A borrower secured a loan from a division of the United States Department of Agriculture (USDA) and repaid the loan. Despite having repaid the loan, the USDA informed a credit reporting agency that his account was past due and in turn, damaged his credit score. The borrower alerted the credit reporting agency and the USDA to the error, but the USDA failed to take any action. The borrower then filed suit against the USDA under the Fair Credit Reporting Act (FCRA) and sought damages consistent with the FCRA. The USDA moved to dismiss the complaint, claiming that the agency benefits from sovereign immunity from suits for money damages. The district court found for the USDA, but the Third Circuit reversed. The USDA then filed a writ of certiorari.
In Dep’t of Agric. Rural Dev. Rural Hous. Serv. v. Kirtz, 601 U.S. 42 (2024), the Supreme Court held that the FCRA effects a clear waiver of sovereign immunity and affirmed the holding of the Third Circuit. The Court began by analyzing the text of the FCRA to determine if there had been a waiver of sovereign immunity. The Court held the FCRA’s term “person” includes the government in each section unless otherwise noted. The Court then addressed the government’s arguments individually. The government first argued that a cause of action must include a separate waiver of sovereign immunity. The Court held that the cause of action need not have a separate waiver. The government then argued that in order for a provision to waive sovereign immunity, it must not play another role in the statute. The Court held this notion has never been endorsed by the Court and refused to do so in this instance. Next, the government argued that the waiver cannot be a result of reading separate provisions in combination, but the Court quickly noted that the waiver must be “clearly discernible from the total sum of its work.” The government also argued that the definition of “person” cannot be applied from one section to another in FCRA, but the Court held that it can. Finally, the government argued the Privacy Act of 1974 covers some of the same ground that the FCRA does. The Court concluded by reasoning there is presumption of harmony when federal statutes touch on the same subject and the government has not met the high burden of proving otherwise. Therefore, the Supreme Court held that “a consumer may sue “any” federal agency for defying the law’s terms.”
By: The Editors