Argument recap: The Court’s Privacy Act rabbit hole

Although no one at the Supreme Court yesterday actually quoted the author Lewis Carroll, the words he wrote in his classic Alice’s Adventures in Wonderland provided a backdrop for the oral argument in Federal Aviation Administration v. Cooper, a case in which the Court is considering what kind of damages are available under the Privacy Act of 1974. The Justices spent the hour questioning the attorneys and parsing the language of the statute and its legislative history to determine the answer to one question: what did Congress mean by the term “actual damages”? Or, to paraphrase the exchange between Alice and the March Hare, did Congress say what they meant or mean what they said?

Specifically, the Court must decide whether the plaintiff in the case, Stanmore C. Cooper, can recover damages for emotional harm he suffered as a result of the government’s illegal sharing of his medical and other records, in violation of the Privacy Act, when that harm did not give rise to specific economic damages. The action by the government was part of an interagency investigation in which it discovered, through Social Security records, that Cooper did not register his HIV status with the FAA, itself a violation of a different law. The Privacy Act waives the government’s sovereign immunity  so that individuals can sue for the “actual damages” suffered as a consequence of such violations; yesterday the lawyers sparred over how broadly to interpret the phrase “actual damages.”  .

In challenging a ruling by the U.S. Court of Appeals for the Ninth Circuit, which held that the law includes damages for emotional injuries, Assistant to the Solicitor General Eric Feigin sought to depict that interpretation as one that would “sweep far beyond any pre-existing common law protection of privacy to impose a detailed set of new and pervasive requirements on the collection, maintenance, use and dissemination of million of Federal agency records.” He suggested that such an interpretation would “expose the United States to expansive damages” – an approach that “Congress would not have taken lightly.”

Feigin quickly was interrupted by Justice Ruth Bader Ginsburg, who noted that if that was the case, “then maybe Congress shouldn’t have passed this statute.” Ginsburg repeatedly challenged Feigin on the government’s limited view of recovery, comparing the injury for invasion of privacy to the tort of intentional infliction of emotional distress, which includes significant embarrassment and humiliation but not necessarily out-of-pocket costs. Feigin countered by suggesting that the correct analogy is not with the common law and that Congress, in passing the Privacy Act, had considered providing an award for emotional distress “but decided not to do that.”  Instead, Feigin argued, Congress assigned this job to the Privacy Protection Study Commission it set up to determine whether the act should later be expanded.

Ginsburg continued to press Feigin about the differences between the types of injury and the language Congress used to cover it, asking whether emotional distress and humiliation constitute “an actual injury.” In response, Feigin suggested that the terms “actual injury” and “actual damages” are “ambiguous. Sometimes they might include emotional distress and sometimes they might not.” But, he continued, “Mr. Cooper did not suffer actual damages within the meaning of the Privacy Act.” I didn’t ask you that,” snapped Ginsburg.  “I asked you did he suffer an actual injury as opposed to someone who is complaining about something – an abstract right or an abstract theory?” Feigin conceded that, in the government’s view, Cooper did suffer an adverse effect “sufficient to confer standing.” But he cited the Court’s most recent ruling in this area, Doe v. Chao, to suggest that adverse effect “doesn’t mean that the plaintiff suffered actual damages.”

Justice Sotomayor broke in to suggest that that the government’s argument seemed to assume that if you suffer non-pecuniary harm, you haven’t been injured.  “There is a big difference between presumed damages and proven injury. … Aren’t you the one confusing what injury is from presumed damage?” she continued. In an apparent attempt to divert from this and suggest an alternative, Justice Anthony Kennedy asked whether certain costs associated with emotional harm, such as medical expenses and lost wages, could constitute actual damage; in response, Feigin agreed that “documented medical expenses that were out-of-pocket … even if they arise from emotional distress . . . would be pecuniary harm and could be compensated under the Act.”  This did not sit well with Justice Sotomayor, who asked Feigin whether he wasn’t “arguing that the emotional distress component can’t be?” Feigin then clarified that “the emotional distress component itself cannot be, but medical expenses to treat symptoms of emotions distress could be compensated.”

