The Supreme Court to Consider Lawsuit Over Credit Report Errors
The Supreme Court has agreed to hear a lawsuit that raises the question of whether the federal government waived its legal immunity for money damages related to credit report errors. The case involves Reginald Kirtz, a Pennsylvania man, and the U.S. Department of Agriculture.
The justices will review a ruling by the U.S. Court of Appeals for the 3rd Circuit, which allowed Kirtz to sue the USDA for inaccurately stating on his credit report that his Rural Housing Service loans were overdue.
Kirtz has filed a lawsuit against the USDA and a Pennsylvania-based lender, alleging that his loans were fully repaid but the lenders continued to report them as overdue. This incorrect information was then passed on to the credit reporting agency TransUnion, resulting in damage to Kirtz’s creditworthiness. He is seeking unspecified damages.
Government’s Legal Immunity
The 3rd Circuit determined that Congress waived the government’s legal immunity when it made amendments to the Fair Credit Reporting Act in 1996, imposing new requirements on lenders.
In response to Kirtz’s appeal, the USDA expressed concerns about the potential liability the government could face if the appeals court’s interpretation of the FCRA is upheld. Lawyers for the Biden administration argued that waivers of sovereign immunity should be unequivocal and unambiguous, citing precedents set by the Supreme Court.
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