Supreme Court deals setback to consumers over card disclosure

Reuters News
Posted: Nov 13, 2012 12:20 PM

By Jonathan Stempel

(Reuters) - The U.S. Supreme Court ruled on Tuesday that consumers who receive receipts from the federal government that contain confidential credit card information may not be able to sue for damages.

The court unanimously said the government may not lose its traditional immunity from lawsuits in cases seeking damages under the Fair Credit Reporting Act, which is designed to ensure fair and accurate credit reporting and protect customer privacy.

James Bormes, a Chicago lawyer, had paid a $350 federal court filing fee through the government's system with his American Express credit card. He said his receipts for that transaction contained his card's expiration date, violating FCRA provisions designed to protect against identity theft.

Bormes then sued the government, seeking class-action status on behalf of people with receipts that displayed card expiration dates or too many digits from credit and debit card numbers.

In the court's first signed decision since its current term began, Justice Antonin Scalia rejected a November 2010 ruling by a federal appeals court in Washington, D.C., that a different law known as the Little Tucker Act provided the government's consent to be sued in FCRA cases.

"Since FCRA is a detailed remedial scheme, only its own text can determine whether the damages liability Congress crafted extends to the federal government," Scalia wrote.

"To hold otherwise - to permit plaintiffs to remedy the absence of a waiver of sovereign immunity in specific, detailed statutes by pleading general Tucker Act jurisdiction - would transform the sovereign-immunity landscape," he added.

The Supreme Court sent the case to the 7th U.S. Circuit Court of Appeals in Chicago to decide whether the FCRA itself provides a waiver of federal immunity from damages actions.

John Jacobs, a lawyer for Bormes, did not immediately respond to requests for comment. The U.S. Department of Justice did not immediately respond to similar requests.

During oral argument last month, Justice Ruth Bader Ginsburg suggested that if Bormes were to win, it could expose the government to many costly claims. "The consequences are enormous for the federal fisc," she had said, referring to the government's financial condition.

The case is U.S. v. Bormes, U.S. Supreme Court, No. 11-192.

(Reporting by Jonathan Stempel in New York; Editing by Howard Goller and Leslie Gevirtz)