REGINALD KIRTZ, Appellant v. TRANS UNION LLC; PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY, doing business American Education Services; UNITED STATES DEPARTMENT OF AGRICULTURE RURAL DEVELOPMENT RURAL HOUSING SERVICE
No. 21-2149
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
August 24, 2022
PRECEDENTIAL. Argued May 24, 2022.
Before: KRAUSE, BIBAS, and PHIPPS, Circuit Judges
Nandan M. Joshi [ARGUED]
Allison M. Zieve
Public Citizen Litigation Group
1600 20th Street, N.W.
Washington, DC 20009
Matthew B. Weisberg
Weisberg Law
7 South Morton Avenue
Morton, PA 19070
Counsel for Appellant
Mark B. Stern [ARGUED]
Sarah W. Carroll
United States Department of Justice
Civil Division, Appellate Staff
Room 7511
950 Pennsylvania Avenue, N.W.
Washington, DC 20530
Counsel for Appellee
KRAUSE, Circuit Judge
There are profound implications to throwing open the doors to the United States Treasury, so before we do, we need to be sure that is what Congress intended. Here, the District Court dismissed Appellant Reginald Kirtz‘s lawsuit against the U.S. Department of Agriculture (“USDA“) for alleged violations of the Fair Credit Reporting Act (“FCRA“),
I.
In 1970, Congress enacted the FCRA to “ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007). As originally enacted, the FCRA imposed substantive requirements on consumer reporting agencies and “persons” who used information in credit reports. See
In 1996, Congress amended the FCRA to impose new requirements on “persons,” such as creditors and lenders, who furnish information to credit reporting agencies. See Consumer Credit Reporting Reform Act of 1996, Pub. L. No. 104-208, § 2413, 110 Stat. 3009, 3009-447 to -449 (“1996 Amendments“). One such set of requirements is triggered when consumers contact a consumer reporting agency to dispute the accuracy of information in their credit file under
If a furnisher of information negligently fails to comply with these requirements—or any of the FCRA‘s other substantive requirements—§ 1681o authorizes consumers to bring an action for actual damages, costs, and attorney‘s fees. If the failure to comply is willful, § 1681n further provides for statutory and punitive damages. When §§ 1681n and 1681o were originally enacted in 1970, they imposed liability only on consumer reporting agencies and users of information, see
This appeal arises from two loans issued to Reginald Kirtz, one by the Pennsylvania Higher Education Assistance Agency (“AES“), a “public corporation” authorized under Pennsylvania law to make, guarantee, and service student loans,
Kirtz commenced this action against Trans Union, AES, and the USDA on October 20, 2020, alleging both negligent and willful violations of the FCRA under §§ 1681n and 1681o.1 Both AES and Trans Union filed answers to Kirtz‘s
Amended Complaint, but the USDA responded by filing a motion to dismiss for lack of subject matter jurisdiction based on the United States’ sovereign immunity.2 See
II.
Kirtz originally invoked the District Court‘s jurisdiction under
The sole question at issue in this appeal is whether §§ 1681n and 1681o of the FCRA waive the USDA‘s sovereign immunity. We have not addressed this question, but four other Courts of Appeals have. The District Court aligned itself with the Fourth and Ninth Circuits, which concluded that the United States is not subject to liability under the FCRA. See Robinson v. United States Dep‘t of Educ., 917 F.3d 799 (4th Cir. 2019); Daniel v. Nat‘l Park Serv., 891 F.3d 762 (9th Cir. 2018). The D.C. and Seventh Circuits, on the other hand, have reached the opposite conclusion, holding that the FCRA‘s plain language indeed waives the United States’ sovereign immunity. See Mowrer v. United States Dep‘t of Transp., 14 F.4th 723 (D.C. Cir. 2021); Bormes v. United States, 759 F.3d 793 (7th Cir. 2014). For the reasons that follow, we agree with the reasoning of the D.C. and Seventh Circuits and hold that §§ 1681n and 1681o unequivocally waive the sovereign immunity of the United States.
A.
