In August 2023, the United States Department of Agriculture (USDA) filed a brief urging the Supreme Court of the United States (SCOTUS) to overturn an Appeals Court decision in USDA Rural Development Rural Housing Service v. Kirtz that civil-liability provisions of the Fair Credit Reporting Act (FCRA) waive the “sovereign immunity” of the U.S. government.
In August 2022, the U.S. Court of Appeals for the Third Circuit reversed a district court’s decision to grant a student loan servicer, consumer credit reporting agency, and the USDA motion to dismiss a lawsuit finding that the U.S. Congress waived the government’s sovereign immunity in the FCRA. The USDA believed the FCRA did not waive sovereign immunity.
“The court of appeals erred in concluding that Congress has unequivocally and unambiguously waived the United States’ sovereign immunity to private damages suits under the general remedial provisions of the FCRA. It has no provision that expressly addresses and withdraws sovereign immunity,” the USDA argued in the brief filed on August 15, 2023.
“The question comes to the court in a case filed by Reginald Kirtz, who contends that although he no longer owed anything on a loan made to him by the Department of Agriculture, the department reported that his account was 120 days past due, damaging his credit score,” explained a SCOTUSblog about the case, which also supplied the following background details:
- Kirtz notified the credit union reporting the overdue account of the inaccurate statement by USDA but USDA did not correct it.
- Kirtz went to federal court in 2020 and alleged that USDA violated the FCRA which requires anyone who provides disputed information to credit reporting agencies to investigate it and, if necessary, correct it.
- The USDA asked a district court to dismiss the case, arguing that the FCRA did not clearly show that Congress had intended to waive the federal government’s immunity from lawsuits, and the district court agreed.
- Kirtz appealed to the U.S. Court of Appeals for the 3rd Circuit, which reversed, pointing to the FCRA’s definition of “person” which includes “any government or governmental subdivision or agency.”
- Moreover, because the federal government is “the nation’s largest employer and creditor,” allowing lawsuits against it for violations of the FCRA would be consistent with the goal of Congress to ensure “fair and accurate credit reporting.”
- The USDA came to the Supreme Court asking the justices to weigh in.
The USDA filed a petition for a writ of certiorari in March 2023 and SCOTUS granted the petition in June 2023. The case likely will be argued in the fall of 2023. The SCOTUSblog “Justices take up Fair Credit Reporting Act case” was written by Independent Contractor and Reporter Amy Howe and the article was originally published at Howe on the Court.
Enacted in 1970, the FCRA protects information collected by consumer reporting agencies (CRAs). Under FCRA 1681s-2(b), a data furnisher receiving a dispute regarding the completeness or accuracy of information provided to a CRA must conduct an investigation, report the results to the CRA, and modify or delete disputed information found to be inaccurate or incomplete.
ClearStar is a leading global Human Resources technology company specializing in background checks, drug testing, and occupational health screening. ClearStar offers employers various compliance services that include an understanding of the FCRA and other laws regulating workforce screening in the United States. To learn more about ClearStar, contact us.
Citation: Amy Howe, Justices take up Fair Credit Reporting Act case, SCOTUSblog (June 20, 2023), https://www.scotusblog.com/2023/06/justices-take-up-fair-credit-reporting-act-case/.
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Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources (HR) 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), Form I-9, identity theft, privacy, social media screening, and workplace violence.
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