US top court deals setback to consumers over card disclosure

Tue Nov 13, 2012 12:16pm EST

* Lawyer challenged printing of credit card data on receipt

* Court rejects claim that US waived sovereign immunity

By Jonathan Stempel

Nov 13 (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.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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