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Feb. 13, 2024 - Epoch Times

12:27

U.S. Supreme Court Issues 9-0 Ruling

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	In a unanimous decision, the US Supreme Court just took a step forward in gutting the administrative state.
	Specifically, they just ruled against the Biden administration in a case that revolved around the central question of whether or not people can sue federal agencies.
	And while the Biden administration was making the argument that federal agencies were immune from these types of lawsuits, well, the US Supreme Court rejected that argument.
	And has now opened the door quite widely for many, many, many more lawsuits to be filed in the near future.
	And so, let me back up for a quick moment and explain what this case was all about.
	To start with, most of the people watching today's episode probably already know what a credit report is.
	It's basically a running file on your economic life.
	It contains details about your credit card history, whether you make your payments on time or not, how much credit you have available to you, whether or not you've recently filed for bankruptcy, whether you're actively in debt collection, and so on and so on and so forth.
	It's connected to your social security number, and this is the file.
	It's basically the dossier on your life that banks and other consumer agencies use when determining whether or not to lend money to you or whether to do business with you or not.
	Now, back in the 1960s, people's credit reports were different than they are today.
	First of all, they were quite secretive, meaning that the bankers or the credit lenders, they could see what was in your report, but you were not able to.
	And then secondly, if there was some kind of a mistake on your credit report, if something was not right, you were pretty much out of luck.
	There was no real mechanism to fix any type of inaccuracy.
	In short, even though, even back then, credit reports were critical in determining whether or not you can get a loan or the rate of that loan, they were kept secretive, inaccessible, and you just had to pray that there weren't any mistakes in your particular file.
	Now, because of this general setup, in October of 1970, something called the Fair Credit Reporting Act was passed by Congress and then it was signed into law by President Richard Nixon.
	The idea behind this law was to protect consumers by forcing these credit reporting agencies to not include any fake or erroneous data in their credit reports, and over time, since the 1970s, this law was amended to ensure that once a year, every American can get a free copy of their credit report,
	and that also, quote,"...if a consumer challenges the accuracy of his or her credit reports, the person who carried out the report must look into the matter and, if appropriate, correct inaccurate information." And also, just for your reference, the term person in the context of this particular law, well, it's actually defined.
	They have a definition subsection in this law, and here's how the word person is defined.
	The term person means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency or other entity.
	Meaning that if any one of those persons were adding erroneous data to a person's credit report, they can be held accountable.
	And if a person's rights under this law were violated, well then he or she would be able to sue the offending party for monetary damages, for attorney's fees, for court costs, as well as for punitive damages.
	Meaning that this law, it really put the onus on the credit agencies, the lenders, and all these different companies to make sure that the reports were accurate.
	And so, this was all the legal background to what happened to Mr.
	Reggie Kurtz.
	Quote, In short, the USDA reported to these credit agencies that Mr.
	Kurtz was not paying off his loans on time, when in actuality, he had paid them off.
	And obviously that was creating a negative effect on his credit score.
	And so then, Mr.
	Kurtz filed a lawsuit against the USDA, arguing that they had violated his rights under the Fair Credit Reporting Act.
	On the flip side, however, the Biden administration, they attempted to have the entire case dismissed, arguing that the federal government is immune from such lawsuits and that the Fair Credit Reporting Act did not waive that government sovereign immunity.
	Now, initially, the district court, meaning the lower court, ruled in favor of the Biden administration.
	However, Mr.
	Kurtz, he appealed that decision, arguing that, quote, And indeed, the Third Circuit Court of Appeals, they sided with Mr.
	Kurtz and reversed this lower court's decision.
	Quote, The Third Circuit Court of Appeals pointed to the definition of person in the Fair Credit Reporting Act, which includes any government or governmental subdivision or agency.
	The appeals court also said that allowing lawsuits against federal agencies would be in line with Congress's aim of ensuring fair and accurate credit reporting because the federal government is the largest employer and creditor in the United States.
	Meaning that the court found that both in the letter of the law as well as in the spirit of the law, the federal government can be sued.
