In a decision issued Tuesday, July 23, 2014, the Seventh Circuit ruled that the federal government does not enjoy immunity from Fair Credit Reporting Act related damages. Although Bormes v. U.S., No. 13-1602 (7th Cir. July 22, 2014), a class-action suit, was ultimately dismissed on other grounds, the decision stands as the first appellate case to address the issue of whether government immunity is a defense to FCRA claims.
In Bormes, attorney-plaintiff James Bormes brought suit after receiving an emailed receipt for a filing fee in one of his cases brought in a federal court. The receipt contained both the last four digits of his credit card number, as well as the card’s expiration date. Bormes brought suit, claiming that FCRA allowed either the last four digits or the expiration date, not both.
In a unanimous decision, the three-judge panel held that the plain language of the statute waives the government’s immunity. Specifically, the Court noted that “Section 1681a(b) does what it has done since 1970, no matter what happens to other sections, and what §1681a(b) does is waive sovereign immunity for all requirements and remedies that another section authorizes against and person. Congress need not add ‘we really mean it!’ to make statutes effectual.” Bormes at pp, 3-4. In claiming immunity, the government argued that the statute was inapplicable because “there is a tradition that the United States is not subject to punitive damages[.]” Id at p. 4. In dismissing this argument, the Seventh Circuit emphatically stated that “[a] tradition differs from a rule of law” and that if excessive liability is created “the solution is an amendment, not judicial rewriting or a pellucid definitional clause.” Id. Finally, the government argued that a lack of immunity could “authorize state prosecutions of federal employees.” In response to this argument, the Court made clear that “[f]ederal employees’ protection is the right to remove and have the adjudication in federal court, not a rule of construction that eliminated the possibility of prosecution altogether.” Id at p. 5.
Ultimately, the Seventh Circuit held that the emailed receipt was not “printed…at the point of the sale or transaction” and therefore held that “although the United States has waived its immunity against damages actions of this kind, it did not violated the statute and prevails on the merits.” Bormes at p. 8.