Reginald Kirtz had a loan account with the United States Department of Agriculture Rural Development Rural Housing Service (USDA), which issues loans for the development of affordable housing in rural communities. When Kirtz discovered that the information on his credit report regarding his USDA account was inaccurate and negatively affecting his credit score, he attempted to get it fixed. However, according to Kirtz, the USDA (among other entities) failed to take appropriate actions to fix the errors, forcing him to file a federal lawsuit alleging that the USDA violated the Fair Credit Reporting Act (FCRA).

The USDA moved to dismiss Kirtz’s suit, arguing that it may not be subject to suit for violating the FCRA because that statute does not waive the federal government’s sovereign immunity. After the Third Circuit ruled in Kirtz’s favor, the USDA asked the Supreme Court to hear the case, and it agreed to do so.

In October 2023, CAC filed a brief in support of Kirtz, arguing that the FCRA plainly waives the USDA’s sovereign immunity and that the Court should respect the FCRA’s text.

Sovereign immunity is a legal doctrine that posits that the United States (including federal agencies like the USDA) may not be subject to suit unless Congress waives its immunity through statutory text. Though nothing in the Constitution mandates federal sovereign immunity, the Supreme Court has consistently applied the doctrine, reasoning that the decision of when it is appropriate for the federal government to be held accountable in court is best vested in the people’s representatives.

Our brief made two principal points. First, the decision whether to waive the federal government’s sovereign immunity belongs to Congress. From the earliest invocations of the sovereign immunity doctrine, the Supreme Court has recognized that deciding whether to waive the federal government’s sovereign immunity involves balancing the policy interests served by immunity against the right of individuals to claim protection of the laws. On the one hand, allowing private individuals to hale into court the entity entrusted with protection of the greater public could disrupt government processes and divert government resources away from pursuit of the public welfare. On the other hand, our constitutional structure manifests a strong interest in permitting individuals to vindicate their federally protected rights in court—regardless of who violates those rights. Congress is best positioned to weigh these competing interests, and for the Court to invoke different rules of statutory interpretation in the sovereign immunity context would arrogate legislative power.

The Court’s sovereign immunity precedents reflect that understanding. When the Supreme Court has previously attempted to discern whether statutes waive sovereign immunity, it has simply used the same tools of statutory interpretation that it uses to interpret any other law. It does not, as the USDA would have it, create a stricter test for interpreting waivers of sovereign immunity where Congress must say some “magic words.” If there is no ambiguity in the statute, the Court does not weigh in.

Second, Congress clearly determined that the federal government should be held accountable when it violated the FCRA and waived sovereign immunity here. The statute subjects to liability any “person” who negligently or willfully fails to comply with the FCRA’s requirements, and it defines “person” to include “any . . . government or governmental subdivision or agency.”

The USDA attempts to controvert this unambiguous text by appealing to legislative history and creating from whole cloth a rule that statutory cross-references do not suffice to waive sovereign immunity.  Our brief explained that indulging these arguments would not only defy the Supreme Court’s precedents, it would also displace Congress’s judgment in violation of fundamental separation of powers principles.  Indeed, we explained that none of the cases the USDA cited in defense of its position actually supported its proposed new rule—the USDA relied on outdated cases that, in any event, do not stand for the broad principles for which the USDA cited them. And heightening the requirements for a waiver of sovereign immunity after Congress has already legislated would subvert Congress’s plan in passing the law and amount to an unconstitutional aggrandizement of judicial power.

In short, the will of the people, expressed by Congress, was to provide a remedy when a person’s right to accuracy in credit reporting is violated by the federal government. The Court should not second guess that judgement.

On February 8, 2024, the Supreme Court unanimously held that the federal government is subject to suit under the FCRA. Echoing our brief, Justice Gorsuch wrote that the text of the statute clearly waives the United States’ sovereign immunity, and that “no amount of legislative history” could “dislodge” that clear waiver.