	But, as expected, the Biden administration did not take this decision lying down, and they asked the U.S. Supreme Court to intervene in the case and to review the details.
	And in their appeal to the U.S. Supreme Court, the USDA argued that, quote, If the appeal court's ruling in favor of Mr.
	Kurtz is allowed to stand, it would allow the government to routinely be threatened with substantial monetary liability for its everyday employment and lending activities.
	The agency further argued in its petition that waivers of federal sovereign immunity must be unequivocally and unambiguously expressed but that the Fair Credit Reporting Act does not contain the kind of unambiguous and unequivocal waiver of sovereign immunity that is required by law.
	The USDA stated that the question presented before the Supreme Court concerns a matter of great importance because even if the government were to prevail in lawsuits, an ultimate victory on the merits would not vindicate the interests protected by sovereign immunity.
	Sovereign immunity, the USDA argued, is an immunity from lawsuits Essentially, the government's position here was that federal agencies were immune from these types of lawsuits due to the general principle of sovereign immunity unless a statute overtly strips sovereign immunity from a given agency.
	Unless they specifically say that sovereign immunity is stripped, it remains.
	That's their argument, at least.
	Here is, in fact, how the Biden administration solicitor general generally summed up the argument.
	Quote, The foundational principle of sovereign immunity also is an important issue in its own right, irrespective of dollars and cents.
	Immunity from suit protects a nation from unanticipated intervention in the process of government.
	Congress is the body charged by the U.S. Constitution with striking the balance between creating federal rights and duties and establishing private remedies to vindicate and enforce them.
	Judicial decisions allowing private suits for money damages against the sovereign, absent its consent, would upset that balance and place unwarranted strain on the government's ability to govern in accordance with the will of its citizens.
	However, after hearing oral arguments from both sides and deliberating on the issue, the U.S. Supreme Court voted unanimously, 9-0, in favor of Mr.
	Kurtz, writing in their final decision that, quote, We think the Third Circuit reached the right decision in this case.
	The Fair Credit Reporting Act affects a clear waiver of sovereign immunity.
	And the court's rationale was rather simple.
	In subsection 617A, here's what the law stated.
	Quote, And while the government was arguing that the term any person did not apply to them, well, in the definition section of that very same law, here's again what it said.
	Quote, The term person means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency or other entity.
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	And those few words right there, in effect, stripped sovereign immunity.
	All it took was a cool three years of legal action for the U.S. Supreme Court to make clear what was already clear from the outset that the government can be sued over this type of a failure.
	And as you would imagine, the lawyers representing Mr.
	Kurtz, they were quite thrilled with his decision, releasing this as a part of their statement after the U.S. Supreme Court came down with their ruling.
	Today's decision confirms that federal agencies cannot escape accountability when they fail to comply with their responsibilities to consumers under the Fair Credit Reporting Act.
	As the court explained, the Fair Credit Reporting Act's text means what it says.
	The Fair Credit Reporting Act allows consumers to sue any person that violates the statute and defines person to include any government agency.
	And the implications in this ruling for everyday Americans is rather large, given the fact that, as the appeals court mentioned, the federal government is indeed the largest employer and the largest creditor in the United States.
	And so perhaps it would now be a good moment for me to remind you that every American is entitled to get a free copy of their credit report.
	If you haven't done so recently, I would highly recommend that you do.
	You can get a free copy of your credit report over at www.annualcreditreport.com.
	And by the way, I'll mention that that website is not sponsoring this episode at all.
	I'm just letting you know that that is the website to go to.
	And if you get your report and you happen to notice any mistakes that were made by the US federal government, well, because of this US Supreme Court decision, you can now sue the government for violating your rights and for negatively affecting your credit score.
	Very cool.
	If you'd like to read either the full decision that just came out of the U.S. Supreme Court, if you'd like to read the full text of the Fair Credit Reporting Act, or if you would like a direct link to that site where you can pull your free credit report yourself, you'll find all those down in the description box below this video where you can check them out.
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