Most of the attention on the Supreme Court today was on the oral argument in Colorado's effort to keep former President Trump off the ballot due to the insurrection clause. However, SCOTUS took the opportunity of having a public sitting to release two outstanding opinions from arguments hear last fall. Remarkably, these are just the second and third cases to be released so far in argued cases for October Term 2023 ... an exceedingly slow pass for the Court's business. So ... they no longer hear all that many cases, and they take forever to release opinions, all while losing institutional legitimacy hand over fist. Well done, Justices!
Anyway, I digress. Let's take a look at the decision issued by the court today in the rather awkwardly named "Department of Agriculture Rural Development Rural Housing Service v. Kirtz." Ya know, let's just ... let's just call it Kirtz, if we ever need to talk about this thing again ...
This case involves a provision of the Fair Credit Reporting Act of 1970 that authorizes lawsuits against creditors who negligently report false credit information on a consumer to a credit bureau. In some cases, those creditors are not private companies, but government entities (such as the subdivision of the Department of Agriculture involved in this case) - and the question for the Court to decide is whether a consumer can sue the government in such a situation.
To understand the conflict, you need to understand that the background case when it comes to suing the United States is that you cannot - for historical reasons, the United States has a general sovereign immunity that applies to any lawsuit. If you're saying "but people sue the United States all the time!" you'd be correct ... but in order for those lawsuits to actually go anywhere, the United States has to have consented to be sued. This consent comes in a variety of forms but the two most common are through generic authorization laws such as the Federal Tort Claims Act that broadly consent to a wide variety of torts claims against the US, or more specific authorizations that appear in specific subject matter laws - such as the Fair Credit Reporting Act at issue here, where there is a much narrower and specific grant of consent for lawsuits covering very specific actions.
At first glance, this seems like it should be a fairly straightforward question. As amended in 1996, the Fair Credit Reporting Act authorizes lawsuits by "any person" who fails to follow "any" requirement of the FCRA either willfully or negligently. The definition of "person" in the FCRA specifically includes any government entity or subdivision of a government entity. The Third Circuit in this case joined the DC Circuit and the Seventh Circuit in finding that these provisions waived sovereign immunity and authorized a suit under FCRA, but the Ninth and Fourth Circuits have ruled that the terms found in the FCRA are not sufficient to waive sovereign immunity. This presents the classic "circuit split" that is a very common cause of cases being granted certiorari by the Supreme Court.
The Court doesn't need to articulate a new standard for resolving this dispute - there is already a rule of decision for determining when Congress has waived sovereign immunity in a given case. That rule is called the "clear statement" rule, and it holds that while Congress doesn't need to follow any specific formula or template to succesfully waive sovereign immunity, it needs to include in the law in question a clear statement of the intent to waive immunity. The Court reiterated that this "clear statement" rule remains the appropriate rule of decision for sovereign immunity cases, while nonetheless providing some additional guidance in the proper way to conduct the analysis to try to avoid future such disputes.
There are two situations in which a statute can be said to provide a clear statement of the intent to waive sovereign immunity: (1) if the statute says in plain language that it is waiving sovereign immunity; or (2) if the statute creates a specific cause of action that would be void and therefore purposeless if sovereign immunity was not viewed as being waived.
Applying that test to the FCRA, the Court unanimously upheld the Third Circuit ruling finding that a lawsuit against the government was authorized, because it clearly created a cause of action by its terms that would be nullified if such a lawsuit was barred by sovereign immunity. Since the decision on when to waive immunity is in the hands of Congress, upholding sovereign immunity against such a clear intent to create a cause of action would be usurping congressional intent and rendering language in the statute pointless surplusage.
Nearly half of the opinion is then devoted to shooting down various theories from the Government in favor of upholding sovereign immunity in this case. I'm not going into them because the previously stated rule and analysis is all that is necessary to decide this case, so the rest of the analysis is essentially just theoretical and therefore dicta (i.e. not part of the binding opinion). It's useful if you go to law school and want to study sovereign immunity, but it isn't necessary to understand the nature of the case or its ruling.
So how did I do in predicting the result after oral argument in November? Well, I got the end result correct - I predicted that sovereign immunity would be waived. I did not predict a unanimous decision, however. Chief Justice Roberts and Justice Kavanaugh seemed hostile enough to the waiver position in oral argument for me to predict that they would "definitely" be against the waiver. Whooops. This is a good reminder that just because Justices ask tough questions during oral argument doesn't necessarily mean that they are going to vote against that position when it comes time to decide the case. Sometimes tough questions just represent thorough probing by the Justice while they have learned counsel in front of them, and that appears to be what happened here. I'll give myself a solid B for the prediction, in any case!
