A District Court judge in Florida has denied a defendant’s motion for judgment on the pleadings in a Fair Credit Reporting Act case on the grounds that the defendant is not subject to immunuty under the Eleventh Amendment of the Constitution.
The background: The lawsuit stems from allegations that the plaintiff was the victim of identity theft after two student loan accounts were opened in his name without his knowledge or consent. According to the complaint, the accounts appeared on the plaintiff’s credit reports in early 2023, prompting him to file an identity theft report with the Federal Trade Commission. Despite this, the defendant allegedly attempted to collect on the accounts and continued furnishing information about them to the credit reporting agencies.
- The plaintiff disputed the accounts with the credit bureaus, which forwarded the disputes to the defendant.
- While the accounts were eventually deleted from the plaintiff’s credit reports, the plaintiff later filed suit alleging violations of the FCRA and the Florida Consumer Collection Practices Act.
- The defendant responded by seeking judgment on the pleadings, arguing that it was entitled to Eleventh Amendment immunity as an arm of the state and therefore could not be sued in federal court.
The ruling: Judge William F. Jung of the District Court for the Middle District of Florida rejected that argument, concluding that the defendant failed to meet its burden of establishing sovereign immunity. Applying the Eleventh Circuit’s four factor test, Judge Jung found that only one factor weighed in favor of immunity, while the remaining three cut against it.
- Although state law characterizes the defendant as a public instrumentality, the judge emphasized its operational and financial independence. The ruling noted that the defendant generates its own revenue, does not receive direct funding from the state, and is solely responsible for its own debts and liabilities. Any judgment entered in the case would not be paid from the state treasury.
- Judge Jung also addressed the defendant’s reliance on recent Supreme Court precedent, explaining that standing and Eleventh Amendment immunity are distinct legal concepts. As he put it, while that decision was “certainly relevant,” it did not resolve whether the defendant was entitled to sovereign immunity in this context.
