Supreme Court: You Can Sue Federal Agencies Under the FCRA

Case: Department of Agriculture Rural Development Rural Housing Service v. Kirtz
Court: Supreme Court of the United States
Citation: 601 U.S. 42 (2024)
Decided: February 8, 2024
Bottom line: If a federal agency such as USDA or the Department of Education reports false information about you and ignores your dispute, you can seek damages from it under the FCRA.

Background

Reginald Kirtz took out a loan from the Rural Housing Service, part of the U.S. Department of Agriculture. He says he repaid it in full, yet the agency kept telling TransUnion that his account was past due. That kind of error is exactly what the Fair Credit Reporting Act’s furnisher provisions are meant to fix: once a consumer disputes through a credit bureau, the company that supplied the data has to investigate under 15 U.S.C. § 1681s-2(b), and it can be sued for damages under §§ 1681n (willful violations) and 1681o (negligent violations) if it doesn’t.

Kirtz sued both TransUnion and USDA. The district court dismissed the claim against USDA on sovereign immunity grounds, reasoning that the federal government cannot be sued for money unless Congress has clearly said so. The Third Circuit reversed in Kirtz v. Trans Union LLC, 46 F.4th 159 (3d Cir. 2022). It noted that §§ 1681n and 1681o make “any person” liable, and that § 1681a(b) defines “person” to include any “government or governmental subdivision or agency.” Other circuits had read the statute the other way, so the Supreme Court took the case.

What the court held

Justice Gorsuch wrote for a unanimous Court and affirmed. The government argued that a waiver of sovereign immunity has to be stated in its own clause, and that Congress cannot waive immunity through a cross-referenced definition that covers private and public entities alike. The Court rejected those arguments. A waiver must be clearly discernible from the statute’s text, but Congress need not use particular magic words or put the waiver in one section. Read together, the definition of “person” and the liability provisions clearly authorize damages suits against federal agencies.

The Court also turned away the government’s other arguments:

The government said that applying the “person” definition everywhere would absurdly expose the United States to the FCRA’s criminal provision, § 1681q. The Court said that even if that application raised a problem, it would not justify rewriting the civil liability provisions, which work sensibly as written.
The government argued it would be incongruous to read the “person” definition into §§ 1681n and 1681o because that definition also covers state entities, which may have constitutional immunity from suit. The Court answered that “person” means what the FCRA says it means, even if state defendants might be able to raise a valid constitutional defense that the federal government cannot.
The government argued the Privacy Act already gives consumers remedies against agencies. The Court treated the two statutes as complementary.

Because the case involved only a federal agency, the Court did not decide whether state agencies can be subjected to FCRA damages suits, an issue that turns on separate constitutional limits.

Our take

We think Kirtz is the most consequential FCRA decision of the year for ordinary consumers, and we think it is plainly right. Congress wrote the definition of “person” to include government agencies in 1970 and has never carved them out of §§ 1681n and 1681o. The government’s position would have produced a strange result: federal lenders, guarantors, and student loan holders would owe consumers accurate reporting and a reasonable investigation, but no one could enforce those duties against them.

The practical stakes are large. The federal government is one of the country’s biggest creditors through student loans, USDA and VA housing programs, and small business lending. Errors in those accounts, such as payments not credited, discharges not reported, and defaulted status that should have been cleared, show up on credit reports like any other tradeline.

Two caveats are worth flagging. First, the Court’s discussion of state defendants leaves open whether a state housing finance agency or state university can be sued in federal court. Defendants in that position will continue to raise Eleventh Amendment defenses. Second, Kirtz decides only that sovereign immunity does not bar the suit. The consumer must still prove an inaccuracy, a dispute through a credit bureau, an unreasonable investigation, and damages. Agencies can also raise the same merits defenses private furnishers raise. Lower courts have already put the decision to work; the Sixth Circuit relied on Kirtz’s reading of the word “subchapter” later in 2024 in Berry v. Experian.

What it means if your report is wrong

If a federal agency is reporting a debt you paid, a loan that was discharged, or a delinquency that never happened, you have the same rights against it as against a private bank. Dispute the item in writing with each credit bureau showing it, keep copies of what you send and the results, and save proof of payment or discharge. If the agency verifies the wrong information anyway, Kirtz means it cannot avoid a damages claim simply because it is part of the federal government. A free case review can assess how the ruling applies to your situation, and there is no fee unless we win.

Sources

Primary

Opinion (Supreme Court of the United States)

Commentary we reviewed

Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.