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U.S. Supreme Court Holds that Spending Clause Antidiscrimination Statutes do not Permit Recovery of Damages for Emotional Distress

U.S. Supreme Court Holds that Spending Clause Antidiscrimination Statutes do not Permit Recovery of Damages for Emotional Distress

Johanna G. Zelman

Johanna G. Zelman

December 15, 2022 07:51 PM

U.S. Supreme Court Holds that Spending Clause Antidiscrimination Statutes do not Permit Recovery of Damages for Emotional Distress

Executive Summary: In a groundbreaking opinion authored by Chief Justice Roberts in Cummings v. Premier Rehab Keller, P.L.L.C., the United States Supreme Court held that damages for emotional distress are not recoverable in a private action for discrimination brought pursuant statutes governing those receiving federal funding enacted pursuant to the Spending Clause. There are four such statutes for those receiving federal funding: Title VI of the Civil Rights Act of 1964 prohibits race, color and national origin discrimination; Title IX of the Education Amendments of 1972 prohibits sex discrimination in schools; the Rehabilitation Act of 1973 (“Rehab Act”) prohibits disability discrimination; and the Affordable Care Act (“ACA”) prohibits discrimination based on race, color, national origin, sex, disability, and age by healthcare entities.

In Cummings, the statutes at issue were the Rehab Act and ACA. The petitioner, Jane Cummings, is deaf and legally blind. She sought physical therapy services from Premier Rehab Keller PLLC (“Premier”), but when she asked Premier to provide an American Sign Language (“ASL”) interpreter at her sessions, her request was denied. Instead, she was instructed to communicate with her therapists through written notes, lip-reading, and gesturing. She filed suit in the U.S. District Court for the Northern District of Texas alleging, among other things, disability discrimination in violation of the Rehab Act and the ACA. Her only damages were emotional distress. In relevant part, both the District Court and the Fifth Circuit Court of Appeals held that emotional distress damages are not available under either statute. The U.S. Supreme Court granted review in the case on July 2, 2021.

Relying on long-standing precedent established by Pennhurst State School & Hospital v. Halderman, the Cummings Court noted that Spending Clause legislation is contractual in nature – in exchange for federal funding, the funding recipients must agree to certain restrictions. But no damages may lay unless the recipient has notice of the penalties available if the restrictions are violated. Thus, 20 years ago in Barnes v. Gorman, the Court held that punitive damages are not available, because such damages are not available in contract, and no funding recipient would be on notice that such penalties are available under the statutes.

In Cummings, therefore, the question to be decided, according to the Court, was “[w]ould 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 [for emotional distress]?” The Court answered the question in the negative. The Court reasoned that, like punitive damages, emotional distress damages are not traditionally available in suits for breach of contract, and the statute itself is silent as to available remedies. Therefore, by accepting federal funding, recipients cannot be said to have consented to being held liable or being on notice that they could be held liable, for damages sounding in emotional distress.

Bottom Line:

The reach of Cummings will likely affect litigation brought against any entity receiving federal funding and, therefore, regulated by Title VI, Title IX, the Rehab Act and/or the ACA. This includes public schools, institutions of higher education accepting federal student loans, and public and private healthcare facilities accepting Medicaid and Medicare funds. This is good news for the defendant in any of these cases, since emotional distress damages, which often far exceed all other available damages awarded by a jury, are now severely restricted in non-employment-related civil rights claims. For employers, the Cummings decision will likely lead litigants alleging sex and disability discrimination to steer away from bringing claims under Title IX and the Rehab Act and towards laws specifically prohibiting discrimination in employment, such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Amendments Act of 2008, where emotional distress damages remain available.

If you have any questions regarding this Alert, please contact the authors, Max Bernas, Senior Associate in our Atlanta, Georgia and Washington, DC offices at kmbernas@fordharrison.com and Johanna Zelman, partner in our Hartford, Connecticut and New York, New York offices at jzelman@fordharrison.com. Of course, you can also contact the FordHarrison attorney with whom you usually work.

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