Sotomayor questioned why Congress would have borrowed from the defamation context to use a “defined term of art, ‘special damages’ and not use it in the Privacy Act if that’s what intended.”  Similarly, she asked why Congress would “then use a term ‘actual damages,’ which has a much broader meaning than “special damages.” At this point, Feigin fell back on an additional theme of the government’s briefs, relating to the canon of statutory construction concerning waivers of sovereign immunity. For these purposes, Feigin explained, the Court is required to adopt the narrower and more “reasonable” reading. But, queried Justice Ginsburg, why would Congress have passed this law in the first place if it wasn’t “thinking of emotional distress injuries”? Feigin demurred, responding that the law was passed “in the wake of Watergate, to impose a set of detailed substantive requirements about Federal recordkeeping.”

 

Arguing on behalf of respondent Stanimore Cooper, Raymond Cardozo began his argument by picking up on Justice Ginsburg’s line of questioning while countering the government’s assertion about the purpose of the law. “The government’s view of ‘actual damages,’” he said, “would mean that the very individuals Congress sought to protect in this act would have no remedy at all for the primary form of harm that was well recognized at common law when this act was passed.” In support, he cited the “common and ordinary meaning” of “actual damages” in Black’s Law Dictionary, which defines them as damages “proven, not presumed, liquidated, punitive, or other forms of damages that are not tied to proof of harm.”

Justice Antonin Scalia scoffed at the validity of dictionary definitions, and he embraced the government’s view that once it is shown that “it isn’t clear what actual damages means that you trigger the rule that waivers of sovereign immunity will not be considered to have any scope except the scope that is clear.”  When asked how far back Mr. Cooper would be claiming damages, Cardozo responded that the award for damages would be a proximate causation question to be determined on remand, but he suggested that the damages would be limited to damages only after the government’s violation of the Act, not Cooper’s earlier violation of the law. But Cardozo explained that the impact is much broader than simply Cooper and would include all of the people to whom the law applies, including whistleblowers “who the government chooses to silence by embarrassing and humiliating them.”

Justice Alito pressed Cardozo for his understanding of the differences between the special and general damages in defamation cases and the relationship of those terms to “actual damages.” Cardozo responded “that actual means simply proven, not presumed,” adding that “the right that’s being described here is an individual and personal right to privacy, well understood, well settled at the time to be a right that was primarily non-pecuniary in nature.”

Justice Breyer asked Cardozo what he thought about the government’s argument  regarding the Privacy Commission’s understanding of “actual damages.” Cardozo responded that the Commission’s explanation is just “two paragraphs in a 620-page report.” It does not, he stated, consider the text of the Act or its purpose or any of “the things one normally does in statutory construction.”  Furthermore, he argued, the Commission’s work was ambiguous and part of an effort “to sell Congress on the notion of expanding the remedy.

Justice Sotomayor attempted to clarify whether the government’s concerns about the fiscal impact on the treasury were merited, asking Cardozo – who responded in the negative – whether he was aware of “any runaway verdicts” based on awards for emotional distress.

Justices Scalia and Kennedy then both returned to the question of whether the scope of the waiver of sovereign immunity must be unambiguous.  Cardozo responded that “what the government is talking about is an ambiguity in the abstract.  They are lifting the two words out of the context of the act… But in this statute, when you run through the tools of construction it’s not ambiguous.” Chief Justice Roberts then jumped into the fray, suggesting that the argument that the Privacy Act is precisely about these kinds of damages “cuts both ways,” that “this is a really big chunk of damages, because this is what the whole act was about [and] if you are going to get into that, you really do need a clearer waiver of sovereign immunity.” Feigin picked up on this theme during his rebuttal, noting that Cooper “wants to fault Congress for not using the specific term ‘special damages.’ But … that flips the canon of interpreting waivers of sovereign immunity on its head.”

The Court is clearly split on the issue, with Justices Ginsburg, Sotomayor, and Breyer seeming to favor the broader reading of the law, with Justices Scalia, Alito, and the Chief Justice likely votes to limit the breadth of the Privacy Act and denying recovery for emotional harm.  Justice Clarence Thomas was silent during the oral argument, but it would seem unlikely that he would vote to allow damages for emotional harm.  Justice Elena Kagan recused herself, probably because she had some involvement with the case as Solicitor General. That means that Justice Kennedy will likely hold the deciding vote; if he favors including emotional damages the court would be evenly split, which would affirm the Ninth Circuit’s ruling in Cooper’s favor.

However the Court resolves the question one can not help recalling another comment from Alice In Wonderland: “Speak English! I don’t know the meaning of half those long words, and I don’t believe you do either.”