In Kent v. TransUnion, plaintiff Rowdy Kent sued multiple consumer reporting agencies and the United States Defense Finance and Accounting Services for alleged violations of the Fair Credit Reporting Act.  DFAS moved to dismiss Kent’s claims, arguing that it possesses sovereign immunity from claims under the FCRA.  On August 25, the District Court for the Northern District of Texas rejected DFAS’s contention, finding that Congress had waived sovereign immunity for claims under the FCRA. 

Since approximately 2009, DFAS has been reporting to consumer reporting agencies that Kent owed approximately $6,000 to DFAS.  Kent claims that DFAS’s reporting was in error and, as a result, DFAS is liable to Kent under the FCRA.  DFAS countered that it could not have violated the FCRA because it is an agency within the United States Department of Defense, which entitles it to governmental sovereign immunity.  The Court disagreed. 

In its analysis, the Court recognized that sovereign immunity shields the United States from suit absent “unequivocally expressed” consent.  According to the Court, a waiver of sovereign immunity cannot be implied or inferred.  Despite this high threshold for waiver, the Court found that Congress had waived sovereign immunity when crafting the FCRA. 

In the Court’s view, the FCRA imposes liability on any “person” who willfully or negligently fails to comply.  The FCRA defines “person” to include a “government or governmental subdivision or agency.”  Given the inclusion of “government” in the definition of “person,” the Court found that Congress explicitly waived sovereign immunity under the FCRA.  In reaching this decision, the Court found numerous district court opinions reaching a contrary conclusion “unpersuasive.”  Instead, the Court agreed with a recent Seventh Circuit decision that found the FCRA’s authorization of monetary relief to “every kind of government” is the “end of the inquiry,”  and it concluded that the FCRA’s language constitutes an “unequivocal waiver” of the United States’ sovereign immunity.