46 F.4th 159
3rd Cir.2022Background:
- Plaintiff Reginald Kirtz alleged TransUnion reported two closed loan accounts (one held by USDA Rural Housing Service) as "120 Days Past Due," harming his credit score; he disputed the entries and TransUnion notified furnishers under 15 U.S.C. § 1681i.
- Kirtz says AES (a Pennsylvania public corporation) and the USDA received notice and failed to investigate or correct the disputed information in violation of FCRA § 1681s-2(b)(1).
- Kirtz sued TransUnion, AES, and the USDA asserting negligent and willful FCRA claims under 15 U.S.C. §§ 1681o and 1681n.
- The USDA moved to dismiss under Rule 12(b)(1), claiming sovereign immunity; the district court granted dismissal, finding §§ 1681n/1681o did not unequivocally waive the United States’ immunity.
- The Third Circuit reversed, holding the FCRA’s express definition of "person" (15 U.S.C. § 1681a(b))—which includes "any government or governmental subdivision or agency"—unambiguously waives federal sovereign immunity for private damages actions under §§ 1681n and 1681o.
- The court acknowledged a circuit split (Fourth and Ninth rejecting waiver; D.C. and Seventh accepting waiver) and resolved the textual and interpretive disputes in favor of a plain-text waiver.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §§ 1681n and 1681o waive the United States’ sovereign immunity | Kirtz: FCRA defines "person" to include government; "any person" liability therefore reaches the U.S. and agencies | USDA: Congress did not unequivocally waive immunity; definitions shouldn’t be read to impose liability on U.S. without clearer statement | Court: Waiver is unequivocal—FCRA's express definition of "person" applies to the civil-liability provisions and waives sovereign immunity |
| Whether applying the statutory definition everywhere creates absurd or untenable results (criminal penalties, punitive damages, state/tribal immunity issues, administrative enforcement) | Kirtz: Even if some provisions produce odd results, canons (absurdity, constitutional limits) allow narrow non-application where necessary; text controls otherwise | USDA: Literal application would produce implausible or untenable results across the statute, so definition is ambiguous and must be construed for immunity | Court: Potentially problematic applications are either resolvable by established canons or not constitutionally barred; implausibility is not ambiguity and does not defeat the clear waiver for §§ 1681n/1681o |
| Whether extratextual sources (legislative history, Privacy Act, or comparisons to other statutes) negate a textual waiver | Kirtz: Text controls; legislative history and other statutes don't override a clear statutory waiver | USDA: Congressional silence, Privacy Act remedial scheme, and other statutes show Congress didn't intend to waive federal immunity here | Court: Legislative history irrelevant where text is clear; Privacy Act differences do not create inconsistency sufficient to avoid the FCRA waiver |
Key Cases Cited
- Bormes v. United States, 759 F.3d 793 (7th Cir. 2014) (held FCRA permits suit against federal government under its text)
- Mowrer v. United States Dep’t of Transportation, 14 F.4th 723 (D.C. Cir. 2021) (concluded FCRA’s definition of "person" waives federal immunity)
- Robinson v. United States Dep’t of Education, 917 F.3d 799 (4th Cir. 2019) (held FCRA does not unambiguously waive sovereign immunity)
- Daniel v. National Park Service, 891 F.3d 762 (9th Cir. 2018) (held FCRA does not unambiguously waive sovereign immunity)
- Lane v. Pena, 518 U.S. 187 (1996) (broad statutory language can waive federal immunity when text is sufficiently inclusive)
- Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996) (distinguishes inquiry into whether Congress expressed intent to waive immunity from whether Congress had authority)
- FAA v. Cooper, 566 U.S. 284 (2012) (Congress need not use "magic words" to waive sovereign immunity; waiver must be unequivocal in text)
- Vermont Agency of Natural Resources v. United States ex rel. Stevens, 529 U.S. 765 (2000) (presumption that "person" excludes the sovereign applies only absent an express statutory definition)
- Sturgeon v. Frost, 139 S. Ct. 1066 (2019) (express definitions are "virtually conclusive" and must be applied except for exceptional reasons)
- Kimel v. Florida Bd. of Regents, 528 U.S. 62 (2000) (Court declined to apply a statutory definition with respect to state sovereign immunity where constitutional limits intervened)