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March 15, 1978

WILLIAM CAULFIELD, President Community School Board No. 26 et al., Plaintiffs,

The opinion of the court was delivered by: WEINSTEIN

MEMORANDUM AND ORDER WEINSTEIN, D.J. TABLE OF CONTENTS Page Introduction 1 I. Proceedings Before this Court 6 A. Parties 6 B. Related Ethnic Census Dispute 7 C. Hearing on Due Process--Title VI Issue 8 II. Facts 9 A. Chronological History 10 1. November 9, 1976--OCR's Letter 10 to Chancellor Anker 2. January 1977--The ESAA Applications 15 3. April 1977--The Board's Response to the November 9, 1976 OCR Letter 16 4. July 1977--ESAA Funding Denied 16 5. Mid-September 1977--Final Denial of ESAA Funding 18 6. November 18, 1977--Remand to Reconsider ESAA Funding 19 7. September 7, 1977--Memorandum of Understanding 20 8. Present Controversy 27 B. Minority Concentrations 28 1. Statistics on Racial Disparity 28 2.Explanations of Statistics 33 a. The High Schools 33 b. Lack of Central Board Control 39 (1) State Law on Teacher Appointment 39 (2) Demographic Changes 45 (3) Contractual Provisions and Court Orders 46 III. Law 48 A. Title VI 48 1. Compliance Procedures 48 2. Standing to Seek Judicial Review 54 3. Judicial Review 59 a. Agency Action Committed to Agency Discretion by Law 60 b. Preclusion of Review by Statute 61 4. Legislative Intent 62 5. Hearings: The Value of Public Participation 65 $6 6. Required Procedures 68 B. Avoidance of Constitutional Questions 70 IV. Conclusion 72 Appendix Memorandum of Understanding Between 73 The Board of Education of the City of New York and the Office for Civil Rights, United States Department of Health, Education and Welfare


 Plaintiff teachers, supervisors and administrators, in two related cases 77-C-2155, 77-C-2278, challenge a September 7, 1977, "Memorandum of Understanding" (Agreement) entered into by the New York City Board of Education and the Office of Civil Rights (OCR) of the United States Department of Health, Education and Welfare (HEW) that requires the assignment of teachers on the basis of race. See related case 77-C-2278 consolidated for purposes of discovery and motions. The Memorandum is set out in the Appendix. Alleging violations of Title VI of the 1964 Civil Rights Act (42 U.S.C. §§ 2000d and 2000d-2) and the Fifth and Fourteenth Amendments, plaintiffs seek a declaratory judgment voiding the September 7, 1977 Agreement, injunctive relief, and summary judgment.

 HEW, the New York City Board of Education, and the intervenor defendants (as well as plaintiffs in related case 77-C-2531) defend on the ground that Title VI of the 1964 Civil Rights Act empowers them to reach such an accord and that the Memorandum of Understanding protects, rather than violates, the constitutional rights of New York City residents. They contend that the regulations of HEW have been fully complied with.

 All parties prefer that this court forthwith declare the Agreement valid or invalid. They concur that there are important statutory and constitutional rights at issue. One side asserts that what is at stake is the right of individual teachers to have their assignments made without respect to race. The other side, save for the Board of Education, insists that New York City maintains an illegally segregated system of teacher assignments and that desegregation requires placement by race to eliminate racial concentrations. To be sure these are substantial substantive questions.

 But there is a preliminary matter of transcendent importance. That is the issue of due process and the right to a hearing before important administrative action affecting the rights of individuals and institutions is taken. The huge power concentrations in the bureaucracies of our governments must not be permitted to be exercised secretly and arbitrarily. No matter how benign and well intentioned, those government officials who can, in practical effect, turn on or off the source of hundreds of millions of dollars, must conduct themselves with scrupulous regard for procedural protections. Not only must the result be just, but, if the people are to retain their faith in their government, the means used to achieve the result must be fair. See Friendly, "Some Kind of Hearing," 123 U. Pa. L. Rev. 1267, 1279-80 (1975).

