Chuck thought you might like to see this, too.
---------------------- Forwarded by Peter Rundlet/WHO/EOP on 06/15/99
03:53 PM ---------------------------
Peter Rundlet
06/15/99 03:04:19 PM
Record Type: Record
To: Charles F. Ruff/WHO/EOP@EOP
cc:
Subject: Cureton brief
I just received this draft of Justice's brief in the NCAA case (in which
the E.D. of Pennsylvania struck down the NCAA's use of the SAT as being
discriminatory under Title VI). Apparently, Justice and Education are in
agreement with the positions taken regarding: (1) the existence of a
private right of action for a disparate impact claim under Title VI and
(2) the NCAA's liabililty under Title VI because it receives federal
financial assistance through another entity (the National Youth Sports
Program) or because it has been ceded controlling authority by a recipient
over a program or activity receiving federal financial assistance.
However, there is some disagreement (see Anita Hodgkiss's note below)
about what position, if any, to take on the merits (i.e., whether the
court correctly applied the law to the facts in this case in finding the
NCAA violated Title VI) .
Anita said that Judy Winston and Norma did not want Justice to take a
position on the merits because it would hurt our efforts on issuing the
high-stakes testing guidance (this view isn't entirely clear to me, but it
may be that so much attention on the Title VI disparate impact regs may
invite Congressional meddling with them). Steve Winnick of Judy's office
stated that their concern is that some portions of the record are under
seal and so that it is imprudent to take a position on the merits absent
complete knowledge of the facts. With the exception of the sentence cited
in Anita's note, Justice has agreed not to address the merits in any
detail, but there is some concern there that the absence of support for
the merits will undermine the plaintiffs' argument.
The brief is due to be filed tomorrow. If you have any questions or
comments on it, please call.
---------------------- Forwarded by Peter RU?dlet/WHO/EOP on 06/15/99
02:45 PM ---------------------------
Anita Hodgkiss
06/15/99 02:27:00 PM
Record Type: Record
To: Peter Rundlet/WHO/EOP
cc:
Subject: Cureton brief
Attached is our draft. The Department of Education was concerned about
the last sentence in the first paragraph of section 3 in the "Introduction
and Summary of Argument" (pp. 13-14 on my printed version). We are all
in agreement that this section should be expanded to better explain the
legal standard that the court applied. The brief must be filed tomorrow.
I
can explain in greater detail why this is so late if that's a question.
- CUREBRF.WPD
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4654B019D83254FB2601DB9A64D96F3ABC56CDCE73BEEA6D8FED64D8D3D5027B8A485FA7CDBIOD
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
TAl KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.O. Box 66078
Washington, D.C. 20035-6078
(202) 514-3068
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FOR THE THIRD CIRCUIT
No. 99-1222
TAI KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
STATEMENT OF THE ISSUES
The United States will address the following issues:
1. Whether there is a private right of action for a claim of
discrimination based upon disparate impact under Title VI of the
Civil Rights Act of 1964, 42 U.S.C. 2000d et ~.
2. Whether the National Collegiate Athletic Association (NCAA)
is subject to the requirements of Title VI because it either receives
federal financial assistance through another recipient or has been
ceded controlling authority by a recipient over a program or activity
receiving federal financial assistance.
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IDENTITY AND INTEREST OF THE AMICUS CURIAE
The United States Department of Education extends financial
assistance to educational programs and activities and is authorized
by Congress to ensure compliance with Title VI, 42 U.S.C. 2000d-1,
in the operation of those programs and activities. Pursuant to that
authority, the Department of Education has issued regulations that
define a recipient, 34 C.F.R. 100.13(i), and regulations that
prohibit use of criteria for determining the type of services,
financial aid, or other benefits a recipient will provide that have
a disparate impact based upon race, 34 C. F. R. 100.3 (b) (2) .
The United States Department of Health and Human Services (HHS)
provides federal financial assistance to the National Youth Sports
Program Fund, an entity that the district court found to be controlled
by the NCAA. HHS has also issued a regulation defining a recipient
that tracks the definition in the regulation issued by the Department
of Education, 45 C.F.R. 80.13(i), and a regulation that prohibits
the use of criteria that have a disparate impact based upon race.
45 C.F.R. 80.3 (b) (2).
The United States Department of Justice coordinates enforcement
of Title VI by executive agencies. Exec. Order No. 12,250, 28 C.F.R.
0.51. The Department of Justice also has authority to enforce Title
VI in federal court upon a referral by an agency that extends federal
financial assistance to an education program or activity.
This appeal presents the issue whether a private individual
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may file a judicial action to enforce agency regulations that prohibit
the use by recipients of federal financial assistance of criteria
or methods of administration that have a disparate impact based upon
race. Because of the inherent limitations on administrative
enforcement mechanisms and on the litigation resources of the United
States, the United States has an interest in ensuring that both Title
VI and its implementing regulations may be enforced in federal court
by private parties acting as "private attorneys general." Such
private suits are critical to ensuring optimal enforcement of the
mandate of Title VI and the regulations. See Cannon v. University
of Chicago, 441 U.S. 677, 705-706 (1979) (permitting private citizens
to sue under Title VI is "fully consistent with -- and in some cases
even necessary to - - the orderly enforcement of the statute"). The
United States filed a brief as amicus curiae on that issue in Chester
Residents Concerned For Quality Living v. Seif, 132 F.3d 925 (3d
Cir. 1997), vacated as moot, 119 S. Ct. 22 (1998); Powell v. Ridge,
No. 98-2096 (3d Cir.); and Sandoval v. Hagan, No. 98-6598 (11th Cir.).
This appeal also presents the issue whether the NCAA is subj ect
to coverage under Title VI. The United States filed a brief as amicus
curiae in National Collegiate Athletic Association v. Smith, 119
S. Ct. 924 (1999), which argued (at 19-20) that the NCAA could be
a recipient of federal financial assistance through a grant from
the Department of Health and Human Services, and (at 20-27) that
it could be subject to coverage under Title IX of the Education
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Amendments of 1972,20 U.S.C. 1681, et~, without being a recipient
if it had been ceded control by a recipient over a program or activity
receiving federal financial assistance.!1 The district court has
held that the NCAA is subject to Title VI under both of those theories,
and this Court's resol ution of this issue could affect the enforcement
of Title VI by the United States.
STATEMENT OF THE CASE
A. Course Of Proceedings And Disposition Below
In January 1997, plaintiffs Tai Kwan Cureton and Leatrice Shaw
filed a complaint individually and on behalf of a class of
African-American student-athletes claiming that the minimum
requirements of the National Collegiate Athletic Association (NCAA)
for freshman students to compete in intercollegiate activities and
to receive athletic scholarships discriminate against them on the
basis of race in violation of Title VI of the Civil Rights Act of
1964, 42 U.S.C. 2000d, et ~, and its implementing regulations.
Curetonv. National Collegiate Athletic Association, C.A. No. 97-131
(E.D. Pa.).
The NCAA filed a motion to dismiss the complaint, arguing that
(1) disparate impact discrimination is not actionable under Title
VI or its implementing regulations; (2) the NCAA is not a "program
or activity" within the meaning of 42 U.S.C. 2000d-4a; and (3) the
11 The Supreme Court's decision did not address the validity
of either of these theories. NCAA v. Smith, 119 S. Ct. at 930.
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NCAA is not subject to Title VI because it does not receive federal
financial assistance. Plaintiffs opposed the motion to dismiss and
also filed a motion for partial summary judgment. On October 9,
1997, the district court entered an order denying the NCAA's motion
to dismiss. The court also granted plaintiffs' motion for partial
summary judgment, holding that there is a private right of action
under the Title VI regulations for a claim of discrimination based
upon disparate impact. 1997 WL 634376, at *2. The district court
denied defendant's motion to certify the question for immediate
appeal, pursuant to 28 U.S.C. 1292(b), stating that there is not
a substantial ground for difference of opinion in light of the
"overwhelming circuit law" supporting the reasoning of its decision.
Cureton v. - - Civ. A. No. 97-131, 1998 WL 726653, at *1.
NCAA, . (E.D.
Pa., Oct. 16, 1998).
The October 9 order found that "the NCAA appears to be a program
or activity covered by Title VI" under the definition in 42 U.S.C.
2000d-4a (4) , but found that the record was not sufficiently developed
to determine whether the NCAA receives federal financial assistance.
1997 WL 634376, at *2-*3. The court therefore left that
determination to a trial on the merits. Id. at *3.
The NCAA thereafter filed a motion for summary judgment, and
plaintiffs filed a cross-motion for summary judgment on the merits
of the alleged Title VI violation. On March 8, 1999, the district
court granted plaintiffs' motion for summary judgment.
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The NCAA filed a timely notice of appeal on March 17, 1999 (JA
1250a). On April 8, 1999, plaintiffs filed a cross-appeal (JA
14l4a) .
B. Statement Of Facts
1. Background.
The NCAA is a voluntary, unincorporated association of
approximately 1200 members, consisting of colleges and universities,
conferences and associations, and other educational institutions.