The United States and its agencies—including the USDA—enjoy sovereign immunity from suit, but Congress may waive that immunity by enacting a statute that authorizes suit against the government for damages or other relief. See FAA v. Cooper, 566 U.S. 284, 290–91 (2012); Doe 1 v. United States, 37 F.4th 84, 86–88 (3d Cir. 2022). Whether a statute waives sovereign immunity is a question of statutory interpretation. Any waiver must be “unequivocally expressed” in the statutory text, Sossamon v. Texas, 563 U.S. 277, 284 (2011) (quoting Pennhurst State Sch. & Hosp. v. Halderman, 465 U.S. 89, 99 (1984)), but “Congress need not state its intent in any particular way” and is “never required” to use “magic words” to waive immunity, Cooper, 566 U.S. at 291. Rather, if, after applying the “traditional tools of statutory construction,” there is “no ambiguity,” courts must apply a waiver as written, Richlin Sec. Serv. Co. v. Chertoff, 553 U.S. 571, 590 (2008), and may not “narrow [a] waiver that Congress intended,” United States v. Idaho ex rel. Dir., Idaho Dep‘t of Water Res., 508 U.S. 1, 7 (1993) (internal quotation marks omitted).
On the other hand, if the waiver is ambiguous—meaning the language Congress purportedly used to waive immunity is reasonably susceptible to more than one meaning—then the sovereign immunity canon requires courts to construe that ambiguity in favor of immunity. See Cooper, 566 U.S. at 290.
Importantly, while we speak of Congress‘s “intent” to waive sovereign immunity, our inquiry is limited the statutory text. Legislative history may neither supply a waiver that is not present in the text nor destroy one that is. See Lane v. Pena, 518 U.S. 187, 192 (1996). Instead, if a waiver is “clearly discernable from the statutory text in light of traditional interpretive tools,” we must give effect to it. Cooper, 566 U.S. at 291. For the reasons that follow, we hold that §§ 1681n and 1681o of the FCRA satisfy this standard.
B.
1.
The FCRA provides that any “person” who either negligently or willfully “fail[s] to comply with any requirement imposed under [the FCRA] with respect to any consumer is liable to that consumer” for civil damages.
This definition, moreover, explicitly applies “for purposes of this subchapter,” id. at
Nor is there ambiguity about whether that express definition—covering “any ... government or governmental subdivision or agency“—encompasses the United States and its agencies, including the USDA. Id.
Likewise,
agency or department makes certain written findings. Id.
be a “person” for purposes of the FCRA‘s substantive requirements;5 rather, they draw a distinction between the Act‘s substantive and enforcement provisions. See Robinson, 917 F.3d at 806; Daniel, 891 F.3d at 773. But that distinction is wholly artificial. The FCRA could not be clearer that its definitions apply to the entire subchapter, see
In sum, we agree with the Seventh and D.C. Circuits that the plain text of the statute operates as a waiver of sovereign immunity: “[O]nce it is conceded that ‘any ... government’ includes the United States ... there is no basis for denying that the same definition governs FCRA‘s private damages actions.”6 Mowrer, 14 F.4th at 730.
2.
Our reading of the FCRA‘s plain text is reinforced by a comparison with the Truth in Lending Act (“TILA“),
The surrounding statutory context of each statute confirms that Congress understood the use of the defined term “person” to signal an unambiguous waiver of sovereign immunity. The TILA, for example, includes a provision that expressly preserves the United States’ sovereign immunity against civil suits. See
3.
The USDA challenges our interpretation by pointing to the original 1970 version of the FCRA, which also defined “person” to include the government but did not impose civil liability on “persons“—only on “consumer reporting agenc[ies] [and] user[s] of information.”
We also take issue with the USDA‘s premise. The 1970 Act imposed civil liability on all “user[s] of information” who violated its requirements, and while the statute did not expressly define “user[s] of information,” it did prohibit consumer reporting agencies from providing credit reports except to “person[s]” whom the agency had reason to believe would “use the information” for specified purposes.
In any event, even if the USDA is correct that the 1970 Act did not waive sovereign immunity, we are focused today on interpreting the 1996 Amendments, and those Amendments, in clear and unambiguous terms, authorize suits against all “persons,” including the United States.
4.
We also find it significant that, in addition to imposing liability on “any person,” Congress also authorized suits for failure to comply with “any requirement imposed under [the FCRA] with respect to any consumer[.]”
This reading finds support in the Supreme Court‘s decision in Lane v. Pena, 518 U.S. 187 (1996). In that case, the Court considered a provision of the Rehabilitation Act of 1973 that authorized civil damages “to any employee or applicant for employment” aggrieved by an employer‘s response to an EEOC complaint.
