263 F. Supp. 26 | D.S.C. | 1967
The Board of Education of Lee County School District Number One, instituted this action against John W. Gardner, as Secretary of Health, Education and Welfare, and Harold Howe, II, as the United States Commissioner of Education. The matter before the court at this time is defendants’ motion to dismiss. The defenses set forth in that motion, which shall be set forth more fully below, are that the action is one against the United States and is barred by the doctrine of sovereign immunity, and, alternatively, that no claim has been stated for which relief can be granted because available administrative remedies have not been exhausted.
The success or failure of the motion to dismiss is in this instance critically dependent on the precise issues raised by the complaint. The particular technical language of the complaint is, of course, that which brings before the court the injury for which the plaintiffs seek their remedy; however, for brevity, the factual allegations of the complaint can be summarized as follows.
In the past the plaintiffs have availed themselves of federal financial assistance in the form of grants for certain education programs and activities. Title VI of the Civil Rights Act of 1964 is headed “Nondiscrimination in Federally Assisted Programs,” and under section 602
The chronology of the action is significant. After the Commissioner had exercised this disputed authority in September 1966, the School District waited for thirty days before bringing action. At that time no legislation Was in effect to protect the District against unwarranted, or arbitrary, deferral, which could be extended, delayed, or confused at the will of the Commissioner. With commendable zeal the Board acted, and on October 7,
The plaintiffs further allege that they have been threatened with the suspension and termination of all federal funds for alleged non-compliance with the guidelines, and they allege on information and belief that the defendants intend to accomplish this. The particular acts which are alleged to be arbitrary, capricious, unreasonable, and unlawful are in substance as follows:
1. That the defendants have acted to require plaintiffs to achieve a racial balance or quota contrary to the terms of the Civil Rights Act of 1964.
2. That the defendants have required the plaintiffs to take certain employment actions in violation of the specific terms of the Act.
3. That the defendants have deferred action on pending or future applications for federal funds without any previous hearing or express findings as required by the Act.
4. That the defendants have ignored the terms of the Act which require that their actions must be consistent with the objectives of the statute authorizing the financial assistance.
5. That the defendants have taken action and threatened actions which result in a general or non-selective deferment of termination of federal financial assistance to all of plaintiff’s educational programs without finding or determining that there has been discrimination in each program, in violation of the terms of the Act.
On these allegations the plaintiffs pray, inter alia, for (1) A temporary injunction and restraining order to enjoin the defendants from continuing to defer action on the applications during the pendency of this action;
(2) For a declaration of the rights of the parties, their legal relationships, and the resolution of the controversies existing between them and a declaration as to the legality of the demands made by defendants on plaintiffs;
(3) For a permanent injunction against the defendants enforcing the regulations set forth and the guidelines and from discontinuing the payment of federal funds.
(4) For a declaration that the guidelines are unlawful, arbitrary, capricious and unreasonable in the manner of their application to plaintiff in the above particulars.
The court is not persuaded by the argument of the defendants that the suit should be dismissed on the doctrine
In Larson, a leading case on the subject, the Court expressly stated that;
[W]here the officer’s powers are limited by statute, his actions beyond those limitations are considered individual and not sovereign actions. The officer is not doing the business which the sovereign has empowered him to do or he is doing it in a way which the sovereign has forbidden. His actions are ultra vires his authority and therefore may be made the object of specific relief. 337 U.S. at 689, 69 S.Ct. at 1461.
In Larson the action was one in which an injunction was sought against lawful and official acts by the defendants and the doctrine was invoked. In State of Louisiana v. McAdoo, supra, the doctrine was invoked where the plaintiffs sought to enjoin acts which were within the discretionary powers of the defendants. In the present case the complaint was drawn so as to present a case which would fall within the recognized exception, that being that the acts alleged are unlawful and in direct conflict with the powers granted the officers. This principle was recognized recently by the district court in Abbott Laboratories v. Celebrezze, 228 F.Supp. 855 (D.Del.1964). The point was not attacked on appeal and the case was reversed on the basis of a finding no controversy existed. 352 F.2d 286 (3rd Cir. 1965). Likewise the Second Circuit passed the point by a footnote, saying that it is clearly established that an action for a declaration that the federal regulatory officers have acted in excess of their authority does not constitute an unconsented suit against the United States. Toilet Goods v. Gardner, 360 F.2d 677, 682 n. 6 (2nd Cir. 1966). See also Wohl Shoe Co. v. Wirtz, 246 F.Supp. 821 (E.D.Mo.1965) (sovereign immunity is inapplicable where officer acts in excess of his authority).