Cureton v. NCAA, 37 F. Supp.2d 687, 690 (3d Cir. 1999). The NCAA
is responsible for promulgating rules governing all aspects of
intercollegiate athletics, including recruiting, eligibility of
student-athletes, and academic standards. Its member institutions
agree to abide by and enforce those rules. Id. at 695 & n.6. The
four-year colleges and universities that are the active members of
the NCAA are divided into Divisions I, II, and III. Id. at 690.
Some bylaws of the NCAA are applicable to all divisions. Each
division may, however, adopt additional bylaws applicable only to
that division. This case involves a bylaw that is applicable only
to Division I schools. Ibid.
In response to public perception that student athletes were
inadequately prepared to succeed academically and to receive an
undergraduate degree, the Division I membership adopted requirements
for high school graduates seeking to participate in athletics and
to receive athletically-related financial assistance during their
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freshman year. Proposition 48, which was implemented during the
1986-1987 academic year, required high school graduates to have a
2.0 GPA in 11 core academic courses and a minimum score of 700 on
the SAT (or a composite score of 15 on the ACT) in order to participate
in freshman intercollegiate athletics. 37 F. Supp.2d at 690.
In 1992, these initial eligibility rules were modified through
the adoption of Proposition 16. As fully implemented effective
August 1, 1996, Proposition 16 increased the number of core courses
required to 13 and introduced an initial eligibility index. Under
the index, a student-athlete could establish eligibility with a GPA
of 2.0 only if combined with an SAT score of 1010 (or an ACT sum
score of 86) .!/ A student with a GPA of 2.5 or higher was required
to have an SAT score of 820 (or an ACT sum score of 68). Since the
core GPA cutoff score of 2.0 is two standard deviations below the
national mean, while the SAT/ACT cutoff score is only one standard
deviation below the national mean, Proposition 16 results in a
"heavier weighting of the standardized test." 37 F. Supp.2d at 691.
2. Federal financial assistance
y In 1995, the College Board recentered the score scales for
the SAT. After recentering, a test score of 700 on the old scale
is approximately equivalent to a score of 830 on the recentered scale.
Cureton v. NCAA, 37 F. Supp.2d at 690 n.2.
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In 1969, the NCAA began receiving federal financial assistance
for the operation of the National Youth Sports Program (NYSP) .!/
From that time until 1991, the NCAA was a direct recipient of federal
financial assistance from the Department of HHS to operate the NYSP
(JA 145a-146a; JA 511a-516a). On October 3, 1989, the NCAA created
the NYSP Foundation as a nonprofit corporation under the laws of
Missouri (JA 506a-509a). It was later renamed the NYSP fund (see
JA 147a, Marshall 7/2/97 Dep. at 29-30). The Fund was created "to
insure that [the NCAA] is not a recipient or a contractor of the
federal government" (JA 147a-148a, Marshall 7/2/97 Dep: at 31-33) .
On August 9, 1991, Edward Thiebe, the Director of Youth Sports for
the NCAA, sent a letter to HHS requesting that its Fiscal Year 1991
grant application for the NYSP be amended to designate the NYSP Fund
as the grantee (JA 151a-152a). From 1992 to the present, the federal
grant has been made to the NYSP Fund. In Fiscal Year 1996, the federal
grant from HHS was $11,520,000 (JA 74a, see also JA 261a (HHS press
release announcing that "$11,520,000 was awarded to the NCAA")).
J! Through subgrantees, the NYSP offers sports instruction and
instruction in life skills, science, and math to poor and
disadvantaged youths (JA 520a) .
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Nonetheless, "Guidelines for the 1993 National Youth Sports
Program," which are prepared by the NYSP Committee as a required
part of the grant application process, listed the NCAA, not the Fund,
as the grantee of the HHS grant (JA 254a-259a; see Marshall 6/30/97
Dep. at 28-30). -The guidelines stated that "[t]he NCAA has been
awarded a grant by the [Office of Community Services]" of HHS (JA
258a). The guideliness also stated that a "specified amount of funds
shall be made available to participating institutions through the
National Collegiate Athletic Association to conduct projects" (JA
257a) and invited applications to be submitted to the NCAA at its
office address in Overland, Kansas (ibid.) .ll
Pursuant to its Bylaws, the Fund has four directors, three of
whom are NCAA officers or employees (JA 229a) .ll The Fund itself
has no offices, no employees, and no letterhead (JA 143a, JA 161a,
Marshall 7/2/97 Dep. at 13, 85; JA 196a, Thiebe Dep. at 44). The
Fund has never had a Board of Directors meeting, but rather has
"handled any business that needed to be taken care of through * *
* consent minutes" (JA 158a). The Fund's bank account is entitled:
"The National Collegiate Athletic Association - - The National Youth
11 In a document dated 2/3/95 that was attached to one of its
own pleadings in the district court, the NCAA is listed as the
"Applicant organization" for the NYSP grant (JA310a - Assurances
given in connection with grant) .
~ The bylaws mandate that the Executive Director and Assistant
Executive Director of the NCAA, and the chairperson of the NYSP
Committee of the NCAA be members of the NYSP Fund Board (JA 229a) .
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Sports Program" (JA 505a). The staff of the NCAA, as well as the
fund, has authority to draw from the federal government's grant
through that account (JA 156a-157a, Marshall 7/2/97 Dep. at 68-69) .
Through 1994, the NCAA, "d/b/a the National Youth Sports
Program," was the named insured on liability policies covering the
activities of the NYSP (JA 526a-629a) .!! The Fund's Articles of
Incorporation provide that upon the dissolution of the Fund, the
assets of the Fund shall be distributed exclusively to the NCAA,
provided the NCAA continues to be an education organization within
the meaning of 501(c) (3) of the Internal Revenue Code (JA 508a).
Perhaps most important, it is the NCAA's NYSP committee, and
not the Fund, that makes all of the decisions about the NYSP and
the use of the federal funds. For example, the NYSP committee has
final approval over which colleges and universities receive subgrants
to operate the NYSP's instructional and educational programs (JA
200a). The NCAA stipulated that once the NCAA's NYSP committee makes
a decision, no further action is required to implement that decision
(JA 209a-210a) .
The NCAA's Executive Director has stated that" [tlhe NYSP is
one of the NCAA's best-kept secrets, yet it is consistently one of
our most successful and influential programs. Our partnership with
& In the NCAA's 1995-1996 Annual Report, the Fund is included
in the NCAA's financial statements (JA 517a-520a). In contrast,
the NCAA Foundation is described in the Annual Report as "a separate
legal entity" not included in the NCAA's financial statements (JA
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the federal Government, local civic organizations and individual
colleges and universities perfectly embodies the NCAA's team spirit"
(JA 263a) .
C. The Decision Below
In granting summary judgment to the plaintiffs, the district
court held that the NCAA is subject to Title VI, and that Proposition
16 violates the disparate impact p~ohibition of the Title VI
regulations. The court's earlier partial grant of summary judgment
held that plaintiffs have a private right of action to enforce the
Title VI regulation prohibiting disparate impact discrimination (see
page , supra).
1. Coverage of NCAA under Title VI.
Plaintiffs raised several theories under which the NCAA would
be subj ect to Ti tle VI. First, they contended that the NCAA receives
federal financial assistance indirectly through the receipt of dues
from its member schools, all of whom receive federal financial
assistance. The district court rejected that theory based upon the
Supreme Court's decision in NCAA v. Smith, 119 S. Ct. 924 (1999).
37 F. Supp.2d at 693.
Plaintiffs also argued that the NCAA directly receives federal
financial assistance through the National Youth Sports Program Fund
because the Fund is nothing more than the alter ego of the NCAA.
The district court found that plaintiffs "failed to sustain their
heavy burden of 'piercing the corporate veil' sufficient to have
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the Fund construed as the NCAA's alter ego." 37 F. Supp.2d at 694.
However, the court found "overwhelming evidence" supporting the
fact that "the Fund is ultimately being controlled by the NCAA,"
ibid., and thus concluded that plaintiffs had sustained their burden
of proving that the NCAA "exercises effective control and operation
of the" grant given by HHS to the Fund "to be construed as an indirect
recipient of federal financial assistance." Ibid. The court found
that "although the Fund is the named recipient of the block grant,
it is merely a conduit through which the NCAA makes all of the
decisions about the Fund and the use of the federal funds." Ibid.
Finally, the court found that plaintiffs also proved that the
NCAA is subject to suit under Title VI regardless of whether it
receives federal financial assistance, "because member schools (who
themselves indisputably receive federal funds) have ceded
controlling authority over federally funded programs to the NCAA."
37 F. Supp.2d at 694. It found that the "member colleges and
universities have granted to the NCAA the authority to promulgate
rules affecting intercollegiate athletics that the members are
obligated to abide by and enforce." Id. at 696. Accordingly,
"because there is a nexus between the NCAA's allegedly discriminatory
conduct with regards to intercollegiate athletics and the sponsorship
of such programs by federal fund recipients, the NCAA is subject
to Title VI for a challenge to Proposition 16." Ibid.
