Jane Cummings v. Premier Rehab Keller, P.L.L.C.

Case: 19-10169 Document: 00515284303 Page: 1 Date Filed: 01/24/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 19-10169
Fifth Circuit
FILED
January 24, 2020
JANE CUMMINGS, Lyle W. Cayce
Clerk
Plaintiff - Appellant
v.
PREMIER REHAB KELLER, P.L.L.C., doing business as Premier Rehab,
P.L.L.C.,
Defendant - Appellee
Appeal from the United States District Court
Northern District of Texas, Fort Worth Division
Before STEWART, CLEMENT, and HO, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
Jane Cummings sued federal funding recipient Premier Rehab Keller,
P.L.L.C. (“Premier”) for disability discrimination. Cummings sought equitable
relief and damages under the Americans with Disabilities Act, the
Rehabilitation Act, the Patient Protection and Affordable Care Act, and the
Texas Human Resources Code. Premier filed a motion to dismiss Cummings’s
claims for lack of subject matter jurisdiction and failure to state a claim upon
which relief could be granted. The district court granted Premier’s motion,
reasoning that, though Cummings had standing to sue, she failed to state a
plausible claim for damages under any of the cited statutes, and that she failed
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to allege facts supporting her standing to seek equitable relief. Cummings
appealed. We AFFIRM the district court’s judgment.
I.
Cummings has been deaf since birth and is legally blind. She has
difficulty speaking, reading, and writing in English; she primarily
communicates in American Sign Language (“ASL”). In October 2016, she
contacted Premier, which offers physical therapy services, to treat her chronic
back pain. She requested that Premier provide an ASL interpreter. Premier
refused, but told her that she could communicate with the therapist using
written notes, lipreading, and gesturing, or bring her own ASL interpreter.
Cummings told Premier she couldn’t communicate using those methods, and
as a result, she went to another physical therapy provider. She alleged that the
other provider’s care was “unsatisfactory.” Cummings contacted Premier twice
more to request an interpreter, for a total of three requests between 2016 and
2017. Cummings also alleged Premier “told her to look for a different physical
therapy center that provided interpreters.” Although she received treatment
at the other facility, Cummings says she was “forced to live with ongoing back
pain as a result of her inability to receive quality therapy services,” and still
wishes to receive treatment from Premier.
Cummings sued Premier for disability discrimination, seeking injunctive
relief and damages. She alleged that Premier violated the Americans with
Disabilities Act (“ADA”) of 1990 § 302, 42 U.S.C. § 12182; the Rehabilitation
Act (“RA”) of 1973 § 504, 29 U.S.C. § 794; the Patient Protection and Affordable
Care Act (“ACA”) of 2010 § 1557, 42 U.S.C. § 18116; and the Texas Human
Resources Code § 121.003, TEX. HUM. RES. CODE § 121.003.
Premier moved to dismiss these claims, contending that Cummings
lacked standing to sue and failed to state a claim upon which relief could be
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granted. 1 The district court granted Premier’s motion. In dismissing her claim
for equitable relief for lack of subject matter jurisdiction, the court first
observed that “Cummings did not allege standing to seek equitable relief . . .
[though] she did allege standing to seek damages.” The court then dismissed
her damages claims. It first noted that damages are not recoverable under Title
III of the ADA. 2 The court then held that emotional distress damages are
unavailable under § 504 of the RA and § 1557 of the ACA. Finally, though the
court could not definitively conclude that Cummings sought to amend her
complaint, it denied her request to amend for failing to comply with the local
rules and procedures, and because she had a fair opportunity to plead her best
case. Cummings now seeks review of the district court’s judgment that
damages for emotional distress are unrecoverable under the RA and the ACA. 3
II.
We review the district court’s grant of a motion to dismiss de novo,
“accepting all well-pleaded facts as true and viewing those facts in the light
most favorable to the plaintiff.” Hines v. Alldredge, 783 F.3d 197, 200–01 (5th
Cir. 2015) (quoting True v. Robles, 571 F.3d 412, 417 (5th Cir. 2009)); see FED.
