A small-plane pilot from San Francisco, who hid his HIV-positive status for years out of fear of losing his license, can sue the government for disclosing his condition during a fraud investigation, a federal appeals court ruled Monday.

A federal judge in San Francisco dismissed Stan Cooper's damage suit in 2008, despite finding that the Federal Aviation Administration and the Social Security Administration had violated Cooper's rights by sharing his confidential personal and medical records. Chief U.S. District Judge Vaughn Walker said Cooper hadn't been harmed financially and that federal privacy law doesn't authorize suits for emotional distress.

In reinstating the suit Monday, the Ninth U.S. Circuit Court of Appeals in San Francisco said the law was intended to compensate people for harm they suffer when a federal agency intentionally discloses their confidential records.

That harm often consists of embarrassment rather than out-of-pocket losses, Judge Milan Smith said in the 3-0 ruling.

Cooper, 67, a pilot since 1964, gave up his license after he was diagnosed HIV-positive in 1985, when FAA rules still barred anyone with the AIDS virus from flying a plane. He said he reapplied in 1994 but did not disclose his medical condition.

Cooper's condition worsened in 1995 and he applied for Social Security benefits, with the assurance that his medical records would remain confidential.

He said he regained his health, discontinued his benefits and applied for a renewal of his license in 1998 after the FAA dropped its ban on HIV-positive pilots. He still did not disclose his condition, explaining later that the FAA required 10 years of medical records but didn't say how it would evaluate them.

The FAA revoked his license in 2005 after obtaining information from the Social Security Administration in the short-lived "Operation Safe Pilot," which examined records of 45,000 pilots, all in Northern California, to see if they had committed fraud in obtaining Social Security benefits or a pilot's license.