Opinion ID: 175946
Heading Depth: 3
Heading Rank: 4

Heading: Actual Damages Requirement

Text: On cross-appeal, the Plaintiffs argue that the district court's damages award does not make them whole because, although the court awarded mitigation damages, it disallowed recovery for lost time and future protective measures that the Plaintiffs assert should qualify as actual damages under common-law tort principles. The Plaintiffs asserted that they should be compensated at their regular hourly rate as BOP employees for the time they had already spent dealing with the disclosure so that damages would exceed the $1,000 statutory minimum for actual damages. The district court disagreed, but found that all of the Plaintiffs were entitled to recover the $1,000 statutory minimum because the costs of the prophylactic measures each took to prevent harm from the disclosure constituted actual damages. The court concluded that compensation for lost time was unavailable under the Privacy Act because it must narrowly construe the waiver of sovereign immunity in the damages provision. The court found that only two of the Plaintiffs had incurred costs above $1,000, and the court awarded the respective amount of actual damages to each. The court rejected the claim for damages for any future protective measures, finding that such damages would be unreasonable given the court's earlier finding that none of the Plaintiffs had suffered adverse effects from the disclosure. Beaven, 2007 WL 1032301, at ; Doc. 353 (Damages Op. at 3-5). The Supreme Court in Doe v. Chao held that a Privacy Act plaintiff must prove some actual damages before she is entitled to the minimum statutory damages under § 552a(g)(4), specifically rejecting general or presumed damages available in other common-law privacy torts. Doe, 540 U.S. at 621-23, 124 S.Ct. 1204. The Court also noted that, from a review of the legislative history, it is implausible that Congress intended tacitly to recognize a nominal damages remedy after eliminating the explicit reference to general damages. Id. at 623 n. 6, 124 S.Ct. 1204. In Hudson v. Reno , we noted that although actual damages as required under § 552a(g)(4) has no plain meaning or consistent legal interpretation, . . . when it is being applied against the government [as a waiver of sovereign immunity] it must be narrowly interpretedhere that requires finding that actual damages only mean out-of-pocket losses, not emotional distress. Hudson, 130 F.3d 1193, 1207 n. 11 (6th Cir.1997) (declining to follow Johnson v. Dep't of Treasury, 700 F.2d 971 (5th Cir. 1983), abrogated by Doe, 540 U.S. at 618, 124 S.Ct. 1204), cert. denied, 525 U.S. 822, 119 S.Ct. 64, 142 L.Ed.2d 50 (1998), abrogated on other grounds by Pollard v. E.I. du Pont de Nemours & Co., 532 U.S. 843, 848, 121 S.Ct. 1946, 150 L.Ed.2d 62 (2001); see Fanin v. U.S. Dep't of Veterans Affairs, 572 F.3d 868, 874 (11th Cir.2009) (acknowledging Hudson and reiterating that the Sixth and Eleventh Circuits follow the same rule requiring proof of actual pecuniary loss), cert. denied, ___ U.S. ___, 130 S.Ct. 1755, 176 L.Ed.2d 212 (2010). In Hudson, this court specifically rejected an attempt to broaden actual damages to include compensatory damages such as `mental injuries, loss of reputation, embarrassment or other non-quantifiable injuries,' but did not actually decide whether § 552a(g)(4) foreclosed such damages. Hudson, 130 F.3d at 1207 (quoting Fitzpatrick v. I.R.S., 665 F.2d 327, 331 (11th Cir.1982), overruled on other grounds by Doe, 540 U.S. at 618, 124 S.Ct. 1204). The Hudson court's finding that the plaintiff could not prove actual damages was not necessary to its decision; indeed, the court introduced its actual damages discussion as [a] final basis for affirming the District Court's decision that the plaintiff had presented no viable Privacy Act claims. Hudson, 130 F.3d at 1207. We need not now decide whether this circuit should adopt the Hudson court's rationale expressed in dicta because it is not necessary to do so to reach a decision in this case. [12] First, even if we determined that the Plaintiffs' alleged future protective measures damages are cognizable out-of-pocket losses, the Plaintiffs are unable to prove causation. See Doe, 540 U.S. at 621-22, 124 S.Ct. 1204 (holding a plaintiff must prove causation in order to obtain damages); Hudson, 130 F.3d at 1207 (same). The Plaintiffs do not challenge the district court's factual finding that it was unreasonable to believe that the disclosure would cause any adverse effects in the future based on the lack of adverse effects to date, Doc. 353 (Damages Op. at 3-4), and, by extension, it is only logical that the Plaintiffs also cannot prove that the disclosure would cause any future out-of-pocket losses. See Hudson, 130 F.3d at 1207 n. 11; Brown v. U.S. Dep't of Justice, 169 Fed.Appx. 537, 541 (11th Cir. 2006) (unpublished opinion) (§ 552a(g)(4) actual damages claims cannot be merely speculative). We therefore affirm the district court's decision to deny the future protective measures damages. The additional lost time damages sought by the Plaintiffs may qualify as out-of-pocket losses under the rationale in Hudson. [13] The Plaintiffs do not challenge the district court's finding that the out-of-pocket costs that the Plaintiffs incurred for taking prophylactic measures did not exceed $1,000, and they have not included a calculation of any lost time damages as an out-of-pocket cost incurred at their hourly rate in their briefing on appeal. [14] However, we conclude that the district court erred in denying the Plaintiffs'lost time damages on the ground that their failure to assert valid FTCA claims precluded them from recovering damages for their valid Privacy Act claims. We agree with the Hudson court's determination that the sovereign immunity waiver in § 552a(g)(4) requires a narrowing construction, and that this narrowing construction when applied here justifies requiring the Plaintiffs to prove out-of-pocket losses for their lost time damages. Hudson, 130 F.3d at 1207 n. 11. We therefore reverse the district court's damages decision to the extent that it denies the Plaintiffs' recovery for lost time damages on the theory of sovereign immunity, and we remand to the district court for a finding on the amount of lost time damages for each Plaintiff. Such damages are neither general damages nor presumed damages within the meaning accorded to those terms in Doe. Doe, 540 U.S. at 620-27, 124 S.Ct. 1204. If the district court finds that a Plaintiff is able to prove that his or her lost time coupled with the costs of his or her prophylactic measures taken exceeds $1,000, then that Plaintiff should be entitled to recover the total amount of his or her actual damages rather than the statutory minimum of $1,000.