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2. The decision on the merits
The district court held that the disparate impact standard
developed under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et ~, in the employment context is applicable to a claim
of disparate impact in educational testing. 37 F. Supp.2d at
696-697. Applying that standard, the court held that P~oposition
16 causes a racially disproportionate effect on African-Americans
(id. at 697-701); that Proposition 16 is not justified by any
legitimate educational necessity (id. at 701-712); and that, in any
event, plaintiffs had demonstrated that there are equally effective
alternative practices to Proposition 16 having less adverse effect
upon African-Americans (id. at 713-714). Accordingly, the court
granted plaintiffs' motion for summary judgment (id. at 714) .
INTRODUCTION AND SUMMARY OF ARGUMENT
1. This Court in Chester Residents Concerned For Quality Living
v. Seif, 132 F.3d 925 (1997), vacated as moot, 119 S. Ct. 22 (1998),
correctly held that "private plaintiffs may maintain an action under
discriminatory effect regulations promulgated by federal
administrative agencies pursuant to section 602 of Title VI of the
Civil Rights Act of 1964," and that decision should be reinstated
as the law in this Circuit. The reasoning of Chester Residents is
still persuasive authority. See Polychrome Int'l Corp. v. Krigger,
5 F.3d 1522, 1534 (3d Cir. 1993); Finberg v. Sullivan, 658 F.2d 93,
100 n.14 (3d Cir. 1981) (en banc). Moreover, the holding in Chester
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Residents was consistent with that of every other court of appeals
to consider the issue. l32 F.3d at 936-937. The NCAA has presented
no "compelling basis" for this Court to disregard that holding.
Wagner v. PennWest Farm Credit, ACA, 109 F. 3d 909, 912 (3d Cir. 1997) .
2. In Part II, we argue that the NCAA is subject to coverage
under Title VI both because it receives federal financial assistance
indirectly through the NSYP Fund, which it controls, and because it
has been conceded controlling authority over the intercollegiate
athletics programs of its member colleges and universities, which
receive federal financial assistance directly.
3. With respect to the district court's ruling that the minimum
.standardized test score cutoff in Proposition 16 violates Title VI
of the Civil Rights Act of 1964, the court correctly held (37 F. Supp.
2d at 696-697) -- and the NCAA does not dispute -- that the disparate
impact standards developed in employment discrimination cases under
Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seg.)
apply to claims brought pursuant to the regulations implementing Title
VI. See, e.g., Georgia State Conference of Branches of NAACP v.
Georgia, 775 F.2d 1403, 1417 (11th Cir. 1985) i NAACP v. Medical Center,
Inc., 657 F.2d l322, l331 (3d Cir. 1981) i Larry P. v. Riles, 793 F.2d
969, 982 nn.9-10 (9th Cir. 1984). Thus, if the facts relied upon
in the district court's rulings (which are based in large measure
on the NCAA's own studies) are right, it would appear that the district
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court correctly held that Proposition 16's cutoff score violates the
effects test of the Title VI regulation.!/
We do not take a position on the factual questions raised in
this appeal. Because parts of the record relating to this issue
remain under seal (see NCAA Br. at 8 n.3), we have not had access
to the information necessary to ascertain whether the district court
correctly determined that Proposition 16's cutoff score causes a
racially disproportionate effect; that the NCAA had not demonstrated
that the cutoff score significantly serves the goal of raising
student-athlete graduation rates; and that, in any event, the
plaintiffs established the existence of alternative practices that
serve the goal of raising student-athlete graduation rates and that
have less of an adverse impact upon African-Americans. These are
v The district court mentioned, but did not apply to Title
VI, the 1991 amendments to Title VII that require a defendant to
bear both a burden of production and persuasion on its business
necessity justification. 37 F. Supp. 2d at 697. See 42 U.S.C.
2000e(m), 2000e-2k(1) (A). Although the alleged discrimination in
this case occurred after 1991, the court appears to have applied
the previous standard, set out in Wards Cove Packing Co. v. Atonio,
490 U.S. 642 (1989), that the defendant bears only a burden of
producing evidence that the challenged employment practice has a
legitimate business justification. If this Court agrees with the
district court's ruling that the NCAA failed to meet its burden under
Wards Cove because it "has not produced any evidence demonstrating
that the cutoff score used in Proposition 16 serves, in a significant
way, the goal of raising student-athlete graduation rates" (37 F.
Supp. at 712), it will be unnecessary for the Court to determine
whether the district court erred in failing to require the NCAA to
satisfy the heavier burden imposed by the Civil Rights Act of 1991.
Cf. Elston v. Talladega County Bd. of Educ., 997 F.2d 1394, 1407
n.14 (11th Cir. 1993). In any event, this Court should not resolve
this important issue without the benefit of full briefing from the
parties (see NCAA Br. at 47 n.19, Cureton Br. at 36 n.19).
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highly fact-bound determinations, and we believe the parties are in
the best position to assist the Court in determining whether the
district court erred in any of these rulings.
ARGUMENT
I
PRIVATE PLAINTIFFS MAY SUE TO ENFORCE THE DISPARATE IMPACT
STANDARD IN AGENCY REGULATIONS IMPLEMENTING TITLE VI
Plaintiffs sought to enforce regulations of the Departments of
Education and Health and Human Services promulgated under Section
602 of Title VI of the Civil Rights Act, 42 U.S.C.
2000d-1 (JA 28a). Those regulations prohibit a recipient of federal
financial assistance from using "criteria or methods of
administration which have the effect of subjecting individuals to
discrimination because of their race." 34 C.F.R. 100.3 (b) (2) i 45
C.F.R. 80.3 (b) (2) (emphasis added). This Court in Chester Residents
Concerned For Quality Living v. Seif, 132 F.3d 925 (1997), vacated
as moot, 119 S. Ct. 22 (1998), held that "private plaintiffs may
maintain an action under discriminatory effect regulations
promulgated by federal administrative agencies pursuant to section
602 of Title VI of the Civil Rights Act of 1964." Although that
decision is no longer binding circuit precedent, the opinion in
Chester Residents retains its persuasive authority. See Polychrome
Int'l Corp. v. Krigger, 5 F.3d 1522, 1534 (3d Cir. 1993) i Finberg
v. Sullivan, 658 F.2d 93, 100 n.14 (3d Cir. 1981) (en banc) ("Even
if a decision is vacated, however, the force of its reasoning remains,
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and the opinion of the Court may influence resolution of future
disputes."). In addition, the holding in Chester Residents was
consistent with that of every other court of appeals to consider the
issue. 132 F.3d at 936-937 (collecting cases from the First, Second,
Fifth, Seventh, Ninth, Tenth, and Eleventh Circuits). This Court
has noted that" [i] n light of such an array of precedent, [it] would
require a compelling basis to hold otherwise before effecting a
circuit split." Wagnerv. PennWest Farm Credit, ACA, 109 F.3d 909,
912 (3d Cir. 1997).
The NCAA has provided no such "compelling basis." All of the
arguments raised by the NCAA (Br. 17-25) were correctly rejected by
the panel in Chester Residents and should likewise be rejected here.
First, the NCAA (Br. 18-20) attacks the district court's decision
for relying on an overly broad reading of Guardians. The district
court, however, issued its decision concluding that there is a private
right of action to enforce the Title VI regulations in October 1997,
some two months before the decision in Chester Residents. Thus, its
conclusion that the Supreme Court in Guardians had resolved the issue
could not have anticipated this Court's conclusion in Chester
Residents that Guardians is not dispositive, 132 F.3d at 930, and
that the Supreme Court's decision in Alexander v. Choate provided
"no direct authority * * * that either confirms or denies the existence
of a private right of action," 132 F.3d at 931. In any event, the
district court's holding that there is a private right of action to
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enforce the disparate impact regulation is, of course, entirely
consistent with this Court's Chester Residents holding.
Second, the NCAA argues (Br. 20-23) that Section 602 does not
permit an implied private right of action, in part because Section
602 "prohibits any enforcement of the regulations" until the federal
funding agency gives the alleged violator notice and an opportunity
to comply voluntarily (Br. 22, emphasis in original). But, as the
Court noted in Chester Residents, 132 F.3d at 935, "a private lawsuit
also affords a fund recipient similar notice." Moreover, the
requirements of Section 602 "were designed to cushion the blow of
a result that private plaintiffs cannot effectuate," i.e.,
termination of funding. Id. at 936. The Court in Chester Residents
therefore properly found that "a private right of action would be
consistent with the legislative scheme of Title VI." Ibid. In
addition, if the NCAA were correct in its reading of the statute,
then a private right of action to enforce the prohibition on
intentional discrimination (which the federal government also
enforces through the procedures established in Section 602) would
also be barred, a result clearly foreclosed by the Supreme Court's
decision in Cannon v. University of Chicago, 441 U.S. 677 (1979).
