I have been blogging since December, 2011. In all that time, I can count on one hand the number of times that I have blogged more than once during a week. As far as I can recall, I have never blogged on back-to-back days. I had actually completed two drafts of the blog entry that hit the mailboxes today before seeing a breaking news alert from Law 360 that Cummings had been decided by the United States Supreme Court, so I went ahead and finished the blog entry that hit the mailboxes earlier in the week and then did Cummings the next day.
I previously blogged on the oral argument in Cummings here. I made a prediction in that blog entry based upon the questions that were asked in the oral argument. It turns out my prediction was way off. As usual, the blog entry is divided into categories and they are: Justice Roberts majority opinion holding that the Rehabilitation Act and the Affordable Care Act do not allow for emotional distress damages; Justice Kavanaugh’s concurring opinion; Justice Breyer’s dissenting opinion; and thought/takeaways. Of course, the reader is free to focus on any or all of the categories.
Justice Roberts Majority Opinion Holding That the Rehabilitation Act and the Affordable Care Act Do Not Allow for Emotional Distress Damages.
Congress has broad power under the Spending Clause of the Constitution to set terms for dispersing federal funds. Such legislation is in the nature of a contract whereby in return for federal funds, the recipient agrees to comply with federally imposed conditions. Legislation enacted under the Spending Clause of the Constitution may be enforced through implied rights of actions and private plaintiffs can secure injunctive or monetary relief in such suits. Punitive damages are not available for such suits per Barnes v. Gorman, which can be found here. Congress has enacted four statutes prohibiting recipients of federal financial assistance from discriminating based upon certain grounds. Those statutes are: title VI of the Civil Rights Act, which forbids race, color, and national origin discrimination in federally funded programs or activities; title IX of the Education Amendments of 1972, which prohibits sex-based discrimination; the Rehabilitation Act of 1973, which bars funding recipient from discriminating because of disability; and the Affordable Care Act, which outlawed discrimination on any of the preceding grounds, in addition to age, by healthcare entities receiving federal funds. None of the statutes mentioned in ¶ 3 provide victims of discrimination a private right of action to sue the funding recipient in federal court. Nevertheless, the United States Supreme Court previously found an implied right of action in such statutes. Congress also later acknowledged that right in amendments to those statutes leading the Supreme Court to conclude that Congress had ratified the Court’s prior holding that private individuals may sue to enforce those statutes. Both the Rehabilitation Act and the Affordable Care Act expressly incorporate the rights and remedies provided under title VI. Spending Clause legislation operate based on consent. That is, in return for federal funds, the recipient agrees to comply with federally imposed conditions. So the key question is whether the recipient voluntarily and knowingly accepts the terms of that contract. Recipients cannot knowingly accept the deal with the federal government unless they would clearly understand the obligations that come along with doing so. If Congress intends to impose a condition on the grant of federal monies, it has to do so unambiguously. When considering whether to accept federal funds, a prospective recipient would surely wonder not only what rules it must follow, but also what sort of penalties might be on the table. So a particular remedy is thus appropriate relief in a private Spending Clause action, only if the funding recipient is on notice that by accepting federal funding, it exposes itself to liability of that nature. In other words, the question is whether a prospective funding recipient at the time it engages in the process of deciding whether to accept federal dollars, would have been aware that it faced such liability. A recipient is on notice to whatever remedies are explicitly provided in relevant legislation. Since it is Spending Clause legislation, a recipient is also on notice with respect to those remedies traditionally available in suits for breach of contract, compensatory damages and injunctive relief. Such an approach also means that punitive damages, per Barnes, are out because they are not generally available for breach of contract. Under Barnes, it can be assumed that a federal funding recipient is aware that for breaching Spending Clause based contract with the federal government, that it will be subject to the usual contract remedies and private suits, excepting punitive damages. It is hornbook law that emotional distress is not generally compensable in contract. Accordingly, it is not possible to treat federal funding recipient as having consented to damages for emotional distress as such damages are not traditionally, generally, or normally found in suits for breach of contract. The approach offered by Cummings pushes the notion of offer and acceptance beyond its breaking point. It is one thing to say that funding recipients know the basic, general rules. However, it is quite another to assume that funding recipients know the parameters of every contract doctrine, no matter how idiosyncratic or exceptional those doctrines may be. Such an approach also risks overturning legislative power. Barnes mandates that courts imply only those remedies that are normally available for contract actions, and a court is not free to treat statutory silence as a license to freely supply remedies that it cannot be sure Congress would have chosen to make available. The Restatement of Contracts saying that emotional distress damages are available where the contractor’s breaches are of such a kind that serious emotional disturbance with a particularly likely result simply doesn’t hold up on further analysis. The Restatement approach does not reflect the consensus rule among American jurisdictions. The Court goes on to explain that states are all over the place with respect to the Restatement with some following it, others rejecting it, and others finding a middle ground. As such, is not possible to argue that clear notice exists for allowing emotional distress damages in Spending Clause legislation where no such damages are explicitly stated in the statute.
