Opinion
CASE NO. 20-81395-CIV-CANNON/Brannon
2021-04-27
Isaaca THORPE., Plaintiff, v. U.S. DEPARTMENT OF EDUCATION, Defendant.
Colleen D. Kukowski, Assistant U.S. Attorney, Kimberly Louise Paschall, Assistant U.S. Attorney, U.S. Attorney's Office, Washington, DC, Benet Kearney, Assistant U.S. Attorney, DOJ-USAO, New York, NY, for United States of America. Benjamin B. Alper, Law Offices of Weintraub & Alper, P.C., Atlanta, GA, Robert D. Owen, Eversheds-Sutherland (US) LLP, New York, NY, for Defendant.
Colleen D. Kukowski, Assistant U.S. Attorney, Kimberly Louise Paschall, Assistant U.S. Attorney, U.S. Attorney's Office, Washington, DC, Benet Kearney, Assistant U.S. Attorney, DOJ-USAO, New York, NY, for United States of America.
Benjamin B. Alper, Law Offices of Weintraub & Alper, P.C., Atlanta, GA, Robert D. Owen, Eversheds-Sutherland (US) LLP, New York, NY, for Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
AILEEN M. CANNON, UNITED STATES DISTRICT JUDGE THIS MATTER comes before the Court upon the United States Department of Education's Motion to Dismiss Plaintiff's Amended Complaint [ECF No. 42]. The Court has reviewed the Motion, Plaintiff's Response in Opposition [ECF No. 23], Defendant's Reply in Support of the Motion [ECF No. 29], and the full record. The Court also held a hearing on the Motion on April 26, 2021. For the reasons stated in open Court on April 26, 2021, and summarized below, the Court agrees with the Department of Education and the weight of persuasive authority that the Court lacks subject matter jurisdiction over Plaintiff's claims because Congress has not waived sovereign immunity for civil enforcement suits under the Fair Credit Report Act (FCRA).
Plaintiff's Amended Complaint names as defendants Equifax Information Services, LLC, and the U.S. Department of Education, but Plaintiff since has dismissed Equifax from this suit [ECF Nos. 33, 34].
I. Relevant Facts and Procedural History
According to the Amended Complaint, on April 28, 2020, Plaintiff Isaaca Thorpe obtained a credit report from Equifax Information Services, LLC, a consumer reporting agency, and noticed that it inaccurately reported that Plaintiff was obligated to make recurring payments on a closed account that Plaintiff had with the Department of Education [ECF No. 4 ¶¶ 9–11]. Specifically, the Department of Education was reporting that Plaintiff had a scheduled monthly payment of $160.00 when, in fact, due to the account being closed, Plaintiff no longer was obligated to make monthly payments [ECF No. 4 ¶¶ 7–15]. Plaintiff thereafter sent a letter to Equifax disputing the tradeline, and Equifax forwarded that dispute letter to the Department of Education [ECF No. 4 ¶¶ 11–13]. According to Plaintiff, however, the Department of Education failed to review all of the relevant information available to it and therefore negligently failed to conduct a proper investigation of Plaintiff's dispute, in violation of 15 U.S.C. § 1681s-2(b) [ECF No. 4 ¶ 18]. As a result, Plaintiff maintains, her credit report still shows an inaccurate monthly payment obligation, and she has suffered damages and other harms as a result of the Department's negligent failure to perform its duties under the FCRA [ECF No. 4 ¶¶ 20-21].
On the basis of these allegations, Plaintiff brought this suit for damages against the Department of Education [ECF No. 4 ¶ 23 (invoking private right of action in 15 U.S.C. § 1681s-2(b) ]. Count I alleges that the Department of Education "negligently failed to conduct a proper investigation of Plaintiff's dispute as required by 15 U.S.C. § 1681s-2(b)" [ECF No. 4 ¶ 18]. Count II alleges that the Department of Education's failure to conduct a reasonable investigation constitutes a "willful[ ]" violation of the FCRA, permitting Plaintiff to recover additional damages under 15 U.S.C. § 1681n [ECF No. 4 ¶¶ 26-28].
In February 2021, the Department of Education filed the instant motion to dismiss under Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure [ECF No. 20]. With respect to jurisdiction, the Department argues that Plaintiff's claims are barred by sovereign immunity because the FCRA's civil enforcement proceedings do not contain an unequivocal waiver of sovereign immunity as would be required to overcome the federal government's presumption of immunity from suit [ECF No. 20 pp. 3–10]. Alternatively, the Department argues that Plaintiff's Amended Complaint fails to state a claim under the FCRA, because Plaintiff does not allege any non-conclusory facts that plausibly suggest that the Department failed to conduct a reasonable investigation of Plaintiff's dispute [ECF No. 20 pp. 10-11].
