Can the government unambiguously waive sovereign immunity by accident?
The mysterious case of Department of Agriculture v. Kirtz
On November 6, 2023, the Supreme Court will hear oral argument in Department of Agriculture Rural Development Rural Housing Service v. Kirtz. The question is Kirtz is: Does the Fair Credit Reporting Act unambiguously waive the sovereign immunity of the United States?
Sorry, Kirtz isn’t about mifepristone or Trump, but sometimes one does have to eat one’s vegetables. And Kirtz is actually a very interesting case. Law professors take note: Kirtz could easily join the vehicles-in-the-park hypothetical in the canon of classic statutory-interpretation puzzles.
Sovereign immunity is hard to waive, no one knows why.
Let’s start with the basics.
The United States possesses sovereign immunity. That means the United States can’t be sued without its consent.
Why? Where does sovereign immunity come from, exactly? Ask ten law professors and you will get ten different answers. There is perhaps no topic more plumbed in the legal literature than sovereign immunity, although the Major Questions Doctrine might give it a run for its money.
Sovereign immunity was definitely a thing in England before the Founding, on the theory that it would be absurd for the King’s Court to force the King to do something in the name of the King, but that rationale doesn’t map easily onto the United States. As far back as 1882, the Supreme Court observed: “As no person in this government exercises supreme executive power, or performs the public duties of a sovereign, it is difficult to see on what solid foundation of principle the exemption from liability to suit rests.” But wherever sovereign immunity comes from, it exists. If you sue the United States, and you can’t point to a waiver of sovereign immunity, you will lose.
Happily, or sadly if you are a government lawyer, Congress has repeatedly waived the United States’ sovereign immunity. For instance, in the Administrative Procedure Act, Congress waived the United States’ sovereign immunity with respect to claims seeking declaratory or injunctive relief from final agency action. In the Tucker Act, Congress waived the United States’ sovereign immunity with respect to breach-of-contract claims (among others).
How do you know whether Congress has waived sovereign immunity? Sometimes it’s clear. For example, the Administrative Procedure Act says: “The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States.”
But what about when it’s not so clear? Answer: the government wins. There’s a longstanding canon that says that waivers of sovereign immunity must be “unequivocal and unambiguous.” If you’re not sure whether the government has waived sovereign immunity, then it hasn’t.
Thus, if a statute is ambiguous as to whether sovereign immunity was waived, the government wins. Even if the statute is unambiguous, the government wins if the statute is written too generally. A statute that says something like “any entity who violates the statute may be sued” wouldn’t waive sovereign immunity. The government is an “entity,” so under the statute’s plain text it applies to the government, but this is still not considered clear enough to waive sovereign immunity.
In fact, the Supreme Court has stated that there are only two situations in which it will find a waiver of sovereign immunity:
The statute says explicitly that there’s a waiver of sovereign immunity. Duh.
The statute doesn’t say that explicitly, but it does explicitly say you can sue the government. The theory is … why would Congress authorize a lawsuit against the government if the lawsuit would fail instantly because of sovereign immunity? By authorizing the lawsuit against the government, Congress has implicitly provided that the government isn’t immune.
When courts apply this clear-statement canon, they do not typically attempt to justify it. Instead, they cite cases applying the canon, which in turn cite older cases applying the canon. If you go back to the oldest cases, they just assert that the canon exists.
There’s nothing wrong with following rules because they’re old. Preserving legal traditions is good. (Sometimes.) From first principles, however, the canon is surprisingly hard to defend.
The government’s brief in Kirtz says it’s important to make sure that Congress “specifically considered” sovereign immunity and acted “intentionally.” But we usually think that the best way to determine what Congress intended is to look at what it said. Why not here? Maybe in some cases a topic is sufficiently obscure that Congress wouldn’t have thought about it, but the United States Treasury is not obscure. Are we seriously concerned that the Executive Branch lacks a sufficient voice in the legislative process?
The government’s brief also expresses concern about placing “unwarranted strain” on the public fisc. Why is it “unwarranted” to hold that the United States should be liable when a statute, fairly read using neutral principles of statutory interpretation, says the government should be liable?
