Jotham Clement JOHNSON, Plaintiff-Appellant, v. CITY OF SALINE, et al., Defendants-Appellees.
No. 97-1041
United States Court of Appeals, Sixth Circuit.
Argued March 17, 1998. Decided Aug. 6, 1998.
151 F.3d 564
Before: BOGGS, NORRIS, and MOORE, Circuit Judges.
Here, based on the same reasoning adopted by the Court, we believe that
Our reading comports with the legislative history of the CEA. See Marchese v. Shearson Hayden Stone, Inc., 644 F. Supp. 1381, 1388-89 (C.D. Cal. 1986), aff‘d, 822 F.2d 876 (9th Cir. 1987) (explaining that the legislative history of the CEA indicates that Congress intended to permit FCMs to retain interest earned on customers’ margin money); see also Craig, 624 F. Supp., at 947 (reasoning that retention by the FCM of interest earned on margin money is appropriate because the FCM bears the risk of any decline in the value of an obligation purchased with a customer‘s margin funds). Against this backdrop, the CFTC promulgated Regulation 1.29 to allow FCMs like Dean Witter, who bear the risk of any decline in the value of investments purchased with customer funds, to retain the profits received on investments of customer margin money in a limited category of permissible investments. See Craig, 624 F. Supp. at 947.
CONCLUSION
For the reasons stated above, we hold that
Mark V. Heusel (briefed), Marian L. Faupel (argued and briefed), John K. Kline (briefed), Faupel & Associates, Ann Arbor, Michigan, for Plaintiff-Appellant.
Michael J. Bommarito, Martens, Ice, Geary, Klass, Legghio, Israel & Gorchow, Southfield, Michigan, Stephen J. Rhodes, Kevin T. McGraw (argued and briefed), R. Lance Boldrey (briefed), Foster, Swift, Collins & Smith, Lansing, Michigan, for Defendants-Appellees.
OPINION
BOGGS, Circuit Judge.
Jotham “Jot” Johnson appeals from the dismissal by the district court of his claims under the Americans with Disabilities Act (ADA),
I
A
Johnson has ankylosing spondylitis, for which he has received social security disability benefits since 1984. The disease caused him to get both of his hips replaced, and his doctor has told him not to carry heavy objects or to use stairs.
In 1988, Johnson entered into an agreement with the city of Saline, Michigan. Under the agreement, which was between the city and SVI (a corporation to be formed by Johnson and an associate), SVI was to operate the city‘s public access cable station. The agreement was supposed to last for a year, but it provided for renewals. It is disputed whether the agreement was explicitly renewed, but both parties continued performing. At some point, SVI lost its corporate status when it failed to file an annual report.
B
The contractual relationship between Johnson and the city was complicated. Although not formally required to do so by the contract, the city allowed Johnson to keep any income he obtained from selling advertising on the station. The cable provider paid a franchise fee to the city, which apparently did not pass any of the money along to the
Johnson listed himself as self-employed on his income tax return; he paid himself a small salary from the money, if any, SVI earned over the course of the year. The city did not provide him with any employee benefits. Johnson described his job responsibilities as “everything,” from taking out the trash to “hiring and firing” volunteers. He did not need or obtain any authorization from the city for his personnel decisions, though at one point the city successfully pressured him to fire an associate. In general, though, the record indicates that he was his own boss.
The main problem for Johnson was that the station‘s studio was on the second floor of a city building. In addition, the only available bathroom was on the first floor. Johnson claims that he notified city officials of his condition and his needs to the best of his ability, and that he pleaded with the city to move the studio to a more easily accessible location. However, it appears that although it was apparent to those who saw Johnson that something was wrong with him, it was unclear to anyone just what his limitations were. After all, Johnson walked up and down the stairs several times a day, making it implausible to expect the city to know that he was not supposed to do so. In a broadcast on the station in February 1995, however, Johnson declared what his restrictions were, and complained about the city‘s actions regarding the station. There is ample evidence that city officials knew that the second floor of the building was generally inaccessible to disabled people.
C
A substantial portion of the programming that Johnson produced was for the city and its government. The city paid Johnson on two occasions when he submitted invoices, in 1990 for making a video for the city ($7,000), and in 1992 for undefined “services rendered” ($7,980). In 1994, however, the city refused to pay one of Johnson‘s invoices. Johnson was denied payment again in 1995, and the city notified him that it was terminating its agreement with him. Johnson continued trying unsuccessfully to get the city to move the studio, and to negotiate with the city, which purported to want to increase the amount of programming on the station. When Johnson decided to acquiesce in the termination of the agreement, he announced that he would remove from the station all of the equipment he had bought. At this, the city asked to buy the equipment, and asked Johnson to continue running the station until June. The city also formed a commission and a task force to try to resolve its differences with Johnson. The negotiations failed, however, and in June Johnson removed his equipment and ceased operations. The city found another operator, who is not disabled but is less trained and less successful at running the station than Johnson was.