At the hearing on the motion the defendants maintained that the doctrine of sovereign immunity was raised only to bring into focus what they perceived to be the proper jurisdictional basis of the action. This, they contend, would
In the usual case where the doctrine of the exhaustion of administrative remedies applies the plaintiff suffers an adverse agency determination and he is then required to proceed with the available administrative remedies until a final administrative decision is reached before seeking review in the courts. Here, in that situation section 603 of the Civil Rights Act, 42 U.S.C.A. section 2000d-2, would provides the means for judicial review, however, this claim does not in any way seek a review of an agency determination. No factual determination has been contested. From the record, none has in fact been made. This complaint is directed to the legality of the policy statements issued by the defendants and each point of these policy statements under consideration is alleged to violate a specific provision of the Civil Rights Act. It is the avowed purpose of these regulations and statements to effectuate that Act. On this distinction the case seems to fall within the authority of Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958), where the Court stated that:
The sole and narrow question presented is whether a Federal District Court has jurisdiction of an original suit to vacate that determination of the Board because made in excess of its powers. * * * We think the answer surely must be yes. This suit is not one to ‘review,’ in the sense of that term as used in the Act, a decision of the Board made within its jurisdiction. Rather it is one to strike down an order of the Board made ip excess of its delegated powers and contrary to a specific prohibition in the Act. * * * Surely, in these circumstances, a Federal District Court has jurisdiction of an original suit to prevent deprivation of a right so given.
Even the most narrow view of Leedom v. Kyne would still encompass the present controversy. In McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U.S. 10, 83 S.Ct. 671, 9 L.Ed. 2d 547 (1963), the Court stated that in Leedom “judicial intervention was permitted since the Board’s order was ‘in excess of its delegated powers and contrary to a specific prohibition in the Act.’ ” 372 U.S. at 16, 83 S.Ct. at 675. McCulloch was said to fall within the exception of Leedom without violating a specific prohibition of the Act because of a uniquely compelling question of public importance. Allowing for that, the Court expressly stated that the narrow exception of Leedom was not extended. 372 U.S. at 17, 83 S.Ct. at 671. In the present case no extension is necessary to bring the action under Leedom for there is both a challenge that actions are in excess of delegated powers and contrary to a specific prohibition in the Act. The case of Leedom v. Kyne, no matter how restrictive or liberal a view is taken, is nevertheless an affirmation of the viability of an established principle of law. Where legal questions are presented which are of the type traditionally determined by courts and there is no question involving underlying administrative expertise no exhaustion of administrative remedy is required. In Public Utilities Comm. v. United Fuel Gas Co., 317 U.S. 456, 63 S.Ct. 369, 87 L.Ed. 396 (1943), the Court denied the applicability of the
No inquiry beyond the orders themselves and the undisputed facts which underlie them is necessary in order to discover that they are in conflict with the federal Act. At 469, 63 S.Ct. at 376.
In Skinner & Eddy Corp. v. United States, 249 U.S. 557, 39 S.Ct. 375, 63 L.Ed. 772 (1919), the Court held against a contention that the doctrine controlled; Mr. Justice Brandéis spoke for the Court in terms very much appropriate to the case at hand.
If plaintiff had sought relief against a rate or practice alleged to be unjust because unreasonably high or discriminatory, the remedy must have been sought primarily by proceedings before the commission * * * ; and the finding thereon would have been conclusive, unless there was lack of substantial evidence, some irregularity in the proceedings, or some error in the application of rules of law * * *. But plaintiff does not contend that * * * [there is] an unreasonably high rate, or that it is discriminatory, or that there was mere error in the action of the commission. The contention is that the commission has exceeded its statutory powers; and that, hence, the order is void. In such a case the courts have jurisdiction of suits to enjoin the enforcement of an order, even if the plaintiff has not attempted to secure redress in a proceeding before the commission. At 562, 39 S.Ct. at 377.
See also the opinion of Mr. Justice Holmes in Waite v. Macy, 246 U.S. 606, 38 S.Ct. 395, 62 L.Ed. 892 (1918), where the doctrine was not applied in reviewing the legality of an administrative regulation.
The defendants arguments appear to the court to depend for their validity upon the theoretical assumption that no final action has been taken. The practical effects upon the school board is the same whether the action is spoken of as a deferral or a termination or no action at all.
