OPINION OF THE COURT
JAMES HUNTER, III, Circuit Judge:
Appellants brought this action under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (1976), and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1976), contending that a proposed health facility relocation would have a discriminatory impact. The district court directed appellants to pursue the administrative remedy provided by section 602 of Title VI. The court subsequently found that Title VI and section 504 do not create private rights of action to seek declaratory and injunctive relief for violations of the statutes, found that the administrative remedy was the sole remedy available to appellants, and then affirmed HEW's administrative decision that the proposed relocation would not have a discriminatory impact. Because we find that Title VI and section 504 create private rights of action for plaintiffs who seek relief other than funding termination,
Appellants are five organizations and six individuals representing minority and handicapped persons who reside in Wilmington, Delaware.
This case arises from the controversy surrounding the decision of the Wilmington Medical Center to relocate major tertiary
On November 3, 1976, HEW filed alternative motions to dismiss or for summary judgment. HEW argued that the Complaint should be dismissed because of plaintiffs' failure to exhaust the administrative remedy provided by section 602 of Title VI. Plaintiffs responded that resort to agency procedures would be futile, alleging that HEW had insufficient resources available to conduct an adequate compliance review.
453 F.Supp. 280, 290 (D.Del.1978), quoting 426 F.Supp. 919, 925 (D.Del.1977).
HEW conducted the ordered compliance review. On July 5, 1977, in a Letter of Findings from its Office of Civil Rights, HEW determined that the relocation proposed by Plan Omega as then formulated would violate Title VI and section 504. The letter also enumerated 12 areas in which the Plan would have to be modified in order to be in compliance with those statutes and with the Secretary's regulations. Subsequently,
The court also had before it a motion by plaintiffs to modify its Order of November 4, 1977, in which the court had determined that the scope of its review was to be governed by the arbitrary and capricious standard defined in the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A) (1976). By their motion, Plaintiffs sought judicial review under the trial de novo standard of the APA, 5 U.S.C. § 706(2)(F), contending that HEW's determination was "adjudicatory in nature." The court denied this motion. Accordingly, the court applied the arbitrary and capricious standard, and affirmed the Secretary's determination. In the course of its decision, the court found that the administrative remedy provided under section 602 was exclusive, and that, as a result, plaintiffs did not have a private cause of action under Title VI or section 504. Additionally, the court denied plaintiffs' motion to supplement the administrative record under review, and rejected plaintiffs' claim of a due process right to an evidentiary hearing before the agency.
On appeal, plaintiffs first contend that Title VI and section 504 create private causes of action, and that as a result the district court's initial referral of their complaint for administrative action was error.
Our analysis of Title VI begins with the language of the statute. Section 601 of Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (1976), declares:
The right established by section 601 is unequivocal, broad, and remedial in nature; in this respect it is quite similar to the later enacted Voting Rights Act, 42 U.S.C. § 1973 et seq. (1976) from which the Supreme Court has inferred a private right of action. Allen v. Board of Elections, 393 U.S. 544, 556, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969).
Section 602 of Title VI,
The principles enunciated by the Supreme Court in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), guide the determination of whether a private remedy is implicit in a statute not expressly providing such a remedy. The relevant factors are:
422 U.S. at 78, 95 S.Ct. at 2088 (citations omitted).
The first and fourth factors are not in dispute. Plaintiffs are members of the class for whose benefit the statutes were enacted.
Under Cort, an explicit statement of congressional intent to deny a private cause of action would preclude our implying such an action. However there is no explicit indication of legislative intent either to create or to deny a private cause of action in the legislative history of Title VI. At best, it may be said that the legislative references to a private cause of action are inconclusive. WMC has directed our attention to statements made on the floor during debate by Congressman Gill
However, Congressman Gill's comments were apparently directed toward the question of who may go to court to challenge funding termination decisions. Senator Kuchel's comments were directed toward the availability of judicial review for terminated funding recipients. Only Senator Keating was speaking to the issue when he noted in passing that an explicit right to
Since we do not find an explicit congressional intent to create or deny a private cause of action, we must proceed to determine if an implicit intent to create or deny such an action can be found in the legislative history of Title VI. The district court canvassed that history and concluded that the implicit intent was to deny a private cause of action. The court arrived at this conclusion after determining that section 602 and section 603 of Title VI are primarily administrative, that section 602 does not allow a private right of action to seek funding termination, and that section 603 provides for only limited judicial review of agency funding decisions. Whether or not these three determinations are correct, they do not necessarily compel or even support the district court's conclusion that section 601 does not create a private cause of action.
Section 601 was probably the least controversial of these three sections of Title VI.
These considerations led to the enactment of sections 602 and 603. Congress was concerned with limiting the power of federal agencies to bring about compliance with section 601, not with limiting private rights under section 601. That sections 602 and 603 are limits on agencies, and not on rights, is repeatedly made clear in the legislative proceedings.
To imply a private cause of action, we must find that such a cause would be consistent with the underlying purposes of the legislative scheme. A private cause of action under Title VI to seek declaratory and injunctive relief is entirely consistent with the legislative scheme. We find it impossible to square the plaintiffs' peripheral role in the section 602 and 603 process with their critical status as protected beneficiaries under section 601, unless section 601 is read to include a right of action distinct from the limitations of sections 602 and 603.
The question arises why Congress would explicitly provide for a funding termination sanction, yet leave the remainder of the enforcement scheme to inference. The answer appears to be that at the time of the passage of Title VI, the power of the executive to terminate funding, and the principles which served to limit that power, were subject to intense dispute.
It is also persuasive evidence of intent that Congress has repeatedly enacted attorneys' fee legislation implicitly predicated on the fact that Title VI may be enforced in a private action.
