Supreme Court Narrows Remedy for Federal Privacy Act Violations

Ruling in the case of an HIV+ licensed pilot whose medical information was improperly shared by the Social Security Administration (SSA) with the Department of Transportation (DOT), the U.S. Supreme Court ruled March 28 by a vote of 5-3 that the federal Privacy Act, codified at 5 U.S.C. Sec. 552a, waives federal sovereign immunity and exposes the government to damage claims only for pecuniary losses caused to the plaintiff by a statutory violation. 

Reversing a contrary ruling by the U.S. Court of Appeals for the 9th Circuit in Cooper v. Federal Aviation Adminstration, 622 F.3d 1016 (2010), the Court held in Federal Aviation Administration v. Cooper, 2012 WL 1019969, that Congress's use of the phrase "actual damages" in the remedial provision of the statute was not intended to extend to compensation for mental and emotional distress or other non-pecuniary injuries.

Justice Samuel Alito, writing for the Court, related that Stanmore Cooper had held a private pilot license since 1964, and was diagnosed as HIV+ in 1985.  However, Cooper did not disclose his HIV+ status to the Federal Aviation Administration when he renewed his license, fearing that he would lose his license.  He renewed his license in 1998, 2000, 2002 and 2004, withholding this information.  His health deteriorated in 1995 and he applied for disability benefits under the Social Security Act, disclosing his HIV status to the Social Security Administration (SSA), and he was awarded benefits effective August 1995.  Subsequently his medical condition improved as a result of treatment by the newly effective protease inhibitors and he went off disability.

In 2002, the Transportation Department started a criminal investigation to identify medically unfit individuals who had obtained pilot's licenses.  DOT gave the SSA a list of licensed pilots in northern California and SSA prepared a spreadsheet, which included Cooper's name, indicating which pilots had been granted disability benefits.  Investigators confronted Cooper, who admitted he had withheld information about his HIV status from the FAA.  The FAA then revoked his pilot's license and he was indicted for making false statements to a government agency.  He pled guilty to one count and was sentenced to two years probation and a $1,000 fine.  After his probation, Cooper received a new pilot's license upon proof of his good medical condition, the FAA having revised its policy against licensing HIV+ individual in light of the current treatment regimes for HIV infection.

Cooper felt that SSA's sharing of his confidential medical information with the DOT was wrong, and brought suit under the Privacy Act, claiming that unauthorized revelation of his HIV status had caused him "humiliation, embarrassment, mental anguish, fear of social ostracism, and other severe emotional distress."  However, he did not allege that he had lost employment as a result (he was not a commercial pilot) or that he suffered any pecuniary loss due to the breach of confidentiality.  The district court granted summary judgment to the government, concluding that although Cooper had stated a potential claim, there was no available remedy because he suffered no pecuniary loss.  The district court judge, finding the term "actual damages" in the statute to be "facially ambiguous," concluded that it could not stand as a waiver of sovereign immunity for the kind of damages sought by Cooper.

The 9th Circuit reversed, reasoning that in light of the purposes of the Privacy Act, the term "actual damages" should be construed to include claims for mental and emotional distress, and that a contrary construction was not "plausible."

In reversing the 9th Circuit, Justice Alito focused on the general rule that a waiver of sovereign immunity must be "unequivocally expressed" in statutory text.  In this case, he said, congressional intent to waive sovereign immunity for non-pecuniary damages was not unequivocally expressed by using the term "actual damages."  He found that this term, not expressly defined in the Privacy Act, has been given different constructions when used in the context of various different statutes, meaning that standing alone without an express statutory definition it was ambiguous.  Drawing an analogy from the common law of defamation, which deals with reputational harm, he noted the distinction between special damages (pecuniary loss) and general damages (intangible injury to reputation, emotional distress), and argued that the narrower meaning of special damages was appropriate for the Privacy Act.  He summoned some support from the legislative history for the proposition that Congress had actually decided to limit relief to compensation for pecuniary losses and to postpone the decision whether to grant broader relief until there had been some experience under the statute.

In a dissent far longer and more impassioned than the majority opinion, Justice Sonya Sotomayor, joined by Justices Ruth Bader Ginsburg and Stephen Breyer, argued that the Court's approach was inconsistent with the purpose of the Privacy Act, noting that the legislative history supported the view that Congress's purpose in passing the statute was to deter federal agencies from violating the privacy of individuals through the unauthorized revelation of confidential information by authorizing compensation for injury caused by such revelation.  The legislative history, according to the dissent, showed Congress's understanding that embarrassment and humiliation and attendant mental and emotional distress were exactly the kind of injuries most likely to flow from the unauthorized release of confidential information.  To construe the statute narrowly so as to bar damages for such injuries seemed contrary to the purpose of the statute, the dissenters argued.

Justice Elena Kagan recused herself in this case, which was litigated under her direction as Solicitor General on behalf of the government in the lower federal courts.

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