US Supreme Court agrees to hear case concerning federal government’s sovereign immunity News
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US Supreme Court agrees to hear case concerning federal government’s sovereign immunity

The US Supreme Court agreed Tuesday to hear a case concerning whether Congress waived the US’s sovereign immunity in civil lawsuits involving the Fair Credit Reporting Act (FCRA). In the case Department of Agriculture Rural Development Rural Housing Service v. Kirtz, Reginald Kirtz argues that the court should hold the US Department of Agriculture (USDA) accountable for investigating disputed credit information under the act. The USDA argues, on the other hand, that Congress did not intend to hold the US government accountable for such responsibilities.

The whole case revolves around the FCRA and its definition of “person.” The act requires persons providing credit agencies with information to investigate the information if it is disputed. Specifically, the act prohibits a person from furnishing “any information relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.” Notably for Kirtz, the act defines “person” as including any “government or governmental subdivision or agency.”

Kirtz claims that he received a credit report which mistakenly listed a Rural Housing Service loan, distributed by the USDA, as past due when he had paid it in full. Kirtz disputed the loan listing, which should have alerted the USDA. This is where the FCRA should have kicked in, according to Kirtz. However, the USDA never followed through to investigate the reported loan. As a result, Kirtz filed suit in a federal district court.

The district court dismissed Kirtz’s suit, finding that the FCRA did not unequivocally waive the government’s sovereign immunity. Kirtz then appealed the ruling to the US Court of Appeals for the Third Circuit, which reversed the district court. The Third Circuit found that the FCRA’s definition of person was wide-reaching enough to encompass the USDA and waive the US government’s sovereign immunity. It was only after that that the USDA filed for review before the Supreme Court.

Kirtz argues that, in adopting that definition of person, Congress waived the US government’s sovereign immunity for the purposes of FCRA disputes. As such, Kirtz is entitled to bring a civil lawsuit against the USDA for failing to investigate reported credit information after he disputed it.

The USDA refutes that, however, arguing that the definition does not “unequivocally and unambiguously” waive the government’s sovereign immunity.

It will be up to the Supreme Court to determine whether the FCRA waives the US government’s sovereign immunity.

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