In Bossier Parish School Board v. Lemon, 370 F.2d 847 (5th Cir.), cert. denied, 388 U.S. 911, 87 S.Ct. 2116, 18 L.Ed.2d 1350 (1967), the panel expressly found that Title VI created a private cause of action. While Lau had emphasized the contractual agreement between a federal agency and a federal funding recipient as the basis for importing section 601's proscription to the funding recipient, the court in Bossier found a Title VI cause of action distinct from any "contract" action which might arise. Merely by accepting federal support the School Board became "bound" by section 601 and "obligated to provide [benefits] without racial discrimination." 370 F.2d at 851 (emphasis in the original). The court concluded:
370 F.2d at 852.
The most recent Supreme Court consideration of Title VI supports our conclusion. Immediately prior to the filing of this opinion, the Supreme Court announced its decision in Cannon v. University of Chicago, ___ U.S. ___, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979). In Cannon, the Supreme Court was not called upon to decide whether a private cause of action could be implied under Title VI, but rather whether such an action could be implied under Title IX of the Educational Amendments of 1972, 20 U.S.C. § 1681 et seq. Since Title IX was expressly intended by Congress to track the previously enacted Title VI,
Developments subsequent to the enactment of Title VI which the Supreme Court thought might have influenced or impressed Congress at the time of Title IX's enactment were: the numerous decisions of the federal courts after 1964 explicitly finding a private cause of action under Title VI;
The Supreme Court, in Cannon, concluded that in 1972 Congress believed that it had created a private right of action under Title VI.
Our holding that there is a private cause of action under Title VI compels a similar holding in respect to section 504 of the Rehabilitation Act of 1973,
S.Rep.No. 93-1297, 93 Cong., 2d Sess. 39-40, reprinted in 4 U.S.Code Cong. & Admin.News, pp. 6373, 6391 (1974).
We agree with the Cort analysis of section 504 undertaken in Lloyd v. Regional Transportation Authority, 548 F.2d 1277, 1284-86 (7th Cir. 1977), in which the court found an explicit congressional intent to create a private action and concluded that such an action was consistent with the underlying purposes of the legislative scheme. This Court relied on Lloyd in Gurmankin v. Costanzo, 556 F.2d 184 (3d Cir. 1977), when it supported, in dicta, the holding we make
We hold that under the principles enunciated in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975), a private cause of action is implicit in section 601 of Title VI and section 504 of the Rehabilitation Act of 1973 for plaintiffs who seek declaratory and injunctive relief. Because we find that both statutes do create private causes of action for the benefit of the classes protected by the respective statutes, and because we find that these plaintiffs have not had an opportunity to try their cause in federal court, we remand the case to the district court for a trial on the merits of plaintiffs' section 601 and section 504 claims against WMC.
453 F.Supp. 280, 284 (D.Del.1978).
Plaintiffs assert, inter alia, that WMC's remaining inner-city division will become a "ghetto" hospital, that transferred acute care services will be virtually inaccessible, that a segregated dual hospital system will be created, and that the staffing of the inner-city division will suffer qualitatively.
Further, appellants may be aggrieved persons who have the right to seek judicial review of HEW's determination that Plan Omega complies with Title VI and section 504. We do not foreclose that right. However, since we are remanding the issue of Plan Omega's compliance for a full trial on the merits, we will not review HEW's approval of the Plan, or the district court's affirmance of that approval, at this time. Nor must we now decide whether appellants are aggrieved persons within the meaning of section 603 of Title VI.
110 Cong.Rec. 1519 (1964).
Similarly, in a colloquy between Senators Humphrey and Talmadge, the undisputed nature of the underlying right was made clear:
Id. at 5254.
There were two concerns embodied in section 601 — that discrimination existed and that such discrimination was being funded by the United States government. (See, e. g., 110 Cong.Rec. 2468 (1964) (remarks of Rep. Rodino)). That congressional debate focused on the second issue should not obscure the fact that, while not incidental, the funding issue was subordinate to the broader principle being established.
It follows that the beneficiary may not sue the administrative agency under section 601. If the beneficiary were allowed to do so, it would be able to circumvent the limitations of sections 602 and 603, and would be in a position to, in essence, compel funding termination — which is an impermissible result. This conclusion is in harmony with our analysis of the legislative scheme. It does no harm to beneficiaries' rights, as complete relief can be awarded without the agency being a party to the private suit, and complete discovery can be undertaken, since the agency has no more relevant information to impart than does the funding recipient, who is a party.
Supplemental Brief at 30 n.25, quoted in, Regents of University of California v. Bakke, 438 U.S. 265, 288 n. 26, 98 S.Ct. 2733, 2748, 57 L.Ed.2d 750 (1978).
___ U.S. ___, 99 S.Ct. 1956 (footnotes omitted).
46 U.S.L.W. at 4927 (footnote omitted). However, the administrative process provided in section 602 was not intended to insulate a federal funding recipient from making hard choices as to whether it would accept funding termination as a cost of continuing to discriminate. Rather, the section 602 limit was intended to protect the recipient from making such choices at the insistence of an unfettered federal grant making agency. If under the threat of a private suit, a recipient were to decide to decline federal money (or more likely to cease discriminatory practices) the rights established by section 601 would be vindicated without the exercise of federal executive power, and the concern which prompted Congress to enact sections 602 and 603 would not arise.
It should be noted that the fact that Congress intentionally modelled Section 504 after Title VI and the fact that its history shows an explicit intent to include a private cause of action strengthens our conclusion that a private cause of action was contemplated as a natural part of Title VI as well.