By: Sarah Kitchell
With its recent ruling in Federal Aviation Administration v. Cooper, 132 S. Ct. 1441 (2012), the Supreme Court limited civil damages available to individuals suing federal agencies for violations of the Privacy Act of 1974 (codified in part at5 U.S.C. § 552a). The Court held that the term “actual damages,” as used in the Privacy Act, is limited to pecuniary damages only and does not include damages for mental or emotional distress.
The Privacy Act of 1974 (the “Act”) sets forth a detailed process for the maintenance, collection, use, dissemination, and disclosure of records which are held by Executive Branch agencies and contain information about individuals. The Act directs federal agencies to establish safeguards to protect against unauthorized disclosures of information “which could result in substantial harm, embarrassment, inconvenience, or unfairness” to the individual, 5 U.S.C. § 552a(e)(10), and authorizes, among other things, a private right of action for individuals to enforce the terms of the Act, 5 U.S.C. § 552a(g)(1). At issue in this case was the individual’s right to bring an action against the agency when the agency failed to comply with the Act in such a way as to have an “adverse effect” on the individual, § 552a(g)(1)(D), and, if the individual can show that the agency acted in a way that was “intentional or willful,” that individual’s right to receive an amount equal to the sum of “actual damages sustained by the individual,” costs of the action and reasonable attorneys fees, § 552a(g)(4) (emphasis added).
The individual bringing suit against the federal agency in this case was Stanmore Cooper, an airplane pilot. As a result of a joint criminal investigation called “Operation Safe Pilot” involving the Department of Transportation (“DOT”), the parent agency to the Federal Aviation Administration (“FAA”), and the Social Security Agency (“SSA”), Cooper had been indicted and pled guilty to making false statements to a government agency. Cooper, who had been diagnosed with human immunodeficiency virus (“HIV”), intentionally withheld disclosure of his condition to the FAA on certain medical certifications required for his pilot’s license, but disclosed his condition to the SSA in order to obtain social security disability benefits after his condition worsened. Cooper alleged that, in connection with their participation in Operation Safe Pilot, the two federal agencies unlawfully shared confidential medical information about him in a way that violated the Privacy Act, causing him “humiliation, embarrassment, mental anguish, fear of social ostracism, and other severe emotional distress.” FAA v. Cooper, 132 S. Ct. at 1447 (quoting App. to Pet. for Cert 120a). Cooper did not allege economic or pecuniary harm resulting from this disclosure, however.
Despite concluding that the FAA and SSA had violated the Act and that there was a triable issue of fact whether the government’s violation was intentional or willful, the district courtgranted summary judgment against Cooper. See 816 F. Supp. 2d 778 (N.D. Cal. 2008). The court determined that the term “actual damages” was “facially ambiguous,” id. at 791, and concluded that because the canon of sovereign immunity requires that waivers of sovereign immunity must be strictly construed in favor of the Government, the scope of the Government’s waiver in §552a(g)(A) must be limited to pecuniary damages only. The Ninth Circuit Court of Appeals reversed and remanded, concluding that the term “actual damages” is not ambiguous when traditional tools of statutory interpretation are applied, and held that “Congress clearly intended that when a federal agency intentionally or willfully fails to uphold its record-keeping obligations under the Act, and that failure proximately causes an adverse effect on the plaintiff, the plaintiff is entitled to recover for both pecuniary and non-pecuniary injuries.” 622 F.3d 1016, 1035 (9th Cir. 2010).
The Court, in an opinion authored by Justice Alito and joined by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas, ruled that the term “actual damages,” as used in the Privacy Act, does not include mental or emotional distress. The Court held that because the “Act does not unequivocally authorize an award of damages for mental or emotional distress,” it does “not waive the Federal Government’s sovereign immunity from liability for such harms.” FAA v. Cooper, 132 S. Ct. at 1456.
The principle of sovereign immunity declares that the government must consent to be sued, and the sovereign immunity canon is an interpretive tool that provides that any waiver of sovereign immunity (allowing for monetary recovery from the federal government) must be strictly construed in favor of the government so as to limit that recovery. In this case, Justice Alito acknowledged that by allowing recovery of “actual damages” as a result of violations of the Act, Congress expressly waived its sovereign immunity. However, what concerned the Court was the scope of that waiver and whether Congress intended to limit recovery of damages provided under §552a(g)(4). FAA v. Cooper, 132 S. Ct. at1448. Justice Alito remarked that Congress does not need to use “magic words” to invoke sovereign immunity because the interpretive tool of the canon of sovereign immunity allows the Court to “take the interpretation most favorable to the government” if the scope of Congress’s waiver is not clearly discernable from the statutory text “in light of traditional interpretive tools.” Id.
