Department of Agriculture Rural Development Rural Housing Service v. Kirtz
601 U. S. ____ (2024) (2024)
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Rule of Law:
The Fair Credit Reporting Act (FCRA) unambiguously waives the federal government's sovereign immunity, permitting consumers to sue federal agencies for money damages for violating the Act's provisions.
Facts:
- Reginald Kirtz secured a loan from the Rural Housing Service, a division of the U.S. Department of Agriculture (USDA).
- Kirtz alleges he fully repaid his loan by mid-2018.
- Despite the repayment, the USDA repeatedly reported to TransUnion, a credit reporting agency, that Kirtz's account was past due.
- These allegedly false reports damaged Kirtz's credit score and his ability to secure future loans at affordable rates.
- Kirtz notified TransUnion of the error, which in turn notified the USDA.
- The USDA allegedly failed to take any action to investigate or correct its inaccurate reporting.
Procedural Posture:
- Reginald Kirtz sued the Department of Agriculture (USDA) in the U.S. District Court for the Eastern District of Pennsylvania, a federal trial court.
- The USDA filed a motion to dismiss the complaint, asserting sovereign immunity.
- The District Court granted the USDA's motion and dismissed the case.
- Kirtz, as appellant, appealed the dismissal to the U.S. Court of Appeals for the Third Circuit, an intermediate federal appellate court.
- The Third Circuit reversed the District Court's decision, holding that the FCRA clearly waived the government's sovereign immunity.
- The USDA, as petitioner, successfully petitioned the U.S. Supreme Court for a writ of certiorari to review the Third Circuit's decision, with Kirtz as respondent.
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Issue:
Does the Fair Credit Reporting Act (FCRA) waive the federal government's sovereign immunity, thereby permitting a consumer to sue a federal agency for money damages for alleged violations of the Act?
Opinions:
Majority - Gorsuch, J.
Yes, the Fair Credit Reporting Act (FCRA) clearly waives the federal government's sovereign immunity. The Act creates a cause of action for money damages against '[a]ny person' who willfully or negligently fails to comply with its requirements (§§ 1681n, 1681o). Crucially, the Act's definitional section (§ 1681a(b)) explicitly defines 'person' to include 'any... governmental... agency.' Reading these provisions together constitutes an unmistakably clear statement by Congress authorizing suits for damages against the government, fitting the second category of waiver where a statute creates a cause of action and explicitly authorizes suit against the government on that claim. The government's arguments that a waiver requires a separate, dedicated provision or that older, methodologically distinct precedents should control are unpersuasive. The statutory text is unambiguous and must be enforced as written.
Analysis:
This unanimous decision solidifies that Congress can waive sovereign immunity through a combination of a general cause of action and an explicit definitional clause, without needing 'magic words' or a standalone waiver provision. It reinforces the Court's textualist approach, prioritizing the plain meaning of the statute over arguments about structural implications or reliance on outdated precedents. The ruling has a significant practical impact, as it holds federal agencies that furnish credit information, such as the Department of Agriculture and the Department of Education, accountable for reporting errors under the same standards as private lenders, strengthening consumer protections.
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