By Jonathan Stempel
WASHINGTON, Oct 2 (Reuters) - The U.S. Supreme Court on
Tuesday considered whether the federal government could be
liable for money damages by printing confidential credit card
information on a customer's receipt, increasing the risk of
identity theft.
A decision against the government could make it easier for
consumers to pursue damages claims under the federal Fair Credit
Reporting Act (FCRA), designed to ensure fair and accurate
credit reporting and to protect customer privacy.
But this would force the government to give up its
traditional immunity from lawsuits, which could get expensive
given the range of financial transactions it processes.
"If you're right about this, the consequences are enormous
for the federal fisc," Justice Ruth Bader Ginsburg told John
Jacobs, a lawyer whose client James Bormes had brought the case.
Bormes, who is also a lawyer, had filed a lawsuit in
Illinois on behalf of a client and paid a $350 filing fee
through the federal government's pay.gov system with his
personal American Express credit card.
He said the receipts for that transaction contained his
card's expiration date, violating FCRA provisions designed to
protect against identity theft.
Noting that the law permits claims against a "person," which
is defined to include any "government," Bormes sought
class-action status on behalf of people who had received
receipts from the government that displayed card expiration
dates, or more than the last five digits of credit card and
debit card numbers.
The government countered that it had not waived sovereign
immunity, and therefore that Bormes could not pursue his case.
But a federal appeals court in November 2010 said the Tucker
Act, a separate law allowing money claims against the
government, allowed the case to go forward.
Deputy Solicitor General Sri Srinivasan, arguing on the
federal government's behalf, told the justices that the appeals
court ruling was wrong, and that the FCRA does not reflect an
"unequivocal expression" of a government willingness to be sued.
He also said that the remedies available to consumers under
the FCRA should prevail over the "more general scheme" of
damages set forth in the Tucker Act.
Chief Justice John Roberts suggested that reading the two
acts together could hurt the government position.
"FCRA does not specifically address the liability of the
United States," Roberts told Srinivasan. "The Tucker Act does."
Jacobs said that because identity theft had become a near
"epidemic" by 2003, when the truncated disclosures on card
receipts became mandatory, it would have made no sense for
Congress to shield the government.
"In terms of protecting the public, you wouldn't want to
exclude such a large thing," he said.
But Justice Elena Kagan asked whether it would be proper to
abandon the traditional assumption that the government retains
immunity unless it says otherwise. "You're asking us to flip the
presumption from now on," she told Jacobs.
A decision is expected by June.
The case is U.S. v. Bormes, U.S. Supreme Court, No. 11-192.
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