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Talley v. United States Dep't of Agriculture

February 12, 2010

WAYNE TALLEY, PLAINTIFF-APPELLEE,
v.
UNITED STATES DEPARTMENT OF AGRICULTURE, DEFENDANT-APPELLANT.



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 07 C 705-Wayne R. Andersen, Judge.

The opinion of the court was delivered by: Easterbrook, Chief Judge.

ARGUED DECEMBER 8, 2009

Before EASTERBROOK, Chief Judge, and ROVNER and TINDER, Circuit Judges.

Any "person" who will- fully or negligently fails to comply with the Fair Credit Reporting Act is liable for damages. 15 U.S.C. §§ 1681n(a), 1681o(a). One of the Act's requirements is that lenders report borrowers' payment history accurately to credit agencies. 15 U.S.C. §1681s--2. The Department of Agriculture violated that requirement by reporting that Wayne Talley is behind on a loan that has been paid off. Talley complained four times to Trans Union, a credit bureau, which asked the Department whether Talley was indeed delinquent. All four times, someone at the Department investigated, concluded that the loan had been repaid, and told Trans Union that Talley had satisfied all of his obligations. Trans Union then corrected Talley's credit history-and the next month the Department again told Trans Union that Talley was tardy in repaying an outstanding loan. Butting your head against a bureaucratic wall is no fun. The ongoing falsehoods hurt Talley's credit rating, so he filed this suit.

The Department does not deny that it violated the Act by telling Trans Union that Talley is a deadbeat, when he isn't, but it contends that he is not entitled to dam-ages. The only remedy available, the Department maintains, is prospective relief-perhaps under the Privacy Act, 5 U.S.C. §552a, or the Administrative Procedure Act, 5 U.S.C. §702. Talley does not much fancy prospective relief, which would not redress his injuries.

According to the Department, sovereign immunity prevents any financial award. As the district court saw things, that position is embarrassed by the definition of "person" in §1681a(b): "any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity." (Emphasis added.) To this the Department rejoins that, when §1681a(b) was enacted, the damages sections of the Act covered only "consumer reporting agenc[ies]" and "user[s] of information." Sections 616 and 617 of Pub. L. 91-508, 84 Stat. 1114, 1134 (1970).

When sections 1681n and 1681o were extended to all "persons" in 1996 (§2412 of Pub. L. 104-208, 110 Stat. 3009--446), the definition of "persons" was unchanged. This leads the Department to insist that Congress and the President may not have realized that they were exposing the United States to financial liability-not only actual but also punitive damages, see §1681n(a)(2)- plus the potential for civil suits by states, §1681s(c), and criminal prosecution of any person who "obtains information on a consumer from a consumer reporting agency under false pretenses", §1681q. And without proof that Congress opened the Treasury to financial awards, the argument wraps up, sovereign immunity prevails. See Library of Congress v. Shaw, 478 U.S. 310 (1986); Employees v. Missouri Department of Public Health, 411 U.S. 279 (1973). The district judge concluded that §1681a(b) is clear enough. 2007 U.S. Dist. LEXIS 50388 (N.D. Ill. July 12, 2007). After a bench trial, the court awarded Talley $10,000 in compensatory damages plus $20,055 in attorneys' fees. 2009 U.S. Dist. LEXIS 8725 (N.D. Ill. Feb. 4, 2009).

One jurisdictional issue requires discussion at the outset. (Others must be postponed until some groundwork has been laid.) The judgment entered by the district court reads: "[P]laintiff's motion to adopt findings of fact and conclusions of law is granted. Plaintiff's petition for attorneys fees and costs is granted." This does not comply with Fed. R. Civ. P. 58. A judgment must state the relief to which the prevailing party is entitled-and, to ensure that it does, the judge must review the draft before its entry. Granting motions differs fundamentally from awarding relief. This judgment not only fails to mention relief (the figures we set out above come from the judge's opinions) but also shows no signs of review and approval by the judge; it bears the typed name (sans signature) of a deputy clerk. Noncompliance with Rule 58 is common in the Northern District of Illinois, despite frequent reminders from this court. See, e.g., Rush University Medical Center v. Leavitt, 535 F.3d 735 (7th Cir. 2008).