R. CIV. P. 12(b)(6). “To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to ‘state a claim to relief that is
plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Further, “[t]he plausibility
standard . . . asks for more than a sheer possibility that a defendant has acted
1 In her response to Premier’s motion to dismiss, Cummings withdrew her Texas-law
claim.
The district court held that “[t]he only compensable injuries that Cummings alleged
2
Premier caused were ‘humiliation, frustration, and emotional distress.’”
3 Cummings does not appeal the district court’s holding that she failed to allege
standing to seek equitable relief or that damages are unrecoverable under Title III of the
ADA.
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unlawfully. Where a complaint pleads facts that are ‘merely consistent with’ a
defendant’s liability, it ‘stops short of the line between possibility and
plausibility of “entitlement to relief.”’” Id. (quoting Twombly, 550 U.S. at 557)
(citations omitted).
III.
The issue before us today is whether emotional distress damages are
available under the RA and the ACA. There is no controlling Fifth Circuit or
Supreme Court precedent on this issue. The district court held that emotional
distress damages are “like punitive damages,” in that damages for emotional
distress (i) “do not compensate plaintiffs for their pecuniary losses, but instead
punish defendants for the outrageousness of their conduct,” and (ii) “are also
unforeseeable at the time recipients accept federal funds and expose them to
‘unlimited liability.’” Cummings v. Premier Rehab, P.L.L.C., No. 4:18-CV-649-
A, 2019 WL 227411, at *4 (N.D. Tex. January 16, 2019) (citations omitted).
Cummings argues that this is incorrect.
Section 504 of the RA states that “[n]o otherwise qualified individual
with a disability . . . shall, solely by reason of her or his disability, be excluded
from the participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity receiving Federal financial
assistance.” 29 U.S.C. § 794(a). Federal-funding recipients such as Premier
“must afford handicapped persons equal opportunity to obtain the same result,
to gain the same benefit, or to reach the same level of achievement, in the most
integrated setting appropriate to the person’s needs.” 45 C.F.R. § 84.4(b)(2). To
state a § 504 claim, “the plaintiff must establish that disability discrimination
was the sole reason for the exclusion or denial of benefits.” Wilson v. City of
Southlake, 936 F.3d 326, 330 (5th Cir. 2019). Further, pursuant to § 1557 of
the ACA, “an individual shall not, on the ground prohibited under . . . [§ 504 of
the RA], be excluded from participation in, be denied the benefits of, or be
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subjected to discrimination under, any health program or activity, any part of
which is receiving Federal financial assistance.” 42 U.S.C. § 18116(a).
Section 504 of the RA and § 1557 of the ACA are Spending Clause
legislation. See Miller v. Tex. Tech Univ. Health Scis. Ctr., 421 F.3d 342, 348
(5th Cir. 2005) (§ 504 of the RA); see also Nat’l Fed’n of Indep. Bus. v. Sebelius,
567 U.S. 519, 575−77, 588 (2012) (plurality opinion) (§ 1557 of the ACA). The
Court has “repeatedly” likened Spending Clause legislation to contract law—
“in return for federal funds, the [recipients] agree to comply with federally
imposed conditions.” Barnes v. Gorman, 536 U.S. 181, 186 (2002) (alteration in
original) (quoting Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17
(1981)); see, e.g., Pennhurst, 451 U.S. at 17 (holding that Spending Clause
legislation is like a “contract,” in that “[t]he 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”). And in
cases in “which funding recipients may be held liable for money damages,” the
Court has “regularly applied the contract-law analogy,” including, like here, in
“private suits under Spending Clause legislation.” Barnes, 536 U.S. at 186−87;
see also Franklin v. Gwinnett Cty. Pub. Sch., 503 U.S. 60, 75 (1992) (holding
that in addition to injunctive relief, monetary damages can be available as a
remedy in private suits under Spending Clause legislation). But the Court has
also made clear that not “all contract-law rules apply to Spending Clause
legislation.” Barnes, 536 U.S. at 186−87.
