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Board of Education v. Harris

decided: November 19, 1979.


Appeal from an order entered in the United States District Court for the Eastern District of New York (Weinstein, District Judge) remanding for appellants' further administrative review appellees' application for a waiver of ineligibility under the Emergency School Appropriations Act, 20 U.S.C. § 1605(d)(1). Affirmed.

Before Oakes and Meskill, Circuit Judges, and Stewart, District Judge.*fn*

Author: Meskill

Three officials of the Department of Health, Education and Welfare (collectively "HEW," the "agency," or "appellant") including the Secretary*fn1 appeal from an order of the United States District Court for the Eastern District of New York remanding for further administrative review the application of the Board of Education of the City School District of the City of New York (the "Central Board") for a waiver of ineligibility under the Emergency School Aid Act, 20 U.S.C. §§ 1601, et seq.,*fn2 and enjoining the appellant from expending funds originally designated for appellees' benefit pending such reconsideration. Previously, the Central Board had been denied funding under the program on the ground that the Central Board's assignment of black teachers to predominantly black high schools disqualified it from receiving such benefits, see 20 U.S.C. § 1605(d)(1)(B). An application for a waiver of ineligibility was summarily denied on the ground that the agency lacked discretion to grant such relief in situations where although the segregative assignment policy had been repudiated, its "effects" still lingered. In reviewing the agency's action, the district judge found that HEW had been entirely too modest in its view of its prerogatives under the waiver provisions of the Act and ordered the matter remanded for administrative reconsideration of the merits of the Central Board's application. Board of Education of the City School District of the City of New York v. Califano, 464 F. Supp. 1114 (E.D.N.Y.1979) ("Califano II "). We affirm.



The instant appeal poses a very circumscribed issue. In substance, we are called upon to decide whether HEW's summary rejection of the Central Board's waiver application on the ground that the "effects" of the now-repudiated discriminatory practice had not yet been entirely abated was proper under the program's statutes and regulations. Before formulating a response, it is necessary to place this appeal in its proper setting which, owing to the volume of litigation which has preceded it, is panoramic.

a. The ESAA Waiver Provision and Its Implementing Regulation.

Recognizing that the cost of desegregating public school systems or of maintaining adequate educational standards in those schools which had achieved integration was beyond the means of many local boards, Congress in 1972, after considerable debate, passed Title VII of the Education Amendments of 1972, the Emergency School Aid Act ("ESAA"), Pub.L. 92-318, Title VII, §§ 701-820, 86 Stat. 354 (1972), 20 U.S.C. §§ 1601, et seq. The announced purposes of the legislation are "(1) to meet the special needs incident to the elimination of minority group segregation . . . (2) to encourage the voluntary elimination . . . of minority group isolation . . . and (3) to aid school children in overcoming the educational disadvantages of minority group isolation." 20 U.S.C. § 1601(b). This Court has previously characterized ESAA as "a program purposefully designed "to aid in desegregating schools and support quality integrated schools.' " Board of Education of the City School District of the City of New York v. Califano, 584 F.2d 576, 578 (2d Cir. 1978), cert. granted, 440 U.S. 905, 99 S. Ct. 1211, 59 L. Ed. 2d 453 (1979) ("Califano I ").*fn3

Funding under ESAA is available on a competitive basis. Applicants must submit timely proposals which are reviewed and ranked by the Assistant Secretary in accordance with the criteria set forth in agency regulations, 45 C.F.R. § 185.14, the most important of which is "the effective net reduction in minority group isolation." Id. § 185.14(a)(2)(i). See also Califano I, supra, 584 F.2d at 579 n.4. A local board whose proposal is deemed meritorious must be in the active process of desegregation, whether by mandatory court order, HEW-approved plan or voluntarily adopted procedure, 20 U.S.C. § 1605(a), and in addition, must demonstrate that subsequent to the date of ESAA's passage, June 23, 1972, it has not engaged in any of the acts, practices, policies or procedures proscribed under 20 U.S.C. § 1605(d)(1). Specifically included as a category of disqualifying conduct is discrimination in the "hiring, promotion, or assignment of employees . . ." Id. § 1605(d)(1)(B). See generally Swann v. Charlotte-Mecklenburg Board of Education, 402 U.S. 1, 91 S. Ct. 1267, 28 L. Ed. 2d 554 (1971). This statutory prohibition is amplified in the regulation promulgated thereunder, 45 C.F.R. § 185.43(b)(2), which provides in pertinent part:

No educational agency shall be eligible for assistance under the Act if, after June 23, 1972, it has had or maintained in effect any other practice, policy, or procedure which results in discrimination . . . including the assignment of full-time classroom teachers to the schools of such agency in such a manner as to identify any of such schools as intended for students of a particular race, color, or national origin.