Johnson filed a complaint, with claims under Titles I and II of the ADA. He also asked for damages arising from the alleged worsening of his condition, and physical and mental suffering. The district court dismissed the case on summary judgment. Johnson then filed this timely appeal.
II
The district court dismissed Johnson‘s Title I claims because he was not in an employer-employee relationship with the city. Title I of the ADA dictates that
No covered entity shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment.
Overall, the determination of what constitutes an employer-employee relationship under the ADA is not evident from the statute. To answer this question, Johnson cites the “economic realities” test we used in Lilley v. BTM Corp., 958 F.2d 746 (6th Cir. 1992). The city argues that the Lilley test was superseded by the Supreme Court‘s decision in Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318 (1992), which propounded a common-law agency test. For its part, the district court held that Johnson lost under both tests.
We hold that the proper test is the common-law test suggested by the city and Darden. Although Darden was an ERISA case, it stands for the proposition that when a statute has left a term undefined, has left no hint in the legislative history of its intended meaning for the terms, and the term has “accumulated settled meaning” under the common law, there is a presumption that Congress meant to incorporate the common-law definition into the statute. Darden, 503 U.S. at 322. The Darden Court noted the use of this principle in a Copyright Act case, and extended it to ERISA. It is a rule of general applicability. See Ware v. United States, 67 F.3d 574 (6th Cir. 1995) (applying Darden to Internal Revenue Code‘s definition of “employee“).
In this case, the ADA uses the same sort of vague definition of employee and employer found in ERISA. Compare
In a recent case, we applied Darden instead of Lilley, but recognized that in practice there is not much difference between the two standards—both consider the entire relationship, with the most important factor being the “employer‘s ability to control job performance and employment opportunities of the aggrieved individual.” Simpson v. Ernst & Young, 100 F.3d 436, 442 (6th Cir. 1996). Later in the same case, we listed applicable Darden factors:
[T]he hiring party‘s right to control the manner and means by which the product is accomplished; the skill required by the hired party; the duration of the relationship between the parties; the hiring party‘s right to assign additional projects; the hired party‘s discretion over when and how to work; the method of payment; the hired party‘s role in hiring and paying assistants; whether the work is part of the hiring party‘s regular business; the hired party‘s employee benefits; and tax treatment of the hired party‘s compensation.
Simpson, 100 F.3d at 443 (citing Darden, 503 U.S. at 323-24).
In Ware, however, we made it clear that while it is appropriate to apply Darden to many other statutory contexts, there is no one catch-all set of standards; a court should examine all incidents of the alleged employee/employer relationship, with the relative weight given to the various factors in the common-law analysis depending on the nature of the statutory context. Ware, 67 F.3d at 578.
With the principles from these cases guiding us, then, we can evaluate the district court‘s determination that, as a matter of law, Johnson was not an employee. Using those Darden factors that apply here, it certainly appears that the district court was correct. Johnson had a contract with the city (initially through his corporation) to provide services, and the contractual relationship reads unmistakably as one with an independent contractor as opposed to one with an
Admittedly, the city did control some aspects of the station‘s operations. In particular, the city controlled the facilities, owned most (but not all) of the equipment in the studio, and did not charge rent. In his deposition, Johnson referred to a particular official as his “supervisor,” and claimed that the official had asserted authority over him. Johnson claims that the city therefore controlled his ability to work, especially when it began exercising control more strongly, demanding that Johnson increase the amount of programming and keeping Johnson from employing an associate of his who had troubles with the law. But these appear just as strongly to be the acts of a party to a contractual relationship, if perhaps a close working relationship.
Therefore, we conclude that Johnson was not employed by the city, and affirm the district court‘s dismissal of Johnson‘s Title I claim.
III
A
Title II of the ADA mandates that, “no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.”
We need not consider whether Johnson‘s argument is correct, for we reach a similar result by other means. We conclude that (1) the discrimination referenced in the statute must relate to services, programs, or activities; and (2) services, programs, and activities include all government activities, including contracting such as that in this case.
