Opinion analysis: The Court’s Privacy Act standard – neither inconceivable nor implausible
on Apr 2, 2012 at 9:17 am
Even as the Supreme Court and the nation focused unprecedented attention on the issue of health care and the constitutionality of the landmark Affordable Care Act last week, the Court issued an unrelated ruling with a much more immediate and personal impact on health care, specifically whether the sharing of information by government agencies about an individual’s health records violates the Federal Privacy Act.
Even as Court-watchers placed every nuance of every question and comment by the Justices under a microscope for indications of what mix of law, politics, and ideology will result in the ACA cases, the Court’s decision in FAA v. Cooper offered an immediate and obvious demonstration of the Court’s conservative-liberal divide on basic questions related to the power of government, the manner in which Congressional intent is determined, and even questions of judicial activism.
Writing for a majority that included the five conservative Justices, Justice Samuel Alito held that the meaning of two words in the law — “actual damages” — is limited to pecuniary loss, does not include claims involving mental and emotional distress, and therefore does not fall within the scope of the government’s waiver of sovereign immunity. In a vigorous dissent, Justice Sonia Sotomayor called the decision one that goes against precedent and common sense, which “cripples the act’s core purpose of redressing and deterring violations of privacy interests.”
The law in question, the Privacy Act, was enacted in 1974, in the wake of Watergate and the disclosure of various unauthorized government investigations of individuals. It created a detailed set of requirements for federal agencies when they deal with confidential personal records, including the imposition of penalties for disclosure of private information. Specifically, for “intentional or willful” violations, the United States is liable for “actual damages.” The current case involves the claim of Stanmore Cooper, who asserted that as part of a government effort to prevent fraud in the acquisition of disability benefits, several government agencies illegally shared his personal and medical information, the result of which caused him significant mental and emotional distress.
The issue was not Cooper’s underlying guilt or innocence. He had been caught in the government’s joint criminal investigation because he had failed to include on the form the Federal Aviation Administration required pilots to fill out to receive a medical certificate the information that he had been diagnosed with HIV and then later applied for disability benefits for his condition. The FAA required such disclosure and would not issue a medical certificate if an applicant indicated the presence of the virus. Cooper made the initial misrepresentation on his application in 1994 and repeated it in subsequent renewals over the next ten years. In 2002, the Department of Transportation launched a joint criminal investigation with the Social Security Administration and those two agencies along with the FAA shared information about pilots, including their applications for disability benefits and related medical information. Cooper was included in this information-sharing and eventually pleaded guilty to making false statements to a government agency. He also brought suit under the Privacy Act.
The district court held both that the government had violated the law and that there was a legitimate issue concerning whether that violation was intentional or willful. But the Court ultimately granted summary judgment to the government, finding the issue was not relevant because Cooper would be unable to recover damages since he alleged “only” mental and emotional harm, not economic loss and therefore the “actual damages” provision of the law was not triggered. The U.S. Court of Appeals for the Ninth Circuit reversed, interpreting the legislative history and the intent of the Act to find that “‘a construction that limits recovery to pecuniary loss’ is not ‘plausible.’”
The Court rejected what Cooper claimed was the “ordinary” interpretation of the term actual damages,” suggesting that “[e]ven as a legal term,” that meaning “is far from clear.” Citing the Ninth’s Circuit’s description of the term as having a “chameleon-like quality,” the majority held that to determine the meaning it must go beyond ordinary use and look at the particular context. To this end, the Court adopted the government’s arguments that the law paralleled the common law torts of libel per quod and slander to mean that “actual damages” are the same as “special damages,” which in turn means that victims can only recover if they show pecuniary or material harm. This conclusion, the majority explained, was furthered by what it concluded was Congress’s determination that “actual” damages and “general” damages are mutually exclusive, a point the legislature purportedly made clear by its establishment of a commission (“an expert body”) to study “whether the Federal government should be liable for general damages.”
