Little Tucker Act Does Not Waive Sovereign Immunity For Alleged Violation Of Fair Credit Reporting Act

The United States Supreme Court recently held that the Little Tucker Act does not waive the sovereign immunity of the United States in an action for damages alleging a violation of the Fair Credit Reporting Act (“FCRA”).  The Court concluded that the resolution of the waiver of sovereign immunity issue depends solely on the text of the FCRA.  (United States v. Bormes (--- S.Ct. ----, U.S., November 13, 2012).

Facts

The FCRA, which is designed to protect consumer privacy, provides that “no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.”  The definition of a “person” under the Act includes, among others, any government, governmental subdivision, or agency.  Any person that willfully fails to comply with the FCRA is liable to the consumer for actual damages or damages of not less than $100 and not more than $1,000, as well as punitive damages, attorney fees and costs.  An action to enforce the FCRA may be brought in any appropriate United States district court, without regard to the amount in controversy, or other court of competent jurisdiction.  The action must be brought the earlier of five years after the violation or two years from the date the consumer discovers the violation.

James Bormes alleged that he paid a $350 federal court filing fee with his credit card on Pay.gov, which is an internet-based system used by federal courts and other government agencies to process payment transactions.  Bormes claimed that the electronic receipt from Pay.gov included the last four digits of his credit card and its expiration date and therefore violated the FCRA.  He claimed that he and thousands of other similarly situated persons are entitled to recover damages under the FCRA.  He filed an action against the United States in the United States District Court for the Northern District of Illinois.  He claims that the court has jurisdiction under the FCRA and the Little Tucker Act. 

The district court dismissed Bormes’ lawsuit on the ground that the “FCRA does not contain the explicit waiver of sovereign immunity to permit a damages suit against the United States.”  Bormes appealed the district court’s decision to the Court of Appeals for the Federal Circuit.  The court of appeals vacated the district court’s decision finding “that the Little Tucker Act provided the Government’s consent to suit for violation of FCRA.”

Supreme Court Decision

“Sovereign immunity shields the United States from suit absent consent to be sued that is ‘unequivocally expressed.’”  The Little Tucker Act unequivocally expresses such consent for certain lawsuits seeking money damages.  The Act provides that district courts “‘have original jurisdiction, concurrent with the United States Court of Federal Claims,’ of a ‘civil action or claim against the United States, not exceeding $10,000 in amount, founded either upon the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.’”  The Little Tucker Act does not create substantive rights but instead contains “‘jurisdictional provisions that operate to waive sovereign immunity for claims premised on other sources of law.’”

Bormes asserted that whether or not the FCRA waives sovereign immunity, the Little Tucker Act authorizes his lawsuit against the United States for damages under the FCRA.  The Court framed the issue before it as “whether a damages claim under FCRA ‘falls within the terms of the Tucker Act,’ so that “the United States has presumptively consented to suit.’”  The Court held that it does not because “[w]here, as in FCRA, a statute contains its own self-executing remedial scheme,” the Court looks “only to that statute to determine whether Congress intended to subject the United States to dam­ages liability.”

The Little Tucker Act and its companion statute the Tucker Act are displaced if a law that imposes monetary liability on the United States has its own judicial remedies.  If a law contains its own judicial remedies, “the specific remedial scheme establishes the exclusive framework for the liability Congress created under the statute.”  The Court held that the “FCRA’s self-executing remedial scheme supersedes the gap-filling role of the Tucker Act.”  Statutory schemes that contain “their own remedial framework exclude alternative relief under the general terms of the Tucker Act.” 

The FCRA has its own detailed remedial scheme.  It provides a time limit in which causes of action must be filed and the appropriate forum, which is “any appropriate United States district court” or “any other court of competent jurisdiction.”  The Court stated, “Without resort to the Tucker Act, FCRA enables claimants to pursue the monetary relief contemplated by the statute.”  Because the FCRA contains a “detailed remedial scheme, only its own text can determine whether the damages liability Congress crafted extends to the Federal Government.”  The Court opined, “To hold otherwise— to permit plaintiffs to remedy the absence of a waiver of sovereign immunity in specific, detailed statutes by plead­ing general Tucker Act jurisdiction—would transform the sovereign-immunity landscape.” 

The Court specifically noted that it was not deciding whether FCRA itself waives the sovereign immunity of the federal government.  This question is for the circuit court of appeal to answer upon remand of the case.

Questions

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