Finally, the NCAA argues (Br. 23-25) that the legislative history
of Title VI does not support the implication of a private right of
action for unintentional discrimination. It attempts to diminish
the import of the legislative history of the Civil Rights Restoration
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Act of 1987, Pub. L. No. 100-259, 102 Stat. 28 (1988), discussed by
this Court in Chester Residents, noting (NCAA Br. at 24) that Chester
Residents relied on comments from opponents of the 1987 legislation
that "do not shed light on the purpose or intent behind Title VI./I
But Chester Residents was following the well-accepted rule that when
there is evidence that Congress understands that a private right of
action was available under a statutory scheme, and amends the statute
without demonstrating any intent to disapprove of such suits, it has
ratified that private right of action. See Herman & MacLean v.
Huddleston, 459 U.S. 375, 386 (1983); Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Curran, 456 U.S. 353, 381-382 (1982); see also Cannon,
441 U.S. at 687 n.7; Lindahl v. OPM, 470 U.S. 768, 787-788 (1985)
And while much of the discussion of private enforcement of the
discriminatory effects regulations came from opponents to the bill,
"they are nevertheless relevant and useful, especially where, as here,
the proponents of the bill made no response./I Arizona v. California,
373 U.S. 546, 583 n.85 (1963).
The NCAA has not articulated a compelling basis for this Court
to discard the holding of Chester Residents and reject the result
reached by the other circuits that have addressed the question. This
Court should reinstate the holding of Chester Residents here.!/
~ By the time this Court considers the issue whether there is
a private right of action to enforce the disparate impact regulations
under Title VI in this case, the issue may have been resolved by
the panel in Powell v. Ridge, No. 98-2096 (3d Cir.), in which oral
argument was held on June 9, 1999. The panel in Powell, however,
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II
THE NCAA IS SUBJECT TO THE REQUIREMENTS OF TITLE VI BECAUSE
IT RECEIVES ASSISTANCE THROUGH ANOTHER RECIPIENT AND
BECAUSE IT HAS BEEN CEDED CONTROLLING AUTHORITY BY A
RECIPIENT OVER A PROGRAM OR ACTIVITY RECEIVING FEDERAL
FINANCIAL ASSISTANCE
A. The NCAA Receives Federal Financial Assistance
Through Another Recipient.
does not need to reach that issue if it decides that the Title VI
discriminatory effect regulations may be enforced through 42 U. S. C.
1983.
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The regulations of the Departments of Education and HHS define
a recipient of federal financial assistance as any entity "to whom
Federal financial assistance is extended directly or through another
recipient, for any program" (34 C.F.R. 100.13 (i) i 45 C.F.R. 80.13 (i)).
From 1969 through 1991, the NCAA directly received federal financial
assistance for the NYSP in its own name. After passage of the Civil
Rights Restoration Act, the NCAA named the NYSP Fund to be the grant
recipient for federal funding in order "to insure that [the NCAA]
is not a recipient or a contractor of the federal government" (JA
147a-148a, Marshall 7/2/97 Dep at 31-33). The evidence relied upon
by the district court, some of which is recited at pp. , supra,
demonstrates, however, that the incorporation of the NYSP Fund was
largely a formality and that the NCAA itself, through the NYSP
Committee, continues to administer the grant program. The NYSP Fund
as the listed grantee is itself a direct recipient of federal financial
assistance subject to coverage under Title VI. But the NCAA receives
federal financial assistance indirectly through its continued control
of the NYSP grant, notwithstanding its attempt to distance itself
from federal oversight. l / Indeed, the Department of HHS has on two
21 The NCAA's assertion (Br. 32) that "there is no evidence
to suggest that the NCAA has diverted any federal funds to its own
coffers" is beside the point. A recipient of federal financial
assistance is required by law to use that assistance to fulfill the
ultimate purpose of the grant, and there is no allegation here that
the NCAA has not done so. The claim here is not that the NCAA has
violated the law by setting up the NYSP Fund as the named grantee,
but rather that it cannot escape responsibility under Title VI if
it controls the administration of the grant.
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occasions (in 1994 and 1998) taken the position that the NCAA is a
recipient of federal financial assistance through a Community
Development Block Grant from HHS and has accepted complaints of
discrimination for investigation (JA 1257a-1261a) .
Based upon the "overwhelming evidence," 37 F. Supp.2d at 694,
the district court properly found that "the Fund is ultimately being
controlled by the NCAA," and thus that the NCAA is the indirect
recipient of federal financial assistance through the NYSP Fund.
Ibid.
B. The NCAA Is Subject To Title VI Because It Has Been
Ceded Controlling Authority Over The Intercollegiate
Athletic Programs Of Its Member Colleges And
Universities, Which Receive Federal Financial
Assistance.
The district court found that "the NCAA is subject to suit
under Title VI irrespective of whether it receives federal funds,
directly or indirectly, because member schools (who themselves
indisputably receive federal funds) have ceded controlling authority
over federally funded programs to the NCAA." 37 F.3d at 694.
Although the district court did not articulate the statutory basis
for this theory of coverage, the United States believes that it is
firmly rooted in the text of Title VI.
Title VI proves in relevant part that" [nl 0 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
subjected to discrimination under any program or activity receiving
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Federal financial assistance." 42 U.S.C. 2000d. As that statutory
text makes clear, Title VI, like Title IX of the Education Amendments
of 1972, 20 U.S.C. 1681(a), was not drafted "simply as a ban on
discriminatory conduct by recipients of federal funds." Cannon v.
University of Chicago, 441 U.S. 677, 691-692 (1979) i see Chowdhury
v. Reading Hospital and Medical Center, 677 F.2d 317, 318 & n.2 (3d
Cir. 1982) (language of Cannon applicable to Title VI). Instead,
the "unmistakable focus" of the statutory text is on the protection
of "the benefitted class." Id. at 691. The text itself does not
specifically identify the class of potential violators. But given
the focus of the text on protection for the individual, and the absence
of any language limiting the class of violators to recipients, Title
VI is most naturally read as prohibiting any entity that has governing
authority over a program from subjecting an individual to race-based
discrimination under it.!/
Although recipients are the principal class of entities that
may subject an individual to discrimination under a program, they
~I Congress has constitutional authority to reach the conduct
of anyone who threatens "the integrity and proper operation of [al
federal program." See Salinas v. United States, 118 S. Ct. 469,
475 (1997) (upholding constitutionality of a statute that prohibits
the acceptance of bribes by employees of state and local agencies
that receive federal funds, as applied to a case in which a county
received funds for the operation of a j ail and the sheriff and deputy
sheriff at the jail accepted bribes in violation of the statute) .
Since the NCAA's actions, if discriminatory, pose a threat to the
integrity and proper operation of the federally assisted programs
at member schools, Congress had constitutional authority to subject
the NCAA to liability for such discrimination.
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are not the only ones. When a recipient cedes governing authority
over a program receiving assistance to another entity, and that entity
subjects an individual to discrimination under the program, that
entity violates Title VI, regardless of whether it is a recipient
itself.
That commonsense reading of Title VI furthers its central
purposes -- "to avoid the use of federal resources to support
discriminatory practices" and to "provide individual citizens
effective protection against those practices." Cannon, 441 U.S. at
704. Several considerations support that conclusion. First, as the
district court recognized, 37 F. Supp.2d at 695, intercollegiate
athletics is unique in that it is "one of the few educational programs
of a college or university that cannot be conducted without the
creation of ~ separate entity to provide governance and
administration." Out of the necessity for a supervising authority
comes the NCAA's power to establish the rules, such as Proposition
16, governing eligibility for intercollegiate athletics at member
schools. "By joining the NCAA, each member agrees to abide by and
to enforce such rules." NCAA v. Tarkanian, 488 U.S. 179, 183 (1988).
Because the NCAA has effective control over eligibility
determinations for intercollegiate athletics, it is the entity most
responsible for any discrimination that enters into those
determinations.
If there is discrimination in the NCAA's rules, a member school
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may attempt to persuade the NCAA to change the rules, but if it is
unsuccessful, its only option is to withdraw from the NCAA. Since
the NCAA has a virtual monopoly on intercollegiate athletics, a school
that has withdrawn from the NCAA in order to satisfy its own Title
VI obligations could no longer offer intercollegiate athletic
opportunities to its students. That would leave victims of
discrimination without an effective remedy and deprive innocent third
parties of intercollegiate athletic opportunities as well. Those
harsh consequences may be avoided if victims of the NCAA's
discrimination may seek relief against the NCAA directly.
Firially, because of its unique power over intercollegiate
athletics, discrimination by the NCAA in the promulgation of its rules
has the capacity to result in discrimination at numerous member
schools simultaneously. Permitting a private right of action against
the NCAA provides a mechanism for stopping discrimination at its
source before it becomes entrenched at member schools.!/
ill A member school, of course, remains liable for any
discriminatory decision of the NCAA that it implements. For the
reasons discussed above, however, when the NCAA is the source of
the discrimination and uses its power over member schools to implement
that discrimination, a remedy against the NCAA is more appropriate
and efficacious than a remedy against member schools.
