Opinion
CASE NO. 19-62425-CIV-SMITH
2021-02-05
Tanya GRAY, Plaintiff, v. EQUIFAX INFORMATION SYSTEMS, LLC, et al., Defendants.
Mitchell L. Fraley, Fraley Law LLC, Tampa, FL, Alan Ginsberg, Law Offices of Alan Ginsberg, North Miami Beach, FL, for Plaintiff. Jason Daniel Joffe, Squire Sanders & Dempsey LLP, Maureen Donlan, United States Attorney's Office, Miami, FL, for Defendant Equifax Information Services, LLC. Maureen Donlan, United States Attorney's Office, Miami, FL, for Defendant US Department of Education.
Mitchell L. Fraley, Fraley Law LLC, Tampa, FL, Alan Ginsberg, Law Offices of Alan Ginsberg, North Miami Beach, FL, for Plaintiff.
Jason Daniel Joffe, Squire Sanders & Dempsey LLP, Maureen Donlan, United States Attorney's Office, Miami, FL, for Defendant Equifax Information Services, LLC.
Maureen Donlan, United States Attorney's Office, Miami, FL, for Defendant US Department of Education.
ORDER GRANTING DEFENDANT UNITED STATES DEPARTMENT OF EDUCATION'S MOTION TO DISMISS FIRST AMENDED COMPLAINT
RODNEY SMITH, UNITED STATES DISTRICT JUDGE
This matter is before the Court on Defendant United States Department of Education's ("U.S. DOE") Motion to Dismiss First Amended Complaint [DE 31], Plaintiff's Response in Opposition [DE 35], and U.S. DOE's Reply [DE 36]. For the reasons that follow, the U.S. DOE's Motion to Dismiss is GRANTED .
I. BACKGROUND
On September 30, 2019, Plaintiff filed suit against three defendants — Equifax Informational Services, LLC ("Equifax"); The Bank of Missouri ("the Bank"); and the U.S. DOE — alleging violations of the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, et seq. (See Compl. [DE 1].) The suit relates to alleged inaccurate reporting of debt on Plaintiff's credit report and Defendants’ responses to a consumer dispute regarding the alleged inaccuracies. (See id. at ¶¶ 6-11.) Plaintiff ultimately dismissed her claims against Equifax and, on May 4, 2020, filed her First Amended Complaint [DE 26] against the Bank and the U.S. DOE. Plaintiff alleges that the U.S. DOE negligently violated the FCRA when it "failed to conduct a proper investigation of Plaintiff's dispute," and willfully violated the FCRA when it "failed to conduct a proper reinvestigation on Plaintiff's dispute." (Am. Compl. ¶¶ 23, 31.)
On May 18, 2020, the U.S. DOE filed its Motion to Dismiss First Amended Complaint, requesting that the Court dismiss Counts I and II pursuant to Federal Rule of Civil Procedure 12(b)(1). The U.S. DOE asserts that the Court lacks jurisdiction because a claim against the U.S. DOE under the FCRA is barred by sovereign immunity. Alternatively, the U.S. DOE requests that the Court dismiss Counts I and II pursuant to Federal Rule of Civil Procedure 12(b)(6) because the FCRA does not provide a private right of action for inaccurate reporting and the U.S. DOE conducted a reasonable investigation. Id.
II. STANDARD
"Federal courts are courts of limited jurisdictions. They possess only that power authorized by Constitution and statute, which is not expanded by judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am. , 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) (internal citations omitted). A Rule 12(b)(1) motion challenges the district court's subject matter jurisdiction and takes one of two forms: a "facial attack" or a "factual attack." McElmurray v. Consol. Gov't of Augusta-Richmond Cty. , 501 F.3d 1244, 1251 (11th Cir. 2007). A facial attack on the complaint requires the court merely look to see if the plaintiff has sufficiently alleged a basis of subject matter jurisdiction, and the allegations in the plaintiff's complaint are taken as true for purposes of the motion. Id. A factual attack challenges the existence of subject matter jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as testimony and affidavits, are considered. Id. If a court determines that it lacks subject-matter jurisdiction, the court must dismiss the action. Fed. R. Civ. P. 12(h)(3).