In the early Republic, waivers of sovereign immunity were rare, so maybe the old cases adopted the clear-statement canon because it was usually reasonable to assume that Congress didn’t mean to waive sovereign immunity. That justification doesn’t work as well now because there are lots of waivers of sovereign immunity. But …
Maybe we can say that now, we should keep the clear-statement canon because Congress enacts legislation in its shadow? Congress doesn’t bother writing statutes saying “just to be clear, this doesn’t apply to the government” because the canon makes such language unnecessary. Now that Congress relies on the canon, eliminating it would be a bait and switch. This position is reasonable, but dissatisfying. “We’ve previously applied an arbitrary and unjustifiable rule which has induced Congress to be sloppy, so let’s keep applying it so Congress can keep being sloppy” is not an inspiring maxim.
But judges usually don’t have to worry about this stuff. Binding Supreme Court precedent establishes that the clear-statement canon exists. Part of the beauty of stare decisis is that you don’t have to think too hard about why you’re applying the rules you’re applying, which makes life easier for everyone...
Unless the clear-statement is itself ambiguous as applied to a particular case, in which you do have to think about the justifications for the rule to determine how far it should extend. Which brings us to Kirtz.
Oops, I unambiguously said something I didn’t mean to!
The Supreme Court has assumed that if Congress unambiguously authorizes lawsuits against the government, this means that Congress specifically considered the issue of sovereign immunity and intentionally chose to waive it. The lesson of Kirtz is that this is not necessarily the case.
Here is what happened in Kirtz. (I’m simplifying mercilessly here.)
In 1970, Congress enacted the Fair Credit Reporting Act (FCRA). FCRA’s purpose was to regulate consumer credit reporting. FCRA applied to credit reports that were furnished to any “person,” with “person” defined as “any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity.” Note the word “government.”
In its original form, FCRA authorized plaintiffs to sue “any consumer reporting agency” or any “user of information” therefrom.
In 1996, Congress decided that FCRA should apply to “persons” who furnish information to the credit reporting agencies. It amended FCRA so that a plaintiff could sue any “person.”
But apparently, everyone forgot that “person” had already been defined under FCRA to include the government. D’oh!
Mr. Kirtz alleges that he borrowed money from the Department of Agriculture and paid it back, but the Department of Agriculture falsely told a credit reporting agency that he still owed money on the loan. He sued the Department, alleging it was a “person” under FCRA capable of being sued. The Department asserted a sovereign immunity defense.
(This man has received his credit report and is very angry at the Department of Agriculture.)
The Third Circuit held that Congress waived the United States’ sovereign immunity from FCRA claims. The D.C. Circuit, per Judge Katsas, and the Seventh Circuit, per Judge Easterbrook, have taken the same view. I can’t improve on Judge Easterbrook’s explanation of that position:
Any "person" who willfully or negligently fails to comply with the Fair Credit Reporting Act is liable for damages. 15 U.S.C. §§ 1681n(a), 1681o(a). "Person" is a defined term: "any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity." 15 U.S.C. § 1681a(b) (emphasis added). The United States is a government. One would suppose that the end of the inquiry. By authorizing monetary relief against every kind of government, the United States has waived its sovereign immunity. And so we conclude.
The government sees it differently, of course.
According to the government, FCRA’s supposed waiver of sovereign immunity isn’t quite clear enough. The government has lots of arguments, but here are some of the highlights:
FCRA doesn’t actually say there’s a waiver of sovereign immunity. Sure, in some cases the Supreme Court has held that authorizing a lawsuit against the government suffices to waive sovereign immunity even without such an explicit statement. The theory was that there’d otherwise be a surplusage problem: why would Congress authorize the lawsuit against the government if the government was immune anyway? But here, finding for the government wouldn’t create a surplusage problem because the word “person” appears in other contexts outside the liability-creating provision, and in those contexts, defining “person” to include the government does have meaning. So we can’t infer an implicit waiver of sovereign immunity from the mere inclusion of “government” in the statutory definition of “person.”
FCRA also imposes criminal liability on a “person” who violates it. In that context, “person” can’t include the government because the government can’t indict itself. This teaches us that in FCRA, “person” sometimes includes the government and sometimes doesn’t, which means “person” is ambiguous, which means, under the clear-statement canon, the government wins.
