Bormes v. U.S.

• Decision Date: 15 March 2011
• Docket Number: No. 2009-1546,2009-1546
• Citation: 626 F.3d 574
• Parties: James X. BORMES, Individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

626 F.3d 574

James X. BORMES, Individually and on behalf of all others similarly situated, Plaintiff-Appellant,

v.UNITED STATES, Defendant-Appellee.

No. 2009-1546.

United States Court of Appeals, Federal Circuit.

Nov. 16, 2010.

Rehearing and Rehearing En Banc Denied March 15, 2011.

John G. Jacobs, The Jacobs Law Firm, CHTD., of Chicago, IL, argued for plaintiff-appellant.

Henry C. Whitaker, Trial Attorney, Appellate Staff, Civil Division, United States

Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Tony West, Assistant Attorney General, and Mark B. Stern, Attorney. Of counsel was Timothy P. Mcilmail, Attorney.

Before RADER, Chief Judge, and NEWMAN and MOORE, Circuit Judges.

RADER, Chief Judge.

James Bormes appeals the dismissal of his class action lawsuit under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681n(a). See Bormes v. United States, 638 F.Supp.2d 958 (N.D.Ill.2009). Because FCRA is a money-mandating statute that supports jurisdiction under 28 U.S.C. § 1346(a)(2), this court vacates the dismissal and remands for further proceedings.

I

On August 9, 2008, Bormes, an attorney, filed a lawsuit on behalf of one of his clients in the U.S. District Court for the Northern District of Illinois using its online document filing system. Bormes paid the filing fee using his credit card, and the transaction was processed through the government's pay.gov system. The government then provided Bormes with a confirmation webpage that appeared on Bormes' computer screen. The confirmation page contained the expiration date of Bormes' credit card.

Alleging that the display of his and similarly situated plaintiffs' credit card information violated section 1681c(g)(1) of FCRA, Bormes filed a class action lawsuit against the government. Bormes seeks, among other things, statutory damages, attorney's fees, and costs. In his complaint, Bormes alleged jurisdiction under both 28 U.S.C. § 1346(a)(2), commonly referred to as the Little Tucker Act, and FCRA's own jurisdictional provision, 15 U.S.C. § 1681p.

The government filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief may be granted. The district court concluded that it had jurisdiction under FCRA, but granted the government's motion to dismiss under Rule 12(b)(6) on the ground that FCRA did not waive the federal government's sovereign immunity for this suit. Because the district court exercised jurisdiction under the jurisdictional provision in FCRA itself, it held that Bormes' arguments for jurisdiction under the Little Tucker Act were moot.

On appeal, the government filed a motion to transfer this case to the Court of Appeals for the Seventh Circuit. A motions panel of this court denied the motion on the ground that Bormes' complaint invoked the district court's jurisdiction under the Little Tucker Act. Bormes v. United States, No.2009-1546, 2010 WL 331771, at *2 (Fed.Cir. Jan.27, 2010). The panel did not, however, make any decision as to whether FCRA is a "money-mandating statute" sufficient to create jurisdiction under the Little Tucker Act.

After Bormes filed his appeal in this case, a panel of the Court of Appeals for the Seventh Circuit determined that the Tucker Act waives sovereign immunity for FCRA claims. See Talley v. U.S. Dep't of Agric., 595 F.3d 754, 759 (7th Cir.2010) (Easterbrook, C.J.). The appellate court in Talley also held that it did not need to transfer the case to this court because the plaintiff only sought to use the Tucker Act for a waiver of sovereign immunity, not as a basis for jurisdiction. "The Tucker Act might have been used for jurisdiction; it is both a grant of jurisdiction and a waiver of sovereign immunity. But if the plaintiff elects to use the latter without the former, then jurisdiction does not arise under theTucker Act. This court therefore has appellate jurisdiction." Id. at 763.

The Seventh Circuit later granted the government's motion for rehearing en banc and vacated the panel opinion. In the order granting rehearing en banc, the court asked the parties to brief "whether the Tucker Act is the exclusive source of subject-matter jurisdiction for remedies that depend on its waiver of sovereign immunity and, if it is, whether this appeal should be transferred to the Federal Circuit under 28 U.S.C. § 1631." Talley v. U.S. Dep't of Agric., 595 F.3d 754 (7th Cir.2010) (reh'g en banc granted, opinion vacated, June 10, 2010). As of the date of this opinion, the Talley case remains pending.

