Actual Damages’ Chameleon-Like Definition Means No Emotional Damages in Privacy Act

Congress did not intend the Privacy Act provision

allowing for ‘‘actual damages’’ to include recovery

for emotional distress damages, the U.S. Supreme

Court ruled March 28 in a 5–3 decision (Federal Aviation

Administration v. Cooper, U.S., No. 10-1024,

3/28/12).

There is no unequivocal waiver of sovereign immunity

regarding emotional distress damages in the text of

the Privacy Act and no reasonable waiver can or should

be implied by relying on a review of the legislative history

of the law or outside sources, Justice Samuel A.

Alito Jr. said, writing for the majority. Chief Justice

John G. Roberts Jr., and Justices Antonin Scalia, Anthony

M. Kennedy, and Clarence Thomas joined the

opinion.

Justice Sonia M. Sotomayor dissented, in an opinion

joined by Justices Ruth Bader Ginsburg and Stephen G.

Breyer. The dissenters argued that by denying individuals

the right to seek emotional damages, the majority

was undercutting the remedial intent of the Privacy Act.

Justice Elena Kagan took no part in the case.

Scott L. Vernick, Fox Rothschild LLP, Philadelphia,

who practices data security and privacy rights law, told

BNA March 28 he was not surprised by the ruling because

the majority applied a standard statutory construction

analysis that nearly always dictates a narrow

reading of a government waiver of its sovereign immunity.

There is also a subtext for the ruling involving the

facts of the case, he added. The plaintiff did not tell the

FAA about his medical status as required. Absent clean

hands, Vernick said, it was unlikely that the court was

going to vote to expand damages under the law.

‘‘If the goal was to expand the reading of the statute

to include emotional damages, this was not the case

with facts that would compel that,’’ he said.

‘‘The opinion forecloses any private cause of action

for violations of the Privacy Act unless the plaintiff has

suffered actual economic loss. And because that showing

is one that each plaintiff must make, it will be difficult

if not impossible to certify a class action under this

standard,’’ Raymond Cardozo, Reed Smith LLP, San

Francisco, who argued the case for the plaintiff, told

BNA March 28.

‘‘The majority’s opinion will be seen as a blow to privacy

advocates, but it is primarily an indication of the

Supreme Court’s reliance on the canon construing

waivers of sovereign immunity narrowly. And so, the

decision might be limited to the particular question of

damages under the Privacy Act, and silent as the general

question of damages for common law privacy violations,’’

Ed McNicholas, who coordinates the privacy,

data security, and information law practice at Sidley

Austin LLP, Washington, D.C., told BNA March 28.

HIV Status Revealed. Stanmore Cooper’s HIV-positive

status, information that the Social Security Administration

retained for disability benefits purposes, was

shared with the Federal Aviation Administration during

an FAA review of medical certifications for a private pilot

license.

The pilot had not previously revealed his diagnosis or

the medications he had been prescribed to the FAA

when seeking license renewal, potentially a crime. The

FAA denied Cooper’s license renewal. He sued, alleging

he faced emotional distress because his HIV status had

been revealed.

The district court ruled that there was likely a Privacy

Act violation but that ‘‘mental distress alone does not

satisfy the Privacy Act’s actual damages requirement.’’

The Ninth Circuit reversed, holding that a plaintiff who

faces emotional distress—or other such nonpecuniary

harm—resulting from a willful or intentional violation

of the Privacy Act, may recover for those injuries as

‘‘actual damages.’’

No General Damages Provision Sinks Case. The Privacy

Act, 5 U.S.C. § 552a(g)(4)(A), allows the recovery of

‘‘actual damages’’ in the case of willful or intentional refusal

or failure to follow the statute.

Doe v. Chao, 540 U.S. 614 (2004), confirmed that a

showing of ‘‘actual damages’’ is required under the Privacy

Act claim, even to recover the minimum $1,000 per

violation statutory damages. But the Chao court left for

another day the issue of exactly what kind of harms fit

within the definition of ‘‘actual damages.’’

The court here admitted that it ‘‘is not inconceivable’’

that the Privacy Act might be read to include emotional

distress claims within the definition of actual damages,

but said that application of the basic canons of statutory

construction could only lead to the opposite conclusion.

Congress refused to authorize ‘‘general damages’’ in

the Privacy Act and therefore any ‘‘special damages,’’

such as those for emotional distress, that might attach

as general damages cannot be plausibly found to be

within the scope of the waiver of sovereign immunity,

the court said.

The court rejected the plaintiff’s argument that forbidding

emotional damages would frustrate the remedial

purposes of the law and lead to the ‘‘absurd result’’

that an individual facing serious mental distress as the

result of a government violation of their privacy would

be unable to recover damages, while an individual with

a minor financial loss would be entitled to a minimum

of $1,000 in statutory damages.

But the court noted that ‘‘by deliberately refusing to

authorize general damages, Congress intended to cabin

relief, not to maximize it.’’

Sotomayor stressed the remedial nature of the statute,

arguing that under the majority opinion ‘‘individuals

can no longer recover what our precedents and common

sense understand to be the primary, and often

only, damages sustained as a result of an invasion of

privacy, namely mental or emotional distress.’’

Impact on Whistle-Blowers? David K. Colapinto, general

counsel of the National Whistleblower Legal Defense

and Education Fund, Washington, D.C., which

submitted an amicus brief supporting Cooper, told BNA

March 28 that he fears that the opinion will have a chilling

effect on people complaining about the government.

Colapinto explained that emotional damages are the

most common type of damages sought under the Privacy

Act, but that the opinion makes any real recourse

under the statute almost impossible. He said that only a

very small category of people will be able to prove significant

damages under the statute now.

According to Colapinto, the Privacy Act was adopted

in the wake of Watergate and the Nixon era. He said

that the statute’s legislative history actually notes that

the intent of the legislation is to stop activities such as

the break-in into Daniel Ellsberg’s psychiatrist’s office

to get information to discredit Ellsberg after the Pentagon

Papers were published.

Colapinto said that the statute is intended to protect

people who the government attempts to discredit by

anonymously leaking their personal information, but

the opinion will now chill their enthusiasm for being a

whistleblower.

‘‘Actual damages’’ is not defined in the statute, and

Colapinto said that Alito’s opinion took a very narrow

view when it came to defining the term. Alito’s definition

is limited to the context of sovereign immunity, but

the government admitted that sovereign immunity was

waived in this case, he noted. Once you get beyond the

sovereign immunity issue, the term should be construed

more broadly by looking at the purpose behind the Privacy

Act, he said. When that is done, emotional damages

are proper under the statute, he said.

In the end, Colapinto said that the opinion gives the

government an avenue to retaliate against its political

enemies.

The government did not respond to a request for

comment.

BY DONALD G. APLIN AND BERNARD J. PAZANOWSKI

Full text at http://pub.bna.com/lw/101024.pdf and 80

U.S.L.W. 4289.

VOL. 80, NO. 37 APRIL 3, 2012

COPYRIGHT _ 2012 BY THE BUREAU OF NATIONAL AFFAIRS, INC. ISSN 0148-8139