Banking and Finance Law Daily Consumer replies in case seeking Supreme Court review of FCRA sovereign immunity
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Friday, March 13, 2020

Consumer replies in case seeking Supreme Court review of FCRA sovereign immunity

By Paul A. Ferrer, J.D.

The government’s concession of conflicting authority on the issue is sufficient, in and of itself, to justify hearing the case, the consumer argues, while reiterating that the plain language of the statute establishes the waiver of sovereign immunity.

In a reply brief in support of his petition seeking the U.S. Supreme Court’s review of the Fourth Circuit’s decision that the Fair Credit Reporting Act (FCRA) does not contain the unequivocal waiver of sovereign immunity required to subject the U.S. to damages actions under the statute, the consumer argued that the government’s response was out of step with the plain language of FCRA subjecting "any government" to liability for violating the statute. Based on the clear text, the government’s reliance on other provisions of FCRA and its legislative history was misplaced. In any event, the consumer emphasized, the government’s focus on the merits of the dispute was beside the point, in light of the government’s recognition that there was a conflict of authority in the circuits on the sovereign-immunity issue (Robinson v. Department of Education, Case No. 19-512).

The case involves a consumer seeking review of whether FCRA waives the federal government’s sovereign immunity against damages actions for violating the statute. The consumer claims that student loans were fraudulently taken out in his name through a program administered by the Department of Education. Despite his dispute, the Education Department reported the delinquent loans to the credit reporting agencies. The consumer sued the Education Department, alleging that it had violated FCRA by failing to investigate his dispute adequately and failing to review all of the material that was relevant to the dispute. A U.S. district court determined that FCRA does not waive the government’s sovereign immunity from suit, and the U.S. Court of Appeals for the Fourth Circuit affirmed. The Fourth Circuit agreed with the Ninth Circuit, creating a 2-1 split with the Seventh Circuit, which had previously held that FCRA waives the government’s immunity from damages for violations of the statute.

The consumer asked the Supreme Court to hear the case, citing the circuit split. The Department of Education responded to the consumer’s petition, arguing that the Fourth Circuit had correctly held that FCRA’s civil damages provisions do not contain the unequivocal waiver of sovereign immunity that is necessary to subject the U.S. to damages actions (see Banking and Finance Law Daily, Feb. 21, 2020).

Consumer’s reply to respondent’s arguments. The consumer argued that the government had essentially conceded that there is a clear conflict of authority on the question presented. While the government suggested that the Seventh Circuit had retreated from its holding that FCRA waives the government’s sovereign immunity, the case cited by the government actually reaffirmed the Seventh Circuit’s earlier holding as regards the federal government while recognizing that a different rule applied to Indian tribes. The consumer emphasized that the circuit split alone was sufficient to justify granting certiorari to resolve the dispute, despite the government’s arguments focusing on the merits of the case.

Turning to the merits, the consumer reiterated that the plain text of the statute demonstrates that Congress had unequivocally waived sovereign immunity in FCRA damages actions. While the government called the consumer’s reading simplistic and mechanical, the government offered no other plausible meaning of the phrase "any... government" in FCRA’s definition of a "person" who can be held liable to a consumer under FCRA. The consumer also found the government’s reliance on other provisions of the FCRA and its legislative history unconvincing and unnecessary, in light of the clear and unambiguous language used in the controlling provision. Finally, the government’s "parade of horribles" that would follow from a contrary decision had not come to pass in the years since the Seventh Circuit’s 2014 decision in conflict with the Fourth and Ninth Circuit’s decisions, and that is a matter for Congress to address in any event.

Attorneys: Quinn Breece Lobato (Lobato Law Firm PLLC) and Ishan Kharshedji Bhabha (Jenner and Block LLP) for Anthony Robinson. Noel J. Francisco, U.S. Department of Justice, for Department of Education.

Companies: Department of Education

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