 Respect for the effective administration of government requires that before we address the substantive issue we permit the executive branch, through its appropriate administrative agency, to rectify any procedural error by granting a proper hearing. The reason is clear. Upon hearing the parties, modification may result that will vitiate the need for further litigation. It is obviously more desirable that those with presumed expertise, who are charged with the administration of federal funding programs, rather than the courts, make administrative decisions wherever possible.

 The fact that the parties wish to sidestep the procedural question is not binding on the court. Cf. Reid v. Board of Education of New York, 453 F.2d 238, 242 n. 7 (2d Cir. 1971). Federal judges are not automatons, slot machines, who return the judgment selected if the parties agree on which button they would push. Once the jurisdiction of the court is invoked, the court has an obligation to decide in accordance with the law, even if the result satisfies none of the parties. Rentways, Inc. v. O'Neill Milk & Cream Co., 308 N.Y. 342, 349, 126 N.E.2d 271 (1955) (Fuld, J.). As Mr. Justice Frankfurter remarked in another context:

A trial is not a game of blind man's buff; and the trial judge -- particularly in a case where he himself is the trier of the facts upon which he is to pronounce the law -- need not blindfold himself . . . .

 Johnson v. United States, 333 U.S. 46, 54, 68 S. Ct. 391, 395, 92 L. Ed. 468 (1948) (dissenting).

 We find that the defendants have failed to comply with the procedural requirements of Title VI. Although the "Memorandum of Understanding" does not call for the termination of funds, it conditions further funding on the achievement of results that will require sweeping changes in the city school system. Title VI mandates that drastic governmental action of this nature that affects the lives of hundreds of thousands of citizens cannot result solely from secret, informal negotiations conducted exclusively by a handful of government officials. HEW regulations must provide for some form of public participation in such critical decisionmaking by those whose rights are directly affected.

 Accordingly, we vacate the September 7, 1977 Memorandum of Understanding and remand to HEW so that it can formulate and implement appropriate procedures. See, e.g., Addison v. Holly Hill Fruit Producers, 322 U.S. 607, 619-21, 64 S. Ct. 1215, 1222-23, 88 L. Ed. 1488 (1944); Douglas v. Hampton, 168 U.S. App. D.C. 62, 512 F.2d 976, 988-89 (D.C. Cir. 1975). To avoid disruption of the school system, the status of those already assigned under the Agreement will be maintained. Until this matter is resolved all assignments after April 7, 1978, will be made as if the Agreement had never become effective.

 In view of this holding, we decline at this juncture to rule on the constitutionality of the Memorandum of Understanding. Such a ruling would be premature since the terms of the Agreement may well be altered when, as Title VI requires, the views of the non-negotiating parties and the public are considered.


 A. Parties

 This suit was brought originally by six community school boards (1, 18, 20, 25, 26, and 29), individual principals and teachers against HEW and the Board of Education. Intervention as plaintiffs was granted to the United Federation of Teachers (UFT) and two teachers in the New York City school system; the Council of Supervisors and Administrators of the City of New York, Local 1, SASOC, AFL-CIO (CSA), plaintiffs in the related case of Zuckerman v. Aiello, 77-C-2278; and Community School Boards 11, 21 and 24. Also granted were motions to intervene as defendants by the Coalition of Concerned Black Educators, an unincorporated association, and four Black teachers, three of whom were reinstated and assigned in September 1977 pursuant to the September 7, 1977 Memorandum of Understanding; and Ronald Ross, a Black teacher in the New York City public school system, who was a co-complainant in an administrative complaint filed with OCR on or about February 17, 1976 alleging various discriminatory practices by the New York City Board of Education. Participating as friends of the court have been the American Jewish Congress, the Anti-Defamation League of B'nai B'rith and Major Davis, the former two aligned generally with the plaintiffs, and the latter with the defendants.

 B. Related Ethnic Census Dispute

 On December 6, 1977, after hearing argument, the court denied the plaintiffs' motion for a temporary restraining order to enjoin the collection of data for the civil rights survey or census being undertaken by the defendant Board of Education on behalf of itself, the State of New York and the federal government. Plaintiffs then sought a preliminary injunction to bar the collection of ethnic data. After further argument on February 23, 1978, this relief was denied. Defendants were stayed for two weeks from placing into their computers any data or information being obtained from plaintiffs from such a survey or census, pending the filing of a notice of appeal and a motion with the Court of Appeals to extend the stay. Subsequent motions to reconsider the court's determination were rejected. There is a clear right and obligation of authorities to gather data in order to determine whether there has been unlawful discrimination. See United States v. Board of Education et al. (E.D.N.Y. 76-C-861) (Order of July 15, 1976), appeal dismissed as moot, 543 F.2d 1 (2d Cir. 1976).