II. Discussion
The question in this case—to date unaddressed by the Eleventh Circuit—is whether the civil enforcement provisions of the FCRA, see 15 U.S.C. §§ 1681n – 1681o, waive the government's sovereign immunity for FCRA civil enforcement suits. Plaintiff says the answer is yes based on the definition of the term "person" as used in 15 U.S.C. §§ 1681n and 1681o. That term is defined in the FCRA to include "any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity." 15 U.S.C. § 1681a(b). According to Plaintiff, since the federal government is a "government," then the federal government qualifies as a "person" under the FCRA and thus can be liable for damages under the FCRA's civil enforcement provisions. The Department of Education acknowledges that definition but says that, read in context and against the backdrop of governing sovereign immunity principles, there simply is not the required clear and unequivocal evidence that Congress sought to abrogate sovereign immunity for FCRA suits. See, e.g. , Dellmuth v. Muth , 491 U.S. 223, 231, 109 S.Ct. 2397, 105 L.Ed.2d 181 (1989) ("[I]t cannot be said with perfect confidence that Congress in fact intended ... to abrogate sovereign immunity, and imperfect confidence will not suffice given the special constitutional concerns in this area.").
As stated during the hearing on April 26, 2021, the Court has examined the text of the FCRA, its broader statutory context, and agrees with the Fourth and Ninth Circuits that the FCRA does not contain an unambiguous and unequivocal wavier of sovereign immunity permitting civil damage suits against the federal government under the FCRA. The Court incorporates into its reasoning the Fourth and Ninth Circuits’ decisions in Robinson v. U.S. Dep't of Education , 917 F.3d 799 (4th Cir. 2019), cert. denied sub nom. Robinson v. Dep't of Educ. , ––– U.S. ––––, 140 S. Ct. 1440, 206 L.Ed.2d 842 (2020), and Daniel v. Nat'l Park Service , 891 F.3d 762 (9th Cir. 2018), and will not repeat that analysis in detail here. As those decisions illustrate, the bottom line is this: for the Court to find a waiver of sovereign immunity, the Court would have to be able to say with "perfect confidence" that Congress intended to open itself up to civil damage suits for negligent or willful violations of the FCRA. There is no clear expression of such intent in the FCRA. To be sure, the term "person" as defined creates some ambiguity about the scope of the terms "government or governmental subdivision or agency," 15 U.S.C. § 1681a(b), but Plaintiff's singular focus on the inclusion of that term loses sight of the context of the FCRA as a whole and governing principles of sovereign immunity.
First, as stated in Robinson , "there is a longstanding interpretive presumption that person does not include the sovereign," even when "person" is elsewhere defined by statute. 917 F.3d at 802 (citing Vt. Agency of Nat. Res. v. U.S. ex rel. Stevens , 529 U.S. 765, 780, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000), and United States v. Cooper Corp. , 312 U.S. 600, 61 S.Ct. 742, 85 L.Ed. 1071 (1941) ).
Second, where courts have found statutory language sufficiently explicit to waive sovereign immunity, it has been in the context of statutes that specifically reference claims, actions, or other forms of liability against the United States directly. Robinson , 917 F.3d at 803 (describing statutes); Daniel , 891 F.3d at 772 (same). The FCRA contains nothing approximating that language. At most it references liability against a "person," with "person" defined to include "government," but it does not refer to the "United States" being subject to suit, nor does it otherwise indicate in clear terms that Congress contemplated civil damages against the United States for FCRA violations.
Third, as a telling counterpoint, the FCRA actually does contain a waiver of sovereign immunity in one specific provision. In 15 U.S.C. § 1681u, consumer reporting agencies are required to furnish certain information to the FBI for counterintelligence purposes provided certain procedures are met, but if "[a]ny agency or department of the United States" obtains such information in violation of the requirements of 15 U.S.C. § 1681u, then the statute specifically contemplates liability against the United States. No such specific waiver exists in the FCRA's civil enforcement provisions. Such a clear contrast is powerful evidence that Congress did not intend to subject the federal fisc to suits for money damages.
