U.S. Supreme Court Rules That Emotional Distress Damages Are Not Recoverable In A Private Action Under The Rehabilitation Act Of 1973 Or The Affordable Care Act

• Published date: 02 May 2022
• Subject Matter: Employment and HR, Litigation, Mediation & Arbitration, Discrimination, Disability & Sexual Harassment, Trials & Appeals & Compensation
• Law Firm: Harris Beach
• Author: Roy W. Breitenbach and Daniel R. LeCours

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...