II

The objective of FCRA is to "promote efficiency in the Nation's banking system and to protect consumer privacy." TRW Inc. v. Andrews, 534 U.S. 19, 23, 122 S.Ct. 441, 151 L.Ed.2d 339 (2001). The 1970 Act originally regulated "consumer reporting agenc[ies]," or "any person" who assembles or evaluates personal information about consumers that is used to determine eligibility for credit and insurance, among other purposes. 15 U.S.C. § 1681a(d), (f) (2006). FCRA also originally imposed duties on "persons," for example, prohibiting a person from furnishing any information about consumers "to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate." 15 U.S.C. § 1681s-2(a)(1)(A) (2006). The Act defined the term "person" in FCRA to mean " any individual, partnership, corporation, trust, estate cooperative association, government or governmental subdivision or agency, or other entity." 15 U.S.C. § 1681a(b) (2006) (emphases added). As originally enacted, however, the damages provisions for willful or negligent noncompliance with FCRA only covered "consumer reporting agenc[ies]" or "user[s] of information." Sections 616 and 617 of Pub.L. 91-508, 84 Stat. 1114, 1134 (1970).

In 1996, an amendment to FCRA made, among other things, the damages provisions applicable to "[a]ny person." Consumer Credit Reporting Reform Act of 1996, Section 2412 of Pub.L. 104-208, 110 Stat. 3009-446. Specifically, FCRA now provides as follows:

(a) In general

Any person who willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer is liable to that consumer in an amount equal to the sum of—

(1)(A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or

(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.

15 U.S.C. § 1681n (emphasis added).

In 2003, another amendment to FCRA added § 1681c(g)(1), the liability provision at issue in this case. Fair and Accurate Credit Transactions Act of 2003, Section 113 of Pub.L. 108-159, 117 Stat.1959. That provision states:

Except as otherwise provided in this subsection, no person that accepts credit cards or debit cards for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction.

Id. (emphasis added).

III

The Little Tucker Act, 28 U.S.C. § 1346, gives the district courts jurisdiction, concurrent with the Court of Federal Claims, over "any other [than tax refund] civil action or claim against the United States, not exceeding $10,000 in amount, founded ... upon any Act of Congress." The Little Tucker Act is therefore a jurisdictional provision that also operates "to waive sovereign immunity for claims premised on other sources of law (e.g., statutes or contracts)." United States v. Navajo Nation, --- U.S. ----, 129 S.Ct. 1547, 1551, 173 L.Ed.2d 429 (2009).

The three commonly-named sections of the Tucker Act are similar. The Indian Tucker Act, 28 U.S.C. § 1505, the Big Tucker Act, 28 U.S.C. § 1491, and the Little Tucker Act, 28 U.S.C. § 1346(a)(2), each grant the Court of Federal Claims jurisdiction over specific causes of action against the United States. The Indian Tucker Act grants the Court of Federal Claims exclusive jurisdiction over all Indian claims against the United States. 28 U.S.C. § 1505. The Big Tucker Act grants exclusive jurisdiction to the Court of Federal Claims to money claims against the United States exceeding $10,000. Jarrett v. White, 57 Fed.Appx. 87, 88 n. 1 (3d Cir.2003). The Little Tucker Act grants concurrent jurisdiction to district courts and the Court of Federal Claims, to money claims against the United States not exceeding $10,000. Id. at 88. This court examines cases under the Indian and Big Tucker Acts to help resolve this appeal.

Because the Little Tucker Act operates to waive sovereign immunity, the district court erred in dismissing Bormes' case without considering whether the Little Tucker Act provided an alternative basis for jurisdiction. If the Little Tucker Act authorizes the district court to hear this case, it also provides the waiver of sovereign immunity that the trial court found lacking in the FCRA itself. See United States v. Mitchell, 463 U.S. 206, 216, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) ("If a claim falls within the terms of the Tucker Act, the United States has presumptively consented to suit.").

To support jurisdiction under the Little Tucker Act, the substantive law that provides the basis for the plaintiffs claims must be "money-mandating." Fisher v. United States, 402 F.3d 1167, 1172 (Fed.Cir.2005). A source of law is money-mandating if it "can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained." United States v. White Mountain Apache Tribe, 537 U.S. 465, 472, 123 S.Ct. 1126, 155 L.Ed.2d...