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Permitting a judicial cause of action against the NCAA is
consistent with the principle that entities should not be subjected
to liability under Title VI without adequate notice. See Gebser v.
Lago Vista Indep. School Dist., 118 S. Ct. 1989, 1997-1999 (1998).
Unlike the situation in Gebser, plaintiffs do not seek to hold the
NCAA liable for discrimination committed by others; rather,
plaintiffs seek to hold the NCAA liable for its own alleged
discrimination in the promulgation and continued use of Proposition
16. The text of the Title VI regulations provides sufficient notice
to the NCAA that it had an obligation not to use its authority over
an education program receiving federal assistance to subject an
individual to race-based discrimination under that program.!/
I f the NCAA did not wish to subject itself to Title VI obligations
on the basis of its relationship to member institutions that receive
assistance, it could have refrained from exercising governing
authority over intercollegiate athletics at those institutions.
Once the NCAA assumed that governing role, it also assumed an
obligation not to use that authority to discriminate on the basis
of race against individuals seeking access to intercollegiate
athletic programs at those institutions.
The NCAA argues (Br. 38-39) that it cannot be subject to Title
- Moreover, t h"
121 lS case lnvo 1 ves a calm for injunctive relief
1 .
only, and not money damages, and so many of the "notice" concerns
that played a particularly significant role in Gebser are not so
compelling in this context.
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VI coverage because it did not assume a contractual commitment not
to discriminate. The text of Title VI, however, is not framed
exclusively in contract terms, and a contractual commitment not to
discriminate is not a precondition to application of the statute.
If a contract analogy were needed, the relevant one would be
to the tort of intentional interference with a contract. Restatement
of Torts, 766 (one who intentionally and improperly interferes with
the performance of a contract between another and a third person by
inducing or otherwise causing the third person not to perform the
contract is subject to liability to the other). When an entity that
has been ceded controlling authority over a recipient requires the
recipient to act in a discriminatory manner by, for example, imposing
a discriminatory requirement for eligibility, it effectively causes
the recipient to breach its agreement with the federal funding agency.
Moreover, when an entity created by recipients makes and enforces
rules for recipients, it is on ample notice that it cannot do so in
a way that subj ects an individual to discrimination under the programs
of the recipients.
Finally, contrary to the NCAA's contention (Br. 37-39)
subjecting non-recipients that have been ceded controlling authority
over federally assisted programs to coverage under Title VI is not
in conflict with the Supreme Court's decision in United States
Department of Transportation v. Paralyzed Veterans, 477 U.S. 597
(1986). There are statements in that opinion that support the NCAA's
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argument that federal funding statutes like Title VI apply only to
recipients of federal financial assistance. 477 U.S. at 605-606.
The context of those statements makes clear, however, that the Court
was addressing only whether coverage should extend past recipients
to beneficiaries. The Court did not purport to address the entirely
different question whether an entity that has been ceded controlling
authority over a program receiving federal assistance violates Title
VI when it subjects an individual to discrimination under that
program. Because the airlines did not have controlling authority
over the federally assisted airport programs, the question at issue
here was simply not presented in Paralyzed Veterans.
Equally important, the Court's crucial concern in Paralyzed
Veterans was that expanding the funding statues to reach beneficiaries
of federal assistance would have resulted in "almost limitless
coverage" - - a result that was clearly at odds with Congress's intent.
477 U.S. at 608-609. The situation here is fundamentally different.
The class of non-recipients that has governing authority over
programs receiving assistance is limited, and permitting a private
right of acting against such entities when they subject persons to
discrimination under those programs advances the purposes of Title
VI.
CONCLUSION
For the foregoing reasons, the judgment should be affirmed
insofar as it (1) permits plaintiffs to bring an action to enforce
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the Title VI disparate impact regulations and (2) finds
that the NCAA is subject to Title VI coverage. Since the district
court properly determined that the disparate impact standards
developed in employment discrimination cases under Title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e et ~.) apply to claims
brought pursuant to the regulations implementing Title VI, the
judgment should also be affirmed if the facts relied upon in the
district court's rulings are correct
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-- a determination that .the parties are in the best position to assist
the Court in making.
Respectfully submitted,
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.O. Box 66078
Washington, D.C. 20035-6078
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-"
==================== ATTACHMENT 1 ====================
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IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
TAl KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.O. Box 66078
Washington, D.C. 20035-6078
(202) 514-3068
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FOR THE THIRD CIRCUIT
No. 99-1222
TAI KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
STATEMENT OF THE ISSUES
The United States will address the following issues:
1. Whether there is a private right of action for a claim of
discrimination based upon disparate impact under Title VI of the
Civil Rights Act of 1964, 42 U.S.C. 2000d et ~.
2. Whether the National Collegiate Athletic Association (NCAA)
is subject to the requirements of Title VI because it either receives
federal financial assistance through another recipient or has been
ceded controlling authority by a recipient over a program or activity
receiving federal financial assistance.
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IDENTITY AND INTEREST OF THE AMICUS CURIAE
The United States Department of Education extends financial
assistance to educational programs and activities and is authorized
by Congress to ensure compliance with Title VI, 42 U.S.C. 2000d-1,
in the operation of those programs and activities. Pursuant to that
authority, the Department of Education has issued regulations that
define a recipient, 34 C.F.R. 100.13(i), and regulations that
prohibit use of criteria for determining the type of services,
financial aid, or other benefits a recipient will provide that have
a disparate impact based upon race, 34 C. F. R. 100.3 (b) (2) .
The United States Department of Health and Human Services (HHS)
provides federal financial assistance to the National Youth Sports
Program Fund, an entity that the district court found to be controlled
by the NCAA. HHS has also issued a regulation defining a recipient
that tracks the definition in the regulation issued by the Department
of Education, 45 C.F.R. 80.13(i), and a regulation that prohibits
the use of criteria that have a disparate impact based upon race.
45 C.F.R. 80.3 (b) (2).
The United States Department of Justice coordinates enforcement
of Title VI by executive agencies. Exec. Order No. 12,250, 28 C.F.R.
0.51. The Department of Justice also has authority to enforce Title
VI in federal court upon a referral by an agency that extends federal
financial assistance to an education program or activity.
This appeal presents the issue whether a private individual
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may file a judicial action to enforce agency regulations that prohibit
the use by recipients of federal financial assistance of criteria
or methods of administration that have a disparate impact based upon
race. Because of the inherent limitations on administrative
enforcement mechanisms and on the litigation resources of the United
States, the United States has an interest in ensuring that both Title
VI and its implementing regulations may be enforced in federal court
by private parties acting as "private attorneys general." Such
private suits are critical to ensuring optimal enforcement of the
mandate of Title VI and the regulations. See Cannon v. University
of Chicago, 441 U.S. 677, 705-706 (1979) (permitting private citizens
to sue under Title VI is "fully consistent with -- and in some cases
even necessary to - - the orderly enforcement of the statute"). The
United States filed a brief as amicus curiae on that issue in Chester
Residents Concerned For Quality Living v. Seif, 132 F.3d 925 (3d
Cir. 1997), vacated as moot, 119 S. Ct. 22 (1998); Powell v. Ridge,
No. 98-2096 (3d Cir.); and Sandoval v. Hagan, No. 98-6598 (11th Cir.).
This appeal also presents the issue whether the NCAA is subj ect
to coverage under Title VI. The United States filed a brief as amicus
curiae in National Collegiate Athletic Association v. Smith, 119
S. Ct. 924 (1999), which argued (at 19-20) that the NCAA could be
a recipient of federal financial assistance through a grant from
the Department of Health and Human Services, and (at 20-27) that
it could be subject to coverage under Title IX of the Education
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Amendments of 1972,20 U.S.C. 1681, et~, without being a recipient
if it had been ceded control by a recipient over a program or activity
receiving federal financial assistance.!1 The district court has
held that the NCAA is subject to Title VI under both of those theories,
and this Court's resol ution of this issue could affect the enforcement
of Title VI by the United States.
STATEMENT OF THE CASE
A. Course Of Proceedings And Disposition Below
In January 1997, plaintiffs Tai Kwan Cureton and Leatrice Shaw
filed a complaint individually and on behalf of a class of
African-American student-athletes claiming that the minimum
requirements of the National Collegiate Athletic Association (NCAA)
for freshman students to compete in intercollegiate activities and
to receive athletic scholarships discriminate against them on the
basis of race in violation of Title VI of the Civil Rights Act of
1964, 42 U.S.C. 2000d, et ~, and its implementing regulations.
Curetonv. National Collegiate Athletic Association, C.A. No. 97-131
(E.D. Pa.).
The NCAA filed a motion to dismiss the complaint, arguing that
(1) disparate impact discrimination is not actionable under Title
VI or its implementing regulations; (2) the NCAA is not a "program
or activity" within the meaning of 42 U.S.C. 2000d-4a; and (3) the
11 The Supreme Court's decision did not address the validity
of either of these theories. NCAA v. Smith, 119 S. Ct. at 930.
