Federal Government Archives - JDP https://www.jdp.com/blog/tag/federal-government/ Employment Screening, Background Check Thu, 22 Feb 2024 18:18:57 +0000 en-US hourly 1 Federal Government Liable for FCRA Violations by Supreme Court https://www.jdp.com/blog/federal-government-liable-for-fcra-violations-by-supreme-court/ Fri, 16 Feb 2024 14:17:09 +0000 https://www.jdp.com/?p=18450 Feb 16, 2024 In a unanimous decision, the U.S. Supreme Court announced its ruling on a Fair Credit Reporting Act (FCRA) case. This ruling allows individuals to sue the federal government for violations of the Fair Credit Reporting Act (FCRA) 15 U.S.C. § 1681. This decision may lead to an uptick in lawsuits against the […]

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Feb 16, 2024

In a unanimous decision, the U.S. Supreme Court announced its ruling on a Fair Credit Reporting Act (FCRA) case. This ruling allows individuals to sue the federal government for violations of the Fair Credit Reporting Act (FCRA) 15 U.S.C. § 1681. This decision may lead to an uptick in lawsuits against the federal government for FCRA violations.

The Case

The case that started this concerns an individual who received a loan from a division of the U.S. Department of Agriculture (USDA). According to the allegations, the plaintiff acquired and repaid a loan from the USDA. Despite the repayment, the USDA reported the loan as overdue. This action damaged the plaintiff’s credit score and ability to acquire loans at affordable rates.

The plaintiff reported the issue to a consumer reporting agency, which notified the USDA. The USDA failed to take “any action to investigate or correct” the problem. The plaintiff filed this lawsuit in answer, alleging that the USDA violated the FCRA. However, the USDA moved for dismissal by claiming sovereign immunity. The U.S. District Court for the Eastern District of Pennsylvania agreed and dismissed the lawsuit.

The Appeal

The Court of Appeals for the Third Circuit reversed this ruling after a request for appeal. According to the Court, the FCRA authorizes lawsuits to recover damages against “any person” for related violations. Among the many definitions of “person,” the FCRA includes “[any] governmental agency.”

The USDA requested a review of the decision with the Supreme Court. Granting it, the Supreme Court sought to resolve the conflicts between Circuits. Both parties agreed that the government generally possesses sovereign immunity. However, they disagreed about whether the FCRA waived this immunity. As such, the Supreme Court applied a “clear statement” rule to determine whether Congress expressly waived its immunity. This ruling allows for lawsuits when “the language of the statute [is] unmistakably clear.”

The Supreme Court Opinion

The Supreme Court found that the law provides this clear statement, waiving the federal government’s immunity. They based it on the definitions including “any governmental agency” and accompanying legislative text reaffirming this conclusion. Thus, the Court affirmed the Third Circuit’s ruling. According to the Court’s Opinion:

“The Executive Branch may question the wisdom of holding federal agencies accountable for their violations of the Fair Credit Reporting Act; certainly, the many and resourceful arguments it advances today suggest as much. But Congress’s judgment commands our respect, and the law it has adopted speaks clearly: A consumer may sue ‘any’ federal agency for defying the law’s terms.”

As of this ruling, consumers can now sue the federal government for certain violations of the FCRA. This clearly illustrates the importance of compliance with the FCRA’s provisions, especially for employers regarding background checks and other consumer reports.

Disclaimer:
Information provided here is for educational and informational purposes only and should not constitute as legal advice. We recommend you contact your own legal counsel for any questions regarding your specific practices and compliance with applicable laws.

 

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