The same is arguably true here, where the FCRA both imposes requirements on the United States and authorizes civil damages for failure to comply with “any requirement.” We need not now decide, however, if the FCRA‘s “any requirement” language would suffice on its own, as in Lane, to effect a waiver of sovereign immunity. For today‘s purposes, it is enough to observe that Congress‘s use of such broad language lends further support to our reading.
5.
In the face of the FCRA‘s clear text, the USDA tells us to look instead to the statute‘s legislative history. Our inquiry, however, is limited to ascertaining Congress‘s intent as expressed in the text, and “[l]egislative history generally will be irrelevant to a judicial inquiry into whether Congress intended” to waive sovereign immunity. Dellmuth v. Muth, 491 U.S. 223, 230 (1989). For the reasons we have laid out, the FCRA‘s text is clear, and legislative history cannot create ambiguity where there is none. See, e.g., Bostock v. Clayton Cnty., 140 S. Ct. 1731, 1749 (2020).
Moreover, even if the legislative history put forward by the USDA were relevant, it would not be persuasive. The USDA provides no evidence that Congress sought to preserve the federal government‘s immunity; instead, it offers scattered references by members of Congress to private furnishers of credit information, such as banks and businesses, and asks us to infer from Congress‘s silence as to public furnishers its intent to exclude them from civil liability.10 But Congressional silence can hardly be said to speak loudly, particularly when viewed alongside clear statutory text.11 Moreover, as Kirtz points out, the USDA‘s reliance on Congressional silence would also mean that the federal government, because it was
not discussed in the floor debates, could not be subject to the FCRA‘s substantive requirements, which it clearly is.
C.
The District Court in this case was persuaded to follow the Fourth and Ninth Circuits, each of which held that Congress needed to be even clearer to meet the standard set by other, more specific, waivers of sovereign immunity. It goes without saying, though, that some waivers of sovereign immunity will be more explicit than others. And the Supreme Court has been clear that “Congress need not state its intent in any particular way,” and that we may not impose any “magic words” requirement. Cooper, 566 U.S. at 291. Thus, while other waivers of sovereign immunity may provide helpful points of reference, they do not dictate the manner in which Congress must convey its intent, nor can they inject ambiguity into otherwise clear text.
The Fourth and Ninth Circuits placed great emphasis on a second, more specific waiver of sovereign immunity within the FCRA itself. Section 1681u requires credit reporting agencies to disclose certain credit information to the Federal Bureau of Investigation for counterintelligence purposes and permits the FBI to disseminate that information to other federal agencies subject to specific requirements. See
We are not persuaded. As the D.C. Circuit correctly observed, “there is a good reason why [§ 1681u(j)] specifically targets federal agencies,” which is that only federal agencies are subject to § 1681u‘s substantive requirements in the first place. Mowrer, 14 F.4th at 729. In contrast, §§ 1681n and 1681o concern requirements that apply not merely to the government but to “persons” generally, so it makes sense to employ the broader term rather than enumerate specific entities already encompassed by the statutory definition.
The Fourth and Ninth Circuits also contrasted §§ 1681n and 1681o with other waivers in other statutes that specifically authorize suits against the United States. See Robinson, 917 F.3d at 803; Daniel, 891 F.3d at 772–73. The Federal Tort Claims Act (“FTCA“), for instance, provides that “[t]he United States shall be liable ... in the same manner and to the same extent as a private individual under like circumstances[.]”
Again, however, there are reasonable explanations for why each of these waivers lists the United States specifically. The FTCA, like § 1681u(j) of the FCRA, only applies to the federal government, so there is no need to name any other entity as liable. And the CWA‘s definition of “person,” unlike the FCRA‘s, only includes state and municipal governments, meaning that the United States would not otherwise be
included in the Act‘s waiver if it were not specifically included. SeeThe last group of comparators on which the Fourth and Ninth Circuits rely are those that explicitly reference the federal government not only in defining the potential defendants but again in imposing liability. The Resource Conservation and Recovery Act (“RCRA“), for instance, defines the term “person” to “include each department, agency, and instrumentality of the United States,” but also includes additional language in its liability provision authorizing suits “against any person, including (a) the United States, and (b) any other governmental instrumentality or agency . . . .”