There’s another place in FCRA where Congress is extremely clear in waiving sovereign immunity. Waiving sovereign immunity via the statutory definition of “person” is more oblique, and if it’s oblique, the government wins.
These are all technical theories. The music behind the government’s position is that all of this is a big accident. There’s zero evidence that in 1996, Congress had any idea it was authorizing lawsuits against the government. There’s nothing in the legislative history, for example, suggesting anyone realized this. Instead, some staffer messed up and forgot about the statutory definition of “person” enacted 26 years earlier. The point of the clear-statement canon is to ensure that waivers of sovereign immunity are intentional, and in this case it wasn’t.
Kirtz is a great case because it is a concrete illustration of numerous theoretical legal debates.
For example, one way of understanding Kirtz is as a skirmish in the battle between textualism and purposivism. The literal text of FCRA states that a plaintiff can sue the government, but Congress didn’t seem to intend that outcome. Textualism is in vogue in today’s Supreme Court, so if there were no clear-statement canon, the plaintiff would win. But the clear-statement canon is unapologetically atextual: even if a broad statute, fairly read, would authorize a lawsuit against the government, the clear-statement canon requires negating the statutory text unless the waiver of sovereign immunity is sufficiently explicit. So should we be atextual textualists?
Another way of understanding Kirtz is as a rules-versus-standards case. The clear-statement rule’s goal is to ensure that Congress doesn’t waive sovereign immunity unless it really means it. One way to achieve that goal is to enact a clear rule—if the statute says you can sue the government, you can sue the government. That rule is sometimes underinclusive (sometimes courts will say that there’s no waiver of sovereign immunity because there are no magic words, even when Congress wanted the government to be amenable to suit) and it is sometimes overinclusive (sometimes, like in this case, Congress will waive sovereign immunity accidentally). But at least the rule is clear. Another way to achieve that goal is to apply a standard—courts should apply a delicate contextual analysis to assess whether Congress really meant to subject the government to lawsuits.
There are many other intriguing issues in Kirtz, such as the proper functioning of the absurdity doctrine, the use of legislative history in cases involving clear-statement rules, and the impact of precedential decisions that contain discredited reasoning. Each of these issues could easily take up an article on its own. (I won’t carry out that threat.)
When all else fails, spend less money on lawyers.
Here’s what I think about Kirtz.
Kirtz turns on the precise articulation of the clear-statement rule. The plaintiff-friendly way of articulating the rule goes like this: “If the statute expressly says you can sue the government, sovereign immunity is waived.” The government-friendly way of articulating the rule goes like this: “Sovereign immunity is waived only if a provision of the statute would be superfluous if the government couldn’t be sued.” So which articulation should we choose?
As noted above, there’s no “textualist” answer to this question. Neither articulation of the clear-statement rule is “textualist.” We’re choosing between two rules, both of which require departing from a neutral interpretation of the text.
Perhaps we should try to select the rule that produces fairer outcomes?
That doesn’t work. It is always hard to decide whether one rule leads to fairer outcomes than another, and it is impossible to do so in the context of sovereign immunity. After all, sovereign immunity is always unfair. The doctrine has bite only when the plaintiff would otherwise win. Its function is to prevent plaintiffs with meritorious claims from obtaining relief.
This doesn’t mean we should pick the most plaintiff-friendly rule possible—we shouldn’t disfavor sovereign immunity, a truly venerable doctrine. It simply means that analyzing “fairness” isn’t helpful in determining the dividing line between statutes that waive sovereign immunity and statutes that don’t.
Maybe we should select the rule that optimizes the odds of the government following the law?
That doesn’t work either. It’s completely unclear whether, or to what extent, the prospect of damages actions against the United States deters violations of law by federal employees. But if damages actions do have some deterrent effect, then sovereign immunity always reduces deterrence. So if we wanted to deter violations, we’d never have sovereign immunity, which can’t be right because sovereign immunity has to exist sometimes.
Maybe we should decide whether Congress has waived sovereign immunity by assessing, on a statute-by-statute basis, whether damages actions would deter governmental misconduct to a sufficient extent? Good luck with that. How can a judge possibly predict this?
