Health Reform WK-EDGE Emotional distress damages not available under ACA or Rehabilitation Act
Monday, February 3, 2020

Emotional distress damages not available under ACA or Rehabilitation Act

By Jeffrey H. Brochin, J.D.

Section 504 of the Rehabilitation Act and section 1557 of the ACA are pieces of spending clause legislation which disallow punitive damages, therefore, federal funding recipients were not on notice of liability for emotional distress.

A recipient of federal funds is not on notice of liability for emotional distress damages, therefore a patient’s discrimination complaint seeking damages for emotional distress cannot proceed. A federal appeals court has affirmed the order of dismissal entered by a district court in a case involving punitive damages claims purportedly arising under the Rehabilitation Act (RA) and the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) because that legislation is analogous to contract law, which does not provide for emotional distress damages (Cummings v. Premier Rehab Keller, P.L.L.C.January 24, 2020, Clement, E.).

Failure to provide ASL interpreter. A patient who was deaf from birth and who was also legally blind, contacted Premier Rehab Keller, P.L.L.C. (Premier) a physical therapy provider to treat her for back pain. Premier is a federal funding recipient. The patient primarily communicates in American Sign Language (ASL), and she requested an ASL interpreter from Premier. However, the provider declined the request and instead offered for her to communicate with the therapist using written notes, lipreading, and gesturing. The patient was also told she could bring her own ASL interpreter. She went to a different physical therapy provider whom she found to be unsatisfactory, and contacted Premier on two more occasions to renew her request, but was still refused.

She filed suit against Premier alleging violations of section 302 of the Americans with Disabilities Act (ADA), section 504 of the RA; section 1557 of the ACA; and the Texas Human Resources Code. Premier moved to dismiss for lack of subject matter jurisdiction which the district court granted. For the reasons cited below, the appeals court affirmed.

Spending Clause legislation. The Fifth Circuit noted that both the RA and ACA are spending clause legislation, and as such are comparable to contract law scenarios. The comparison to contract law is due to the fact that in return for federal funds, the recipients agree to comply with federally imposed conditions. Furthermore, the legitimacy of Congress’ power to legislate under the spending power rests on whether the federal-funding recipient voluntarily and knowingly accepts the contract’s terms. In cases in which funding recipients may be held liable for money damages, the court has regularly applied the contract-law analogy, including, as in the instant case, in private suits under spending clause legislation.

Emotional distress damages unavailable. Because emotional distress damages, like punitive damages, are traditionally unavailable in breach-of-contract actions, the district court held that Premier was not "on notice" that it could be liable for such damages. The U.S. Supreme Court has held that the fundamental question in evaluating damages in the context of spending clause legislation is whether the funding recipient is "on notice" that by accepting federal funding, it exposes itself to liability for the asserted damages. If funding recipients are not "on notice" for such liability, that remedy is not an appropriate relief.

The appeals court agreed that Premier was not on notice that it could be held liable for punitive damages under the RA or the ACA, for the patient’s emotional distress damages, and it therefore affirmed the granting of Premier’s motion to dismiss for lack of subject matter jurisdiction.

The case is No. 19-10169.

Attorneys: Andrew Rozynski (Eisenberg & Baum, LLP) for Jane Cummings. Brian Scott Bradley (Watson, Caraway, Midkiff & Luningham, LLP) for Premier Rehab Keller, P.L.L.C., d/b/a Premier Rehab, P.L.L.C.

Companies: Premier Rehab Keller, P.L.L.C., d/b/a Premier Rehab, P.L.L.C.

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