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NCAA is not subject to Title VI because it does not receive federal
financial assistance. Plaintiffs opposed the motion to dismiss and
also filed a motion for partial summary judgment. On October 9,
1997, the district court entered an order denying the NCAA's motion
to dismiss. The court also granted plaintiffs' motion for partial
summary judgment, holding that there is a private right of action
under the Title VI regulations for a claim of discrimination based
upon disparate impact. 1997 WL 634376, at *2. The district court
denied defendant's motion to certify the question for immediate
appeal, pursuant to 28 U.S.C. 1292(b), stating that there is not
a substantial ground for difference of opinion in light of the
"overwhelming circuit law" supporting the reasoning of its decision.
Cureton v. - - Civ. A. No. 97-131, 1998 WL 726653, at *1.
NCAA, . (E.D.
Pa., Oct. 16, 1998).
The October 9 order found that "the NCAA appears to be a program
or activity covered by Title VI" under the definition in 42 U.S.C.
2000d-4a (4) , but found that the record was not sufficiently developed
to determine whether the NCAA receives federal financial assistance.
1997 WL 634376, at *2-*3. The court therefore left that
determination to a trial on the merits. Id. at *3.
The NCAA thereafter filed a motion for summary judgment, and
plaintiffs filed a cross-motion for summary judgment on the merits
of the alleged Title VI violation. On March 8, 1999, the district
court granted plaintiffs' motion for summary judgment.
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The NCAA filed a timely notice of appeal on March 17, 1999 (JA
1250a). On April 8, 1999, plaintiffs filed a cross-appeal (JA
14l4a) .
B. Statement Of Facts
1. Background.
The NCAA is a voluntary, unincorporated association of
approximately 1200 members, consisting of colleges and universities,
conferences and associations, and other educational institutions.
Cureton v. NCAA, 37 F. Supp.2d 687, 690 (3d Cir. 1999). The NCAA
is responsible for promulgating rules governing all aspects of
intercollegiate athletics, including recruiting, eligibility of
student-athletes, and academic standards. Its member institutions
agree to abide by and enforce those rules. Id. at 695 & n.6. The
four-year colleges and universities that are the active members of
the NCAA are divided into Divisions I, II, and III. Id. at 690.
Some bylaws of the NCAA are applicable to all divisions. Each
division may, however, adopt additional bylaws applicable only to
that division. This case involves a bylaw that is applicable only
to Division I schools. Ibid.
In response to public perception that student athletes were
inadequately prepared to succeed academically and to receive an
undergraduate degree, the Division I membership adopted requirements
for high school graduates seeking to participate in athletics and
to receive athletically-related financial assistance during their
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freshman year. Proposition 48, which was implemented during the
1986-1987 academic year, required high school graduates to have a
2.0 GPA in 11 core academic courses and a minimum score of 700 on
the SAT (or a composite score of 15 on the ACT) in order to participate
in freshman intercollegiate athletics. 37 F. Supp.2d at 690.
In 1992, these initial eligibility rules were modified through
the adoption of Proposition 16. As fully implemented effective
August 1, 1996, Proposition 16 increased the number of core courses
required to 13 and introduced an initial eligibility index. Under
the index, a student-athlete could establish eligibility with a GPA
of 2.0 only if combined with an SAT score of 1010 (or an ACT sum
score of 86) .!/ A student with a GPA of 2.5 or higher was required
to have an SAT score of 820 (or an ACT sum score of 68). Since the
core GPA cutoff score of 2.0 is two standard deviations below the
national mean, while the SAT/ACT cutoff score is only one standard
deviation below the national mean, Proposition 16 results in a
"heavier weighting of the standardized test." 37 F. Supp.2d at 691.
2. Federal financial assistance
y In 1995, the College Board recentered the score scales for
the SAT. After recentering, a test score of 700 on the old scale
is approximately equivalent to a score of 830 on the recentered scale.
Cureton v. NCAA, 37 F. Supp.2d at 690 n.2.
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In 1969, the NCAA began receiving federal financial assistance
for the operation of the National Youth Sports Program (NYSP) .!/
From that time until 1991, the NCAA was a direct recipient of federal
financial assistance from the Department of HHS to operate the NYSP
(JA 145a-146a; JA 511a-516a). On October 3, 1989, the NCAA created
the NYSP Foundation as a nonprofit corporation under the laws of
Missouri (JA 506a-509a). It was later renamed the NYSP fund (see
JA 147a, Marshall 7/2/97 Dep. at 29-30). The Fund was created "to
insure that [the NCAA] is not a recipient or a contractor of the
federal government" (JA 147a-148a, Marshall 7/2/97 Dep: at 31-33) .
On August 9, 1991, Edward Thiebe, the Director of Youth Sports for
the NCAA, sent a letter to HHS requesting that its Fiscal Year 1991
grant application for the NYSP be amended to designate the NYSP Fund
as the grantee (JA 151a-152a). From 1992 to the present, the federal
grant has been made to the NYSP Fund. In Fiscal Year 1996, the federal
grant from HHS was $11,520,000 (JA 74a, see also JA 261a (HHS press
release announcing that "$11,520,000 was awarded to the NCAA")).
J! Through subgrantees, the NYSP offers sports instruction and
instruction in life skills, science, and math to poor and
disadvantaged youths (JA 520a) .
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Nonetheless, "Guidelines for the 1993 National Youth Sports
Program," which are prepared by the NYSP Committee as a required
part of the grant application process, listed the NCAA, not the Fund,
as the grantee of the HHS grant (JA 254a-259a; see Marshall 6/30/97
Dep. at 28-30). -The guidelines stated that "[t]he NCAA has been
awarded a grant by the [Office of Community Services]" of HHS (JA
258a). The guideliness also stated that a "specified amount of funds
shall be made available to participating institutions through the
National Collegiate Athletic Association to conduct projects" (JA
257a) and invited applications to be submitted to the NCAA at its
office address in Overland, Kansas (ibid.) .ll
Pursuant to its Bylaws, the Fund has four directors, three of
whom are NCAA officers or employees (JA 229a) .ll The Fund itself
has no offices, no employees, and no letterhead (JA 143a, JA 161a,
Marshall 7/2/97 Dep. at 13, 85; JA 196a, Thiebe Dep. at 44). The
Fund has never had a Board of Directors meeting, but rather has
"handled any business that needed to be taken care of through * *
* consent minutes" (JA 158a). The Fund's bank account is entitled:
"The National Collegiate Athletic Association - - The National Youth
11 In a document dated 2/3/95 that was attached to one of its
own pleadings in the district court, the NCAA is listed as the
"Applicant organization" for the NYSP grant (JA310a - Assurances
given in connection with grant) .
~ The bylaws mandate that the Executive Director and Assistant
Executive Director of the NCAA, and the chairperson of the NYSP
Committee of the NCAA be members of the NYSP Fund Board (JA 229a) .
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Sports Program" (JA 505a). The staff of the NCAA, as well as the
fund, has authority to draw from the federal government's grant
through that account (JA 156a-157a, Marshall 7/2/97 Dep. at 68-69) .
Through 1994, the NCAA, "d/b/a the National Youth Sports
Program," was the named insured on liability policies covering the
activities of the NYSP (JA 526a-629a) .!! The Fund's Articles of
Incorporation provide that upon the dissolution of the Fund, the
assets of the Fund shall be distributed exclusively to the NCAA,
provided the NCAA continues to be an education organization within
the meaning of 501(c) (3) of the Internal Revenue Code (JA 508a).
Perhaps most important, it is the NCAA's NYSP committee, and
not the Fund, that makes all of the decisions about the NYSP and
the use of the federal funds. For example, the NYSP committee has
final approval over which colleges and universities receive subgrants
to operate the NYSP's instructional and educational programs (JA
200a). The NCAA stipulated that once the NCAA's NYSP committee makes
a decision, no further action is required to implement that decision
(JA 209a-210a) .
The NCAA's Executive Director has stated that" [tlhe NYSP is
one of the NCAA's best-kept secrets, yet it is consistently one of
our most successful and influential programs. Our partnership with
& In the NCAA's 1995-1996 Annual Report, the Fund is included
in the NCAA's financial statements (JA 517a-520a). In contrast,
the NCAA Foundation is described in the Annual Report as "a separate
legal entity" not included in the NCAA's financial statements (JA
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the federal Government, local civic organizations and individual
colleges and universities perfectly embodies the NCAA's team spirit"
(JA 263a) .
C. The Decision Below
In granting summary judgment to the plaintiffs, the district
court held that the NCAA is subject to Title VI, and that Proposition
16 violates the disparate impact p~ohibition of the Title VI
regulations. The court's earlier partial grant of summary judgment
held that plaintiffs have a private right of action to enforce the
Title VI regulation prohibiting disparate impact discrimination (see
page , supra).
