On Monday, the Supreme Court will face a basic constitutional dilemma: how does it reconcile two long-standing legal principles, neither of which is actually mentioned in the Constitution but are treated as if they were? That will be examined in a single hearing on a controversy over consumers’ credit status.
Tomorrow’s hearing: U.S. Department of Agriculture v. Kirtz The hearing begins at 10 a.m. and is scheduled for one hour.
The Court will broadcast “live” the audio (no video) of the hearing on its homepage, supremecourt.gov To listen, click on “Live Audio” and follow the prompt when the courtroom scene appears lower on the page. The audio also will be available, under the title of the case, on C-Span TV at this link: cspan.org/supremecourt
Background of this case: Some important principles that are enforced under the Constitution are not actually in the text of that basic document, but have been considered a part of it nevertheless. Two are at stake in the hearing set for Monday.
First, there is the idea that the federal government cannot be sued in any court unless it has consented to be sued. Adopted from the English common law rule that “the king can do no wrong,” this principle treats the national government as a sovereign entity which, as such, cannot be summoned to court without its permission.
“The principle,” the Supreme Court said in 1882, “has never been discussed or the reasons for it given, but it has always been treated as an established doctrine.”
Second, there is an idea traced back to America’s early Founding period that, under the Constitution, for every legal injury there should be a legal remedy. Chief Justice John Marshall put it this way in an 1803 decision: “The very essence of civil liberty certainly consists in the right of every individual to claim the protection of the laws, whenever he receives an injury.”
Those two principles clash, of course, if the injury has been caused by the federal government.
The first of those principles has been recited so often by the Court that it seems unassailable, but there are serious constitutional scholars today who argue that the concept cannot be reconciled with the spirit of a Constitution that is strongly protective of the people and of their rights. Why, those scholars ask, should the government be immune to challenge in court if it has caused someone harm, especially in violation of their rights?
There appears, however, to be no chance, in the foreseeable future, that the Court will end that immunity altogether, although it appears to have the authority to do so, since the concept is not a textual mandate of the Constitution; it is a judge-made doctrine.
Still, the Court has made clear over the years that, if the peoples’ representatives in Congress are prepared to act, then a remedy for federal agency misconduct can be enacted in a new federal law that sets aside government immunity for specific harms. And Congress can do that without the need for a constitutional amendment to permit it.
Once Congress has done so, an individual may seek the remedy and, if necessary, file a lawsuit. The task may then fall to the courts to interpret — case by case — whether the remedy is, indeed, available to that individual. If Congress includes as part of a remedy a right to ask for money damages, that can have a major impact on the federal Treasury. As the appeals court in this case remarked: “There are profound implications to throwing open the doors to the United States Treasury, so before we do, we need to be sure that is what Congress intended.”
In this case, it ruled that, in the federal law at issue, Congress did intend to create a damages remedy.
The facts of this case: A Pennsylvania man, Reginald Kirtz, borrowed money from a loan agency of the U.S. Department of Agriculture. The agency, the Rural Housing Service, provides financing to help assure that affordable housing is available in the nation’s rural areas. Kirtz paid back the loan, but discovered that the agency continued to report to consumer reporting services that his debt was “120 Days Past Due.”
Kirtz file suit in federal court under the Fair Credit Reporting Act. First enacted in 1970, the law mainly applied to those entities that compile computer credit reports – basically, assessments of borrowers’ financial status, including their credit worthiness (as calculated by credit scores).
The law at that time said that it applied to any “person,” which it defined to include any “government agency.” When Congress amended the law in 1996, it imposed added duties on credit reporting agencies, but also on those who supplied loan data to reporting firms. It created a new right to sue to enforce the broader requirements of the law, and specified that such lawsuits could seek money damages for violations. The amended law retained the broad definition of “person” covered, including government agencies.
The Rural Housing Service sought to have the case dismissed, claiming that the federal government as a sovereign was immune to the requirements, and especially to the potential award of money damages. It argued that Congress had not spoken in explicit, clear terms to take away the government’s immunity to the new type of lawsuits.
A federal trial judge agreed, and dismissed the case. A federal appeals court, however, reinstated Kirtz’s lawsuit, concluding that Congress had used sufficient clarity in the text of the law to abrogate sovereign immunity. The agency appealed to the Supreme Court, and the Justices agreed to decide.
The questions before the Court: What specific language must Congress use if it seeks to make a federal government agency subject to an award of money damages for violating a federal law? Did Congress fail to do that in the expansion of this credit reporting law in 1996?
Significance: This case is important, of course, to anyone who borrows money from a federal program – say, to pay for education, housing, business, disaster relief, among other lending. The outcome can affect how fairly they are treated in credit reports about their financial status.
But the case is most important for what it may say, in the end, about the federal government’s long-established immunity to being sued. Because that concept appears so firmly set, the occasions when Congress has formally acted to take it away have not been numerous. The government has argued that there have been only two kinds of situations where that has been done: (1) when the law says in explicit wording that immunity has been erased, and (2) when the law creates a right to sue and expressly acknowledges that this involves a loss of immunity.
The government’s appeal insists that Congress did neither in the credit reporting law, but it lost on that argument in the appeals court. Other appeals courts, however, have read this same credit reporting law differently, finding no loss of immunity.
Is this a difference merely in how the same language used by Congress is read, or does it reflect different underlying judgments about the importance of such immunity? And, if it is that more fundamental disagreement, how will the Supreme Court sort that out?
It is possible that some clue to the Court’s approach can be found in the Justices’ recent insistence that Congress speak far more clearly when it uses its legislative powers to create wide-ranging new federal programs.
Congress, of course, is often tempted to expand the scope of the national government, but the necessity for compromise within the normal legislative process can result in ambiguity in the final measure’s words. The pattern in the Court lately has been to treat that ambiguity as a telltale sign that the other branch of government – the Executive – is grasping for even more power and needs to be checked by the judiciary.
On Tuesday, the Court’s one hearing will feature a highly significant case on gun rights under the Constitution’s Second Amendment. It is a test of a federal law that bars guns for a person who is under restraining order after a violent domestic assault.