In Barnes v. Gorman, the Court explained that compensatory damages
are available under Spending Clause legislation because federal-funding
recipients are “on notice” that accepting such funds exposes them to liability
for monetary damages under general contract law:
[A] remedy is “appropriate relief,” only if the funding recipient is
on notice that, by accepting federal funding, it exposes itself to
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liability of that nature. A funding recipient is generally on notice
that it is subject not only to those remedies explicitly provided in
the relevant legislation, but also to those remedies traditionally
available in suits for breach of contract. Thus we have held that
under [a Spending Clause statute], which contains no express
remedies, a recipient of federal funds is nevertheless subject to suit
for compensatory damages.
Id. at 187 (citation omitted) (second emphasis added). The Court then
addressed whether punitive damages are available under Spending Clause
legislation. It held that, because “punitive damages, unlike compensatory
damages and injunction, are generally not available for breach of contract,” id.
at 187, federal funding recipients are not “on notice” that they could be liable
for such damages. See id. at 188 (“Not only is it doubtful that funding
recipients would have agreed to exposure to such unorthodox and
indeterminate liability; it is doubtful whether they would even have accepted
the funding if punitive damages liability was a required condition.”).
The Supreme Court reiterated that not all contract-law principles apply
to Spending Clause legislation in Sossamon v. Texas, 563 U.S. 277 (2011).
There, the Court again stressed that Spending Clause legislation is merely
analogous to contract law—they are not one and the same. See Barnes, 536
U.S. at 186 (“[W]e have been careful not to imply that all contract-law rules
apply to Spending Clause legislation.”). The Court explained
[Plaintiff] contends that, because Congress enacted [the
statute at issue] pursuant to the Spending Clause, the
[defendants] were necessarily on notice that they would be liable
for damages. [Plaintiff] argues that Spending Clause legislation
operates as a contract and damages are always available relief for
a breach of contract . . . .
We have acknowledged the contract-law analogy, but we
have been clear “not [to] imply . . . that suits under Spending
Clause legislation are suits in contract, or that contract-law
principles apply to all issues that they raise.” . . . [I]n Barnes and
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Franklin, the Court discussed the Spending Clause context only as
a potential limitation on liability.
Id. at 289−90 (quoting Barnes, 536 U.S. at 189 n.2).
Thus, the Supreme Court has made clear 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 of that nature.” Barnes, 536 U.S. at 187. If funding recipients
are not “on notice” for such liability, that remedy is not “appropriate relief.” Id.
We agree with the district court that Premier was not “on notice” that it
could be held liable, under the RA or the ACA, for Cummings’s emotional
distress damages. Because emotional distress damages, like punitive damages,
are traditionally unavailable in breach-of-contract actions, we hold that
Premier was not “on notice” that it could be liable for such damages. See
RESTATEMENT (SECOND) OF CONTRACTS § 353 cmt. a (“Damages for emotional
disturbance are not ordinarily allowed. Even if they are foreseeable, they are
often particularly difficult to establish and to measure.”); see also Barnes, 536
U.S. at 187 (noting that funding recipients are “on notice” for “those remedies
traditionally available in suits for breach of contract,” and that funding
recipients are not “on notice” for punitive damages because they “are generally
not available for breach of contract”).
Cummings points to two rare exceptions to the general rule that
emotional distress damages are not available for breach of contract. See
RESTATEMENT (SECOND) OF CONTRACTS § 353 cmt. a (“There are, however, two
exceptional situations where such damages are recoverable.”). The first
exception allows plaintiffs to recover emotional distress damages where the
“[emotional] disturbance accompanies a bodily injury”—i.e., a so-called tort
exception. Id. The second exception, which Cummings argues applies here,
permits a plaintiff to recover emotional distress damages when the contract or
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breach is such that the plaintiff’s “serious emotional disturbance was a
“particularly likely result.” Id. (emphasis added).