1. Coverage of NCAA under Title VI.
Plaintiffs raised several theories under which the NCAA would
be subj ect to Ti tle VI. First, they contended that the NCAA receives
federal financial assistance indirectly through the receipt of dues
from its member schools, all of whom receive federal financial
assistance. The district court rejected that theory based upon the
Supreme Court's decision in NCAA v. Smith, 119 S. Ct. 924 (1999).
37 F. Supp.2d at 693.
Plaintiffs also argued that the NCAA directly receives federal
financial assistance through the National Youth Sports Program Fund
because the Fund is nothing more than the alter ego of the NCAA.
The district court found that plaintiffs "failed to sustain their
heavy burden of 'piercing the corporate veil' sufficient to have
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the Fund construed as the NCAA's alter ego." 37 F. Supp.2d at 694.
However, the court found "overwhelming evidence" supporting the
fact that "the Fund is ultimately being controlled by the NCAA,"
ibid., and thus concluded that plaintiffs had sustained their burden
of proving that the NCAA "exercises effective control and operation
of the" grant given by HHS to the Fund "to be construed as an indirect
recipient of federal financial assistance." Ibid. The court found
that "although the Fund is the named recipient of the block grant,
it is merely a conduit through which the NCAA makes all of the
decisions about the Fund and the use of the federal funds." Ibid.
Finally, the court found that plaintiffs also proved that the
NCAA is subject to suit under Title VI regardless of whether it
receives federal financial assistance, "because member schools (who
themselves indisputably receive federal funds) have ceded
controlling authority over federally funded programs to the NCAA."
37 F. Supp.2d at 694. It found that the "member colleges and
universities have granted to the NCAA the authority to promulgate
rules affecting intercollegiate athletics that the members are
obligated to abide by and enforce." Id. at 696. Accordingly,
"because there is a nexus between the NCAA's allegedly discriminatory
conduct with regards to intercollegiate athletics and the sponsorship
of such programs by federal fund recipients, the NCAA is subject
to Title VI for a challenge to Proposition 16." Ibid.
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2. The decision on the merits
The district court held that the disparate impact standard
developed under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et ~, in the employment context is applicable to a claim
of disparate impact in educational testing. 37 F. Supp.2d at
696-697. Applying that standard, the court held that P~oposition
16 causes a racially disproportionate effect on African-Americans
(id. at 697-701); that Proposition 16 is not justified by any
legitimate educational necessity (id. at 701-712); and that, in any
event, plaintiffs had demonstrated that there are equally effective
alternative practices to Proposition 16 having less adverse effect
upon African-Americans (id. at 713-714). Accordingly, the court
granted plaintiffs' motion for summary judgment (id. at 714) .
INTRODUCTION AND SUMMARY OF ARGUMENT
1. This Court in Chester Residents Concerned For Quality Living
v. Seif, 132 F.3d 925 (1997), vacated as moot, 119 S. Ct. 22 (1998),
correctly held that "private plaintiffs may maintain an action under
discriminatory effect regulations promulgated by federal
administrative agencies pursuant to section 602 of Title VI of the
Civil Rights Act of 1964," and that decision should be reinstated
as the law in this Circuit. The reasoning of Chester Residents is
still persuasive authority. See Polychrome Int'l Corp. v. Krigger,
5 F.3d 1522, 1534 (3d Cir. 1993); Finberg v. Sullivan, 658 F.2d 93,
100 n.14 (3d Cir. 1981) (en banc). Moreover, the holding in Chester
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Residents was consistent with that of every other court of appeals
to consider the issue. l32 F.3d at 936-937. The NCAA has presented
no "compelling basis" for this Court to disregard that holding.
Wagner v. PennWest Farm Credit, ACA, 109 F. 3d 909, 912 (3d Cir. 1997) .
2. In Part II, we argue that the NCAA is subject to coverage
under Title VI both because it receives federal financial assistance
indirectly through the NSYP Fund, which it controls, and because it
has been conceded controlling authority over the intercollegiate
athletics programs of its member colleges and universities, which
receive federal financial assistance directly.
3. With respect to the district court's ruling that the minimum
.standardized test score cutoff in Proposition 16 violates Title VI
of the Civil Rights Act of 1964, the court correctly held (37 F. Supp.
2d at 696-697) -- and the NCAA does not dispute -- that the disparate
impact standards developed in employment discrimination cases under
Title VII of the Civil Rights Act of 1964 (42 U.S.C. 2000e et seg.)
apply to claims brought pursuant to the regulations implementing Title
VI. See, e.g., Georgia State Conference of Branches of NAACP v.
Georgia, 775 F.2d 1403, 1417 (11th Cir. 1985) i NAACP v. Medical Center,
Inc., 657 F.2d l322, l331 (3d Cir. 1981) i Larry P. v. Riles, 793 F.2d
969, 982 nn.9-10 (9th Cir. 1984). Thus, if the facts relied upon
in the district court's rulings (which are based in large measure
on the NCAA's own studies) are right, it would appear that the district
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court correctly held that Proposition 16's cutoff score violates the
effects test of the Title VI regulation.!/
We do not take a position on the factual questions raised in
this appeal. Because parts of the record relating to this issue
remain under seal (see NCAA Br. at 8 n.3), we have not had access
to the information necessary to ascertain whether the district court
correctly determined that Proposition 16's cutoff score causes a
racially disproportionate effect; that the NCAA had not demonstrated
that the cutoff score significantly serves the goal of raising
student-athlete graduation rates; and that, in any event, the
plaintiffs established the existence of alternative practices that
serve the goal of raising student-athlete graduation rates and that
have less of an adverse impact upon African-Americans. These are
v The district court mentioned, but did not apply to Title
VI, the 1991 amendments to Title VII that require a defendant to
bear both a burden of production and persuasion on its business
necessity justification. 37 F. Supp. 2d at 697. See 42 U.S.C.
2000e(m), 2000e-2k(1) (A). Although the alleged discrimination in
this case occurred after 1991, the court appears to have applied
the previous standard, set out in Wards Cove Packing Co. v. Atonio,
490 U.S. 642 (1989), that the defendant bears only a burden of
producing evidence that the challenged employment practice has a
legitimate business justification. If this Court agrees with the
district court's ruling that the NCAA failed to meet its burden under
Wards Cove because it "has not produced any evidence demonstrating
that the cutoff score used in Proposition 16 serves, in a significant
way, the goal of raising student-athlete graduation rates" (37 F.
Supp. at 712), it will be unnecessary for the Court to determine
whether the district court erred in failing to require the NCAA to
satisfy the heavier burden imposed by the Civil Rights Act of 1991.
Cf. Elston v. Talladega County Bd. of Educ., 997 F.2d 1394, 1407
n.14 (11th Cir. 1993). In any event, this Court should not resolve
this important issue without the benefit of full briefing from the
parties (see NCAA Br. at 47 n.19, Cureton Br. at 36 n.19).
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highly fact-bound determinations, and we believe the parties are in
the best position to assist the Court in determining whether the
district court erred in any of these rulings.
ARGUMENT
I
PRIVATE PLAINTIFFS MAY SUE TO ENFORCE THE DISPARATE IMPACT
STANDARD IN AGENCY REGULATIONS IMPLEMENTING TITLE VI
Plaintiffs sought to enforce regulations of the Departments of
Education and Health and Human Services promulgated under Section
602 of Title VI of the Civil Rights Act, 42 U.S.C.
2000d-1 (JA 28a). Those regulations prohibit a recipient of federal
financial assistance from using "criteria or methods of
administration which have the effect of subjecting individuals to
discrimination because of their race." 34 C.F.R. 100.3 (b) (2) i 45
C.F.R. 80.3 (b) (2) (emphasis added). This Court in Chester Residents
Concerned For Quality Living v. Seif, 132 F.3d 925 (1997), vacated
as moot, 119 S. Ct. 22 (1998), held that "private plaintiffs may
maintain an action under discriminatory effect regulations
promulgated by federal administrative agencies pursuant to section
602 of Title VI of the Civil Rights Act of 1964." Although that
decision is no longer binding circuit precedent, the opinion in
Chester Residents retains its persuasive authority. See Polychrome
Int'l Corp. v. Krigger, 5 F.3d 1522, 1534 (3d Cir. 1993) i Finberg
v. Sullivan, 658 F.2d 93, 100 n.14 (3d Cir. 1981) (en banc) ("Even
if a decision is vacated, however, the force of its reasoning remains,
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and the opinion of the Court may influence resolution of future
disputes."). In addition, the holding in Chester Residents was
consistent with that of every other court of appeals to consider the
issue. 132 F.3d at 936-937 (collecting cases from the First, Second,
Fifth, Seventh, Ninth, Tenth, and Eleventh Circuits). This Court
has noted that" [i] n light of such an array of precedent, [it] would
require a compelling basis to hold otherwise before effecting a
circuit split." Wagnerv. PennWest Farm Credit, ACA, 109 F.3d 909,
912 (3d Cir. 1997).
The NCAA has provided no such "compelling basis." All of the
arguments raised by the NCAA (Br. 17-25) were correctly rejected by
the panel in Chester Residents and should likewise be rejected here.
