1 – OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

JONATHAN ELDON HUNSAKER and 

CHERYL LYNN HUNSAKER,

Plaintiffs-Appellees, Case No. 6:16-cv-00386-MC

 v. OPINION AND ORDER

UNITED STATES,

Defendant-Appellant.

_____________________________

MCSHANE, Judge:

The Internal Revenue Service (IRS) appeals the bankruptcy court’s judgment awarding 

Jonathon and Cheryl Hunsaker emotional distress damages under 11 U.S.C. § 362(k). The court 

concluded the IRS’s repeated violations of the automatic stay contained in § 362(a) caused the 

Hunsakers significant emotional harm. The IRS argues the Hunsakers’ emotional distress was 

insufficient to award emotional distress damages. In the alternative, the IRS argues sovereign 

Case 6:16-cv-00386-MC Document 19 Filed 10/20/16 Page 1 of 6
2 – OPINION AND ORDER

immunity bars the Hunsakers’ claims altogether. This second argument, whether the United 

States waived sovereign immunity for emotional distress damages under § 362(k), is a matter of 

first impression in the Ninth Circuit.

Sovereign immunity can only be waived by unequivocal, clear statutory language. F.A.A. 

v. Cooper, 132 S. Ct. 1441, 1448 (2012). Section 362(k) contains, at best, an ambiguous waiver 

for emotional distress damages. Ambiguities must be resolved in favor of immunity. Id.

Therefore, sovereign immunity bars the Hunsakers’ claims. The judgment of the bankruptcy 

court is REVERSED.

BACKGROUND

The Hunsakers filed for Chapter 13 bankruptcy protection on November 5, 2012. Their 

filing triggered the automatic stay contained in 11 U.S.C. § 362(a). The automatic stay blocks

creditors from collection attempts outside of court-supervised reorganization proceedings. In this 

case, the parties agree the IRS violated the automatic stay four times.

On December 2, 2013, the IRS sent the first of four notices to the Hunsakers demanding 

payment for back taxes. The notice bore the headlines “Final Notice” and “Notice Of Intent to 

Levy And Notice Of Your Right To A Hearing.” The IRS sent similar notices on February 10, 

2014; September 1, 2014; and December 8, 2014. Each notice violated the automatic stay. The 

IRS’s violations allegedly caused the Hunsakers significant emotional harm.

The IRS presents compelling arguments regarding the merits of the Hunsakers’ claims for 

emotional distress damages. For example, Mr. Hunsaker alleged only brief losses of appetite, 

stress, and mounting frustration after receiving the IRS notices. Appellant’s Br. App. 185:14–20, 

195:21–23, ECF No. 13-6. Therefore, Mr. Hunsaker likely never suffered an injury sufficient to 

support an award of emotional distress damages under § 362(k). See In re Dawson, 390 F.3d 

Case 6:16-cv-00386-MC Document 19 Filed 10/20/16 Page 2 of 6
3 – OPINION AND ORDER

1139, 1149 (9th Cir. 2004) (“Fleeting or trivial anxiety or distress does not suffice to support an 

award; instead, an individual must suffer significant emotional harm.”).

Although Mrs. Hunsaker likely suffered legally sufficient harm in the form of debilitating 

migraine headaches, the evidence in the record does not necessarily connect Mrs. Hunsaker’s 

migraines to the IRS’s violations. For example, neither Hunsaker could remember if, or when, 

any specific IRS notice triggered a debilitating migraine. In fact, after receiving the third notice, 

when assurances from their attorney were allegedly wearing thin, Mrs. Hunsaker got up the next 

day and went to work as normal. Additionally, although Mrs. Hunsaker testified her prescription

records would be the best indicator of when she experienced debilitating migraines, those records 

strongly suggest she experienced fewer migraines during the relevant time period. This Court is 

skeptical whether Mrs. Hunsaker established the required causal connection between the notices 

and her migraines. In re Dawson, 390 F.3d at 1149. This Court need not reach those issues, 

however, because sovereign immunity bars the Hunsakers’ claims.

STANDARD OF REVIEW

This Court reviews the bankruptcy court’s conclusions of law de novo. In re Dawson, 

390 F.3d at 1145.

DISCUSSION

Sovereign immunity limits a district court’s subject matter jurisdiction over actions 

brought against the United States. Vacek v. United States Postal Service, 447 F.3d 1248, 1250 

(9th Cir. 2006). The United States “is immune from suit unless it has expressly waived such 

immunity and consented to be sued.” Dunn & Black, P.S. v. United States, 492 F.3d 1084, 1087-

88 (9th Cir. 2007). Legislative history cannot provide a waiver that otherwise appears ambiguous 

in the text of the statute. Cooper, 132 S. Ct. at 1448. In other words, the scope of the waiver must 

Case 6:16-cv-00386-MC Document 19 Filed 10/20/16 Page 3 of 6
4 – OPINION AND ORDER

be “clearly discernable” from the statutory language. Id. If the scope is unclear, this Court must 

accept the interpretation most favorable to the federal government. Id. Stated differently, the 

scope of any waiver of sovereign immunity is to be strictly construed in favor of the United 

States. Dunn & Black, 492 F.3d at 1088 (citation omitted). The party suing the United States 

bears the burden of demonstrating the existence of “an unequivocal waiver of immunity.” 

