Department of Agriculture Rural Development Rural Housing Service v. Kirtz
The Supreme Court ruled unanimously that people can sue federal government agencies under the Fair Credit Reporting Act when those agencies provide false information to credit reporting companies and fail to fix it.
The decision resolves a split among federal appeals courts and means the federal government — one of the country's largest reporters of credit data — faces the same legal accountability to consumers that private lenders do.
How it got here: A federal district court dismissed Kirtz's lawsuit on sovereign immunity grounds; the Third Circuit reversed; the Supreme Court agreed to hear the case to resolve a split among the circuits.
The Case in Depth
What happened
Reginald Kirtz took out a home loan from the USDA's Rural Housing Service and says he paid it off in full by mid-2018. Despite the payoff, the USDA kept telling TransUnion — a major credit reporting company — that his account was past due. The errors hurt his credit score and threatened his ability to borrow at affordable rates. After Kirtz flagged the problem to TransUnion, which then notified the USDA, the agency still failed to correct its records. Kirtz sued the federal agency under the Fair Credit Reporting Act.
The question before the Court
Can an ordinary person sue a federal government agency for money damages when that agency supplies false information about them to a credit reporting company?
The Court's answer
Yes — the Fair Credit Reporting Act clearly allows consumers to sue a federal agency for money damages when that agency provides false information to a credit reporting company and fails to correct it.
The Act's liability sections authorize suits against "any person" who willfully or negligently violates the law's requirements. A separate definitions section expressly says "person" includes "any governmental agency," and that definition applies throughout the entire statute. Read together, those provisions leave no serious ambiguity: Congress authorized consumer claims against federal agencies, and dismissing those claims would effectively erase what Congress wrote. The Court rejected the government's arguments that the definition section was not clearly incorporated into the liability provisions, that absurdity in one part of the Act contaminated others, and that the Privacy Act of 1974 made these remedies unnecessary.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Federal agencies, including the USDA and Department of Education, are among the largest suppliers of credit information to companies like TransUnion and Equifax. People whose credit scores have been damaged by a federal agency's errors now have a clear legal path to seek money damages in court. Courts that had previously thrown out such lawsuits will need to allow them to proceed.
What changes now
Kirtz's lawsuit against the USDA can now proceed on the merits now that the sovereign immunity defense has been rejected. More broadly, any consumer whose credit has been harmed by a federal agency's false reporting may sue that agency for money damages under the Fair Credit Reporting Act. Federal courts in circuits that had previously blocked such lawsuits — including the Fourth and Ninth Circuits — must now allow them to go forward under the Supreme Court's ruling.
What this does not decide
The ruling applies only to federal agencies. Whether state governments and state agencies can also be sued under the FCRA is a separate constitutional question — involving limits on Congress's power to override state immunity — that the Court explicitly reserved and did not answer today.
How the Court got there
The legal reasoning, step by step
- The Court applied the 'clear statement' rule governing federal sovereign immunity: the government is generally protected from lawsuits for money unless Congress waives that protection using unmistakably clear language in the statute's text. No magic words are required, but the waiver must be evident from the text — not from legislative history or inference alone.
- The Court recognized two established paths to a clear waiver. The first is a statute that explicitly says it strips a sovereign entity of immunity. The second — and the one at play here — is a statute that creates a cause of action and clearly authorizes suing the government on that claim, even without using the phrase 'sovereign immunity.' Prior decisions (including Kimel v. Florida Board of Regents) established that Congress can accomplish this through cross-referencing provisions and definitions, not just a single standalone section.
- The Fair Credit Reporting Act satisfies the second path through three interlocking provisions: its duty-to-investigate section requires any 'person' who furnishes credit information to fix errors; its civil liability sections allow any 'person' to be sued for willful or negligent violations; and its definitions section says 'person' means 'any governmental agency' — a definition the Act expressly applies throughout the entire statute. Together, these provisions clearly authorize consumer suits against federal agencies.
- The Court rejected the government's argument that a waiver of sovereign immunity requires a separate standalone provision explicitly addressing immunity. It also rejected the idea that a waiver cannot be assembled from cross-referencing provisions: Kimel itself had done exactly that by combining the Age Discrimination in Employment Act's enforcement provision with the Fair Labor Standards Act's separate definition of 'public agency.'
- The Court limited an older case, Atascadero State Hospital v. Scanlon, to a narrow proposition: Congress must at least mention the government to strip its immunity. The FCRA clearly does. It also distinguished Employees of Dept. of Public Health and Welfare — which had found similar FLSA language insufficient — because that decision leaned on legislative history to override the statute's plain text, a methodological approach the Court has repeatedly rejected in the decades since.
- The Court brushed aside two remaining objections: that the FCRA's criminal enforcement provision cannot sensibly apply to the government (and so the word 'person' shouldn't cover the government anywhere in the Act), and that the Privacy Act of 1974 already provides remedies for federal agency errors. On the first point, an absurdity in one provision does not license distorting other provisions. On the second, two complementary statutes must both be given effect.
Doctrinal impact
Cases affected by this decision
Reaffirms Kimel v. Florida Bd. of Regents (528 U.S. 62)
Reaffirmed that a sovereign immunity waiver can be assembled from cross-referencing statutory provisions, not just a single section.
Reaffirms Financial Oversight and Management Bd. for P. R. v. Centro De Periodismo Investigativo, Inc. (598 U.S. 339)
Reaffirmed the two-category framework for finding a clear congressional waiver of sovereign immunity.
Limits Atascadero State Hospital v. Scanlon (473 U.S. 234)
Limited to the narrow rule that Congress must at least mention the government to waive its immunity — nothing more demanding.
Distinguishes Employees of Dept. of Public Health and Welfare of Mo. v. Department of Public Health and Welfare of Mo. (411 U.S. 279)
Distinguished because it relied on legislative history to override clear statutory text — a method the Court has since rejected.