Kirtz v. Trans Union LLC

• Citation: 46 F.4th 159
• Decision Date: 24 August 2022
• Docket Number: 21-2149
• Parties: 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
• Court: U.S. Court of Appeals — Third Circuit

46 F.4th 159

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, Third Circuit.

Argued May 24, 2022

Filed: August 24, 2022

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

Before: KRAUSE, BIBAS, and PHIPPS, Circuit Judges

OPINION OF THE COURT

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"), 15 U.S.C. § 1681 et seq. , because it concluded the statute did not clearly waive the United States' sovereign immunity. The District Court was in good company, as the Courts of Appeals to have considered this issue are split down the middle, and until today, we had not yet spoken. But our best indicator of Congress's intent is the words that it chose, and in our view, the FCRA's plain text clearly and unambiguously authorizes suits for civil damages against the federal government. In reaching a contrary conclusion, the District Court relied on its determination that applying the FCRA's literal text would produce results that seem implausible. That may be, but implausibility is not ambiguity, and where Congress has clearly expressed its intent, we may neither second-guess its choices nor decline to apply the law as written. Accordingly, we will reverse and remand to the District Court for further proceedings.

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, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007). As originally enacted, the FCRA imposed substantive requirements on consumer reporting agencies and "persons" who used information in credit reports. See Pub. L. No. 91-508, §§ 604-615, 84 Stat. 1114, 1129-33 (1970) ("1970 Act"). The 1970 Act also expressly defined the term "person" as "any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity." Id. § 603(b).

rIn 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 § 1681i(a)(1)(A) of the FCRA. The consumer reporting agency is required to send notice of the dispute to "any person who provided any item of information in dispute"—that is, to the furnisher of the information. 15 U.S.C. § 1681i(a)(2)(A). When a furnisher receives such notice from a consumer reporting agency, it must "conduct an investigation with respect to the disputed information," "modify," "delete," or "block the reporting of" any information found to be inaccurate, and "report the results of the investigation" to both the consumer reporting agency that provided notice and, "if the investigation finds that the information is incomplete or inaccurate," to "all other consumer reporting agencies" to which the furnisher provided the disputed information. Id. § 1681s-2(b)(1).

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 Pub. L. No. 91-508 at §§ 616-17, but when Congress expanded the FCRA's substantive requirements in the 1996 Amendments it also expanded these sections to authorize suits against "[a]ny person" who fails to comply with "any requirement" under the Act, 15 U.S.C. §§ 1681n(a), 1681o(a).

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, 24 Pa. Stat. and Cons. Stat. §§ 5101, 5104(1), and the other by the USDA through the Rural Housing Service, which issues loans to promote the development of safe and affordable housing in rural communities. Kirtz alleges that, as of June 2018, both of his loan accounts were closed with a balance of zero. Despite this, AES and the USDA continued to report the status of Kirtz's accounts as "120 Days Past Due Date" on his credit file from Trans Union LLC, resulting in damage to his credit score. Pursuant to § 1681i(a)(1)(A) of the FCRA, Kirtz sent a letter to Trans Union disputing the inaccurate statements on his credit file, and Trans Union gave notice of the dispute to both AES and the USDA per § 1681i(a)(2)(A). According to Kirtz, however, neither AES nor the USDA took any action to investigate or correct the disputed information, in violation of § 1681s-2(b)(1).

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 Fed. R. Civ. P. 12(b)(1). The District Court agreed with the USDA that §§ 1681n and 1681o did not unequivocally express Congress's intent to waive sovereign immunity and granted the USDA's motion to dismiss. Applying the statutory definition of "person" to the civil liability provisions, the Court reasoned, would require doing so throughout the FCRA, leading to certain results that seemed implausible. Thus, the Court rejected that reading, even recognizing those provisions authorize suits against "[a]ny person," and § 1681a(b) expressly defines "person" to include any "government or governmental subdivision or agency."

II.

Kirtz originally invoked the District Court's jurisdiction under 15 U.S.C. § 1681p and 28 U.S.C. § 1331. We have jurisdiction under 28 U.S.C. § 1291. We review the District Court's legal conclusion that the FCRA does not waive the federal government's sovereign immunity de novo. See Karns v. Shanahan , 879 F.3d 504, 512 (3d Cir. 2018).

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, 132 S.Ct. 1441, 182 L.Ed.2d 497 (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, 131 S.Ct. 1651, 179 L.Ed.2d 700 (2011) (quoting Pennhurst State Sch. & Hosp. v. Halderman , 465 U.S. 89, 99, 104 S.Ct. 900, 79 L.Ed.2d 67 (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, 132 S.Ct. 1441. 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, 128 S.Ct. 2007, 170 L.Ed.2d 960 (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, 113 S.Ct. 1893, 123 L.Ed.2d 563 (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, 132 S.Ct. 1441.

Importantly, while we speak of Congress's "intent" to waive sovereign immunity, our inquiry is...