In sum, none of the more explicit waivers cited by the USDA or invoked by the Fourth or Ninth Circuits call into question the clarity with which Congress spoke in the 1996 Amendments.
D.
In departing from the FCRA‘s plain text, the Fourth and Ninth Circuits assumed that treating the government as a “person” for purposes of the FCRA‘s civil liability provisions would require doing so in every other provision of the statute, including those that subject “persons” to punitive damages,
Marshaling that parade, however, is a legal bogeyman. Courts have never been required to choose between mechanically applying a statutory definition everywhere in a statute or applying it nowhere. To the contrary, the Supreme Court has repeatedly held that where a statute contains an “express definition,” that definition is “virtually conclusive” and must be applied for all purposes “[s]ave for some exceptional reason.” Sturgeon v. Frost, 139 S. Ct. 1066, 1086 (2019) (internal quotation marks omitted). These reasons include circumstances where applying a definition to a specific provision would be unconstitutional, see Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 73-74, 91 (2000) (declining to apply the ADEA‘s definition of “public agency” to unconstitutionally abrogate state sovereign immunity), where it would be absurd, see Green v. Bock Laundry Mach. Co., 490 U.S. 504, 510 (1989) (declining to apply the plain text of
When it comes to sovereign immunity, it is understandable and entirely appropriate that the District Court was wary of implausible results and cautious about exposing the public fisc to liability. But even exceptional circumstances justify departing from a statutory definition only to the extent necessary to avoid untenable—not merely implausible—results. For all other provisions of a statute, courts must continue to apply statutory terms as defined. With this standard in mind, we consider the two categories of purportedly “untenable” applications of the term “person” that led the Fourth and Ninth Circuits to reject the FCRA‘s statutory definition.
1.
One category of potentially problematic applications is those that appear untenable on their face, but which can be reconciled with the statute without rejecting its definition wholesale by using well-established canons of statutory construction.
Similarly, a court could not interpret the term “person” as used in
To the contrary, doing so would disregard the central tenet of Seminole Tribe and conflate Congress‘s intent with its power. In Seminole Tribe, the Supreme Court clearly distinguished between two distinct inquiries—(1) whether Congress has unequivocally expressed its intent to waive immunity, and (2) whether Congress has acted pursuant to a valid grant of authority, see 517 U.S. at 55—and addressed each independently. It concluded that while Congress clearly intended to abrogate state immunity, it lacked the power to do so. See id. at 56-57, 72-73. Here, however, the plain text of
Indeed, that inference has been resoundingly rejected by the Supreme Court. In Kimel, the Court applied Seminole‘s twin inquiries to the ADEA, which subjects “public agencies” to civil damages. See 528 U.S. at 78,
2.
The other category of applications that concerned the Fourth and Ninth Circuits are those that would produce results that may be implausible, but which, ultimately, are not untenable.
For example, there is a “presumption against [the] imposition of punitive damages on governmental entities,” Vt. Agency, 529 U.S. at 785, but that presumption, like sovereign immunity, may be overcome by a clear expression of Congress‘s intent, see City of Newport v. Fact Concerts, Inc., 453 U.S. 247, 263-64 (1981). Section 1681n(a)(2) meets that standard.
Similarly, while Congress has only rarely expressed its intent to subject the United States and its agencies to enforcement actions brought by administrative agencies and states, neither is unprecedented. RCRA, for instance, authorizes the Environmental Protection Agency to bring enforcement actions against other federal agencies, see
In sum, there are two provisions for which applying the FCRA‘s definition of “person” would lead to untenable results and a handful for which the results would be merely unusual, but none ultimately precludes our application of that definition to the civil liability provisions at issue here.15
The upshot of that discussion is that we see no exceptional reason that absolves us of our duty to apply the FCRA‘s definition to
The closest the Fourth and Ninth Circuits come to identifying a reason not to apply the FCRA‘s express definition of “person” to the civil liability provisions is their observation that waiving immunity for FCRA claims would expose the federal fisc to potential liability. See Robinson, 917 F.3d at 804; Daniel, 891 F.3d at 775-76. But this is true whenever Congress decides to waive immunity for damages claims and is certainly not an exceptional reason to depart from Congress‘s clear intent. Whether to subject the federal fisc to liability is a policy choice reserved to Congress and one that we are bound to honor, not second-guess. See Doe, 37 F.4th at 88 (emphasizing that the clear-statement rule for finding a waiver of sovereign immunity “ensures that elected officials, not judges, choose when to open the public purse“).
