The opinion of the court was delivered by: OWEN
Plaintiffs, the Board of Education of the City School District of the City of New York, New York City Community School Board No. 6 and New York City Community School Board No. 26, move for a preliminary injunction pursuant to Rule 65, Fed.R.Civ.P. Plaintiffs seek to enjoin the defendants, the United States Department of Health, Education and Welfare ("HEW") from further obligating, disbursing or otherwise expending any monies from funds initially allocated pursuant to the Emergency School Aid Act ("ESAA"), 20 U.S.C. § 1601 et seq., to New York State for the fiscal year 1974-75, to any other local educational agency or institution outside of New York City. Having carefully reviewed all the affidavits and exhibits submitted to me on the motion, and having held an evidentiary hearing,
I conclude that the preliminary injunction should not issue. The facts upon which I reach this conclusion are as follows.
Each of the above named plaintiffs submitted applications for ESAA grants to HEW for the fiscal year 1974.
The ESAA was enacted in 1972 to provide financial assistance (1) to meet the special needs incident to the elimination of minority group segregation and discrimination among students and faculty in elementary and secondary schools; (2) encourage the voluntary elimination, reduction or prevention of minority group isolation in elementary and secondary schools with substantial proportions of minority group students; and (3) aid school children in overcoming the educational disadvantages of minority group isolation. By its terms ESAA grants are only for one year, and the awarding of such grants is placed in the discretion of the Assistant Secretary of Education of HEW.
Although there are several types of ESAA grants, the two for which plaintiffs applied are basic
grants which are given to local educational agencies ("LEA's").
All of the applications for grants submitted by the plaintiffs in 1974 were rejected by HEW, because of claimed inferior educational quality. It is these rejections which form the basis of the present action.
For the fiscal year 1974, the second year in which ESAA grants were made, Congress appropriated funds in the amount of $236,493,000. The appropriations act required that all ESAA grants be made by June 30, 1974, the end of the fiscal year. Any unallocated money remaining after that date would be returned to the Treasury. All monies appropriated by Congress for ESAA basic and pilot grants in fiscal year 1974, were already obligated by HEW by June 28, 1974, the date plaintiffs commenced this action.
Because New York City has decentralized its school system and thus contains many LEA's and because many of these applied for ESAA grants, competition this year was more intense than last year.
In December 1973, plaintiffs Districts No. 6 and 26, submitted applications for basic grants for 1974 and plaintiff Board of Education of the City School District of the City of New York (Central Board) applied for both basic and pilot grants. Before their applications were submitted, plaintiffs were told that $17,500,000 had been allocated to New York State as a whole, for basic and pilot grants. However, the Central Board alone sought over $22,000,000, District No. 6 sought $953,000, and District 26 sought $1,373,170.
Plaintiffs' applications were evaluated by the defendants according to procedures applied uniformly throughout the country.
As part of the review, and in order to compare competing applications, both a statistical and quality score were assigned to each application. These scores were then totalled to arrive at a composite score.
According to the affidavits, exhibits, and the testimony at the hearing, it is undisputed that Jack Simms, the Program Manager, Bureau of Equal Opportunity Education, Region II, met with representatives of the plaintiffs before they submitted their original applications. He explained to these representatives how to prepare an application and how that application would be evaluated. He gave these representatives copies of the administrative manual which plaintiffs admitted they knew was "the bible" for purposes of preparing ESAA applications. He told the representatives that the fact that New York City had received ESAA grants in Fiscal 1973 did not guarantee that they would receive such grants in Fiscal 1974, since the grants are only for one year and each year's grants are the result of a totally new competition.
Mr. Simms testified that once all the original applications in New York State had been received, they were assigned statistical quality composite scores, were grouped according to the type of grant applied for, and then ranked. Mr. Simms then conducted a final independent review of all applications and made recommendations to the Regional ...