FAA v. Cooper (10-1024)

Oral argument: Nov. 30, 2011

Appealed from: United States Court of Appeals for the Ninth Circuit (June 20, 2011)

A joint criminal investigation carried out by the Department of Transportation and the Social Security Administration revealed that Respondent Stanmore Cawthon Cooper failed to disclose that he had HIV to one agency, while simultaneously collecting medical benefits from the other. Upon being convicted for making these misrepresentations, Cooper brought suit against the Federal Aviation Administration, the Department of Transportation, and the Social Security Administration under the Privacy Act of 1974, arguing that the Government had unlawfully disclosed his HIV status. The district court dismissed the suit, holding that the Privacy Act’s language, which imposes liability on federal agencies only in cases where an individual suffered “actual damages,” does not cover Cooper’s allegations of emotional harm. The Ninth Circuit Court of Appeals reversed, holding that the term “actual damages” encompasses mental or emotional harm suffered. The FAA now appeals, arguing that the term “actual damages” is ambiguous and must be construed in favor of the federal government to exclude noneconomic damages. The Supreme Court’s decision in this case will address whether emotional and other noneconomic damages are “actual damages,” raising broad implications for future suits under the Privacy Act.

Question presented

Whether a plaintiff who alleges only mental and emotional injuries can establish "actual damages" within the meaning of the civil remedies provision of the Privacy Act, 5 U.S.C. 552a(g)(4)(A).

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Issue

Whether a plaintiff suing under an invasion of privacy theory can recover for emotional and other nonpecuniary damages when the relevant statute’s language is ambiguous about the types of damages it covers.

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Facts

In 1985, Stanmore Cawthon Cooper, an airline pilot, was diagnosed with human immunodeficiency virus (“HIV”). See Cooper v. FAA, 596 F.3d 538, 541 (9th Cir. 2010). Per Federal Aviation Administration (“FAA”) regulations, Cooper was required to periodically renew his medical certificate, a process which required Cooper to disclose any illnesses from which he might suffer. See id. at 540–41. Knowing that he would not qualify for a new medical certificate because of his HIV, Cooper initially decided not to proceed with the renewal process. See id. at 541. However, in 1994, Cooper applied for a new medical certificate without disclosing his condition. See id. Cooper continued to conceal the information during subsequent medical certificate renewals. See id.

At the same time, starting in 1995, Cooper began receiving long-term disability benefits from the Social Security Administration (“SSA”). See Cooper, 596 F.3d at 541. In applying for these benefits, Cooper disclosed his HIV diagnosis to SSA. See id. Cooper received SSA payments from August 1995 to August 1996. See id.

In 2002, the FAA and Department of Transportation (“DOT”) began a joint criminal investigation to uncover medically unfit pilots who had nevertheless obtained medical certificates. See Cooper, 596 F.3d at 541. Dubbed “Operation Safe Pilot,” the investigation involved exchanges of information between the DOT and SSA in order to expose fraud. See id. at 541–42. One such exchange revealed that Cooper had managed to obtain medical certification while simultaneously receiving SAA medical benefits by concealing his HIV status from the FAA. See id. at 542. In 2005, Operation Safe Pilot agents confronted Cooper, who confessed to intentionally concealing his HIV diagnosis from FAA. See id. In response, FAA revoked Cooper’s medical certificate, and in 2006, Cooper was sentenced to two years of probation and fined for his misrepresentations. See id.

In 2007, Cooper filed suit in the United States District Court for the Northern District of California against the FAA, DOT, and SSA (collectively the “Government”), claiming that the Government violated the Privacy Act of 1974 by exchanging his information. See Cooper, 596 F.3d at 542; 5 U.S.C. § 552a. Cooper alleges that the disclosure of his HIV status caused him to suffer emotional distress, including humiliation and the fear of social ostracism. See Cooper, 596 F.3d at 542. The district court granted summary judgment in favor of the Government, holding that the language of the Privacy Act, which only establishes liability in the event of “actual damages,” is ambiguous and therefore must be interpreted narrowly and in favor of the Government. See id. Read in that light, the district court concluded that sovereign immunity had not been explicitly waived in this instance. See id.; 5 U.S.C. § 552a(g)(4)(A). Reasoning that Cooper’s damages were not pecuniary, the court determined that Cooper had not suffered “actual damages” under the Act, and therefore failed to state an issue of material fact. See id.

