Today, in a unanimous opinion, the Supreme Court of the United States ruled that agencies of the federal government can be sued by individual consumers for violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq. The decision is significant in that it paves the way for more FCRA suits against one of the country’s biggest lenders—the federal government—which may in turn draw renewed interest from Congress in the FCRA.

The underlying facts of the case are simple: consumer Reginald Kirtz received a loan from a division of the United States Department of Agriculture (“USDA”). Allegedly, the consumer paid off the loan, but the USDA repeatedly reported to a credit agency that the loan was past due, damaging his credit score. He eventually sued the USDA for willfully or negligently failing to take steps to investigate or correct disputed information as required under the FCRA. § 1681s-2(b)(1). 

Avoiding the issue of whether the USDA did take appropriate steps, the agency argued that it could not be sued at all under the FCRA because (i) the federal government enjoys sovereign immunity unless Congress waives that immunity and (ii) the FCRA does not waive immunity. The Supreme Court, affirming the Third Circuit, rejected the second portion of USDA’s argument. The Court reasoned that Congress waived sovereign immunity because the FCRA expressly authorizes consumer suits against “[a]ny person” who violates the FCRA, and the FCRA’s definition of “person” includes “any … governmental agency.” § 1681a(b). The USDA’s variety of arguments that waiver requires an even more express legislative statement under the Supreme Court’s caselaw were thoroughly refuted by the Court.