 C. Hearing on Due Process -- Title VI Issue

 On February 23, 1978, the parties were requested to assist the court in deciding whether rights to constitutional and statutory due process were abridged by the failure to afford interested persons an opportunity to participate in the administrative proceedings that resulted in the Memorandum of Understanding. A hearing on this question was held on March 7, 1978.

 At that hearing the parties were afforded an opportunity for full argument and submission of any relevant evidence. The Board of Education offered various documents and supplemented its submission by letter. Other parties relied upon the uncontested documents already on file in this court and subsequent affidavits.

 The court's March 7, 1978 decision on the threshold procedural question obviated the need to decide other issues. Accordingly, all motions for summary judgment or injunctive relief were mooted pending a further determination by HEW.


 The September 7, 1977 Memorandum of Understanding culminated a year old dispute between HEW and the New York City Board of Education. The controversy has spawned a complicated legal tangle, including one other major law suit, Board of Education of the City School District of the City of New York, et al. v. Califano, et al., 77-C-1928, decided by this court on November 18, 1977. In that case, the Board of Education sued HEW, claiming that HEW had illegally cut-off some $17.5 million -- subsequently reduced to $3.8 million -- of Emergency School Aid Act (ESAA) funding, 20 U.S.C. §§ 1601 et seq., needed by the city to help integrate its schools. After extensive hearings, we determined that HEW had failed to adhere to constitutionally mandated procedure and statutory standards and remanded the case to HEW for further consideration.

 In this case, HEW and the Board of Education are positioned not as adversaries, but as co-defendants, united in opposition against the claims of a substantial number of the teachers, supervisors and administrators of the New York City school system. In spite of the shifting alignments of the parties, the facts of the two law suits are, as might be expected, intimately related.

 A. Chronological History

 1. November 9, 1976 -- OCR's Letter to Chancellor Anker

 The immediate source of this litigation dates to a November 9, 1976 letter sent by OCR to Chancellor Irving Anker, operating head of New York City's school system. Based on an investigation of civil rights compliance in New York City under Title VI of the 1964 Civil Rights Act and Title IX of the Education Amendments of 1972, it specified areas of alleged noncompliance with the provisions of both statutes.

 Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d) provides that no person in the United States shall, on the ground of race, color or national origin, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity receiving federal financial assistance. Title IX of the Educational Amendments of 1972 similarly prohibits discrimination in federally assisted programs on grounds of sex. 20 U.S.C. § 1681. Each federal department and agency is charged with assuring compliance with these provisions in the programs and activities under its jurisdiction and with terminating or withholding federal funding to programs found not in compliance. 42 U.S.C. § 2000d-1. In addition to requiring initial assurances of nondiscrimination in every application for federal assistance made to it, each federal department is required to conduct periodic compliance reviews and to investigate and resolve individual or class complaints of discrimination arising under the federally assisted programs which it supervises. See 45 C.F.R. §§ 80.1-80.13.

 HEW supervises various programs of federal aid to the New York City schools. The November 9, 1976 letter to Chancellor Anker focused only on the "employment phase" of HEW's compliance review of the New York City school system. It charged that the City had, in violation of Title VI, on the basis of race and national origin:

(1) denied minority teachers full access to employment opportunity through the use of racially discriminatory selection and testing procedures and through the use of racially identifiable employment pools in a manner that discriminatorily restricts the placement of minority teachers;
(2) assigned teachers, assistant principals and principals in a manner that has created, confirmed and reinforced the racial and/or ethnic identifiability of the system's schools; and
(3) assigned teachers with less experience, lower average salaries and fewer advanced degrees to schools which have higher percentages of minority students.

 It also charged that, in violation of Title IX, the City had, on the basis of sex:

(1) denied females equal access to positions as principals and assistant principals throughout the system;
(2) provided a lower level of financial support for female athletic coaching programs; and
(3) deprived female teachers of seniority rights and other compensation through failure to eliminate the effects of past discriminatory leave policies.

