Supreme Court hears case involving medical record disclosure

The U.S. Supreme Court has heard oral arguments in a case centering on whether the government is liable for disclosing to another agency the medical history of an HIV-positive patient.

The Social Security Administration admits that it violated federal law when it shared a pilot's medical records with the Federal Aviation Administration. But government attorneys say the federal Privacy Act allows recovery for economic damages only, not for emotional distress.

The case emphasizes the importance of adhering to national privacy laws, such as the Health Insurance Portability and Accountability Act, said Alexander Wohl, a law professor at the Washington College of Law and a contributor to the Supreme Court's blog.

"It reinforces the impact of those laws. Doctors have their own legal standards," but they still need to be careful not to violate their patients' privacy, he said.

The case stems from a joint investigation by the FAA and the SSA in 2002 to locate pilots hiding medical conditions from the FAA. Pilots must disclose all illnesses, disabilities and medications to the FAA before being approved to fly.

The agencies compared pilots' license information with people who applied for Social Security benefits. During the process, investigators identified California pilot Stanmore Cooper. In 1985, he was diagnosed with HIV, but failed to disclose his diagnosis when renewing his license, according to court records.

In 1995, Cooper applied for long-term disability benefits with the SSA, which required disclosure of his medical condition. Cooper was fined for making false statements to the FAA.

In 2007, Cooper sued the federal government, alleging that the government intentionally violated the Privacy Act by sharing his records with other agencies. He experienced humiliation, mental anguish and fear of social ostracism because of the disclosure, he said.

A lower court found that the government violated the Privacy Act, but Cooper was not entitled to recover emotional damages under the law. An appeals court reversed the decision, ruling for Cooper. The government appealed to the Supreme Court, and the high court heard arguments Nov. 30.

A decision in the case is expected by the spring. At this article's deadline, messages left with the FAA and SSA had not been returned.

Ruling could have broad impact

Legal arguments focused on the Privacy Act's language. The law was enacted in 1974 to protect the privacy of individuals identified in information systems maintained by federal agencies. The act regulates the collection, use and dissemination of data by such agencies.

Cooper argues the statute says people who experience "actual injury" from violation of the law are subject to recover any damages, which he concludes means emotional distress.

The government argues that the Privacy Act should be interpreted to cover only pecuniary losses.

"If Congress had intended to waive the sovereign immunity of the United States to allow uncapped emotional distress claims under the Privacy Act, it would have and [it would be] required to state that waiver clearly and unambiguously in the statutory text," Eric J. Feigin, attorney for the FAA, said during the Supreme Court hearing.

Preventing plaintiffs from recovering damages for emotional distress would mean they would have no remedy for the primary form of harm incurred from privacy violations, said Raymond Cardozo, Cooper's attorney.

"Congress passed this act to restore the citizens' faith in their government, and it made a solemn promise to the American citizens that in cases of intentional and willful violation, the United States shall be liable for actual damages," he said during the hearing.

The case is a classic example of the issues that arise when Congress writes a law in which not every term is spelled out, Wohl said. If justices rule for the government, the decision significantly would limit recoveries for plaintiffs under the Privacy Act, he said.

A ruling for the government also would affect whistle-blowers who report violations such as health care fraud, said an amicus brief filed by the National Whistleblowers Center, an organization that advocates protecting employees' disclosure of waste, fraud and abuse. David Colapinto, an attorney for the center, said doctors who report health care abuse could be impacted by the justices' ruling.

"If a doctor or someone were to come forward with examples of Medicare or Medicaid fraud and the government were to turn around and leak information about that person, the doctor could face retribution for blowing the whistle," he said. "There has to be some protection to guard against the government to do whatever they want with" confidential information.