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Emotional Distress Monetary Damages Section 504 Claims Allowed by Supreme Court

John T. Vogel, jvogel@tuckerlaw.com, (412) 594-5622

In Cummings v. Premier Rehab Keller, P.L.L.C., 142 S. Ct. 1562 (April 28, 2022) (U.S. Supreme Court) concludes that damages for emotional distress are not recoverable under the Rehabilitation Act of 1973 and the Affordable Care Act.

BACKGROUND

In civil rights suits against school districts and other public entities alleging discrimination based on disability, plaintiffs have often included claims for emotional distress under Section 504 of the Rehabilitation Act.  The availability of such damages often have compelled public entities in the past to settle cases or face additional damages (and the accompanying attorney’s fees).    But under the recent Cummings case, such damage claims are now precluded.   

Under the facts, Plaintiff, Jane Cummings, who is deaf and legally blind, sought physical therapy services from Premier Rehab Keller and asked Premier Rehab to provide an American Sign Language interpreter at her sessions.  Premier Rehab declined, informing  Cummings that the therapist could communicate with her through other means.  Cummings later filed suit in a Federal District Court in Texas seeking damages and other relief against Premier Rehab alleging that its failure to provide an ASL interpreter constituted discrimination on the basis of disability in violation of the Rehabilitation Act of 1973 and the Affordable Care Act.  Premier Rehab was allegedly subject to these statutes because it received reimbursement through Medicare and Medicaid for the provision of some of its services, therefore both Acts applied.  The District Court dismissed the complaint claims for injunctive and declaratory relief, observing that the only compensable injuries that  Cummings alleged Premier Rehab caused were humiliation, frustration and emotional distress.  But in the District Court’s view, “damages for emotional harm” were not recoverable in private actions brought to enforce the Rehabilitation Act or the Affordable Care Act.   Cummings then appealed to the Federal Fifth Circuit Court of Appeals on just the District court ruling on her emotional distress damages:  The Appeals Court agreed with the District Court, holding that funding recipients were not liable for damages for emotional distress given the general common law rule prohibiting that remedy for breaches of contract, which this claim essentially was.  As a result, the Appeals Court adopted the same conclusion as the District Court. 

ANALYSIS

All courts hearing the case agreed that this matter involved the “Spending Clause” of the Constitution, under which Congress has the power to collect taxes and to pay the debts for the  general welfare of the country.  Article 1, Section 8.  In turn, the Supreme Court reiterated that laws (such as Section 504 of the Rehabilitation Act) apply Congress’s power under this Clause to condition the receipt of federal funding on the recipient’s agreement not to engage in discrimination on certain grounds.  Accordingly, parties aggrieved by a violation of these conditions not to discriminate may file suit against the party receiving funds under an implied right of action recognized under Title VI of the Civil Rights Act of 1964.  Similar applied rights allowing suits are available under Title IX and also under provisions of the Patient Protection and Affordable Care Act. 

In reviewing the case, the Supreme Court noted that while private individuals may sue to enforce antidiscrimination statutes, it was less clear what remedies were available in such suits.  Whether a particular remedy or claim is the basis of recovery must be interpreted by understanding the way Spending Clause statutes operate: such legislation essentially offers federal funding to recipients based on a promise by the recipient not to discriminate.  This amounts to a contract between the government and the fund recipient.  Also Spending Clause legislation operates based on consent — Congress cannot force someone to take money to perform a contract — but Congress has the power to set out such potential consequences depending on whether the recipient voluntarily accepts the term of that contract.  Courts have regularly applied this contract law analogy to define the scope of conduct for which federal funding recipients may be liable, with an eye towards ensuring that recipients had notice of their obligations.  A particular remedy is available in a Spending Clause action only if the funding recipient is on notice that by accepting federal funding, it exposes itself to a particular liability. 

To decide whether emotional distress damages are available under the Spending Clause the Court, therefore, inquired whether a prospective funding recipient, on deciding whether to accept federal funds, would have had “clear notice” regarding that liability.  Because most Spending Clause statutes (such as the Rehabilitation Act) are silent as to available remedies, it was not clear to the Court how to decide that question.  But relying on other federal court cases, the Supreme Court believed that the contract analogy applied and that a federal funding recipient may be considered on notice that it is subject to those remedies traditionally available in suits for breach of contract.  Citing previous cases, the Court had found that punitive damages generally were unavailable for breach of contract cases, and the few exceptions allowing punitive damages in contract cases were not sufficient enough to provide funding recipients notice that they could face such damages.  Applying the analogy of punitive damages to the matter before it, the Court found that the law generally holds that emotional distress damages are not compensable in contract actions.  Further established treatises hold as a general rule that emotional distress damages are not available under contract law.  Therefore the Court could not treat federal funding recipients as having consented to be subject to damages for emotional distress in Spending Clause cases.

Plaintiff  Cummings argued for a different result, maintaining that traditional contract remedies can include damages for emotional distress under special conditions.  That special condition for allowing such damages was met in her case and similar cases because discrimination is very likely to cause mental anguish to those aggrieved.  Along this line, federal funding recipients should be on notice that they will face not only exposure under general rules of contract damages but under “more fine-grained” rules that govern situations such as the present one.  The Court rejected this argument, finding that the approach argued by the plaintiff pushed the notion of offer and  acceptance central to the Court’s Spending Clause cases past its breaking point: it was one thing to say funding recipients should know basic general rules of contract law, it is quite another to assume that recipients should know the contours of every contract doctrine no matter how unusual or idiosyncratic.  Further there was no clear majority rule under contract law on what circumstances an exception allowance should be made to allow such damages. 

The Court therefore concluded that emotional distress damages are not traditionally available in breach of contract actions.  Thus, there was no basis under prior precedent to conclude that federal funding recipients would have clear notice that they could be liable for emotional distress damages in Spending Clause cases (such as with Rehabilitation Act cases).

PRACTICAL ADVICE

While Cummings arose in the context of a disability discrimination claim, the Court’s ruling will extend to emotional distress damages for all types of race, sex, and age discrimination brought against any funding recipient.  Further, it appears the Court believes that its holding will also apply to damages available under Title VI and Title IX, as well as the American Disabilities Act.  As a practical matter, this will limit the types of relief and damages available against public entities.  When faced with a suit, schools should carefully review complaints to ensure that they are not facing claims in which the Supreme Court has held there is right to relief. 

For more information, contact John Vogel at jvogel@tuckerlaw.com.

October 21, 2022

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