The opinion of the court was delivered by: LASKER
In a decision dated February 10, 1984, addressing defendants' motion to dismiss the complaint, the Court reserved decision on the issue whether the individual defendants, employees and officers of Consolidated Edison Company of New York, Inc. ("Con Ed"), may be sued in their individual capacities under section 504 of the Rehabilitation Act of 1973, (the "Act"), 29 U.S.C. § 794. The parties have submitted further briefing on this issue, as requested, and we now deny the motion to dismiss the individual defendants.
Section 504 of the Act provides, in relevant part:
"No otherwise qualified handicapped individual in the United States . . . shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. . . ."
There appears to be no authority directly addressing the question whether a corporation's directors, officers and employees who are alleged to be responsible for policies which violate section 504 may be liable in their individual capacities under that section. However, some cases have assumed, without deciding, that such liability exists. The decisions in Pomerantz v. County of Los Angeles, 674 F.2d 1288, 1291 (9th Cir. 1982), and Tatro v. Texas, 516 F. Supp. 968, 973-74 (N.D. Tex. 1981), aff'd, 703 F.2d 823 (5th Cir. 1983), cert. granted, 464 U.S. 1007, 104 S. Ct. 523, 78 L. Ed. 2d 707, 52 U.S.L.W. 3440, (Dec. 5, 1983), discussed the question whether governmental immunity might shield governmental officials sued individually under § 504.
In both cases, the officials involved were held to be protected from individual liability under various theories of immunity. There would be no occasion for such a determination if section 504 permitted suits only against governmental entities and not against individual officials.
Moreover, defendants' primary argument against individual liability for violations of § 504 -- that § 504 is violated only if a "recipient" of federal funding engages in discrimination, and the individual defendants are not "recipients" within the meaning of the regulation -- is unpersuasive. Although the definition of a "recipient" set forth in the regulations promulgated under § 504 does not include agents of an entity receiving federal financial assistance,
it does not necessarily follow that such agents are not liable if they are responsible for discriminatory policies carried out by a recipient of federal funding. As plaintiffs point out, 42 U.S.C. § 1983 predicates liability on the requirement that the challenged actions were carried out under color of state law, but nevertheless does not restrict liability to state agencies. Similarly, § 504 and the accompanying regulations can be read as requiring a showing that the discrimination took place under a federally funded program, but as permitting a suit against individuals responsible for discriminatory policies as well as against the entity receiving federal funds.
In addition, it is appropriate to note that the statute itself does not speak of discrimination by a recipient of federal funds, but instead forbids discrimination under any program or activity receiving federal funding.
In sum, although we recognize that the question is not free from doubt, we find plaintiffs' arguments to be more persuasive on this issue. Accordingly, the motion to dismiss the individual defendants is denied.