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Dep’t of Agric. Rural Dev. Rural Hous. Serv. v. Kirtz., No. 22-846,
cert. granted, 2023 WL 4065594 (June 20, 2023).
Oral argument scheduled for Nov. 6, 2023.
Issue: Whether the civil liability provisions of the Fair Credit Reporting Act unequivocally and unambiguously waive the sovereign immunity of the United States.
Like many people in the U.S., Reginald Kirtz took out both student and housing loans. See Kirtz v. Trans Union LLC, 46 F.4th 159, 162–63 (3d Cir. 2022). In 2018, he paid off both of those loans and his accounts were closed with a balance of zero. Id. at 163. Nonetheless, the Pennsylvania Higher Education Assistance Agency (“AES”) and the U.S. Department of Agriculture’s Rural Housing Service (“USDA”) continued to report the status of his accounts as overdue. Id. According to Kirtz, this damaged his credit report with Trans Union LLC (“Trans Union”) and, in turn, lowered his credit score. Id. Kirtz disputed the accuracy of the overdue reports in a letter to Trans Union. Id. Trans Union then notified both AES and the USDA of the disputed information. Id. Kirtz sued Trans Union, AES, and the USDA, alleging that neither AES nor the USDA investigated or corrected the disputed information as required by the Fair Credit Reporting Act (“FCRA”). Id.
The FCRA was enacted to “ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Id. at 162 (3d Cir. 2022) (citing Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007)). In 1996, Congress amended the FCRA, expanding its reach to authorize suits against “any person” who fails to comply with “any requirement” under the FCRA. Id. While it is unquestionable that the FCRA requires that disputed information provided to a credit reporting agency be investigated and corrected, the question before the Court is whether Congress intended, when making the amendment, to include the government in the term “any person.” See 46 F.4th at 163.
The FCRA defines the term “person” to include “any individual, . . . government or governmental subdivision or agency.” 15 U.S.C. § 1681(b). Nonetheless, the USDA filed a motion to dismiss claiming they are immune from liability and thus should not count as a person, as defined under the FCRA. 46 F.4th at 163. The doctrine of sovereign immunity means that the United States government cannot be sued unless Congress has chosen to waive the immunity. U.S. v. Mitchell, 463 U.S. 206, 212 (1983). The district court granted the USDA’s motion to dismiss, finding that it would be “implausible” for the federal government to be sued under the FCRA. 46 F.4th at 162. Kirtz appealed this decision to the Third Circuit. Id.