The United States Court of Appeals for the Ninth Circuit reversed, holding that the Privacy Act’s “actual damages” language included both pecuniary and nonpecuniary damages. See Cooper, 596 F.3d at 550. After examining the statutory context, structure, and purpose of the Act, the Ninth Circuit concluded that sovereign immunity was inappropriate, and remanded the case. See id. The court later amended its decision (changing a footnote unrelated to the issue at hand) while denying a rehearing en banc. See Cooper v. FAA, 622 F.3d 1016, 1018 (2010). The Supreme Court granted certiorari to hear the Government’s appeal on June 10, 2011. See FAA v. Cooper, 131 S.Ct. 3025 (2011).

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Discussion

At issue is whether the “actual damages” language of the Privacy Act of 1974 should be read to include nonpecuniary damages, which would allow the plaintiff’s suit to proceed. See 5 U.S.C. § 552a(g)(4)(A). Petitioners, the Government, argue that an expansive view of the Privacy Act would expose the Government to open-ended liability, thereby increasing the number of subsequent suits. See Brief for Petitioner, Federal Aviation Administration et al. at 32–33. In addition, the Government fears that this increased number of suits will increase litigation costs because emotional and other nonpecuniary harms are often hard to prove, requiring expert testimony and other expensive procedures. See id. at 33–34. In opposition, Respondent Stanmore Cawthon Cooper argues that the Government’s fear of an increased number of costly suits is misguided, given the other prerequisites found within the Privacy Act. See Brief for Respondent, Stanmore Cawthon Cooper at 57–58. Furthermore, amici curiae argue that a narrow interpretation of the statute would leave those with HIV without any way to combat the stigmas and backlash often associated with their status. See Brief of Amicus Curiae AIDS Foundation of Chicago et al. in Support of Respondent at 22–26.

Impact on the Government

The Government argues that permitting emotional-distress damages would raise the Government’s potential liability to unrealistic and unsustainable levels. See Brief for Petitioner at 32–33. In reaching this conclusion, the Government alleges that an expansive reading of the Privacy Act would increase the number of lawsuits, and would increase the size of potential damage awards. See id. The Government further points to the subjective nature of emotional damages. See id. at 33–34. Because an expansive reading of the Privacy Act would allow parties to allege subjective and often personal damages claims, the Government argues that the costs of litigation would increase due to the added burden of sorting through and defending these suits. See id.

In response, Cooper asserts that the fear of depleted fiscal resources is unwarranted given the other limitations found within the Privacy Act. See Brief for Respondent at 57–58. For example, Cooper points to the Act’s requirement that any violation be “intentional” or “willful” in concluding that a sudden drain on resources is unlikely to occur. See id.; 5 U.S.C. § 552a(g)(4). Cooper similarly dismisses the Government’s fear of increased litigation costs by arguing that federal judges have experience with the Privacy Act and understand that the law’s provisions generally preclude egregious damage awards. See Brief for Respondent at 58.

Impact on Persons Diagnosed with HIV

The AIDS Foundation of Chicago and others (collectively “AIDS Foundation”) argue that a limited reading of the Privacy Act would leave those individuals diagnosed with HIV without any means of relief from the emotional distress they often suffer. See Brief of Amicus Curiae AIDS Foundation of Chicago et al. in Support of Respondent at 22–26. Emphasizing the unique nature of HIV, the AIDS Foundation argues that the primary harm associated with the disclosure of an individual’s HIV status often includes nonpecuniary injuries like discrimination. See Brief of Amicus Curiae AIDS Foundation of Chicago et al. at 28. The AIDS foundation asserts that the damages suffered by individuals whose HIV status was unlawfully disclosed, coupled with the emotional duress that often follows from such discrimination, must, as a matter of reason and the intent to protect, be covered by the Privacy Act. See id. at 32–33. Furthermore, the Electronic Privacy Information Center (“EPIC”) notes that the nonpecuniary harms associated with privacy violations “go to the core of what privacy statutes aim to protect.” Brief of Amicus Curiae EPIC at 5–6. Pointing, like the AIDS Foundation, to the unique nature of issues involving HIV, EPIC concludes that individuals' HIV status should be covered under the Privacy Act. See id. at 11.

The Government, however, argues that a nonpecuniary reading of "actual damages" in the Privacy Act would provide sufficient protection for those who have suffered emotional damage. See Brief for Petitioner at 34. The Government points out that there are other remedies available under the Privacy Act, including criminal penalties for certain violations, as well as remedies available elsewhere, including injunctive relief to prevent further violations. See id. at 34–35. With these alternative options available, the Government asserts that allowing Cooper to recover under the “actual damages” provision would be superfluous. See id.