The Supreme Court made clear in Barnes and Sossamon that the
contract-law analogy is only a metaphor. See Barnes, 536 U.S. at 187−88; see
also Sossamon, 563 U.S. at 290. “[C]ontract-law principles [do not] apply to all
issues that [suits under Spending Clause legislation] raise.” Barnes, 536 U.S.
at 189 n.2; see also Sossamon, 563 U.S. at 290. Thus, that contract law has
exceptions to the general prohibition against emotional distress damages does
not mean that we are obligated to apply those exceptions. Indeed, the Supreme
Court cautions against it. The issue is whether funding recipients are “on
notice.”
The Restatement’s “exceptional situation” exception that Cummings
cites to does not put funding recipients “on notice.” Given the general
prohibition against emotional distress damages in contract law, funding
recipients are unlikely to be aware that such an exception exists, let alone
think that they might be liable under it. 4 Further rarefying this exception is
its requirement that the emotional damage caused be “serious” and
“particularly likely.” RESTATEMENT (SECOND) OF CONTRACTS § 353 (emphasis
added). Thus, funding recipients are not “on notice” that they might be liable
for such a rare and narrow exception to the prohibition of emotional distress
damages.
Moreover, contract law also has exceptions for awarding punitive
damages for breach of contract. See id. § 355, cmts. a, b. But Barnes
nevertheless held that funding recipients were not “on notice” that they might
4 We note that we find only three mentions of this exception in case law within the
Fifth Circuit. See Dean v. Dean, 821 F.2d 279, 281−83 (5th Cir. 1987); In re Educ. Testing
Serv. Praxis Principles of Learning & Teaching: Grades 7−12 Litig., 517 F. Supp. 2d 832,
850−52 (E.D. La. 2007); Jones v. Benefit Tr. Life Ins. Co., 617 F. Supp. 1542, 1548 (S.D. Miss.
1985).
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be liable for punitive damages. Despite the existence of such exceptions, Barnes
stuck to the general rule, which prohibits punitive damages. We see no reason
to go down the rabbit-hole of “exceptions” to the general rule that emotional
distress damages are unavailable for breach of contract when the Court in
Barnes did not do so with regard to punitive damages. Because punitive
damages are unavailable for a funding recipient’s “breach” of its Spending
Clause “contract,” despite the existence of exceptions to the general prohibition
against such damages, we likewise hold that emotional distress damages are
unavailable for a funding recipient’s “breach” of the RA or the ACA, despite the
existence of exceptions. In neither situation is “the funding recipient . . . on
notice that, by accepting federal funding, it exposes itself to liability of that
nature.” Barnes, 536 U.S. at 187.
IV.
Cummings’s brief relies heavily on the Eleventh Circuit’s decision in
Sheely v. MRI Radiology Network, P.A., 505 F.3d 1173 (11th Cir. 2007). With
Sheely, the Eleventh Circuit became the only circuit to address whether
emotional distress damages may be recovered under the RA. There, an MRI
facility refused to allow a legally blind woman to bring her guide dog with her
to a waiting room to accompany her minor son. Id. at 1178−79. The court held
that “emotional distress is a foreseeable consequence of funding recipients’
‘breach’ of their ‘contract’ with the federal government not to discriminate
against third parties . . . they therefore have fair notice that they may be
subject to liability for emotional damages.” Id. at 1198. The court first
explained that, “[a]s a matter of both common sense and case law, emotional
distress is a predictable, and thus foreseeable, consequence of [intentional]
discrimination.” Id. at 1199 (emphasis added). And unlike punitive damages,
which the court reasoned “‘may range in orders of “indeterminate magnitude,”
untethered to compensable harm . . .’ emotional damages . . . are designed to
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make the plaintiff whole, and therefore bear a significant and altogether