The authority of the Commissioner to defer action without a hearing has come under contention under the defendants’ Rule 12(b) (6) motion. They have asserted that no claim has been stated for which relief can be granted as to the matter of deferral because deferral is within the lawful discretion of the Commissioner. The precise point of its legality is challenged by the complaint and there are most serious questions raised regarding such discretionary authority by the legislative history of the Act and of the Fountain Amendment.
The context of the case, as apparently viewed by the defendants, is that no final action has been taken, that the guidelines are interpretative regulations that have not been applied to a specific fact situation, and that, therefore, the matter is not yet reviewable. The other view is, that the original, unlimited, arbitrary deferral was hopelessly final and that court action had become necessary. The Fountain Amendment now provides that a hearing may be had at a determinable time. While no basis for a dismissal of this action has been shown, the Fountain Amendment would now allow administrative actions to proceed to finality. This would cure the defendants’ objections to the present proceedings and would allow the court to have the benefit of the .completed record. Therefore, in order that no decision on the merits will be reached on an incomplete record, the motion to dismiss is denied; the jurisdiction of the court is retained; the parties are directed to proceed among themselves to a final administrative action, at which time the parties are to reappear before this court, perfect the record and proceed to further disposition of the case.
And it is so ordered.
. Section 602 of the Civil Rights Act of 1964, 42 U.S.C.A. § 2000(1-1, provides: Each Federal department and agency which is empowered to extend Federal financial assistance to any program or activity, by way of grant, loan, or contract other than a contract of insurance or guaranty, is authorized and direct
. The Office of the Commissioner falls within the organizational structure of the United States Department of Health, Education and Welfare.
. Obviously, the phraseology is used euj)liemistically to guard an inquiry as to the ratio of pupil assignment for a comparison with the percentage formulae which the Department seems to hold in such veneration.
. See Note 1, supra.
. Under Rule 12(a) Fed.R.Civ.P. “The United States or an officer or agency thereof shall serve an answer * * * within 60 days * * It is obvious that half the fiscal school year, or more, would have expired before the case could have been tried and disposed of even without appeal. The money, meanwhile, was withhold.
. A bill to strengthen and improve programs of assistance for elementary schools.
. Mr. Fountain, in offering the amendment, quite succinctly exposed the emptiness and futility of the attempt to maintain verbal distinctions in the situation as it existed at that time: “Commissioner Howe piously contends that he is not actually ‘refusing to grant’ funds for new programs to the school districts involved, since that would admittedly violate section 602. Instead, he says, he is merely ‘deferring’ action indefinitely on applications for funds submitted by these districts. From the standpoint of the schools and the students affected, of course, an indefinite ‘deferral’ of action on an application for funds has exactly the same effect as a refusal.” 103 Cong.Rec. 24562 (daily ed. Oct. 6, 1966).
. The following sample of legislative commentary shows that the asserted discretionary authority to defer is certainly not an unassailable proposition.
Mr. Fountain, speaking before the House, when the Amendment was offered said: As I recall, when this act passed there were many members of this body who opposed the enactment of Title VI because they were sincerely and deeply concerned that administrative officials might misuse it to arbitrarily and unjustifiably deny Federal funds to local governmental units which were not engaged in discriminatory practices * * *.
Congress specifically provided, in section 602 of Title VI, that Federal funds are not to be refused to any local school
Mr. Pucinski: “There is nothing in the school act that gives them that right * * * And there is nothing in the Civil Rights Act that provides such arbitrary powers, but the Office of Education still held up the funds.” 103 Cong.Rec. 24564 (daily ed. October 6, 1966).
Mr. Perkins: “[The objective of the Fountain Amendment is to preclude the abuse of the power to defer action on applications to such an extent that it would amount to a denial of assistance without appropriate provision for a hearing.” 103 Cong.Rec. 27059 (daily ed. October 20, 1966).
* * * * *
Mr. Quie: This new language does not take from or add to Title VI of the Civil Rights Act?
Mr. Perkins: In no wise does it modify Title VI of the Civil Rights Act.
Mr. Quie: So since it is not yet determined whether the Commissioner lias the legal right to defer or not, this does not give him the right or take away that right. Is that correct?
Mr. Perkins: That is correct.
Mr. Quie: It will have to be up to the court?
Mr. Perkins: To make that finding.
Mr. Quie: As to whether they did or not?
Mr. Perkins: Yes. 103 Cong.Rec. 27061 (daily ed. October 20, 1966).
ifc *
Mr. Fountain: I do not believe the Commissioner of Education has legal authority to withhold funds through deferral action. But that is a question for the courts to decide. If ho does not already have deferral authority, the conference report will not give it to him. 103 Cong. Rec. 27063 (daily ed. October 20, 1966).