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Analysis

At issue is Section 552a(g)(4) of the Privacy Act of 1974. This section authorizes individuals to sue federal agencies for “actual damages” resulting from unlawful disclosures of confidential information. See 5 U.S.C. § 552a(g)(4). The United States Court of Appeals for the Ninth Circuit held that the term “actual damages” encompasses any mental or emotional harm suffered. See Cooper v. FAA, 596 F.3d 538, 550 (9th Cir. 2010). The Supreme Court must now determine whether to uphold the Ninth Circuit’s ruling, or whether to adopt the Government’s interpretation that “actual damages” should be limited to economic harm.

Plain Meaning of “Actual Damages”

The Government argues that the term “actual damages” is ambiguous and therefore does not implicate waiver of the federal government’s immunity for claims of mental or emotional distress. See Brief for Petitioner, Federal Aviation Administration at 13. The Government claims that Congress, both before and around the time that the Privacy Act was enacted, used the term “to refer exclusively to economic harm.” Reply Brief for Petitioner, Federal Aviation Administration at 7. The Government contends that the Supreme Court has held that, if a sovereign immunity waiver’s scope is ambiguous, courts must interpret any unclear language strictly in the government’s favor. See Brief for Petitioner at 13. Therefore, the Government argues that the Supreme Court must adopt a definition of “actual damages” that excludes recovery for mental or emotional distress. See id. at 14.

On the other hand, Cooper argues that the plain meaning of “actual damages” is unambiguous and includes claims of mental or emotional distress. See Brief for Respondent, Stanmore Cawthon Cooper at 12. Cooper argues that, according to both legal and non-legal dictionaries in use at the time of the statute’s enactment, “actual damages” meant monetary compensation for real injuries. See id. at 12–13. Cooper contends that the established definition simply contrasted damages that were not based on any real harm suffered, such as nominal damages. See id. at 13. Thus, Cooper argues that Congress clearly intended “actual damages” to include recovery for real mental or emotional distress. See id.

The Government contends that the Ninth Circuit should not have relied on the purpose stated in the Act’s preamble to interpret the meaning of “actual damages.” See Brief for Petitioner at 37. The Government points out that the Act’s stated purpose is to protect individuals from invasions of privacy by subjecting federal agencies, “unless otherwise provided by law,” to liability for any damages caused by intentional Privacy Act violations. See id. at 3738. The Ninth Circuit held that the broad term “any damages” necessarily encompasses mental and emotional harm. See Cooper v. FAA, 596 F.3d at 546. However, the Government argues that the phrase “unless otherwise provided by law” expressly qualifies the preamble’s general purpose, and that a statute’s general purpose cannot supersede the statute’s operative provisions. See Brief for Petitioner at 38. Thus, the government argues that the term “any damages” found in the preamble’s general purpose is qualified by the operative provision permitting only recovery for “actual damages.” See id.

In contrast, Cooper contends that the Supreme Court should consider the preamble’s stated purpose when interpreting the plain meaning of “actual damages.” See Brief for Respondent at 13. Cooper argues that it is a well-established principle of statutory construction that courts interpret statutes in a manner that, whenever possible, incorporates all of the statutory language. See id. at 15. Cooper contends that the Supreme Court should not determine that the statute’s operative provisions are controlling and dismiss the preamble’s duly enacted language that permits recovery for any damages. See id. Therefore, Cooper maintains that the plain meaning of “actual damages” should be interpreted more broadly to encompass recovery for mental or emotional harm. See id. at 17.

The Government notes that the Supreme Court has held that Congress probably patterned Section 552a(g)(4) after the law governing certain defamation-related torts, which required proof of “special harm” before any recovery was permitted. See Brief for Petitioner at 22; Doe v. Chao, 540 U.S. 614, 625 (2004). “Special harm” is demonstrated through proof of an economic kind. See Brief for Petitioner at 22. The Government contends that these torts are known as defamation “per quod.” See id. at 23. Therefore, the Government argues that the Supreme Court should interpret the Privacy Act to impute the requirements of defamation “per quod” and limit recovery to instances where there is proof of economic damages. See id. at 24.