The definition of a QID relates the discrimination referenced in
an individual with a disability who, with or without reasonable modifications to rules, policies, or practices, the removal of architectural, communication, or transportation barriers, or the provision of auxiliary aids and services, meets the essential eligibility requirements for the receipt of services or the participation in programs or activities provided by a public entity.
However, we must acknowledge that our conclusion—that the discrimination forbidden by
Second, this broad reading of “programs, services, and activities” is consistent with the broad definition used in § 504 of the Rehabilitation Act (“the term ‘program or activity’ means all of the operations“).
Next, we note that the Department of Justice regulations interpreting Title II also require a holding that Johnson has stated a valid claim under Title II. Congress gave the Attorney General the task of developing regulations to implement Title II.
This application of Title II to public contracting is bolstered and somewhat broadened by a section in the Department of Justice‘s Technical Assistance Manual, which as an interpretation by the Department of its own regulations is entitled to substantial deference. See Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994). The section provides that “[a] public entity may not discriminate on the basis of disability in contracting for the purchase of goods and services.” TITLE II TECHNICAL ASSISTANCE MANUAL, § 3.7100.
To summarize, “programs, services, and activities,” include all of the activities of a public entity. The ADA and its regulations forbid the city from discriminating against people who are, with reasonable accommodation, qualified to “participate” in contracting with the city to provide services.
In this case, Johnson has raised sufficient disputed issues of material fact, and the district court should not have dismissed his Title II claim on summary judgment.
Our decision today should not be read too broadly. At least one important limit to the reach of Title II remains. Title II only requires reasonable accommodation; otherwise, the would-be plaintiff is not a QID. See
B
We also note that the city is not exempt from Title II‘s requirement that it provide reasonable accommodations to members of the public. The district court held that because the facility was not generally open to the public, Title II did not apply. For this proposition, it cited Torcasio v. Murray, 57 F.3d 1340, 1346 n. 5 (4th Cir. 1995), a case that held that Title II did not apply to prisons.
Besides being wrong that the station was closed to the public,3 the district court erred in its general view of the breadth of Title II. After the district court‘s decision, however, the Supreme Court rejected the Torcasio view of Title II in Pennsylvania Dep‘t of Correc. v. Yeskey, 524 U.S. 206 (1998),4 holding that Title II protection extends to state prisoners, and ignoring any public/private distinction. As discussed above, Title II is broadly applicable to all of the activities of a public entity. This requirement is subject, as also discussed above, to the bounds of reasonableness. We cannot conclude in this case, however, that the state established as a matter of law that no reasonable accommodation was required or alternately that no reasonable accommodation was possible.
The district court also erred by barring Johnson‘s claim on the grounds that he operated the station, and thus that only he was responsible for providing reasonable accommodations, while the city was not. The city, not Johnson, determined where the studio was to be located. Though it was run by Johnson, the station was located in a city building, and operated there rent free. It is clear from the Technical Assistance Manual construing Title II that public entities have a duty to provide accessible facilities even when those facilities are used by contractors. As noted above, the Manual is entitled to substantial deference for this interpretation of Title II. The Technical Assistance Manual gives the specific example of a city-owned building in which the first floor is leased by private businesses. Even though the businesses may be subject to Title III of the ADA (
Furthermore, because of the city‘s role in providing the space and the equipment for the station, the station may be considered a “public entity” under the regulations. The Manual makes the following point:
Where an entity appears to have both public and private features, it is necessary to examine the relationship between the entity and the governmental unit to determine whether the entity is public or private. Factors to be considered in this determination include—
(1) Whether the entity is operated with public funds;
(2) Whether the entity‘s employees are considered government employees;
(3) Whether the entity receives significant assistance from the government by provision of property or equipment; and
(4) Whether the entity is governed by an independent board selected by members of a private organization or a board elected by the voters or appointed by elected officials.
TITLE II TECHNICAL ASSISTANCE MANUAL, § 1.2000. Although some of these factors do not apply (we have already held, for instance, that Johnson was not a public employee), the third factor is highly relevant. We do not mention this section of the Manual in order to establish a four-pronged balancing test—among other things, the list quoted above is of “consider[ations],” and non-exclusive ones at that. Rather, we hold only that the district court was unduly dismissive of Johnson‘s claims.
We leave it to the district court to determine on the merits whether the station is a public entity and the city is thereby subject to liability, or whether the city is subject to liability merely as a landlord. This distinction may factor into the district court‘s determination of whether or not the city is actually liable in this case (a question we do not purport to have answered here), since the reasonableness of an accommodation may depend on the context in which the city is providing it.5
Based on the foregoing, then, we conclude that the district court erred in dismissing Johnson‘s Title II claims on summary judgment.
