Unanimous Supreme Court Agrees with Housing Clinic Brief in USDA v. Kirtz
In October, the Housing Clinic at Yale Law School’s Jerome N. Frank Legal Services Organization filed an amicus brief with the U.S. Supreme Court arguing that the civil-liability provisions of the Fair Credit Reporting Act (FCRA) waive the sovereign immunity of the United States.
On Feb. 8, the Supreme Court unanimously held in USDA v. Kirtz that the plain text of FCRA unambiguously waives federal sovereign immunity, agreeing with the Clinic that one of the nation’s largest lenders — the federal government — can be sued when it violates FCRA’s provisions.
The Housing Clinic, along with the Berkeley Center for Consumer Law and Economic Justice, the National Consumer Law Center, and Public Justice, submitted one of two amicus briefs in the case. Drawing on amici’s experience working on behalf of consumers affected by credit reporting errors, the brief provided an important perspective on the many ways in which the federal government — a major lender to farmers, veterans, homeowners, students, small businesses, and more — furnishes credit data to credit reporting agencies. The brief then underscored the harmful impact of inaccurate credit reports on millions of Americans’ ability to participate in everyday life.
The first sentence of the opinion raised the very arguments presented in the brief: “A credit report can determine everything from whether a person can secure a credit card, purchase a home, win a new job, or start a small business.” As such, mistakes in credit reports can have serious consequences, leading “lenders to insist on higher interest rates or other terms that make it difficult or impossible for consumers to obtain a mortgage, auto loan, student loan, or other credit.”
Recognizing this need for accurate credit reports, Congress adopted FCRA to allow consumers to sue “persons” who violate FCRA’s protections. Importantly, FCRA’s definition of a “person” that can be sued under the Act includes a “government or governmental subdivision or agency.” The Court held that this definition is an unequivocal waiver of sovereign immunity.
The Court also addressed several counterarguments presented by the government. As one example, the Court agreed with Respondent and amici that the Privacy Act of 1974, which “covers some of the same ground we attribute to FCRA,” supplements and does not displace FCRA liability.
When the federal government serves as a lender — like for the homeowners the Housing Clinic represents and the bulk of the clinic’s students — it plays a central role in the distribution and use of credit information. The Court’s ruling ensures that “federal agencies are answerable under the FCRA for their mistakes,” according to the opinion. The Housing Clinic celebrated this victory for consumers across the country.
Yale Law School students Pragya Malik ’24 and Melissa Kay ’24 worked on the brief, along with Clinical Lecturer in Law and Housing Clinic co-supervisor Jeff Gentes.