 The letter ordered the City to submit a plan within 90 days which "will remedy the discrimination and provide corrective action where individual cases of discrimination are identified." It noted: "Our goal is to end discrimination not to cut off federal funds."

 After receipt of the November 9, 1976 letter, Chancellor Anker asked Bernard Gifford, Deputy Chancellor of the Board, to serve as chairman of an internal Board of Education committee to review and evaluate the specific allegations of discrimination made by OCR. During his review of the employment practices within the New York City school system, Mr. Gifford consulted with, and received information from, persons both within and without the school system. The organizations consulted included the American Jewish Congress, the UFT, the Council of Supervisors and Administrators, the NAACP, ASPIRA of New York, and the New York Civil Liberties Union. See pp. iii-iv of the Gifford Report entitled "Race, Ethnicity, and Equal Employment Opportunity: An Investigation of Access to Employment and Assignment of Professional Personnel in New York City's Public Schools" (June 1977). According to intervenor-defendant Ross, the Gifford Report confirmed OCR's charges and provided the impetus for the Board of Education to enter into the Memorandum of Understanding in early September. See Memorandum of Law in Support of Defendant-Intervenor Ross' Motion to Amend Order of February 24, 1978 and in Opposition to the Entry of Summary Judgment with Respect to the Procedural Due Process Issues Raised by the Court Sua Sponte, Court Exhibit 7 at March 7, 1978 hearing, at p. 12.

 OCR first rejected a voluntary compliance plan submitted by the Board of Education in April 1977. Id. at p. 8. Further negotiations in July and August resulted in the September Memorandum. Id. at p. 12.

 During the period of November 9, 1976 to September 7, 1977, OCR received comments, communications and inquiries respecting its November 9, 1976 letter from not only the Central Board and its Chancellor, but also from various organizations, public officials, teachers, principals, and other people. There were also meetings and conferences in both Washington, D.C. and in New York between representatives of OCR, the Central and Local School Boards, parents, teachers, and other citizens and groups concerning these and related matters. See Memorandum of Law in Opposition to Court's Sua Sponte Suggestion for Remand, U.S. Attorney, Eastern District of New York, Court Exhibit 6 at March 7, 1978 hearing, at p. 4; affidavit of Ira Glasser of March 13, 1978 at p. 2.

 2. January 1977 -- The ESAA Applications

 Two months after receiving OCR's letter, in January, 1977, the Central Board along with various Local Boards submitted applications for ESAA funding to the Secretary of HEW. The applications sought money for basic, pilot and bilingual programs in the public schools of the City of New York for the 1977-78 school year in Districts 1, 7, 9, 11, 12, 13, 16, 17, 18, 20, 21, 22, 25, 26, 28, 30 and 32 and in the high schools and special educational programs administered by the Central Board. The funds were to provide services for an estimated 40,000 students. On April 14, 1977, the Board, as instructed by the HEW staff, submitted a revised application to HEW Secretary Califano. HEW officials then informed the Board that the educational programs described in the April, 1977 ESAA applications met all HEW programmatic and fiscal requirements and that the applications were approved as to content and amount, subject only to a determination that no other legal impediments to funding existed. At this time ESAA funds of approximately $17.5 million were tentatively approved and set aside by HEW for these programs.

 3. April 1977 -- The Board of Education's Response to the November 9, 1976 OCR Letter

 On April 22, 1977, the Central Board, on behalf of itself and the Local Boards, issued a report denying the existence of any discriminatory practices in the New York City public school system. The report contained supporting data purporting to rebut the conclusions of OCR.

 4. July 1977 -- ESAA Funding Denied

 In early July, 1977, the applicant school boards received a letter from Herman R. Goldberg, Associate Commissioner of HEW's Equal Educational Opportunity Programs. Dr. Goldberg makes preliminary determinations of eligibility for ESAA funding. The letter, dated July 1, 1977, advised the school boards that ESAA funding would be denied to New York City for the 1977-78 school term. HEW based its decision upon conclusions stated in the November 9, 1976 OCR report.