E.
The USDA also directs our attention to the Seventh Circuit‘s decision in Meyers v. Oneida Tribe of Indians of Wis., 836 F.3d 818, 826 (7th Cir. 2016), which held that the FCRA did not unambiguously abrogate tribal sovereign immunity,17 and suggests
We disagree. As the Seventh Circuit correctly explained in Meyers, there are important differences between waiver of the federal government‘s own immunity and abrogation of Indian tribes’ inherent sovereignty that warrant different analyses. See Meyers, 836 F.3d at 826-27. Indian tribes are “‘domestic dependent nations’ that exercise inherent sovereign authority[.]” Okla. Tax Comm‘n v. Citizen Band Potawatomi Tribe of Okla., 498 U.S. 505, 509 (quoting Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831)). Congress, however, may abrogate that sovereignty at any time pursuant to its plenary authority over tribes. See, e.g., Michigan v. Bay Mills Indian Cmty., 572 U.S. 782, 789 (2014).
But Indian tribes are not vassal states, nor is the United States an empire. Rather, Congress is presumed to legislate for the benefit of Indian tribes, with all statutory language ““construed liberally in favor of the Indians“” and any “ambiguous provisions interpreted to their benefit.” Ysleta Del Sur Pueblo v. Texas, 142 S.Ct. 1929, 1941 n.3 (2022) (quoting Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985)); see also McClanahan v. State Tax Comm‘n of Ariz., 411 U.S. 164, 174-75 (1973); Choate v. Trapp, 224 U.S. 665, 675 (1912). This canon of interpretation is robust and displaces rules that would otherwise govern outside the Indian law context. See, e.g., Cobell v. Salazar, 573 F.3d 808, 812 (D.C. Cir. 2009) (explaining that the Indian canons “trump[]” and “mute[]” the application of Chevron deference) (internal quotation marks omitted). For this reason, too, Congress must speak with particular clarity when it chooses to abrogate tribal sovereign immunity. See, e.g., Bay Mills, 572 U.S. at 788-90. Application of these unique canons of construction would thus require us to not only identify a clear statement from Congress, but also to pause and consider whether Congress believed that waiving tribal immunity under the FCRA would have inured to tribes’ benefit, an inquiry that may perhaps require specificity beyond that required to waive the United States’ immunity. See Justin W. Aimonetti, “Magic Words” and Original Understanding: An Amplified Clear Statement Rule to Abrogate Tribal Sovereign Immunity, 2020 Pepp. L. Rev. 1, 29-34 (2020).
Even applying the ordinary rules of statutory construction, however, it is not clear that Congress intended to abrogate tribal immunity. It is indisputable that the United States is a “government” within the FCRA‘s definition, as evidenced by those provisions that explicitly treat “person” as including the federal government. See
This is significant; as the Seventh Circuit correctly noted, “there is not one example in all of history where the Supreme Court has found that Congress intended to abrogate tribal sovereign immunity without
In short, the Seventh Circuit‘s decisions in Bormes and Meyers are in perfect harmony given the unique status of Indian tribes, the special rules of construction that apply in the Indian law context, and the complete lack of any reference to Indian tribes in the FCRA.
F.
Finally, the USDA contends that construing “person” to include the federal government would expand the United States’ liability beyond that provided for by the Privacy Act of 1974, codified at
We find this argument unpersuasive for two reasons. First, the Privacy Act‘s remedial scheme in no way limited Congress‘s ability, more than two decades later, to revisit an area of perceived need. To the contrary, it would have been quite reasonable for Congress, in enacting the 1996 FCRA amendments, to find that the Privacy Act‘s remedial scheme, with its strict limit on money damages, was insufficient to ensure the accuracy of consumer credit information. In any event, the mere fact that the 1996 FCRA amendments struck a balance that may be inconsistent with the Privacy Act is no reason to set aside clear statutory text.
Second, USDA has not identified any actual inconsistency between the Privacy Act and the 1996 amendments. No doubt, there is some overlap between the information covered by the two statutes, as the
But there the overlap ends. For one thing, the government‘s duties to correct inaccurate information under both statutes are triggered by different events. Under
III.
For the foregoing reasons, we will reverse the judgment of the District Court and remand for further proceedings not inconsistent with this opinion.