Anyway, I digress. Let's take a look at the decision issued by the court today in the rather awkwardly named "Department of Agriculture Rural Development Rural Housing Service v. Kirtz." Ya know, let's just ... let's just call it Kirtz, if we ever need to talk about this thing again ...
This case involves a provision of the Fair Credit Reporting Act of 1970 that authorizes lawsuits against creditors who negligently report false credit information on a consumer to a credit bureau. In some cases, those creditors are not private companies, but government entities (such as the subdivision of the Department of Agriculture involved in this case) - and the question for the Court to decide is whether a consumer can sue the government in such a situation.
To understand the conflict, you need to understand that the background case when it comes to suing the United States is that you cannot - for historical reasons, the United States has a general sovereign immunity that applies to any lawsuit. If you're saying "but people sue the United States all the time!" you'd be correct ... but in order for those lawsuits to actually go anywhere, the United States has to have consented to be sued. This consent comes in a variety of forms but the two most common are through generic authorization laws such as the Federal Tort Claims Act that broadly consent to a wide variety of torts claims against the US, or more specific authorizations that appear in specific subject matter laws - such as the Fair Credit Reporting Act at issue here, where there is a much narrower and specific grant of consent for lawsuits covering very specific actions.
At first glance, this seems like it should be a fairly straightforward question. As amended in 1996, the Fair Credit Reporting Act authorizes lawsuits by "any person" who fails to follow "any" requirement of the FCRA either willfully or negligently. The definition of "person" in the FCRA specifically includes any government entity or subdivision of a government entity. The Third Circuit in this case joined the DC Circuit and the Seventh Circuit in finding that these provisions waived sovereign immunity and authorized a suit under FCRA, but the Ninth and Fourth Circuits have ruled that the terms found in the FCRA are not sufficient to waive sovereign immunity. This presents the classic "circuit split" that is a very common cause of cases being granted certiorari by the Supreme Court.
The Court doesn't need to articulate a new standard for resolving this dispute - there is already a rule of decision for determining when Congress has waived sovereign immunity in a given case. That rule is called the "clear statement" rule, and it holds that while Congress doesn't need to follow any specific formula or template to succesfully waive sovereign immunity, it needs to include in the law in question a clear statement of the intent to waive immunity. The Court reiterated that this "clear statement" rule remains the appropriate rule of decision for sovereign immunity cases, while nonetheless providing some additional guidance in the proper way to conduct the analysis to try to avoid future such disputes.
There are two situations in which a statute can be said to provide a clear statement of the intent to waive sovereign immunity: (1) if the statute says in plain language that it is waiving sovereign immunity; or (2) if the statute creates a specific cause of action that would be void and therefore purposeless if sovereign immunity was not viewed as being waived.
Applying that test to the FCRA, the Court unanimously upheld the Third Circuit ruling finding that a lawsuit against the government was authorized, because it clearly created a cause of action by its terms that would be nullified if such a lawsuit was barred by sovereign immunity. Since the decision on when to waive immunity is in the hands of Congress, upholding sovereign immunity against such a clear intent to create a cause of action would be usurping congressional intent and rendering language in the statute pointless surplusage.
Nearly half of the opinion is then devoted to shooting down various theories from the Government in favor of upholding sovereign immunity in this case. I'm not going into them because the previously stated rule and analysis is all that is necessary to decide this case, so the rest of the analysis is essentially just theoretical and therefore dicta (i.e. not part of the binding opinion). It's useful if you go to law school and want to study sovereign immunity, but it isn't necessary to understand the nature of the case or its ruling.
So how did I do in predicting the result after oral argument in November? Well, I got the end result correct - I predicted that sovereign immunity would be waived. I did not predict a unanimous decision, however. Chief Justice Roberts and Justice Kavanaugh seemed hostile enough to the waiver position in oral argument for me to predict that they would "definitely" be against the waiver. Whooops. This is a good reminder that just because Justices ask tough questions during oral argument doesn't necessarily mean that they are going to vote against that position when it comes time to decide the case. Sometimes tough questions just represent thorough probing by the Justice while they have learned counsel in front of them, and that appears to be what happened here. I'll give myself a solid B for the prediction, in any case!