The majority acknowledged that Cooper’s interpretation, upheld by the Ninth Circuit, was not “inconceivable.” But, it concluded, because such an interpretation would involve a waiver of sovereign immunity, “Congress must speak unequivocally,” and “[h]ere … it did not.” The Court dismissed interpretations of other federal laws that Cooper suggested indicate the term “actual damages” includes compensation for mental and emotional distress, suggesting that none of those laws “mirror” the privacy law and therefore are not “a fitting analog for construing the Act.”
The Court also rejected the suggestion that excluding damages for mental and emotional harm would “lead to absurd results,” a claim premised on the conclusion that those suffering “relatively minor pecuniary loss would be entitled to recover $1,000, while those suffering more significant mental or emotional distress would get nothing.” According to the majority, this argument “ignores the fact that, by deliberately refusing to authorize general damages, Congress intended to cabin relief, not to maximize it,” a finding based on its earlier conclusion and precisely the issue that is being contested.
Justice Sonia Sotomayor’s dissent for herself and Justices Stephen Breyer and Ruth Bader Ginsburg challenged both the majority’s underlying premise of the interpretation of the sovereign immunity canon as well as the broader statutory interpretation and understanding behind The Privacy Act. (Justice Kagan did not participate, presumably because of a connection to the case when she was Solicitor General.)
Sotomayor took issue with the majority’s decision to adopt the restrictive interpretation of “actual damages” simply because it finds that meaning “plausible” and believes the government must receive the most favorable interpretation (even, as she pointed out, the majority “candidly acknowledges that a contrary reading is not ‘inconceivable’”). That interpretation of the sovereign immunity canon, she wrote, “simply cannot bear the weight the majority ascribes it.” The canon is merely “a tool for interpreting the law, and we have never held that it displaces the other traditional tools of statutory construction.” In this case, she states, “those tools, — text, structure, drafting history, and purposes — provide a clear answer: The term ‘actual damages’ permits recovery for all injuries established by competent evidence in the record.”
Citing several definitional sources, including Black’s Law Dictionary, other legal dictionaries, and Webster’s dictionary, Sotomayor asserts that the plain language definition of “actual damages” is clear and “connotes compensation for proven injuries or losses.” Nothing in the use of that phrase, she said, “indicates proven injuries need to be pecuniary in nature,” and she charged that the majority “discards all this,” with its suggestion that context is more important. In fact, she asserts, “the relevant statutory context – the substantive provisions whose breach may trigger suit under the civil-remedies provision – only reinforces the ordinary meaning of ‘actual damages.’”
To adopt the majority’s approach permitting only recovery for pecuniary loss “creates a disconnect between the Act’s substantive and remedial provisions,” and “allows a swath of Government violations to go unremedied.” Noting that the conclusion that Congress intended “actual damages” to mean “special damages” is exactly the opposite conclusion that should be drawn, she asserts the Court is “substituting words [it] think[s] Congress intended to use for words congress in fact used.”
The dissent also provides a completely contrary interpretation of Congress’s decision to delete the term “general damages” from the legislation and assign a commission to study the matter. “The elimination of presumed damages from the bill can only reasonably imply that what Congress left behind – ‘actual damages’ – comprised damages that are not presumed, i.e. damages proved by competent evidence in the record.” Sotomayor suggests the majority is relying on a syllogism: “Because Congress excluded recovery for ‘general damages,’ it must have meant to retain recovery only for ‘special damages.’” But she asserts, that syllogism ignores the existence of another category of damages, which is in fact “the very category Congress used in the text of the Privacy Act: ‘Actual damages.’”
Finally, Justice Sotomayor suggests that the majority’s interpretation is contrary to law’s historical context, the reading that “best effectuates the statute’s basic purpose[,]” along with the principle that “we have recognized time and again that the primary form of [such] injuries is nonpecuniary, and includes mental distress and personal humiliation.” The result is that the Court’s decision “render[s] impotent” the law’s remedial provision and leaves an individual harmed by “concededly unlawful agency action” without a remedy whenever the injury is solely nonpencuniary
Both Sotomayor and the respondent, Stanmore Cooper, came up one vote short in a decision that came down to one word. And while she did not cite it, one wonders whether Justice Sotomayor thought about including a reference or quote from the character of Vizzini in The Princess Bride: “You keep using that word [inconceivable]. I do not think it means what you think it means.”