 Subsequently, HEW advised the applicant school boards that ESAA funds would be denied solely on the ground of discrimination in assignment of teachers in the public schools. See Dr. Goldberg's letter of September 19, 1977. OCR statistics allegedly reflected a low system-wide minority hiring rate in New York City public schools. The statistics also showed a strong correlation between minority teachers and minority students.

 A compromise at the administrative level resulted in ESAA funds being allocated to all the local districts but District 11. The approved local districts had agreed to reassign their teachers to eliminate racial disparities in teacher census in the schools within each district. HEW then agreed that some $14 million would be paid to the various acquiescent local school boards. This agreement reduced the amount of funds in dispute from $17.5 million to $3.8 million, a sum HEW continued to withhold from the Central Board and Local Board 11.

 Commissioner Goldberg's July 1, 1977 letter of denial also advised the school boards that, pursuant to section 185.46 of title 45 of the Code of Federal Regulations, they had an opportunity to show cause before him why the determinations of ineligibility should be revoked. The school boards requested and were granted such an opportunity. On July 20, 1977, a show cause hearing was held for Local Board 11. The Central Board's hearing was held on July 22, 1977. On July 26, 1977, Local Board 11 submitted supplementary materials as did the Central Board on August 10, 1977.

 5. Mid-September 1977 -- Final Denial of ESAA Funding

 About one week after the Board and HEW entered into the Memorandum of Understanding, HEW Commissioner Goldberg informed Local Board 11 and the Central Board that the summer show cause hearings had not caused HEW to reconsider its denial of ESAA funding. See letter dated September 15, 1977 from Commissioner Goldberg to Local Board 11's Superintendent Nicholas Cicchetti and letter dated September 16, 1977 from Commissioner Goldberg to Chancellor Irving Anker. The school boards then submitted evidence to HEW in support of requests for waivers of ineligibility pursuant to 20 U.S.C. § 1605(d)(5) and 45 C.F.R. § 185.43(d), but to no avail. Chancellor Anker, in an October 28, 1977 affidavit (p. 15), noted that the Board had already been "advised informally by defendants Goldberg and Tatel that waivers of ineligibility will not be granted to plaintiffs unless the remedy for eligibility is effectuated immediately, that is, a quota of teacher assignments is adopted and implemented by plaintiffs."

 6. November 18, 1977 -- Remand to Reconsider ESAA Funding

 After an extensive review of the administrative proceedings in the ESAA case, this court concluded that although show cause hearings were held, plaintiffs were effectively granted a sham hearing at which the evidence they submitted was not considered. The court rejected HEW's position that the evidence submitted was irrelevant because even if it were true, it could not change the result. See Board of Education of the City School District of the City of New York v. Califano, 77-C-1928, at p. 14 (November 18, 1977). The court, accordingly, remanded the case to HEW so that the plaintiff school boards would be given a "meaningful opportunity to rebut the statistical case of discrimination." Id. at 55.

 7. September 7, 1977 -- HEW and City Board of Education Enter Into Memorandum Of Understanding

 On September 7, 1977, HEW and the City Board of Education entered into the Memorandum of Understanding challenged in this law suit. The Agreement calls for the implementation of a three year plan to eliminate alleged discrimination in the selection or assignment of teachers and supervisors in the public schools. The terms, which HEW accepts as compliance with both Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972, include the following:

1. Not later than September of 1979, the teacher corps of each District in the system will reflect, within a range of five percent, the racial-ethnic composition of the system's teacher corps as a whole for each educational level and category, subject only to educationally-based program exceptions.
2. Not later than September of 1980, each individual school in the system will reflect, within a range of five percent, the racial-ethnic composition of the system's teacher corps as a whole for each educational level and category, subject only to educationally-based program exceptions.
3. The Board of Education will demonstrate to the Office for Civil Rights, subject to prescribed review, that any failure to meet the commitments set forth in paragraphs one and two hereof results from genuine requirements of a valid educational program. In addition, the Board will demonstrate that it has made and is continuing to make special efforts to overcome the effects of educationally-based program exceptions through effective use of such mechanisms as recertification, recruitment and special assignment of teachers.
. . .
6. The Board agrees, as soon as practicable to have performed a study of the relevant qualified labor pool by race, ethnicity, and sex by an independent expert acceptable to the parties and pursuant to methodology and standards agreed to by the parties. Through the adoption and implementation of the affirmative action procedures and legislation provided in paragraph 4 of this Memorandum and other efforts taken or to be taken by the Board, the Board commits that by September of 1980, the levels of minority participation in the teaching and supervisory service will be within a range representative of the racial and ethnic composition of the relevant qualified labor pool.

