In what could be a landmark case against the U.S. government, the U.S. Supreme Court heard arguments Oct. 2 concerning whether the federal government could be held financially liable for actions not in accordance with the Fair Credit Reporting Act.
The case originated when Illinois attorney James Bormes noticed his credit card receipt issued by the U.S. government’s pay.gov Web site printed not only the last four digits of the American Express number but also the expiration date. The FCRA prohibits the printing of anything more than the last five digits of a credit or debit card number or the expiration date on a receipt. The law also defines liable parties as “any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency.”
Bormes, through his attorney John Jacobs, sought a class action suit, representing anyone whose credit card receipt from the government site included their credit card expiration date. Jacobs argued that by 2003, when the FCRA was passed by Congress, identity theft had become an “epidemic,” and, therefore, when prohibiting certain information from receipts, it would have obviously included the government.
“In terms of protecting the public, you wouldn’t want to exclude such a large thing,” he said.
“Knowing that the government is one of the largest issuers of credit card receipts, one would have to wonder why they would want to exclude the government in terms of protecting the public” with the Fair Credit Reporting Act, Jacobs said.
Lawyers representing the U.S. government, however, argue the United States is immune from monetary law suits regarding violations of the FCRA. An Illinois federal court judge agreed, but a federal appeals court judge sided with the plaintiff in November 2010, citing the Tucker Act, another law which allows monetary claims against the government.
Sri Srinivansan, deputy solicitor general who argued the case for the federal government, stated the appeals court ruling was incorrect, “and that the FCRA does not reflect an ‘unequivocal expression’ of a government willingness to be sued,” according to Reuters. He also told the justices the options available to consumers under the FCRA should predominate over “the more general scheme” of restitution under the Tucker Act.
Are we taking the position that even if substantive obligations run against the United States, there still wouldn’t be a remedy, at least a remedy in damages against the United States? And the answer to that is yes,” said Srinivasan. “But that’s not at all atypical under this court’s sovereign immunity jurisprudence, and it’s not at all atypical for Congress to have fashioned a scheme that runs in that way.”
Justices saw both sides of the argument. Chief Justice John Roberts felt considering both acts together could hurt the government.
“FCRA does not specifically address the liability of the United States,” Roberts told Srinivasan. “The Tucker Act does.
Government lawyers noted the “massive liability” the government could face if the Supreme Court sides with Bormes, as the federal government is not only the largest creditor, but also the largest lender and employer in the United States.
“If you’re right about this, the consequences are enormous,” Justice Ruth Bader Ginsburg stated. “The United States is governed by the substance of the (Fair) Credit Reporting Act. The act applies to the government, but your point is that there’s no sanction for noncompliance, even though the United States, a government system, is supposed to conform to the standards in the act?”
The case is US. v. Bormes, U.S. Supreme Court, No: 11-192. A decision is expected by the end of the term in June.