Justice Alito then turned to such “traditional interpretive tools” to conclude that the term “actual damages,” as used in the Privacy Act, was ambiguous. He cited the Ninth Circuit, agreeing that the precise meaning of the term “changes with the specific statute in which it is found.” Id. at 1449 (quoting FAA v. Cooper, 622 F.3d at 1029). Drawing connections to defamation and privacy torts, which “serve similar interests” to the Privacy Act, Justice Alito inferred that Congress “intended the term ‘actual damages’ to mean ‘special damages.’” Id. at 1445 (citing Doe v. Chao, 540 U.S. 614 (2004) for the proposition that § 552a(g)(4)(A) parallels the “remedial scheme for the common-law torts of libel per quod and slander,” which limit recovery unless plaintiffs can prove “special harm,” also known as “special damages”). Justice Alito next quoted several treatises on torts and remedies, stating that “special damages” are limited to “actual pecuniary loss, which must be specially pleaded and proved” whereas “general damages” cover “loss of reputation, shame, mortification, injury to the feelings . . . and need not be alleged in detail and require no proof.” 132 S. Ct. at 1451 (quoting D. Haggard, Cooley on Torts, §164, 579-80 (4th ed. 1932)). Finally, Justice Alito reasoned that because Congress chose to use authorize “actual damages” rather than “general damages,” Congress viewed these terms as “mutually exclusive” and intended “actual damages” to mean “special damages for proven pecuniary loss.” Id. at 1452. Ultimately, because Congress did not speak “unequivocally,” Justice Alito wrote, the Court adopted the interpretation most favorable to the government: that “the interpretation of ‘actual damages’ [is] limited to proven pecuniary or economic harm.” Id. at 1453.
Justice Sotomayor’s dissent, joined by the Justices Ginsburg and Breyer, argued that the Court’s ruling “is at odds with the text, structure, and drafting history of the Act. And it cripples the Act’s core purpose of redressing and deterring violations of privacy interests.” Id. at 1456 (Sotomayor, J., dissenting). The dissent disagreed with the majority’s reliance on the sovereign immunity canon, arguing that “traditional tools of statutory construction – the statute’s text, structure, drafting history, and purpose – provide a clear answer” that “actual damages” include all proven injuries, including mental and emotional distress demonstrated by competent evidence. See id. By limiting the term “actual damages” to pecuniary damages only, Justice Sotomayor contended, the majority has created “a disconnect between the Act’s substantive and remedial provisions” and allows “a swath of Government violations to go unremedied.” Id. at 1459.
Sarah Kitchell is an associate in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Boston office. She focuses her practice on general health law, including the representation of hospitals, health systems and other health care clients.
Sarah received her J.D., magna cum laude, with a concentration in health law from the Boston University School of Law and was awarded the Dr. John Ordronaux Prize for greatest overall professional ability. While in law school, she was editor-in-chief of the Boston University Law Review and served as a summer associate at the Firm. Prior to law school, Sarah worked for the National Cancer Institute’s Cancer Information Service at the University of Iowa Hospitals & Clinics and at a rural health clinic in Tennessee. Sarah received her B.A. from Stanford University with honors and was elected to Phi Beta Kappa.
Sarah is admitted to practice in Massachusetts.
 The Act applies to records under the control of federal agencies that contain individually identifiable information including, but not limited to, the individual’s “education, financial transactions, medical history, and criminal or employment history.” 5 U.S.C. §552a(a)(4). For more information on the Act, including a discussion of caselaw, see U.S. Dep’t of Justice, Office of Privacy and Civil Liberties, Overview of the Privacy Act of 1974 (2010), available at http://www.justice.gov/opcl/1974privacyact-overview.htm.
 Cooper admitted that he withheld this information intentionally because at the time, the FAA did not issue medical certifications to individuals diagnosed with HIV. See FAA v. Cooper, 132 S. Ct. at 1446.
 The Respondent’s brief alleges that Operation Safe Pilot intentionally and willfully violated the Act’s narrow law-enforcement exception allowing sharing of records between agencies, set forth in §552a(b)(7), because the agencies’ investigators disclosed confidential records “without written requests from, or approval by, their respective agency heads.” Brief for the Respondent, FAA v. Cooper, No. 10-1024 (2011) at 3. The Respondent’s brief further alleges that the agencies also “did not provide written notice to, or obtain written consent from, any pilot” being investigated, also in violation of the Act. Id.
 Justice Kagan took no part in the case, presumably due to her connection with the case as Solicitor General.