 (The full memorandum is set out in Appendix A.)

 The Board further agreed to actively sponsor and support state legislation at the 1978 session of the Legislature to help accomplish these goals, including the abolition of the rank ordering of persons who had passed examinations (Paragraph 4c of the Memorandum), the combination of all eligibility lists by license, and the merger of such lists with the names of those who have passed any new tests without regard to the dates of examination. Paragraph 4b. In a special addendum to the entire Memorandum, the UFT also committed itself to support the adoption of such legislation. Should such legislation not be adopted, the Board is bound to undertake litigation to achieve the agreed objectives. Paragraph 5.

 Although the UFT was consulted with respect to the specific terms of the September 7, 1977 Agreement before it was adopted, other parties to the present litigation were not. The public and other interested parties were presented with an accomplished fact. No publication of the proposed Agreement was made in advance of its adoption and no hearings were held by HEW on its specific terms.

 HEW's extensive discussions with interested groups dealt with the general problem of alleged discrimination in the City's schools, not with the specific terms of the proposed Agreement. For instance, in February 1976, The Coalition of Concerned Black Educators, Maria Banks, Kenneth Johnson and Dolores Ward, all of whom have intervened as defendants, filed an administrative complaint with HEW alleging racial discrimination in the employment policies and practices of the City School District of the City of New York. This administrative complaint allegedly resulted in, or at least contributed to, the decision of OCR to launch a full-scale investigation of the City school system which, in turn, prompted OCR to send its November 9, 1976 letter to Chancellor Anker charging the City with non-compliance with Title VI and Title IX. In spite of their important roles, first as catalysts, and later as interested parties directly affected by any consent settlement, none of these intervenors were consulted by HEW or the Board of Education on the terms of the Agreement at any time prior to its promulgation. See Notice of Motion to Intervene at paragraph 22; March 7, 1978 Letter to Court from James Meyerson, Court Exhibit 5 at March 7, 1978 hearing. Had they been consulted, they would have urged that the Agreement include "substantially more definitive hiring goals the net effect of which hopefully would have resulted in significantly greater minority employment on an integrated assignment basis within the City School District of the City of New York." Intervenor-Defendants Responsive Pleading at p. 10.

 Nor did HEW or the Board of Education consult Ronald Ross, who has also intervened as a party defendant. He, too, had filed an administrative complaint with OCR in February 1976. Ross asserts that his interests in enforcing the September 7, 1977 agreement may not be identical with either HEW or the City Board of Education. See Affidavit in Support of Motion to Intervene of Arthur N. Eisenberg at paragraph 11. Intervenor-plaintiff, the Council of Supervisors and Administrators, was also not consulted in spite of the allegedly "clear impact that such Memorandum of Understanding was intended to have upon the seniority rights of CSA members guaranteed by the applicable collective bargaining agreement between CSA and Defendant Board of Education and the civil service rights of those employees under the New York State Constitution and Education Law." Intervenor's Complaint at p. 19.

 A limited post-Agreement opportunity for expressing views was afforded on October 19, 1977 by the Board of Education -- not by HEW as required by Title VI. This "hearing" took place almost six weeks after the Memorandum became effective. In its calendars of October 5, 1977 (March 7, 1978 hearing -- Defendant's Exhibit A) and October 19, 1978 (March 7, 1978 hearing -- Defendant's Exhibit B) the Board printed the text of the September 7, 1977 Memorandum of Understanding, noting that it would be presented for adoption at its regularly scheduled meeting on the night of October 19, 1977. The calendars stated that the Memorandum was printed "for information only." At the October 19, 1977 meeting, the Board heard some 10 statements by various members of the New York City community, including Mr. Jack Zuckerman, the President of CSA. See list of speakers -- Defendant's Exhibit C -- at March 7, 1978 hearing. These ...

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