Can consumers sue the federal government and its agencies for violating the Fair Credit Reporting Act? As we previously have observed, the answer varies by circuit and even by district, but the Supreme Court of the United States has just officially declined to wade into the debate—at least for now.
In 2014, Judge Frank Easterbrook, writing for a unanimous Seventh Circuit panel in Bormes v. United States, ruled that a consumer was free to bring a lawsuit against the federal government based on the general civil enforcement provisions of the FCRA, 15 U.S.C. §§ 1681n–1681o. Judge Easterbrook reasoned that since the FCRA includes “government or governmental subdivision or agency” within the statutory definition of “persons” who may be sued, it must have been the intent of Congress to waive the sovereign immunity that ordinarily would prohibit consumers from bringing lawsuits against the federal government. (citing 15 U.S.C. § 1681a(b).) Interestingly, on appeal the federal government admitted that it fell within the definition of “person”—a concession that likely influenced the Court’s reasoning.
In 2018, Judge Margaret McKeown, writing for a unanimous Ninth Circuit panel, reached exactly the opposite conclusion in Daniel v. Nat’l Park Serv. She commented, “[W]e are not convinced by the Seventh Circuit’s reasoning,” diplomatically characterizing Judge Easterbrook’s opinion as “curious” and observing in a footnote that Bormes had “traveled a long and twisting path in reaching its conclusion.” Instead, she wrote: “Construing the FCRA as a whole—including the different contexts in which ‘person’ is used, and the inclusion of a clear waiver of sovereign immunity in an unrelated provision—we view the statute as ambiguous with respect to whether Congress waived immunity for Daniel’s suit.” In the absence of an explicit sovereign immunity waiver, and declining to find an implicit one, the opinion ultimately held that the plaintiff could not sue the Park Service.
In 2019, Judge Harvie Wilkinson, writing for a unanimous Fourth Circuit panel in Robinson v. Dep’t of Educ., sided with Judge McKeown and the Ninth Circuit. Anthony Robinson had alleged that the United States Department of Education was furnishing incorrect information about him to the credit reporting agencies; he claimed he was a victim of identity theft and had never authorized any student loan account to be opened in his name. Judge Wilkinson acknowledged the Circuit split created by Daniel and Bormes but interpreted a later 2016 decision from the Seventh Circuit as a “retreat” from Bormes’s holding. (citing Meyers v. Oneida Tribe of Indians of Wis., 836 F.3d 818, 823–27 (2016).)
With a sharp split in opinion among three of the country’s most eminent jurists—and sovereign immunity an increasingly hot-button topic in the legal community—Robinson seemed like a shoe-in for Supreme Court review.
But in late April 2020, the high court declined to take up Robinson. No. 19-512, 590 U.S. ____, 2020 WL 1906555, 2020 U.S. LEXIS 2402 (Apr. 20, 2020). This decision was not without controversy. Justice Clarence Thomas, joined by Justice Brett M. Kavanaugh, vociferously dissented from denial of certiorari. Fascinatingly, the dissent interpreted the very Seventh Circuit opinion that Judge Wilkinson had characterized as a “retreat” from Bormes as, in fact, a re-affirmation of Bormes—arguing that Meyers deepened the Circuit split, rather than resolving it.
As the dissent from denial of certiorari put it, “borrowers of federal loans in Illinois, Indiana, and Wisconsin have access to a cause of action against the Federal Government while borrowers with the same types of loans in 14 other States are barred from suit.” In making the case for why such a split is so impactful, Justice Thomas made a few choice observations on the federal government’s role in the credit markets—particularly student loans: “As the Nation’s primary student-loan lender, [the U.S. government] is one of the largest furnishers of credit information in the country. According to petitioner, the Federal Government is responsible for 90 percent of student loans nationwide in a market that has tripled between 2007 and 2018, from $500 billion to a staggering $1.5 trillion.”
Only three circuits have weighed in on this important question so far, but in the absence of controlling authority, that number is likely to increase. Once more circuits have chimed in with their views, the Supreme Court may eventually decide that the time is ripe to resolve the split.