Section 1681u(j) provides:
Any agency or department of the United States obtaining or disclosing any consumer reports, records, or information contained therein in violation of this section is liable to the consumer to whom such consumer reports, records, or information relate in an amount equal to the sum of—
(1) $100, without regard to the volume of consumer reports, records, or information involved;
(2) any actual damages sustained by the consumer as a result of the disclosure;
(3) if the violation is found to have been willful or intentional, such punitive damages as a court may allow; and
(4) in the case of any successful action to enforce liability under this subsection, the costs of the action, together with reasonable attorney fees, as determined by the court.
15 U.S.C. § 1681u.
Fourth, Plaintiff's reading produces a host of implausible results that cannot be reconciled with the FCRA as a whole, yet Plaintiff offers no principled basis to reconcile those consequences. Daniels and Robinson canvass those untenable results in detail, including the most glaring of all—that under Plaintiff's definition of the term "person," the federal government literally could bring criminal charges against itself, see 15 U.S.C. § 1681q, and federal agencies like the Federal Trade Commission and state attorneys general also could pursue damages against the federal government. For Congress to intend such a dramatic and incongruous result would require significantly more than the loose reference to "government" in the definition of "person" in 15 U.S.C. § 1681a(b).
As a final point, to the extent the Court's reading can be said to render the inclusion of "government or governmental subdivision or agency" in the definition of "person" superfluous, that is far from clear, and even if it were, still that would not be enough to substitute for the unequivocal expression of Congressional intent sufficient to waive sovereign immunity. As the Fourth Circuit stated in Robinson , "the substantive and enforcement provisions in FCRA are not one and the same." 917 F.3d at 806. In other words, reading the FCRA as preserving the sovereign immunity of the United States (and other governments) eliminates the possibility of damage suits against those governments—but that does not mean "governments" acting as "persons" have no role to play in the FCRA scheme. Section 1681b, for example, lists circumstances under which a consumer reporting agency may furnish a consumer report to a "person," and that duty applies equally to the federal government as it would to any "person" as defined in the statute. 15 U.S.C. § 1681b. Similarly, Section 1681c-1(i)(4) provides exceptions to the requirement to place a security freeze on the making of a consumer report if the request is by a "person" for certain listed uses—and that again would apply to "governments" in their role as "persons." Id. § 1681c-1(i)(4).
III. Conclusion
For these reasons, all of which are detailed at length in Daniel and Robinson , the Court joins every district court to address the issue since Daniel and concludes that it cannot exercise subject matter jurisdiction over Plaintiff's claims. ,
The Court is not aware of any case recognizing a FCRA waiver of sovereign immunity in this context since the Ninth Circuit issued its decision in Daniel . See, e.g. , Gray v. Equifax Information Systems, LLC et al. , No. 19-cv-62425, 519 F. Supp. 3d 1138 [DE 67] (S.D. Fla. Feb. 8, 2021) ; Tillery v. U.S. Dep't of Education , No. 18-cv-3256, 2019 WL 3413518, at *3 (D. Md. July 29, 2019) ; Smith v. Pennsylvania Higher Education Assistance Agency , No. 18-cv-10162, 2019 WL 3219896, at **4-5 (E.D. Mich. July 17, 2019) ; Marzouq v. U.S. Dep't of Education , No. 18-cv-13616, 2019 WL 2996177, at *1 (E.D. Mich. July 9, 2019) ; Dumas v. GC Services, L.P. , No. 18-cv-12992, 2019 WL 529260, at **3-4 (E.D. Mich. Feb. 11, 2019) ; Russ v. U.S. Dep't of Education , 364 F. Supp. 3d 1009, 1015-1016 (D. Neb. 2018).
The Court notes the Seventh Circuit's contrary decision in Bormes v. United States , 759 F.3d 793 (7th Cir. 2014), which the Seventh Circuit subsequently declined to extend to the context of tribal governments. See Meyers v. Oneida Tribe of Indians of Wis. , 836 F.3d 818, 823-27 (7th Cir. 2016) (distinguishing Bormes and refusing to conclude that a tribal "government" qualifies as "government" under the FCRA's definition of "person"); Robinson , 917 F.3d at 806 ("[W]hen faced with the actual consequences of that ruling [referring to Bormes ], the Seventh Circuit retreated from Bormes by upholding tribal sovereign immunity under FCRA, even though federal and tribal governments equally qualify as ‘any government’ under Bormes ’ reading of the statute.").
1. Plaintiff's Amended Complaint is DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION .
2. The Clerk is directed to CLOSE this case
The Court does not address the Department of Education's alternative argument that Plaintiff's allegations fail to state a claim under Rule 12(b)(6).
DONE AND ORDERED in Chambers at Fort Pierce, Florida, this 27th day of April 2021.