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Wednesday, February 17, 2010

New case law out of the Seventh Circuit Court of Appeals

According to a recent ruling by the United States Court of Appeals for the Seventh Circuit, sovereign immunity does not apply to protect the federal government from credit reporting violations.

The federal government is protected against individual lawsuits in all cases except where Congress explicitly states the immunity has been lifted. The question in the case, Talley v. United States Department of Agriculture, was whether Congress waived the federal government’s immunity in the Fair Credit Reporting Act.


The FCRA was amended in 1996 to apply to all "persons", with no mention either way as to whether its definition of a "person" included the federal government.  The U.S. Department of Agriculture argued that Congress did not intend to do away with sovereign immunity when it amended the FCRA.

“You are asking us to presume that Congress is a bunch of blithering idiots,” responded Chief Judge Frank Easterbrook. He added that “Congress is presumed to know what is in the statute books when it amends them.”  He added that “because Congress need not add ‘we really mean it!’ to make statues effectual, and because courts don’t interpret statues to blot out whole phrases, that line of argument has poor prospects.”

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