III. DISCUSSION
The issue before the Court is whether the United States has waived sovereign immunity for suits alleging that the federal government willfully or negligently violated the FCRA. There is, at present, a circuit split. The Eleventh Circuit has not yet addressed the issue, and the Supreme Court denied a petition for writ of certiorari to resolve the conflict. See Robinson v. Dep't of Educ. , ––– U.S. ––––, 140 S. Ct. 1440, 206 L.Ed.2d 842 (2020). The U.S. DOE requests that the Court follow the Ninth Circuit's decision in Daniel v. National Park Service , 891 F.3d 762 (9th Cir. 2018) and the Fourth Circuit's decision in Robinson v. United States Department of Education , 917 F.3d 799 (4th Cir. 2019), cert. denied , ––– U.S. ––––, 140 S. Ct 1440, 206 L.Ed.2d 842 (2020), both of which held that the relevant provisions of the FCRA do not waive sovereign immunity. In response, Plaintiff requests that the Court follow the Seventh Circuit's decision in Bormes v. United States, 759 F.3d 793 (7th Cir. 2014), which found that the relevant provisions did waive sovereign immunity. The Court finds the reasoning of the Fourth and Ninth Circuits persuasive, and therefore, the Court concludes that the FCRA does not contain a clear, unequivocal, and unambiguous waiver of sovereign immunity.
1. Fair Credit Reporting Act, 15 U.S.C. § 1681, et seq .
"Congress enacted the FCRA in 1970 to ensure fair and accurate credit reporting, promote efficiency in the banking system, and protect consumer privacy." Saunders v. Branch Banking & Trust Co. of Va. , 526 F.3d 142, 147 (4th Cir. 2008) (citing Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52, 127 S.Ct. 2201, 167 L.Ed.2d 1045 (2007) ). The Act imposes civil liability on "any person" who "willfully fails to comply with any requirement imposed under this subchapter with respect to any consumer," 15 U.S.C. § 1681n, or who "is negligent in failing to comply with any requirement imposed under this subchapter." 15 U.S.C. § 1681o. The Act defines "person" to mean "any individual, partnership, corporation, trust, estate, cooperative, association, government or government subdivision or agency , or other entity." 15 U.S.C. § 1681s-2(b) (emphasis added ). The parties disagree about whether the phrase "government or government subdivision or agency " constitutes an effective waiver of sovereign immunity.
2. Sovereign Immunity
"Absent a waiver, sovereign immunity shields the Federal Government and its agencies from suit." FDIC v. Meyer , 510 U.S. 471, 475, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994). "A waiver of the Federal Government's sovereign immunity must be unequivocally expressed in statutory text ... and will not be implied." Lane v. Pena , 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996) (internal citations omitted). Waivers cannot contain ambiguity, which "exists if there is a plausible interpretation of the statute that would not authorize money damages against the Government." FAA v. Cooper , 566 U.S. 284, 290-91, 132 S.Ct. 1441, 182 L.Ed.2d 497 (2012). "Any ambiguities in the statutory language are to be construed in favor of immunity." Id. at 290, 132 S.Ct. 1441. Thus, sovereign immunity can only be waived by statutory text that is unambiguous and unequivocal. Robinson , 917 F.3d at 802. A plaintiff bears the burden of showing that the government has waived sovereign immunity at the motion to dismiss stage. Id.
The Court begins by examining the text of the statute. In doing so, the Court examines the provisions of the statute as a whole, not in isolation, to determine whether the FCRA's "any person" language unambiguously applies to the federal government. See Daniel , 891 F.3d at 769 (citing King v. Burwell , 576 U.S. 473, 135 S. Ct. 2480, 2489, 192 L.Ed.2d 483 (2015) ); see Koons Buick Pontiac GMC, Inc. v. Nigh , 543 U.S. 50, 60, 125 S.Ct. 460, 160 L.Ed.2d 389 (2004) ("Statutory construction is a wholistic endeavor"). There is a "longstanding interpretative presumption that ‘person’ does not include the sovereign." Vt. Agency of Nat. Res. v. United States ex rel. Stevens , 529 U.S. 765, 780, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000). "As we have often noted in common usage, the term ‘person’ does not include the sovereign, the statutes employing the word are ordinarily construed to exclude it." Int'l Primate Prot. League v. Adm'rs of Tulane Educ. Fund , 500 U.S. 72, 82-3, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991) (internal marks omitted).
The provision at issue in the FCRA does not expressly include the "United States" and is therefore distinct from those statutes in which Congress has expressly and unequivocally waived sovereign immunity. Statutes that waive sovereign immunity are clear. Although Congress need not use "magic words" to waive sovereign immunity, see Cooper , 566 U.S. at 290, 132 S.Ct. 1441, most statutes expressly include the "United States." "[W]hen Congress means to waive sovereign immunity in a provision otherwise applying to persons it says so explicitly." Robinson , 917 F.3d at 803 (citing Daniel , 891 F.3d at 772 ). The difference between the FCRA's civil liability provisions and the statutes containing recognized waivers serve as strong evidence that Congress did not waive sovereign immunity under the FCRA. Id. at 804.