Justice Kavanaugh Concurring Opinion (Justice Gorsuch Joined)
The contract analogy is an imperfect way to determine the remedies for this particular implied cause of action. So, it is Congress and not the Supreme Court that should extend those implied causes of action and expand available remedies. Since that has not been done, emotional distress damages are not in play.
Justice Breyer Dissenting Opinion (Justice Sotomayor and Justice Kagan Joined)
Citing to the Restatement Second of Contracts, emotional distress damages have long been traditionally available when the contract or the breach was of such a kind that serious emotional disturbance was a particularly likely result. A private cause of action does exist for enforcing the four antidiscrimination statutes tied into Spending Clause legislation. The majority opinion will affect the remedies available under all four of those statutes, impacting victims of race, sex, disability, and age discrimination alike. Compensatory damages serve contract law’s general purposes, however, punitive damages go beyond compensating the injured party for lost expectation and instead put him in a better position than had the contract been performed. Most contracts are commercial contracts in nature entered for pecuniary gain. Pecuniary remedies are therefore typically sufficient to compensate the injured party for their expected losses. Contract law treatises make clear that expected losses from the breach of a contract entered for nonpecuniary purposes might reasonably include nonpecuniary harms. So contract law traditionally does award damages for emotional distress where other than pecuniary benefits are contracted for or where the breach is particularly likely to result in serious emotional disturbance. Such contracts have included, among others: 1) contracts for marriage; 2) contract by common carrier, innkeepers, or places of public resort or entertainment; 3) contract relating to the handling of a body; and 4) contracts for delivery of a sensitive telegram message. In all of those cases, emotional distress damages are compensatory because they make good the wrong done. Breach of a promise not to discriminate falls into the same kind of contract as those described in ¶ 6. The purpose of statutes seeking to eradicate invidious discrimination is clearly nonpecuniary. Also, discrimination based upon race, color, national origin, sex, age, or disability is particularly likely to cause serious emotional harm. In fact, often times emotional injury is the primary and sometimes only harm caused by the discrimination, with pecuniary injury at most secondary. For this point, Justice Breyer cites to: 1) a case involving a high school student repeatedly sexually assaulted by her teacher; 2) a person using a wheelchair who was forced to crawl up two flights of stairs to access the courthouse (Tennessee v. Lane, here); and 3) many historical examples of racial segregation in which black patrons had to use separate facilities or services. Regardless of whether financial injuries were present in these cases, a major and foreseeable harm was emotional distress caused by the indignity and humiliation of discrimination itself. Justice Goldberg stated when affirming the Civil Rights Act of 1964 that antidiscrimination laws seek the vindication of human dignity and not mere economics. It is difficult to believe that perspective funding recipients would be unaware that intentional discrimination based on race, sex, age, or disability is particularly likely to cause emotional suffering. Justice Breyer also does not believe that recipient would be unaware that in the event of an analogous contractual breach they could also be held legally liable for causing emotional distress. The majority opinion overly narrows Barnes, which did not contain the limitation that perspective funding recipients could only be expected to be aware of basic, general rules and not the exceptions or subsidiary rules governing specific circumstances. The majority opinion’s comparison to punitive damages is simply not persuasive because punitive damages are not embraced by contract law analogy since they do not serve the central purpose of compensating the injured party. So, the punitive damages exception cited by the majority opinion is not relying on contract law principles at all, but rather on tort law. According to The Restatement, when contract and tort claims overlap, contract law does not