However, Cooper argues that the Government has provided no proof that the term “actual damages” was modeled after the tort of defamation “per quod” or that recovery requires proof of economic damages. See Brief for Respondent at 52. Cooper contends that, in Doe v. Chao, the Supreme Court specifically chose not to rule on whether mental or emotional distress would sufficiently prove “actual damages.” See id. Therefore, Cooper asserts that the Government’s argument relies on mere dicta. See id. Cooper also points out that the Act’s language makes no mention of “special harm.” See id. By using “actual damages” instead of “special harm,” Cooper asserts, Congress specifically chose another legal term with an alternate common law meaning. See id.

Legislative History

The Government argues that Section 552a(g)(4)’s drafting history reveals that Congress considered awarding damages for mental or emotional harm, deciding to limit recovery to economic harm in the final statute. See Brief for Petitioner at 2526. The Government points out that the Senate’s original bill authorized recovery of both “actual damages” and “general damages.” See id. at 26. The Government contends that the Supreme Court has interpreted “general damages” to permit recovery for the mental or emotional distress presumed from the harm that defamation normally inflicts on an individual’s reputation. See id. However, the Government points out that Congress limited the text of the Privacy Act to “actual damages” and assigned the Privacy Protection Study Commission (“Commission”) the task of determining whether federal agencies should be liable for “general damages.” See id. The Government asserts that the Commission eventually recommended liability for “general damages.” See id. at 29. However, the Government asserts that Congress ultimately chose not to adopt the recommendation. See id. Therefore, the Government argues that the legislative history provides no indication that Congress intended to permit any recovery for mental or emotional harm. See id.

In contrast, Cooper contends that Congress intentionally patterned the Privacy Act after the laws governing torts of defamation and invasion of privacy, and understood that privacy invasions cause mental and emotional harm. See Brief for Respondent at 36. Cooper points out that the Senate’s original bill permitted recovery for both “general damages” and “actual damages” caused by intentional Privacy Act violations. See id. at 39. Cooper also points out that the House of Representatives’ (“House”) bill permitted recovery for “actual damages” caused by “willful, arbitrary or capricious conduct.” See id. at 38. Cooper asserts that, while the final statute only permits “actual damages” for intentional violations, the definition of the term “actual damages” was never discussed when the Senate and the House debated the compromise statutory language. See id. at 3940. Thus, Cooper argues that the lack of debate over the terminology indicates that both chambers of Congress simply assumed that the term “actual damages” would be synonymous with the damages available under the tort of invasion of privacy. See id. at 40.

Sovereign Immunity

The Government asserts that Congress has the exclusive authority to waive federal immunity. See Brief for Petitioner at 15. The Government contends that Congress controls the Treasury and therefore must balance the protection of individual privacy rights against limiting federal exposure to liability. See id. at 2930. The Government argues that courts must narrowly construe Congressional immunity waivers in order to prevent separation-of-powers violations and unintentional burdens on the Treasury. See id. at 15. The Government contends that since the term “actual damages” is ambiguous and can exclude harm from mental or emotional distress, the Supreme Court must narrowly construe the immunity waiver in favor of the federal government to mean the term does exclude harm from mental or emotional distress. See id. at 21.

In contrast, Cooper argues that the principle of sovereign immunity is one type of interpretive tool and does not displace the plain meaning obtained using traditional tools of statutory construction. See Brief for Respondent at 41. Cooper contends that the Supreme Court has indicated that the sovereign immunity principle is a last resort, which should only be utilized if the traditional tools of statutory construction do not resolve a textual ambiguity. See id. at 44–45. Cooper argues that, since there is an express waiver, the Supreme Court cannot assume the authority to narrow the scope of the express waiver that Congress has provided. See id. at 32. Cooper further points out that the Supreme Court has held that, if the scope of the government’s liability for “actual damages” is to be limited, Congress must be the one to impose the limitation. See id. at 33.

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Conclusion

In this case, the Supreme Court will determine whether the use of “actual damages” in the Privacy Act of 1974 permits recovery for mental or emotional distress caused by a federal agency’s willful invasion of privacy. The Government argues that individuals cannot recover for mental or emotional harm because the term “actual damages” is ambiguous and must be construed in favor of the federal government to exclude noneconomic damages. However, Cooper maintains that the Privacy Act’s purpose, substance, language, and legislative history indicate that Congress intended the statute to encompass mental or emotional damages. This decision will have far-reaching implications, not only because of the potential for increased lawsuits and monetary judgments, but also because of the potential for limited relief for individuals diagnosed with HIV.

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Authors

Prepared by: Heather Byrne and Judah Druck

Edited by: Colin O'Regan

Additional Sources

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Edited by