Economic Undertakings

Supreme Court: Damages for Emotional Distress Not Available in Lawsuits to Enforce Rehabilitation Act or Affordable Care Act – Trial, Appeals and Compensation

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In Cummings v Premier Rehab Keller, PLLC, the United States Supreme Court has ruled that private plaintiffs cannot obtain damages for emotional distress under the Rehabilitation Act of 1973 or the Affordable Care Act. The ruling, based on a contract law analogy, will make it difficult for plaintiffs asserting implied rights of action under similar federal statutes to recover anything beyond traditional contractual remedies.

The complainant, Jane Cummings, is deaf and legally blind and communicates primarily through sign language. When Cummings requested physical therapy from the defendant, Premier Rehab, he refused to arrange for a sign language interpreter, instead suggesting that Cummings provide his own interpreter or communicate by other means, such as written notes or lip reading.

Cummings sued Premier Rehab, alleging discrimination in violation of Section 504 of the Rehabilitation Act and Section 1557 of the Affordable Care Act. These provisions prohibit organizations that receive federal funding — in the case of Premier Rehab, Medicare and Medicaid reimbursement — from denying services to people with disabilities. Both laws were passed under the Spending Clause of the Constitution, which grants Congress the power to condition the funding it provides on the recipient’s compliance with various terms and conditions.

The district court dismissed the lawsuit, finding that Cummings’ only injuries were emotional and that damages for emotional distress could not be recovered in actions to enforce either laws. The Fifth Circuit confirmed.

In a 6-3 decision, the Supreme Court agreed. Writing for the majority, Chief Justice Roberts acknowledged that it is “undisputed” that the provisions of the Rehabilitation Act and the Affordable Care Act conditioning federal funds on non-discrimination give victims of discrimination an implied right of action to enforce them. “[L]ess clear” is “what remedies are available”.

To answer this question, the Court drew an analogy with fundamental principles of contract law because, by “conditioning an offer of federal funding on the recipient’s promise not to discriminate”, the federal government entered into a contract with the beneficiary. The Court held that, given the voluntary nature of contractual commitments, “[a] special remedy” is available in a Private Action Expenses Clause “only if the funding recipient is on notice that by accepting federal funding, it exposes itself to liability of this nature.”

Since neither the Rehabilitation Act nor the Affordable Care Act mention remedies, the question then arose whether other sources warned recipients of federal funding that they could be held liable for damages for emotional distress if they violated the non-discrimination provisions of the statutes. A similar question has already arisen in Barnes v. Gorman (2002), who decided whether punitive damages are available under the same laws. the Barnes The Court found that recipients of federal funding were not advised that they could be held liable for punitive damages because punitive damages “are not generally available” in contract cases.

Applying the same analysis in cumming, the Court held that private plaintiffs asserting implied rights of action under the Rehabilitation Act and the Affordable Care Act cannot obtain damages for emotional distress because “emotional distress is generally not indemnifiable in the contract”. Since damages for emotional distress are not “traditionally available in breach of contract suits”, recipients of federal funding do not have “a clear view” that, simply by contracting with the government, they may be held liable for such damages.

Taken together, cumming and Barnes clarify that in determining what damages are available in private actions to enforce the Rehabilitation Act and the Affordable Care Act, the test is whether those damages are in general available under contract law. That a certain category of damages may be available in exceptional circumstances is not enough. Significantly, the Court did not limit this test to damages for emotional distress. The Court’s reasoning arguably encompasses other types of non-economic damages that victims of discrimination might allege.

Nor is the Court’s justification expressly limited to the Rehabilitation Act and the Affordable Care Act. On the contrary, the cumming The Court identified Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972 as other statutes enacted under the Spending Clause that condition funding on compliance with the provisions of no discrimination.

In actions to enforce these laws, Barnes and now cumming provide recipients of federal funds with a shield against emotional distress damages and other types of damages not generally available in contract actions.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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