The Supreme Court ruled the other day in a 5-4 decision that there were limitations to a class-action lawsuit filed after TransUnion, a credit reporting agency, flagged thousands of innocent individuals as potential terrorists, drug dealers, or high-level criminals.

Roughly 8,000 individuals were impacted after they were mislabeled in the credit agency’s database. The mix-up happened after TransUnion incorrectly matched up individuals who shared their name or a variation of their name with notorious and under-the-radar criminals. The misleading information was then made available to other businesses. This decision impacted those who were affected in capacities including being denied large purchases and being denied employment opportunities after required background checks deemed them as criminals.

The decision stems from a case in which a California car dealership denied selling a car to a man named Sergio Ramirez. After negotiating the terms of the sale, the dealership ran a credit check on Ramirez and found that his name came up as being on the Treasury Department’s watch list of individuals who were labeled as terrorists, drug traffickers, or other high-level criminals. Ramirez’s wife ended up purchasing the car under her name.

Following the incident, Ramirez led a class-action lawsuit that alleged that the credit agency had violated his and thousands of others’ rights under the Fair Credit Reporting Act. Under the act, individuals are allowed to seek legal remedy if an agency fails to “follow reasonable procedures to assure maximum possible accuracy.”

The narrow vote by the Supreme Court ruled that the class-action lawsuit would not be viable for all members named in the suit. Instead, only those who had their information sent out to third parties, like Ramirez, were able to pursue legal action. This decision narrowed down the members in the lawsuit from several thousand to about 1,800.

The majority opinion was written by Justice Brett M. Kavanaugh. Kavanaugh explains that the majority of the members in the class action will not be allowed to pursue legal action because they did not suffer any “concrete harm.” He adds that individuals like Ramirez who actually had his information used by the third party suffered in a manner similar to defamation. Kavanaugh writes, “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.”

Kavanaugh adds, “In cases such as these where allegedly inaccurate or misleading information sits in a company database, the plaintiffs’ harm is roughly the same, legally speaking, as if someone wrote a defamatory letter and then stored it in her desk drawer. A letter that is not sent does not harm anyone, no matter how insulting the letter is. So too here.”

The Electronic Frontier Foundation highlights that this decision does not take into consideration the implications of what data privacy breaches and misuse of data mean to consumers. In their analysis, they explain that the high court “fails to grapple with how consumer data is collected, analyzed, and used in modern society. It likened the gross negligence resulting in a database marking these people as terrorists to ‘a letter in a drawer that is never sent.’ But the ongoing technological revolution is not at all like a single letter. It involves a large and often interconnected set of corporate databases that collect and hold a huge amount of our personal information.”

Justice Clarence Thomas voiced a dissenting opinion which was also shared by his three liberal counterparts. In his opinion, Justice Thomas explained that “TransUnion generated credit reports that erroneously flagged many law-abiding people as potential terrorists and drug traffickers.” He adds, “the majority decides that TransUnion’s actions are so insignificant that the Constitution prohibits consumers from vindicating their rights in federal court. The Constitution does no such thing.”