Even though an applicant has been disqualified from the program by virtue of the commission of proscribed activity postdating June 23, 1972, it may nonetheless receive ESAA funds if it can obtain a waiver of ineligibility under 20 U.S.C. § 1605(d)(1). That provision requires the applicant to specify the reason for its exclusion from the program, and set forth such assurances as the Secretary may require to demonstrate that the disqualifying "practice, policy, procedure or other activity . . . has ceased to exist or occur," and that such activities will not reoccur after submission of the application. Although the legislative history is scant, Section 1605(d)(1) appears to have been adopted as a safeguard against the channeling of ESAA funds to any school district whose desegregation plan was a sham or was in danger of being abandoned or flouted. See Califano II, supra, 464 F. Supp. at 1121 and legislative history cited therein. In aid of this purpose the statute further provides that the Secretary may not delegate the duty of determining the adequacy of waiver applications, 20 U.S.C. § 1605(d)(2), that such applications must conform to the regulations promulgated thereunder, 20 U.S.C. § 1605(d)(5), that relevant committees in both houses of Congress shall be notified of the Secretary's favorable review of such applications, and that final approvals thereof will not formally be granted until 15 days after Congress receives this notification, 20 U.S.C. § 1605(d)(6).

With regard to the waiver of ineligibility stemming from discrimination in teacher assignments, the regulations provide, 45 C.F.R. § 185.44(d)(3):

applications for waiver shall contain evidence that such agency has assigned its full-time classroom teachers to its schools so that no school is identified as intended for students of a particular race, color, or national origin.

b. The Central Board's Attempts to Obtain ESAA Funding.

In November, 1976, HEW's Office of Civil Rights notified the Central Board that its employment practices were in violation of laws barring discrimination in federally funded programs, 42 U.S.C. § 2000d and 20 U.S.C. § 1681, in that the agency's statistical data indicated that a pattern existed whereby teachers of minority group backgrounds were consistently assigned to schools whose student populations were predominantly of similar racial or ethnic origin.*fn4 When the Central Board applied for a 1977-78 ESAA grant, HEW, although finding one proposal worthy of funding, denied the appropriation since its figures demonstrated that some schools were identifiable on the basis of segregative teacher assignments. The Central Board attributed the pattern to (1) provisions of the collective bargaining agreement between the Central Board and the teachers' union restricting the inter-school transfer of some teachers; (2) the preference of senior teachers for assignment to nonminority schools, together with their unwillingness to teach elsewhere; and (3) the unequal distribution of teaching licenses in specific areas. In the ensuing litigation, this Court held the ESAA funds could be properly withheld upon a simple showing that the assignment method had a disparate impact upon different groups, despite the absence of proof that the discriminatory deployment was willful or intentional which would be required to support a finding that the Central Board's teacher assignment practices violated the Constitution. Califano I, supra.

On September 7, 1977, the Central Board and HEW entered into a detailed plan, entitled the "Memorandum of Understanding," see Caulfield v. Board of Education of the City of New York, 449 F. Supp. 1203, 1227 (E.D.N.Y.) ("Caulfield I "), rev'd, 583 F.2d 605, 607 n.2 (2d Cir. 1978), aimed inter alia at rectifying the objectionable mode of teacher assignments. Pursuant to this agreement, the Central Board undertook to phase out the practice over a three year period, in exchange for which, HEW's Office of Civil Rights warranted that the Central Board would be in compliance with Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, et seq., and Title IX of the Education Amendments of 1972, 20 U.S.C. §§ 1681-86.

Implementation of the plan was hampered from the outset by individual teachers and principals and their unions. It appears that while teacher and principal assignments are, as a technical matter, made on an annual basis, certain collective bargaining agreements guarantee personnel with some degree of seniority placement in the schools where they have previously served. Claiming that the Memorandum of Understanding mandated the assignment of teachers to particular schools solely on the basis of race, several teachers and principals commenced legal action. On March 15, 1978, the district court, while not reaching plaintiffs' substantive claim, nonetheless found an abuse of plaintiffs' procedural due process rights to participate in the negotiations which had led up to the drafting of the desegregation plan, and vacated the Memorandum of Understanding, thereby halting its implementation, Caulfield I, supra. Approximately six weeks thereafter, the Central Board informed HEW that it would, for the present, be unable to fulfill its objective of correcting the prior pattern of discriminatory teacher assignments. For this reason, the Central Board's request for ESAA funding for 1978-79 was denied on June 20, 1978. An application for a waiver of ineligibility, which has become the subject of this appeal, was filed on July 7, 1978.

