Today, in Cummings v. Premier Rehab Keller, P.L.L.C., 596 U.S. __ (2022), in a 6-3 decision, the U.S. Supreme Court held that emotional distress damages are not recoverable in a private action to enforce the Rehabilitation Act of 1973 or the Affordable Care Act. 

Both the Rehabilitation Act and the Affordable Care Act were enacted pursuant to Congress’ spending power under the U.S. Constitution. Because Spending Clause legislation is binding upon recipients of federal funds, it “operates based on consent” and is interpreted differently from “ordinary legislation, which ‘imposes congressional policy’ on regulated parties ‘involuntarily’”. This difference has led the Supreme Court to rely on a contract-law analogy to determine the reach of Spending Clause legislation and, in particular, the remedies available to private litigants pursuing implied private causes of action under such statutes. According the Supreme Court, when assessing whether a remedy is available under Spending Clause statutes, the key question is: “Would a prospective funding recipient, at the time it engaged in the process of deciding whether to accept federal dollars, have been aware that it would face such liability?”

Faced with this question, in Barnes v. Gorman, 536 U. S. 181, 189 (2002), the Supreme Court held that punitive damages are not available in private actions brought pursuant to Spending Clause statutes because such damages were not “traditionally available” in a breach of contract action at common law. In Cummings, the majority extended the reasoning of Barnes to the availability of emotional distress damages.  Emotional distress damages, the majority concluded, are generally not compensable upon a breach of contract. Therefore, the majority determined, because they “cannot treat federal funding recipients as having consented to be subject to damages for emotional distress,” “[i]t follows that such damages are not recoverable under the Spending Clause statutes we consider here.”

This ruling will have a profound impact on litigation involving discrimination claims brought pursuant to the Rehabilitation Act and Affordable Care Act.  In such cases, often the only damages sought by plaintiffs are to compensate for the emotional impact of the alleged discrimination. Under Cummings, this relief is no longer available. The impact of this decision will reach beyond Rehabilitation Act and Affordable Care Act claims. As the Supreme Court acknowledged, there are four federal anti-discrimination statutes, enacted pursuant to the Spending Clause, pursuant to which the Court has held an implied private right of action exists: the Rehabilitation Act; Affordable Care Act; Title VI of the Civil Rights Act of 1964; and Title IX of the Education Amendments of 1972. Since the Rehabilitation Act and Affordable Care Act each expressly incorporates the rights and remedies provided under Title VI, which is the source of the implied private right of action under those statutes, the Court’s ruling encompasses Title VI claims.  As assumed by Justice Breyer in his dissenting opinion, the Court’s ruling in Cummings will likely be interpreted to extend to Title IX claims as well, since the analytical framework used is equally applicable to Title IX and the Court’s Title IX decisions are cited throughout the opinion.

It appears that this decision will not impact private claims under federal statutes which expressly permit private causes of action and contemplate the award of damages for emotional distress.  See Cummings v. Premier Rehab Keller, P.L.L.C., 596 U.S. __ (2022) (Breyer, J., dissenting) (citing 42 U. S. C. §1981a(b)(3) and 42 U. S. C. §1983, both of which contemplate damages for emotional distress)). 

For any questions about this topic, please do not hesitate to contact Roy Breitenbach, Daniel R. LeCours, or the Harris Beach attorney with whom you typically work.  

This alert does not purport to be a substitute for advice of counsel on specific matters.

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