preclude an award of punitive damages if such an award is appropriate under the law of torts. The Restatement does not attribute the availability of emotional distress damages to tort rather than contract law. Nothing in Barnes requires the Court to ignore directly applicable contract rules in favor of the less applicable general rule on which the majority opinion relies. The majority opinion creates an anomaly. Other antidiscrimination statutes that Congress has provided an express cause of action for do permit recovery of compensatory damages for emotional distress, such as §§1981, 1983 claims. What the majority opinion means is that until Congress fixes the lack of emotional distress being explicitly stated for in the statute, remedies available under certain statutes would not be available under other statutes, such as to students suffering discrimination at the hands of the teachers, patients suffering discrimination at the hands of their doctors, and others. It is difficult to square the majority opinion’s holding with the basic purposes that antidiscrimination laws seek to serve. One of those purposes is vindicating human dignity and not mere economics. The majority opinion allows victims of discrimination to recover damages only if they can prove that they have suffered economic harm even though the primary harm inflicted by discrimination is rarely economic. Victims of intentional discrimination may sometimes suffer profound emotional injury without any attendant pecuniary harms. The majority opinion leaves those victims with no remedy at all.
The majority opinion means that unless the particular Spending Clause legislation has an explicit provision in its statute for recovery of emotional distress damages, emotional distress damages will not be recoverable. So, be sure to check the appropriate Spending Clause legislation to see if an explicit emotional distress statutory provision exists. If not, emotional distress is going to be out, though traditional contract compensatory damages and injunctive relief are in. The statutes are all fee shifting statutes. So, attorney fees are also in play. Both the majority and dissenting opinions rely heavily on Barnes v. Gorman, which you can read for yourself here. The Supreme Court did affirm that under all of the statutes a private cause of action exists. Justice Kavanaugh’s concurring opinion to my mind raises a question associated with standing as well. That is, if it is Congress that establishes causes of action, why isn’t that a cause of action in and of itself not sufficient to allow for standing? Justice Kavanaugh’s approach does bring into question, to my mind anyway, the validity of the holding of the Court in TransUnion, which we discussed here. It is hard for me to understand how it is arguable that the purposes of statutes seeking to eradicate invidious discrimination are not clearly nonpecuniary. That is, it is clear that such laws seek the vindication of human dignity and not mere economics. Previously, we discussed that getting damages under title II of the ADA and the Rehabilitation Act in 1973 means proving deliberate indifference per this blog entry. So, the question becomes whether deliberate indifference is now necessary to prove compensatory damages when emotional distress damages are not in play. If so, and that indeed may be very well the case after this opinion, it is hard to believe that many plaintiff’s lawyers will be interested in taking on title II/§504 cases on a contingency fee basis because you are talking about a relatively high standard for damages that don’t even pertain to emotional distress. I will say that my experience is that many attorneys operating in §504/title II of the ADA do not work on contingency basis, though some do. For those working on a contingency fee basis, this decision may severely impact how they go about deciding what cases to take on. All that said, attorney fees are still in play, but you can expect after this decision that fewer and fewer plaintiff side attorneys will take title II and §504 cases. This case also has a huge impact on title III standing cases with respect to serial plaintiffs, especially Internet accessibility serial plaintiffs. That is, since emotional distress damages are out of bounds, how can the stigmatic harm be even possible to confer standing. This is especially so considering damages are not even allowed under title III of the ADA per 42 U.S.C. § 12188.