When does the federal government’s sovereign immunity apply? This question was the center of debate during discussions about the ‘U.S. Department of Agriculture Rural Development Rural Housing Service v. Kirtz’ case. Congress has established under the Fair Credit Reporting Act (FCRA) that if a private lender fails to respond promptly to a consumer’s claim of false portrayal of their borrowing history, the lender is liable for damages. However, the question under consideration is whether the federal government is also bound by this decision or if it enjoys immunity.
Several justices leaned towards imposing liability on the federal government, drawing upon the language of the statute that includes ‘any government or governmental subdivision or agency’ in the definition of a person. Justice Clarence Thomas asked why this definition wouldn’t be sufficient to waive sovereign immunity. Justice Elena Kagan was particularly resolute, pointing out the basic rule of statutory interpretation – we substitute the law’s defined term, thus determining its meaning. She went on to explain that the FCRA’s “definitions section” also includes natural persons, enterprises, and governments. Justice Neil Gorsuch also seemed to agree with this line of reasoning, indicating that the statutory definition should apply.
Justice Ketanji Brown Jackson also weighed in, observing that the statute had been amended to broaden liability, substituting the term ‘consumer reporting agency or user of information’ with ‘any person’, which is defined in the law to include ‘government’.
However, the argument was not one-sided. In defense of the government’s view, Assistant to the U.S. Solicitor General, Benjamin Snyder, brought up a parallel provision of the FCRA that imposes criminal penalties. This raised eyebrows among some justices who questioned the idea of the government prosecuting itself. Justice Sonia Sotomayor, on the other hand, rejected this point, citing criminal provisions in the Clean Water Act, the Safe Drinking Water Act, and the Agricultural Adjustment Act similar to the one in question, and pointing out that sovereign immunity is demonstrably waived in those cases.
In an interesting turn, Justice Neil Gorsuch voiced skepticism over the entire concept of a clear-statement rule in this context. He argued that since it was Congress itself making the decision, the worry over sovereign immunity was not as salient. It remains to be seen how this perspective influences the final ruling, and the legal professionals worldwide will be eyeing this space closely to understand the potential consequences on their work.
Interested professionals can follow the ongoing development of this case and further analysis on the SCOTUS blog.