On February 8, 2024, the U.S. Supreme Court decided Department of Agriculture Rural Development Rural Housing Service v. Kirtz, No. 22-846, affirming the decision below and holding that a governmental agency is not immune from suit for violating the Fair Credit Reporting Act (FCRA).

The FCRA, as amended by the Consumer Credit Reporting Reform Act of 1996, allows consumers to sue lenders who willfully or negligently supply false information about them to entities that generate credit reports. The question before the Court was whether the federal government — when acting as a lender — may be sued when it supplies false information, or whether it may invoke sovereign immunity.

Respondent alleged that he had paid off a loan from a division of the Department of Agriculture, but that the USDA falsely reported the loan as past due, thereby damaging his credit. Respondent sued for money damages under the FCRA. The USDA moved to dismiss the complaint, asserting sovereign immunity. The district court dismissed the claim; but the Third Circuit reversed, finding that the FCRA waives sovereign immunity.

The Supreme Court affirmed. Congress may make a “clear statement” that waives sovereign immunity either by addressing waiver directly or by authorizing suit against a governmental agency. The FCRA authorizes consumer suits for money damages against “[a]ny person” who willfully or negligently fails to comply with the Act’s requirements. It further defines a “person” to include any governmental agency. The express authorization of suit against a governmental agency provides a clear indication of congressional intent to waive immunity. In so holding, the Court rejected the argument that sovereign immunity could only be waived by a separate provision directly addressing the issue. It also rejected the Government’s argument that the statute’s inclusive definition of “person” could not be applied to the provisions at issue.

Justice Gorsuch delivered the opinion for a unanimous Court.

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