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[FCRA] Split Personalities: Government Immune From FCRA Suit, Maybe Not?

As of 2018, the Department of Education had issued $1.5 trillion in student loans.  As the United States’ top student-loan lender, it is one of the largest furnishers of credit data in the country.  That’s right, the Government as a furnisher.  Who would have thought?  Does that mean a borrower can sue the Department of Education if it violates the Fair Credit Reporting Act (“FCRA”)?  If the borrower lives in the Seventh Circuit, he or she can. 

            Currently, there is a Circuit split on whether the general civil enforcement provisions of the FCRA, 15 U. S. C. §§1681n–1681o, waive the Federal Government’s sovereign immunity for FCRA civil enforcement suits.  Just this week, in Anthony Robison v. Department of Education, 590 U.S. ___ (2020), the Supreme Court denied Mr. Robinson’s writ of certiorari, leaving the split, well split.  This means borrowers in Seventh Circuit states have a cause of action against the Department of Education while borrowers with same types of loans in Ninth and Fourth Circuit states are barred from suit. At least for now.

            But this was not a unanimous Supreme Court denial.  Justice Thomas, with whom Justice Kavanaugh joined, dissented because they believed that the question concerned a “matter of great importance” that has divided the Circuits making it ripe for Supreme Court intervention.  Their primary concern is the potential litigation exposure the Department of Education faces, where a “waiver of sovereign immunity would thus have a significant impact on the public fisc.”  Id. at 4.  In short, with trillions of dollars in loans, potential plaintiffs could riddle the department with time-consuming and costly litigation at a great expense to the American people.

            So what is the split?  The split turns on the definition of “person” under the FCRA and “whether the inclusion of ‘governmental . . . agency’ in the FCRA’s definition of ‘person’ constitutes an unequivocal waiver of the federal government’s immunity from money damages and subjects the United States to the various provisions directed at ‘any person’ who violates the law.”  Daniel v. Nat’l Park Serv., 891 F.3d 762, 769 (9th Cir. 2018).  The statute defines person as “any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.”  15 U.S.C. §1681a(b)(emphasis added). 

            But even though “government” is plainly in the statutory definition of “person”, both the Fourth and Ninth Circuits held that the statute text is not “unambiguous and unequivocal” to amount to a waiver of sovereign immunity, especially when the statutory framework is considered as a whole.  See Robinson v. United States Dep’t of Educ., 917 F.3d 799 (4th Cir. 2019); see also Daniel v. Nat’l Park Serv., 891 F.3d 762 (9th Cir. 2018). 

            On the other hand, the Seventh Circuit held that the government is a person within the plain reading of the statute and thereby sovereign immunity is waived because “[t]he United States is a government. One would suppose that the end of the inquiry. By authorizing monetary relief against every kind of government, the United States has waived its sovereign immunity.  And so we conclude.”  Bormes v. United States, 759 F.3d 793, 795 (7th Cir. 2014).  And there you have it.

            So, who is going to fix this?  The Circuits or Congress – or maybe a very large judgment against the Government that peaks the Supreme Court’s interest again.  Indeed, the Supreme Court has found the government immune under other consumer privacy statutes like the TCPA.  See, e.g., Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 672 (2016)(noting that “[t]he United States and its agencies, it is undisputed, are not subject to the TCPA’s prohibitions because no statute lifts their immunity”, but the immunity did not pass-through to the federal subcontractor in Cambell).  So, no matter how this split is to be resolved, this is one to watch and we will keep you posted.

© Copyright 2023 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 113

About this Author

Katherine Spicer, attorney, Squire

Katherine (Katy), is a litigator who draws on her unique military background to help clients solve their complex legal issues. Katy represents clients in internal and government investigations, complex civil and criminal litigation and international arbitration.