See, e.g., Federal Torts Claims Act, 28 U.S.C. § 2674 (2018) ("The United States shall be liable ... in the same manner and to the same extent as a private individual under like circumstances ....") (emphasis added); Clean Water Act, 33 U.S.C. § 1365 (2018) ("any citizen may commence a civil action on his own behalf ... against any person including the United States ....") (emphasis added); Resource Conservation and Recovery Act, 42 U.S.C. § 6972 (2018) ("any person may commence a civil action on his own behalf ... against any person including the United States ....") (emphasis added); Tucker Act, 28 U.S.C. § 1346(a)(2) (2018) ("[t]he district court shall have original jurisdiction ... of ... [a]ny civil action or claim against the United States ....") (emphasis added); Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9620(a)(1) (2018) ("[e]ach department, agency, and instrumentality of the United States ... shall be subject to liability ....") (emphasis added); I.R.C. § 7433(a) (2018) ("taxpayer may bring a civil action for damages against the United States ") (emphasis added); 46 U.S.C. § 30903(a) (2018) ("a civil action in admiralty in personam may be brought against the United States ....") (emphasis added).
Furthermore, Congress included an explicit waiver of sovereign immunity elsewhere in the FCRA. Section 1681u(j) includes a clear waiver: "Any agency or department of the United States obtaining or disclosing any consumer reports, records, or information contained therein in violation of [ § 1681u ] is liable to the consumer to whom such consumer reports, records, or information relate" for statutory, actual, and punitive damages. 15 U.S.C. § 1681u(j) (emphasis added). Unlike the provision at issue in Plaintiff's case, this provision expressly includes "the United States" and in doing so clearly waives sovereign immunity. "[C]ourts are to ‘presume congressional familiarity’ with the need for waivers of sovereign immunity to be unambiguous and unequivocal." Robinson , 917 F.3d at 804 (quoting U.S. Dep't of Energy v. Ohio , 503 U.S. 607, 615, 112 S.Ct. 1627, 118 L.Ed.2d 255 (1992) ). The fact that Congress explicitly named the United States in § 1681u but not in the civil liabilities provisions found in §§ 1681n and 1681o demonstrates that Congress understood the need for an unequivocal waiver of sovereign immunity and that Congress did not intend to waive sovereign immunity in the FCRA's general definition of "person."
As explained in Daniel , if the Court were to accept the United States as a "person" under the FCRA's civil liabilities provision, then the Court must also accept the United States as a "person" in all applicable FCRA provisions. See Daniel , 891 F.3d at 770. However, including the United States in each of the FCRA's iterations of "person" leads to implausible results and serves as evidence that Congress did not intend for the sovereign to be included within the definition of "person." Id. "We thus follow the Supreme Court's lead in being ‘especially reluctant to read "person" to mean the sovereign where, as here, such a reading is decidedly awkward.’ " Robinson , 917 F.3d at 804 (quoting Int'l Primate Prot. League , 500 U.S. at 83, 111 S.Ct. 1700 ).
For example, accepting the United States as a "person" under the FCRA's civil liabilities provisions would subject the United States to criminal liability. See 15 U.S.C. § 1681q ("any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined ..., imprisoned for not more than 2 years, or both."). In United States v. Cooper Corp., 312 U.S. 600, 61 S.Ct. 742, 85 L.Ed. 1071 (1941), the Supreme Court sought to construe the use of "person" in the Sherman Antitrust Act. The Court wrote:
The connotation of a term in one portion of an Act may often be clarified by reference to its use in others. The word "person" is used in several sections other than [this one]. In [the other sections], the phrase designating those liable criminally is "every person who shall" etc. In each instance it is obvious that ... the term "person" ... cannot embrace the United States.
Cooper Corp. , 312 U.S. at 606-7, 61 S.Ct. 742. "Because authorizing criminal penalties against governments rather than individuals would be unprecedented, it is highly unlikely that Congress intended to do so obliquely with a broad definition of person." Daniel , 891 F.3d at 770 (citations omitted).