Looking at the issue from the other direction, sovereign immunity’s purpose is to carry forward tradition, honor the sovereign’s dignity, and protect the public fisc from undesired spending. But those purposes aren’t advanced when Congress wants to waive sovereign immunity. There’s nothing traditional or dignified about denying a plaintiff a remedy when the government has consented to the suit. Nor is there an interest in protecting the public fisc when Congress wants the money to be spent. So sovereign immunity’s purposes are advanced by adhering to Congress’s intent. This anodyne statement tells us nothing about how to determine what Congress intended.
If we don’t know which rule is better, perhaps we should choose the rule that is cheaper.
As a practicing lawyer, I am exquisitely sensitive to the cost of complex legal rules. For a lawyer, practicing law is an interesting and pleasant job, but for our clients, we are depressingly expensive transaction costs.
After years of practice, I’ve settled on the philosophy that in the context of judge-made law, there should be a presumption of choosing the legal rule that’s easiest to apply. The simpler the rule, the less time and money is spent litigating it. Needless to say, if there’s a statute requiring judges to adopt a complex doctrine, judges should follow it according to its terms. But the clear-statement rule for waivers of sovereign immunity is not enshrined in any statute. It’s judge-made law, and judges have the discretion to refine it as they please.
Kirtz’s refinement—“if the law says you can sue the government, you can sue the government”—is extremely easy to apply. You simply look at the statute and check whether it says you can sue the government. If yes, you can sue the government. Judge Easterbrook’s opinion resolves the legal issue in a single paragraph. The government’s refinement—“if the law says you can sue the government, then maybe you can sue the government, depending on context”—is trickier. The government relies on the use of “person” in other portions of FCRA, the relationship between the 1970 and 1996 amendments, the absence of legislative history, and other contextual clues. Realistically, under the government’s rule, a plaintiff can’t figure out whether he overcomes immunity unless he hires a lawyer.
So that’s why I’m rooting for Kirtz. I have no idea whether Kirtz’s rule is fairer or more efficient than the government’s rule. All I know is that Kirtz’s rule is simpler, and I have nothing else to go on.
The simpler-is-better principle isn’t just intended to save money on attorney’s fees. There’s something beautiful about the idea that a private citizen can understand what a law means without consulting a lawyer. After all, laws are written not for lawyers, but for the people. That, to me, is the core intuition behind textualism more generally, and it still applies even when you’re applying a clear-statement rule that isn’t exactly textualist.
Thanks for reading!
fascinating look into the minds of judicial interpreters. Does Kirtz have other theories besides the FCRA on which to base a claim of damages?
Adam,
Great essay.
If it was assumed that Congress did not intend to waive s.i., it seems odd to me that in selecting between a more literal reading of the statute or congressional intent, it should go in favor of textualism because of the beauty of a lay person understanding it superficially. Are lay private citizens considering filing suit under the Credit Act after walking themselves through the statute to determine sovereign immunity? Wouldn’t it be clear enough to this (rather sophisticated) potential lay litigant to google and find out that a court has held that the government can or can’t be sued under this law? Doesn’t the judiciary want to “get it right” even if it means statutes are harder to understand for a lay person? For better or worse we have so many laws that a lay person can read as straightforward but have no idea as to its real world meaning. If a citizen is charged with, say, possession of a weapon by a gang member - it’s simply not possible for a lay citizen to read the words of the statute and know what it means for their liberty. It requires extra textual legal work to determine the meaning of this law - determining their criminal history eligibility or what it will take for the prosecution to prove constructive possession or gang membership. Throw Bruen into the mix, and all the judge made law in interpreting the constitution, and the meaning of a number superficially easy to read laws are unknowable to their full extent by a lay person. Laws should be written by legislators as simply as possible, but in interpreting them, I don’t see textualism as protecting the lay person from lawyers complicating things with a legislative intent reading. An originalist wouldn’t be dissuaded from applying early American legal opinions on the grounds that that the result could confuse a lay reader of the words of the current law. In the gun possession example, the extra textual work ensures that the law is applied as intended and constitutionally.
I guess I prefer the reading of the ‘no vehicles in the park’ law that allows the ambulance in, even if this makes it a little harder to understand for the private citizen.
Again, thanks for your writing Adam.