Seventh Circuit decison in Fair Credit Reporting Act case

Several years ago, an attorney named James Bormes paid a case filing fee via, which the federal courts use to facilitate electronic payments. He received an email receipt that included both the last four digits of his credit card’s number and the card’s expiration date. Bormes sued seeking damages under the Fair Credit Reporting Act (FCRA), which he read to allow a credit card receipt to contain one or the other of these things, but not both.

To prevail in the suit, Mr. Bormes first hurdle was to overcome the government’s argument that the U.S. was immune from suit for damages. In 2012, the U.S. Supreme Court held in the case, called Bormes v. United States, that the Little Tucker Act, 28 U.S.C. §1346(a)(2), does not waive the sovereign immunity of the United States in a suit seeking to collect damages for an asserted violation of the FCRA. The case then went back to the Seventh Circuit Court of Appeals, for consideration of whether the FCRA itself waives the government’s immunity from suit for damages.

In a decision yesterday, the court of appeals held that the FCRA does waive the U.S.’s immunity from suit for damages. The court held that this conclusion follows easily from FCRA’s text.

The court of appeals then turned to the alleged FCRA violation: Does the FCRA prohibit an email receipt that includes both the last four digits and the expiration date? On this issue, Mr. Bormes lost. The court held that the relevant statutory provision addresses only paper receipts given to a consumer at the point of sale, not to email receipts.

Although the ultimate result is a loss for the consumer in this case, the Seventh Circuit’s holding on the immunity issue may nonetheless be a useful precedent for consumers, either in litigation or by encouraging FCRA compliance by the U.S.

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