"If courts are to require that others follow regular procedures, courts must do so as well." Hollingsworth v. Perry, No. 09A648 (U.S. Jan. 13, 2010), slip op. 16--17. Because the parties agree that proceedings are over in the district court, the failure to enter a proper judgment does not prevent an appeal. Bankers Trust Co. v. Mallis, 435 U.S. 381 (1978). We hope that the district judge's failure to perform his ministerial duties will not cause Talley any problems when he tries to collect. (Talley must submit a judgment as part of the payment process. 31 C.F.R. §256.12(a); see also 28 U.S.C. §2414. We trust that the district court will correct its judgment if greater specificity is necessary to enforcement.)

As it happens, the district court's jurisdiction and ours are in question for other reasons: The Tucker Act's allocation of cases between district courts and the Court of Federal Claims, and between the regional circuits and the Federal Circuit. See 28 U.S.C. §§ 1295(a)(2), 1346(a), 1491(a).

Before turning to those questions, however, we need to decide whether the Tucker Act plays any role in this suit-and before asking that question we need to be sure just what argument the Department of Agriculture is presenting.

After reading its briefs, we understood the Department to contend that federal agencies are not "persons" for the purpose of the Fair Credit Reporting Act, because §1681a(b), though admirably clear, was enacted before the amendment extending §1681n and §1681o to all "persons." Giving the sequence of enactment the effect of making the Act inapplicable to the national (and state) governments would mean, however, that "government or governmental subdivision or agency" in §1681a(b) had no legal effect, unless, every time Congress amends the Act, either the statute or its legislative history contains an express declaration that the original definition of "person" applies to the Act's amended as well as its original version. Because Congress need not add "we really mean it!" to make statutes effectual, and because courts don't interpret statutes to blot out whole phrases, that line of argument had poor prospects. See, e.g., Swain v. Pressley, 430 U.S. 372, 378--79 & n.11 (1977); Harrison v. PPG Industries, Inc., 446 U.S. 578, 592 (1980) ("it would be a strange canon of statutory construction that would require Congress to state in committee reports or elsewhere in its deliberations that which is obvious on the face of a statute").

At oral argument, however, counsel for the government conceded that, by virtue of §1681a(b), all substantive requirements that the Fair Credit Reporting Act imposes on any "person" apply to the United States and its agencies. Counsel told us that the only dispute concerns remedy: although 5 U.S.C. §702 may waive the United States' sovereign immunity for prospective relief, there is no equivalent waiver for money damages. To be sure, the Act says that damages are available, but the sections of the Act that authorize financial awards do not say whether (and, if so, how) they apply to units of government. The Department's argument, in other words, is that the Act does not meet the Supreme Court's standards for financial relief against the Treasury. Decisions such as United States v. Testan, 424 U.S. 392, 398 (1976), and United States v. Mitchell, 463 U.S. 206, 216--17 (1983), say that damages may be awarded against the United States only if Congress does three things: (1) create a substantive right; (2) mandate money damages as compensation for a violation; and (3) expressly authorize that relief against the United States. Section 1681a(b) in conjunction with §1681s--2 does the first of these things; §1681n(a) and §1681o(a) do the second; but nothing in the Fair Credit Reporting Act does the third, the Department contends.

To put the Department's argument in this way, how-ever, poses the question: Why must the provision authorizing an award against the United States be in the Fair Credit Reporting Act? The Tucker Act is general legislation waiving sovereign immunity, and authorizing money damages, for any "civil action or claim against the United States . . . founded either upon the Constitution, or any Act of Congress". If the plaintiff wants $10,000 or less, the suit belongs in a district court, §1346(a)(2); other-wise it belongs in the Court of Federal Claims, §1491(a)(1). Testan and Mitchell stress that the Tucker Act does not itself create any substantive obligation or mandate money damages as compensation for a violation of a substantive obligation. But if some other statute does those things, then the Tucker Act waives sovereign immunity. Magic language is unnecessary; all that's needed is a fair ...


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