Department of Agriculture Rural Development Rural Housing Service v. Kirtz

Background

Reginald Kirtz, a borrower, got a loan from the Rural Housing Service, a division of the U.S. Department of Agriculture. He says he repaid the loan, but the agency repeatedly told TransUnion his account was past due. Those reports hurt his credit score and his ability to get affordable loans. After TransUnion informed the agency and the agency did not correct the error, Kirtz sued the agency under the Fair Credit Reporting Act (FCRA). The agency argued it was protected by sovereign immunity (the government’s general protection from money lawsuits), and a district court dismissed the case, but the Third Circuit reversed, creating a conflict among appeals courts.

Reasoning

The central question was whether the FCRA lets consumers sue federal agencies that supply false credit information. The Court applied the clear-statement rule, which requires statutes to be unmistakably clear before they waive the government’s immunity. The opinion explained that the FCRA creates a money-damages cause of action against “any person” and that the statute defines “person” to include government agencies. The Court rejected the government’s arguments that this reading would be superfluous, inconsistent with other provisions, or produce absurd results. The Court concluded the statute clearly permits consumer suits against federal agencies and affirmed the Third Circuit. The opinion was unanimous and delivered by Justice Gorsuch.

Real world impact

The decision lets consumers harmed by incorrect government-supplied credit information seek money damages from federal agencies. It resolves a split among federal appeals courts and could make agencies change how they investigate and correct credit information. The ruling does not decide separate constitutional questions about state immunity that might apply to state agencies.