Supreme Court looks at role of damages in privacy violation

The U.S. Supreme Court heard oral arguments yesterday on whether a plaintiff who alleges emotional injuries but has no monetary loss can collect damages after the government intentionally releases personal information protected under the Privacy Act.

In the case, Federal Aviation Administration v. Cooper, plaintiff Stanmore Cawthon Cooper claimed “severe emotional distress” after government agencies exchanged information that he has HIV. The U.S. Court of Appeals in San Francisco (9th Cir.) found for Cooper in February 2010, holding that he could get compensated for emotional injury under the Privacy Act even though he suffered no monetary damages, such as medical bills.

If the Supreme Court decides for Cooper, government agencies, fearing a flood of lawsuits from people who claim emotional distress, could be more cautious about releasing data that journalists may want, media lawyers warned.

The Privacy Act protects the confidentiality of certain personal information in federal agencies’ data systems by forbidding disclosure of certain personal information without consent. If the government violates the act, the injured party can sue for “actual damages.”

The dispute centered on what “actual damages” means under the Privacy Act. The parties agreed that the term includes expenses, such as medical bills, but disagreed on whether it also covers emotional distress claims with no associated out-of-pocket costs.

The case arose after government agencies exchanged information that Cooper is HIV positive. Cooper had applied to the Federal Aviation Administration to get a medical certificate that he needed for his private pilot’s license, but did not list that he had HIV. He did disclose his medical condition on an application to the Social Security Administration for long-term disability benefits. The two agencies shared Cooper’s files as part of “Operation Safe Pilot,” a government initiative to discover licensed pilots who were unfit to fly.

Cooper pleaded guilty to a charge of delivering false official writing. In March 2007, he filed suit against the government, alleging that it “willfully or intentionally” violated the Privacy Act and caused him “to suffer humiliation, embarrassment, mental anguish, fear of social ostracism, and other severe emotional distress” when it disclosed that he has HIV.

While questioning the government, Justice Ruth Ginsburg suggested that Congress may have intended to provide remedies for emotional distress because that is the type of injury that most commonly arises under the Privacy Act.

“The person who is subject to this, to this embarrassment, this humiliation, doesn’t have out of-pocket costs, but is terribly distressed, nervous, anxious, and all the rest,” Ginsburg said.

The U.S. Department of Justice argued in its brief that Congress did not intend for the term to include emotional injuries because such a reading could open the floodgates to many lawsuits against the government. The “actual damages” clause is a limited waiver on “sovereign immunity,” a legal doctrine that protects the government from being sued without consent, Justice Department attorney Eric J. Feigin told the Court. As the meaning of “actual damages” is ambiguous, the government argued, the Court must interpret it narrowly to respect Congress’ authority over public money.

Cooper’s attorney, Raymond A. Cardozo, argued that, in the context of the Privacy Act as a whole, “actual damages” is not an ambiguous term.

“Embracing the government's view of ‘actual damages’ 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,” Cardozo said.

Courts interpret “actual damages” to include emotional distress in defamation cases and in claims stemming from other statutes, Cardozo said.

Justice Antonin Scalia expressed skepticism toward Cardozo’s argument, suggesting that damages for emotional injury may be more appropriate when a statutory violation requires information be leaked to the public. Here, data was just shared between agencies.

But Cardozo warned that a narrow reading could preclude other people such as a whistleblower that the government attempts to silence by leaking “embarrassing details to the press” from getting a remedy under the Privacy Act.

First Amendment lawyer Thomas Julin said he expects the Court to decide in favor of the government, but said a ruling for Cooper could have two adverse effects for the media industry. First, threats of costly lawsuits stemming from the broader reading of “actual damages” could deter government agencies from releasing information. Second, private companies, such as Facebook and Google, could be subject to “very large claims on a very large scale” from people who try to extend Cooper’s logic beyond government agencies, Julin said.

“Although this is dealing with a narrow statutory interpretation issue, there’s real reason for journalists to be concerned about how this is going to be decided,” said Julin, an attorney at Hunton & Williams in Miami.