On February 8, 2024, the Supreme Court of the United States (SCOTUS) affirmed in a unanimous 9 to 0 opinion delivered by Justice Neil M. Gorsuch in the case of Department of Agriculture Rural Development Rural Housing Service v. Kirtz that a consumer may sue a federal agency for defying the terms of the Fair Credit Reporting Act (FCRA).
In the case of USDA v. Kirtz, a consumer who secured a loan from a division of the United States Department of Agriculture (USDA) later sued the agency for monetary damages under the FCRA, alleging that the USDA falsely told a credit reporting agency that his account was past due, thus damaging his credit score and his ability to secure loans.
According to the opinion, the USDA moved to dismiss the lawsuit, invoking sovereign immunity, and a District Court sided with the USDA. A Circuit Court reversed the decision, holding that the FCRA authorizes lawsuits for damages against “any person” who violates the FCRA and expressly defines “person” to include “any” government agency.
The Supreme Court agreed and held that a consumer may sue a federal agency for defying the FCRA’s terms. “The FCRA clearly waives sovereign immunity in cases like this one. The FCRA’s requirements apply to ‘person[s]’ who, like the federal government here, furnish information to consumer reporting agencies,” the opinion stated.
The Supreme Court explained in the opinion that the FCRA creates “a cause of action for money damages to consumers injured by ‘[a]ny person’ who willfully or negligently fails to comply with the statute’s directive” and “provides a definition of ‘person’ that includes ‘any… government… agency,’ and that applies to the entire Act.”
“The Executive Branch may question the wisdom of holding federal agencies accountable for their violations of the Fair Credit Reporting Act… But Congress’s judgment commands our respect and the law it has adopted speaks clearly: A consumer may sue ‘any’ federal agency for defying the law’s terms,” the opinion concluded.
Enacted by the United States Congress in 1970, the FCRA 15 U.S.C. § 1681 allows consumers to sue lenders who willfully or negligently supply false information about them to entities that generate credit reports and protects information collected by consumer reporting agencies (CRAs) such as credit bureaus. To view a copy of the FCRA, click here.
ClearStar is a leading global Human Resources technology company that specializes in background checks, drug testing, and occupational health screening. ClearStar is a CRA that offers FCRA-compliant pre-employment screening solutions to help employers make informed hiring decisions while maintaining legal compliance. To learn more, contact ClearStar.
© 2024 ClearStar. All rights reserved. – Making copies of or using any part of the ClearStar website for any purpose is prohibited unless written authorization is first obtained from ClearStar. ClearStar does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.
Let's start a conversation
Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), identity theft, privacy, social media screening, and workplace violence.
At ClearStar, we are committed to your success. An important part of your employment screening program involves compliance with various laws and regulations, which is why we are providing information regarding screening requirements in certain countries, region, etc. While we are happy to provide you with this information, it is your responsibility to comply with applicable laws and to understand how such information pertains to your employment screening program. The foregoing information is not offered as legal advice but is instead offered for informational purposes. ClearStar is not a law firm and does not offer legal advice and this communication does not form an attorney client relationship. The foregoing information is therefore not intended as a substitute for the legal advice of a lawyer knowledgeable of the user’s individual circumstances or to provide legal advice. ClearStar makes no assurances regarding the accuracy, completeness, or utility of the information contained in this publication. Legislative, regulatory and case law developments regularly impact on general research and this area is evolving rapidly. ClearStar expressly disclaim any warranties or responsibility or damages associated with or arising out of the information provided herein.