determinable relationship to events in which the defendant . . . participated
and could have foreseen.” Id. at 1199−1200 (citations omitted) (quoting Barnes,
536 U.S. at 190−91 (Souter, J., concurring)).
We disagree with Sheely’s reasoning, which is based on the supposed
“foreseeability” of emotional distress damages. The court claims
“foreseeability” is a “basic and longstanding rule of contract law”—“that
‘[d]amages are not recoverable for loss that the party in breach did not have
reason to foresee as a probable result of the breach when the contract was
made.’” Sheely, 505 F.3d at 1199 (quoting RESTATEMENT (SECOND) OF
CONTRACTS § 351 (alteration in original) (emphasis added)). While we don’t
dispute that “foreseeability” may be a general concept of contract law, we find
that Sheely’s reliance on it is misplaced.
That is because Sheely conflates two distinct “foreseeability” issues. The
first is whether federal funding recipients were “on notice”—i.e., did they know
that, when they accepted their funding, they were agreeing to be liable for
emotional distress damages. The second is whether a funding recipient can
foresee that a patient might suffer an emotional injury as a result of its actions.
Put differently, whether funding recipients can foresee a consequence of a
particular “breach” of a Spending Clause “contract” is not the same as whether
they are “on notice” that, when they accepted funding, they agreed to be liable
for damages of this kind. Barnes addressed the “on notice” issue, finding that
federal funding recipients couldn’t “foresee” their liability for punitive damages
for a breach of Spending Clause “contract,” because such damages are
generally unavailable under contract law. Nowhere in Barnes does the Court
condone Sheely’s strand of “foreseeability.”
As the Court explained in Sossamon—decided almost four years after
Sheely—the contract-law analogy is a “limitation on liability.” 563 U.S. at 290.
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But the “foreseeability” rule Sheely applies would expand funding recipients’
liability. Thus, we do not believe that it is in our power today to expand the
Spending Clause contract-law analogy, as Cummings wishes, which would
expose federal funding recipients to greater liability.
Finally, Cummings echoes Sheely’s reasoning that emotional distress
damages should be allowed for breach of contract because “where legal rights
have been invaded, and a federal statute provides for a general right to sue for
such invasion, federal courts may use any available remedy to make good the
wrong done.” Bell v. Hood, 327 U.S. 678, 684 (1946) (emphasis added).
Although Barnes addressed this rule, it did so in order to reconcile the rule
with its holding:
Our conclusion is consistent with the “well settled” [Bell v.
Hood] rule . . . . When a federal-funds recipient violates conditions
of Spending Clause legislation, the wrong done is the failure to
provide what the contractual obligation requires; and that wrong
is “made good” when the recipient compensates the Federal
Government or a third-party beneficiary (as in this case) for the
loss caused by that failure.
Barnes, 536 U.S. at 189. Sheely says that, because emotional distress damages
are foreseeable where a federal funding recipient engages in intentional
discrimination, the “Court’s concern with notice in awarding remedies for
violations of Spending Clause legislation—which operates as a constraint on
the Bell v. Hood presumption—is . . . satisfied, and we are obliged to adhere to
Bell’s presumption that we may award ‘any available remedy to make good the
wrong done.’” Sheely, 505 F.3d at 1204 (quoting Bell, 327 U.S. at 684). But, as
we have explained, because federal funding recipients are not “on notice” that
their “contractual obligation” can expose them to liability for emotional
distress damages, the Court’s “constraint on the Bell v. Hood presumption”
applies here. Id. Sheely attempts to use the Bell rule as an end-run around the
Supreme Court’s limitations on the contract-law analogy. But Barnes accounts
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for Bell, while limiting the remedies available for such suits. In sum, we find
that the Bell rule is not a vehicle for importing remedies that have already
been rejected.
V.
Because emotional distress damages are not available under the RA or
the ACA, we AFFIRM the district court’s dismissal of Cummings’s claims.
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