IV
A
Parenthetically, the city argues that Johnson‘s “total disability” Social Security status forecloses any remedy under the ADA. Its argument is that if Johnson represents himself as totally disabled with regard to Social Security, he cannot represent that he is a qualified individual under the ADA. This argument is foreclosed by our decision in Griffith v. Wal-Mart Stores, Inc., 135 F.3d 376 (6th Cir. 1998).
B
The final question on appeal is whether the district court was correct in holding that Johnson could not bring an action for damages under the ADA, and alternately, if he could, that such a claim would be barred in his case by the doctrine of “avoidable consequences.” Specifically, Johnson sought compensatory and punitive damages for “physical damage ... psychological and
The remedial section of Title II of the ADA,
Section 794a(a)(2), in turn, incorporates the remedies, procedures, and rights provisions of Title VI of the Civil Rights Act of 1964 (
We have made a previous decision that is decisive as to one aspect of this question—punitive damages are not available under § 504 of the Rehabilitation Act, and so are not available to Johnson under Title II of the ADA. See Moreno v. Consolidated Rail Corp., 99 F.3d 782 (6th Cir. 1996) (en banc). The punitive damages issue was the only one we formally reached in Moreno, though we noted there that “federal courts have long held that compensatory damages may be awarded” for violations of § 504, and we were untroubled by that portion of the award. Id. at 784. We formalize these dicta today, and hold that compensatory damages are available under Title II of the ADA, by extension from their availability under the Rehabilitation Act and Title VI.
In Franklin v. Gwinnett County Pub. Sch., 503 U.S. 60 (1992), the Supreme Court held that compensatory damages are available under Title IX. Specifically, the Court cited the “general rule” that “absent clear direction to the contrary by Congress, the federal courts have the power to award any appropriate relief in a cognizable cause of action brought pursuant to a federal statute.” Id. at 70-71. The Court further found that Congress did not intend to limit that general rule in the case of Title IX. Id. at 71.
Given that Title IX parallels Title VI very closely, see Cannon v. University of Chicago, 441 U.S. 677, 694-95 (1979), the reasoning of Franklin extends to Title VI and, transitively, to § 504 of the Rehabilitation Act and Title II of the ADA. See also Guardians Ass‘n v. Civil Serv. Comm‘n, 463 U.S. 582 (1983) (holding, before Franklin, that compensatory damages are available for intentional violations of Title VI). Indeed, each of our sister circuits reaching the question has held that compensatory damages are available for violations of § 504. See W.B. v. Matula, 67 F.3d 484, 494 (3d Cir. 1995); Pandazides v. Virginia Bd. of Educ., 13 F.3d 823, 830 (4th Cir. 1994); Rodgers v. Magnet Cove Pub. Sch., 34 F.3d 642, 645 (8th Cir. 1994); Waldrop v. Southern Co. Svcs., 24 F.3d 152, 157 n. 5 (11th Cir. 1994). Even before Franklin, we reached this conclusion with regard to § 504, albeit in an unpublished decision. See Cook v. Hairston, 948 F.2d 1288 (6th Cir. 1991) (unpublished per curiam).
In dismissing this portion of Johnson‘s claim, the district court in this case also relied on the tort doctrine of “avoidable consequences,” perhaps better known as the requirement of mitigation of damages. The court held that, because Johnson himself chose to violate his medical restrictions, he could not charge the city with liability for the resulting damages. However, this analogy from tort law is inapt, for two reasons. First, the doctrine of avoidable consequences does not apply to intentional or continuous
Therefore, we hold that the district court erred in disallowing Johnson‘s claim for compensatory damages under Title II of the ADA.
V
Based on the foregoing, we AFFIRM the district court‘s dismissal of Johnson‘s claims under Title I, and his request for punitive damages, but VACATE and REMAND for further proceedings with regard to Johnson‘s Title II claim, including compensatory damages.
MOORE, Circuit Judge, concurring in part.
I concur in the majority opinion with one exception. The last paragraph of part III A of the majority includes a sentence regarding the hypothetical intersection of lowest-bidder contracting requirements and reasonable accommodations for disabilities. This sentence does not pertain to any facts or legal issues presented in this appeal. This sentence is pure dictum; it is totally unnecessary and irrelevant to our disposition of this case. In other respects I concur with the majority.