On September 5, 1978, this Court reversed Caulfield I, supra, reinstating the Memorandum of Understanding, and permitting the Central Board to renew immediately its corrective measures.*fn5 Despite the revival of the desegregation plan, HEW on September 26, 1978, informed the Central Board that its waiver application had been denied for the reason that the agency lacked evidence that the prior mode of teacher assignment had ceased and would not reoccur.

c. The Proceedings Below.

Claiming that the summary rejection of its waiver application was an abuse of discretion, and seeking to enjoin the expenditure of $2.36 million in ESAA grants earmarked for it for the 1978-79 school year, the Central Board once again sought the intervention of the district court. A temporary restraining order, issued on September 27, 1978, was converted into a preliminary injunction on October 10 of that year. An expedited trial on the merits was scheduled for November 8 but both parties declined the opportunity to present oral testimony, preferring to submit the matter upon the pleadings, the administrative record and certain stipulated facts.

HEW took the stance that although no further impediment to the full implementation of the Memorandum of Understanding existed, it had properly denied the waiver application because both the statute, 20 U.S.C. § 1605(d)(1), and its implementing regulation, 45 C.F.R. § 185.44(d)(3), require that the waiver applicant alleviate both the cause and the remaining "effects" of prior discriminatory teacher assignments in order to qualify for ESAA funds. The district court upheld the agency's determination that the Central Board was ineligible for direct ESAA funding by virtue of discriminatory behavior postdating June 23, 1972. However, the court rejected HEW's contention that its option to grant a waiver was foreclosed because, in the agency's view, the waiver statute and relevant regulation require not only that the applicant have desisted from the proscribed activity, but also, in the case of segregative teacher assignments, that the applicant have fully eliminated the effects of the prior misconduct. After a canvass of the legislative history and a close analysis of congressional purpose, Judge Weinstein found that such was not the intent of the waiver statute. While he agreed that the regulation demanded that the waiver applicant cure both the cause and effect of past actions, he found the provision invalid as contrary to the legislation's objectives. Accordingly, he remanded the waiver application to the agency for reassessment on its merits, clearly indicating that evidence of the Central Board's backsliding, bad faith, or simple failure to implement the teacher assignment reforms on schedule could be considered as bearing upon the likelihood that the discriminatory practice might reoccur, and explicitly leaving the ultimate resolution of the application to the sound discretion of the Secretary. Califano II, supra, 464 F. Supp. at 1127. This appeal followed.



a. Waiver of Objection and Primary Agency Jurisdiction.

As a preliminary matter, we must determine whether the district court properly entertained this action. Appellants claim that by failing to advocate the position while the matter was still under administrative study, the Central Board "waived" its right to challenge, under the theory ultimately adopted by the court below, HEW's denial of their waiver application.

It is true that as a general rule subject only to certain narrowly drawn exceptions, courts will not review objections to an agency's procedures not raised at the administrative level, United States v. L. A. Tucker Truck Lines, Inc., 344 U.S. 33, 37, 73 S. Ct. 67, 97 L. Ed. 54 (1952); NLRB v. Newton-New Haven Co., 506 F.2d 1035, 1038 (2d Cir. 1974); KFC National Management Corp. v. NLRB, 497 F.2d 298, 300 n.1 (2d Cir. 1974), cert. denied, 423 U.S. 1087, 96 S. Ct. 879, 47 L. Ed. 2d 98 (1976). However, the theory that the implementation of the Memorandum of Understanding absolved the Central Board of its current discriminatory teacher assignments could not have been raised prior to September 5, 1978, the date on which this Court resurrected the plan, by which time the waiver of ineligibility application had already been pending before HEW for two months. Moreover, there is some evidence to suggest that the agency did in fact weigh the prospect of the Memorandum's revival before finally denying the application. In its letter of September 28, 1978, formally notifying the Central Board of its action, HEW indicated that its unfavorable action might in some degree be attributed to its belief that the desegregation plan, even if implemented, was insufficient compliance with the nondiscrimination requirements of the ESAA program. Thus, it seems that the theory was not in fact "waived" in any meaningful sense.

Apart from the factual infirmities of the contention, the notion of "waiver of objection" is inappropriate to the circumstances of this case. That concept is applicable where a petitioner before an agency belatedly seeks to challenge a procedure employed by the administrative tribunal, see, e.g., KFC National Management Corp. v. NLRB, supra; NLRB v. Newton-New Haven Co., supra (Court of Appeals refuses to allow unsuccessful petitioner to challenge, for the first time, the composition of the agency's reviewing panel). What is involved here, however, is not an objection to the manner in which the agency has proceeded, or a claim which has been unjustifiably withheld from its review, but a question of the interpretation of the statute which regulates the appellees' access to the administrative review process itself. The essential issue is not one of waiver of objection or deliberate by-pass of a claim or theory before the agency tribunal. The essential issue is whether the ...

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