Holloman v. Watt, 708 F.2d 1399, 1401 (9th Cir. 1983).

Section 106(a) of the Bankruptcy Code clearly waives sovereign immunity for some 

claims under § 362(k). See 11 U.S.C. § 106(a) (“[S]overeign immunity is abrogated as to a 

governmental unit to the extent set forth in this section with respect to . . . [§] 362[.]”). Section 

362(k) allows individual debtors injured by a creditor’s willful violation of the automatic stay to 

recover “actual damages.” In Dawson, the Ninth Circuit resolved the question of whether 

Congress intended “actual damages” to include claims for emotional distress. 390 F.3d at 1146. 

The court concluded allowing emotional distress damages best fulfills legislative intent to protect 

debtors from excessive psychological and emotional harm.1Id. at 1148. Therefore, “actual 

damages” in § 362(k) includes emotional distress damages under some circumstances.2Id.

Dawson did not address sovereign immunity, however, because the dispute there involved only 

private parties. That emotional distress damages are available against private parties does not 

automatically authorize them against the federal government. After all, “when it comes to an 

award of money damages, sovereign immunity places the Federal Government on an entirely 

different footing than private parties.” Lane v. Pena, 518 U.S. 187, 196 (1996).

 

1 The Dawson court relied on the legislative history of the automatic stay provision generally, not on the legislative 

history for § 362(k), which does not exist. See In re Schwartz-Tallard, 803 F.3d 1095, 1100 (9th Cir. 2015) (“We do 

not have legislative history that speaks directly to Congress’ purpose in enacting § 362(k).”).

2 When the Ninth Circuit decided Dawson, the damages provision was coded at § 362(h). In 2005, an amendment 

moved the provision to § 362(k) but left it otherwise unchanged.

Case 6:16-cv-00386-MC Document 19 Filed 10/20/16 Page 4 of 6
5 – OPINION AND ORDER

The Dawson court concluded the phrase “actual damages” was ambiguous even given the 

text and context of § 362(k) as a whole. 390 F.3d at 1146. The legislative history discussed in 

Dawson cannot waive sovereign immunity where the text of § 362(k) otherwise remains 

ambiguous. See Cooper, 132 S. Ct. at 1448 (“Legislative history cannot supply a waiver that is 

not clearly evident from the language of the statute.”). Because the phrase “actual damages” is 

ambiguous, this Court must construe § 362(k) in favor of immunity. See id. (any ambiguities in 

the statutory language must be strictly construed in favor of immunity, including ambiguities 

regarding the scope of the waiver). Reinforcing this conclusion is the fact that, before concluding 

“actual damages” includes emotional distress damages, the Dawson panel came to the opposite 

conclusion in an opinion it later withdrew. Dawson v. Washington Mutual Bank, F.A., 367 F.3d 

1174 (9th Cir.), withdrawn, 385 F.3d 1194 (9th Cir. 2004). The two Dawson opinions provide 

compelling proof that any waiver of sovereign immunity as to emotional distress damages in § 

362(k) is, at best, implicit. 

The Supreme Court’s decision in Cooper also supports a limited reading of 362(k). 

Although Cooper specifically addressed the Privacy Act, not § 362(k), the Supreme Court 

addressed essentially the same question: if a statute waives sovereign immunity for “actual 

damages,” does that waiver include emotional distress damages? Id. at 1447–48. The Supreme 

Court answered no. Id. at 1453. In doing so, the Supreme Court identified multiple plausible 

readings of “actual damages,” even given the particular context of the Privacy Act. Id. In the 

context of § 362(k), the phrase “actual damages” displays the same chameleon-like qualities 

found in the Privacy Act; there are multiple plausible readings of § 362(k). Therefore, this Court 

must accept the reading most favorable to the federal government, which excludes emotional 

distress damages. Cooper, 132 S. Ct. at 1448; Dunn & Black, 492 F.3d at 1088.

Case 6:16-cv-00386-MC Document 19 Filed 10/20/16 Page 5 of 6
6 – OPINION AND ORDER

Barring emotional distress damages against the federal government will not, as the 

bankruptcy court said, “swallow up the waiver of sovereign immunity altogether.” Appellant’s 

Br. App. 255:8, ECF No. 13-10. For example, the Bankruptcy Code unequivocally waives 

sovereign immunity for economic damages under § 362(k). Sections 106(a)(3) and 362(k), when 

read together, waive sovereign immunity for a “money recovery” of “actual damages.” There is 

no plausible way to read “money recovery of actual damages” to exclude economic damages. 

Thus, the federal government cannot “escape liability for any form of damages” simply because 

it is immune from emotional distress damages under § 362(k).

CONCLUSION

Sovereign immunity bars claims against the federal government seeking emotional

distress damages under 11 U.S.C. § 362(k). Therefore, the bankruptcy court lacked jurisdiction 

to award the Hunsakers emotional distress damages. See F.D.I.C. v. Meyer, 510 U.S. 471, 475 

(1994) (“Sovereign immunity is jurisdictional in nature.”). The judgment of the bankruptcy court 

is REVERSED.

IT IS SO ORDERED.

DATED this 20th day of October, 2016.

 __________________________

Michael McShane

United States District Judge

Case 6:16-cv-00386-MC Document 19 Filed 10/20/16 Page 6 of 6