Both Daniel and Robinson elaborate further on the confusing and problematic results that would occur if the United States were included within the definition of a "person" under the FCRA, including: (i) allowing the Federal Trade Commission to bring suit against itself; (ii) authorizing state governments to launch enforcement actions against the federal government; (iii) exposing the United States to punitive damages; and (iv) exposing "any government," including foreign, tribal, and state governments, to liability and consequently compromising treaties. See 15 U.S.C. §§ 1681n, 1681s, 1681(c)(1)(b) ; Robinson , 917 F.3d at 805 ; Daniel , 891 F.3d at 770. "The statute bears no indica of congressional intent to bring about such a bevy of implausible results, let alone an unambiguous and unequivocal intent to do so." Robinson , 917 F.3d at 805.
In its Response, Plaintiff requests that the Court follow the Seventh Circuit's decision in Bormes and argues that several courts have held that Congress did intend to waive sovereign immunity under the FCRA. The Court does not agree with the rationale in Bormes . First, in Bormes , the United States conceded that it is a "person" for purposes of the substantive provisions. See Bormes , 759 F.3d at 795. The Seventh Circuit therefore concluded that "if the United States is a ‘person’ ... for the purpose of duties, how it can it not be one for the purpose of remedies?" Id. Second, the Seventh Circuit did not correctly interpret the implausible consequences that would result from including the United States in the definition of "person." See Daniel , 891 F.3d at 770 (stating that the statutory definition would read "United States" into the FCRA's enforcement provisions, not "federal employees" as interpreted by the court in Bormes ). Further, the Seventh Circuit did not consider the express waiver in section 1681u(j), nor did the Seventh Circuit consider the distinction between the purported waiver in the FCRA liabilities provisions and the statutes that contain recognized waivers of sovereign immunity. Finally, as explained in both Daniel and Robinson , the Seventh Circuit has since questioned its own reasoning in Bormes . See Daniel , 891 F.3d at 774 ; Robinson , 917 F.3d at 806 ; see also Meyers v. Oneida Tribe of Indians of Wis. , 836 F.3d 818, 823-27 (7th Cir. 2016), cert. denied ––– U.S. ––––, 137 S. Ct. 1331, 197 L. Ed. 2d 518 (2017).
Plaintiff cites a series of district court cases in which those courts followed the decision in Bormes . However, most of the cases to which Plaintiff cites were decided prior to both the Ninth Circuit's decision in Daniel and the Fourth Circuit's decision in Robinson . Plaintiff does cite to one case from the Middle District of Alabama that was decided after Daniel , Bowers v. Navient Solutions, LLC, No. 18-cv-166, 2018 WL 7568368 (M.D. Ala. Dec. 27, 2018). However, as argued by the U.S. DOE, the court in Bowers stated that the Seventh Circuit's decision in Bormes was the only circuit court decision that addressed the issue. See Bowers , 2018 WL 7568368, at *5. The court in Bowers did not consider the ruling in Daniel that occurred earlier that year. The Court is not aware of a case published after Robinson that follows the Seventh Circuit's decision in Bormes . See, e.g., Marzouq v. U.S. Dep't of Educ. , No. 18-13616, 2019 WL 2996177 (E.D. Mich. July 9, 2019) (finding that the FCRA does not contain a clear unequivocal waiver of sovereign immunity); Thurston v. Equifax Info. Servs. , No. SA-20-CV-00513-FB, 2020 WL 6434854 (W.D. Tex. Nov. 2, 2020), (adopted 2020 WL 7872520 (W.D. Tex. Dec. 1, 2020) (same); Golden v. Leon Hood & Def. Fin. & Accounting Serv. , No. 4:20-cv-4052, 2020 WL 7321072 (W.D. Ark. Dec. 11, 2020) (same); Edelman v. United States , No. 18-CV-2143(JS)(AKT), 2020 WL 7123175 (E.D.N.Y. Dec. 4, 2020) (same)).
IV. CONCLUSION
The Court finds the reasoning of the Fourth and Ninth Circuits persuasive, and therefore, the Court concludes that the FCRA does not contain a clear, unequivocal, and unambiguous waiver of sovereign immunity. Consequently, the Court does not have subject matter jurisdiction over Plaintiff's claims against the U.S. DOE. Accordingly, it is
ORDERED that:
1. The United States Department of Education's Motion to Dismiss First Amended Complaint [DE 31] is GRANTED .
2. All motions not otherwise ruled on are DENIED as moot .
3. This case is CLOSED .
DONE AND ORDERED in Fort Lauderdale, Florida on this 5th day of February, 2021.