(4th Cir. 2015) (“To

create a genuine issue for trial, the nonmoving party must rely on more than conclusory

allegations, mere speculation, the building of one inference upon another, or the mere

existence of a scintilla of evidence.” (internal quotation marks omitted)). According to the

undisputed evidence, even though Dorsey Ridge paid for tenant screening reports, its senior

property manager—who reviewed Fernandez’s report—could not recall ever looking at the

OFAC section of any screening report and didn’t know what OFAC was. No evidence

19 USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 20 of 22

suggests that Dorsey Ridge had any policy about renting to tenants with an OFAC name

match, which would have spurred Kemp and the leasing agents to review that information.

After discovery in this case, an inference that Dorsey Ridge representatives read and

understood the OFAC information in Fernandez’s tenant screening report they requested

from RentGrow has proven to be unsupported.

Accordingly, Fernandez has failed to demonstrate that the misleading OFAC

information in his screening report was read and understood, or otherwise considered, by

any third party, as would support the kind of “reputational harm associated with the tort of

defamation.” TransUnion,

. Because reputational harm is the only injury

Fernandez asserts in relation to his claim that RentGrow failed to follow reasonable

procedures to assure the accuracy of OFAC information in his screening report, he has not

shown a concrete injury in fact flowing from that alleged statutory violation. And without

a concrete injury, Fernandez lacks Article III standing to bring this claim. See TransUnion,

(“No concrete harm, no standing.”).

C.

The foregoing analysis inevitably affects the district court’s class certification order.

“To obtain certification of a class action for money damages under Rule 23(b)(3), a plaintiff

must satisfy Rule 23(a)’s . . . prerequisites of numerosity, commonality, typicality, and

adequacy of representation, and must also establish that the questions of law or fact

common to class members predominate over any questions affecting only individual

members, and that a class action is superior to other available methods for fairly and

efficiently adjudicating the controversy.” Amgen Inc. v. Conn. Ret. Plans & Tr. Funds,

20 USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 21 of 22

(2013) (internal citation and quotation marks omitted). In the district

court, RentGrow argued that the inquiry necessary to determine whether each class member

had suffered a concrete injury sufficient for Article III standing undermined nearly every

Rule 23 prerequisite. The district court categorically rejected RentGrow’s arguments in

view of its ruling that dissemination of the class members’ tenant screening reports, by

itself, established a concrete injury to Fernandez and each class member, regardless of

whether a third party read and understood, or otherwise considered, the misleading OFAC

alerts in those reports.

We have concluded that the district court’s standing analysis was erroneous and that

Fernandez lacks standing to pursue the OFAC claim. Because that ruling undermines the

district court’s reasoning at various points throughout the class certification order, we think

that court is best positioned to reconsider class certification in the first instance in light of

this opinion.

III.

The district court’s order granting class certification is vacated and remanded for

further proceedings consistent with this opinion.

VACATED AND REMANDED

21 USCA4 Appeal: 22-1619 Doc: 49 Filed: 09/11/2024 Pg: 22 of 22

NIEMEYER, Circuit Judge, concurring:

The factual profile in this case — dissemination of an erroneous Office of Foreign

Assets Control (OFAC) report — is nearly identical in kind to that in TransUnion LLC v.

Ramirez,

(2021), where the Supreme Court held that individuals who have

had false information about them “disseminated to third parties suffer[] a concrete injury

in fact under Article III” and therefore have standing to sue.

(emphasis added).

But the one subtle difference, which by its nature is material, is that in TransUnion, the

Supreme Court was presented with an unchallenged record where the disseminated OFAC

report was indeed read by third parties, thus inflicting injury on the plaintiff. The plaintiff

there was denied the opportunity to purchase an automobile from an automobile dealer

because “his name was on a terrorist list.”

(cleaned up). In this case, however,

as Judge Rushing has carefully pointed out, such a conclusion that third parties read the

erroneous OFAC report cannot be made based on the record before us, and therefore the

injury shown in TransUnion has not been shown in this case.

While this is indeed a close call — as in other similar circumstances, a third-party

reading of the false information might be presumed — I am satisfied that Judge Rushing

has conducted a thorough analysis of the record before us to show that such a third-party

reading cannot be presumed. Therefore, I am pleased to join her opinion in full.

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