First, the NCAA (Br. 18-20) attacks the district court's decision
for relying on an overly broad reading of Guardians. The district
court, however, issued its decision concluding that there is a private
right of action to enforce the Title VI regulations in October 1997,
some two months before the decision in Chester Residents. Thus, its
conclusion that the Supreme Court in Guardians had resolved the issue
could not have anticipated this Court's conclusion in Chester
Residents that Guardians is not dispositive, 132 F.3d at 930, and
that the Supreme Court's decision in Alexander v. Choate provided
"no direct authority * * * that either confirms or denies the existence
of a private right of action," 132 F.3d at 931. In any event, the
district court's holding that there is a private right of action to
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enforce the disparate impact regulation is, of course, entirely
consistent with this Court's Chester Residents holding.
Second, the NCAA argues (Br. 20-23) that Section 602 does not
permit an implied private right of action, in part because Section
602 "prohibits any enforcement of the regulations" until the federal
funding agency gives the alleged violator notice and an opportunity
to comply voluntarily (Br. 22, emphasis in original). But, as the
Court noted in Chester Residents, 132 F.3d at 935, "a private lawsuit
also affords a fund recipient similar notice." Moreover, the
requirements of Section 602 "were designed to cushion the blow of
a result that private plaintiffs cannot effectuate," i.e.,
termination of funding. Id. at 936. The Court in Chester Residents
therefore properly found that "a private right of action would be
consistent with the legislative scheme of Title VI." Ibid. In
addition, if the NCAA were correct in its reading of the statute,
then a private right of action to enforce the prohibition on
intentional discrimination (which the federal government also
enforces through the procedures established in Section 602) would
also be barred, a result clearly foreclosed by the Supreme Court's
decision in Cannon v. University of Chicago, 441 U.S. 677 (1979).
Finally, the NCAA argues (Br. 23-25) that the legislative history
of Title VI does not support the implication of a private right of
action for unintentional discrimination. It attempts to diminish
the import of the legislative history of the Civil Rights Restoration
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Act of 1987, Pub. L. No. 100-259, 102 Stat. 28 (1988), discussed by
this Court in Chester Residents, noting (NCAA Br. at 24) that Chester
Residents relied on comments from opponents of the 1987 legislation
that "do not shed light on the purpose or intent behind Title VI./I
But Chester Residents was following the well-accepted rule that when
there is evidence that Congress understands that a private right of
action was available under a statutory scheme, and amends the statute
without demonstrating any intent to disapprove of such suits, it has
ratified that private right of action. See Herman & MacLean v.
Huddleston, 459 U.S. 375, 386 (1983); Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Curran, 456 U.S. 353, 381-382 (1982); see also Cannon,
441 U.S. at 687 n.7; Lindahl v. OPM, 470 U.S. 768, 787-788 (1985)
And while much of the discussion of private enforcement of the
discriminatory effects regulations came from opponents to the bill,
"they are nevertheless relevant and useful, especially where, as here,
the proponents of the bill made no response./I Arizona v. California,
373 U.S. 546, 583 n.85 (1963).
The NCAA has not articulated a compelling basis for this Court
to discard the holding of Chester Residents and reject the result
reached by the other circuits that have addressed the question. This
Court should reinstate the holding of Chester Residents here.!/
~ By the time this Court considers the issue whether there is
a private right of action to enforce the disparate impact regulations
under Title VI in this case, the issue may have been resolved by
the panel in Powell v. Ridge, No. 98-2096 (3d Cir.), in which oral
argument was held on June 9, 1999. The panel in Powell, however,
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II
THE NCAA IS SUBJECT TO THE REQUIREMENTS OF TITLE VI BECAUSE
IT RECEIVES ASSISTANCE THROUGH ANOTHER RECIPIENT AND
BECAUSE IT HAS BEEN CEDED CONTROLLING AUTHORITY BY A
RECIPIENT OVER A PROGRAM OR ACTIVITY RECEIVING FEDERAL
FINANCIAL ASSISTANCE
A. The NCAA Receives Federal Financial Assistance
Through Another Recipient.
does not need to reach that issue if it decides that the Title VI
discriminatory effect regulations may be enforced through 42 U. S. C.
1983.
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The regulations of the Departments of Education and HHS define
a recipient of federal financial assistance as any entity "to whom
Federal financial assistance is extended directly or through another
recipient, for any program" (34 C.F.R. 100.13 (i) i 45 C.F.R. 80.13 (i)).
From 1969 through 1991, the NCAA directly received federal financial
assistance for the NYSP in its own name. After passage of the Civil
Rights Restoration Act, the NCAA named the NYSP Fund to be the grant
recipient for federal funding in order "to insure that [the NCAA]
is not a recipient or a contractor of the federal government" (JA
147a-148a, Marshall 7/2/97 Dep at 31-33). The evidence relied upon
by the district court, some of which is recited at pp. , supra,
demonstrates, however, that the incorporation of the NYSP Fund was
largely a formality and that the NCAA itself, through the NYSP
Committee, continues to administer the grant program. The NYSP Fund
as the listed grantee is itself a direct recipient of federal financial
assistance subject to coverage under Title VI. But the NCAA receives
federal financial assistance indirectly through its continued control
of the NYSP grant, notwithstanding its attempt to distance itself
from federal oversight. l / Indeed, the Department of HHS has on two
21 The NCAA's assertion (Br. 32) that "there is no evidence
to suggest that the NCAA has diverted any federal funds to its own
coffers" is beside the point. A recipient of federal financial
assistance is required by law to use that assistance to fulfill the
ultimate purpose of the grant, and there is no allegation here that
the NCAA has not done so. The claim here is not that the NCAA has
violated the law by setting up the NYSP Fund as the named grantee,
but rather that it cannot escape responsibility under Title VI if
it controls the administration of the grant.
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occasions (in 1994 and 1998) taken the position that the NCAA is a
recipient of federal financial assistance through a Community
Development Block Grant from HHS and has accepted complaints of
discrimination for investigation (JA 1257a-1261a) .
Based upon the "overwhelming evidence," 37 F. Supp.2d at 694,
the district court properly found that "the Fund is ultimately being
controlled by the NCAA," and thus that the NCAA is the indirect
recipient of federal financial assistance through the NYSP Fund.
Ibid.
B. The NCAA Is Subject To Title VI Because It Has Been
Ceded Controlling Authority Over The Intercollegiate
Athletic Programs Of Its Member Colleges And
Universities, Which Receive Federal Financial
Assistance.
The district court found that "the NCAA is subject to suit
under Title VI irrespective of whether it receives federal funds,
directly or indirectly, because member schools (who themselves
indisputably receive federal funds) have ceded controlling authority
over federally funded programs to the NCAA." 37 F.3d at 694.
Although the district court did not articulate the statutory basis
for this theory of coverage, the United States believes that it is
firmly rooted in the text of Title VI.
Title VI proves in relevant part that" [nl 0 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
subjected to discrimination under any program or activity receiving
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Federal financial assistance." 42 U.S.C. 2000d. As that statutory
text makes clear, Title VI, like Title IX of the Education Amendments
of 1972, 20 U.S.C. 1681(a), was not drafted "simply as a ban on
discriminatory conduct by recipients of federal funds." Cannon v.
University of Chicago, 441 U.S. 677, 691-692 (1979) i see Chowdhury
v. Reading Hospital and Medical Center, 677 F.2d 317, 318 & n.2 (3d
Cir. 1982) (language of Cannon applicable to Title VI). Instead,
the "unmistakable focus" of the statutory text is on the protection
of "the benefitted class." Id. at 691. The text itself does not
specifically identify the class of potential violators. But given
the focus of the text on protection for the individual, and the absence
of any language limiting the class of violators to recipients, Title
VI is most naturally read as prohibiting any entity that has governing
authority over a program from subjecting an individual to race-based
discrimination under it.!/
Although recipients are the principal class of entities that
may subject an individual to discrimination under a program, they
~I Congress has constitutional authority to reach the conduct
of anyone who threatens "the integrity and proper operation of [al
federal program." See Salinas v. United States, 118 S. Ct. 469,
475 (1997) (upholding constitutionality of a statute that prohibits
the acceptance of bribes by employees of state and local agencies
that receive federal funds, as applied to a case in which a county
received funds for the operation of a j ail and the sheriff and deputy
sheriff at the jail accepted bribes in violation of the statute) .
Since the NCAA's actions, if discriminatory, pose a threat to the
integrity and proper operation of the federally assisted programs
at member schools, Congress had constitutional authority to subject
the NCAA to liability for such discrimination.
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are not the only ones. When a recipient cedes governing authority
over a program receiving assistance to another entity, and that entity
subjects an individual to discrimination under the program, that
entity violates Title VI, regardless of whether it is a recipient
itself.
That commonsense reading of Title VI furthers its central
purposes -- "to avoid the use of federal resources to support
discriminatory practices" and to "provide individual citizens
effective protection against those practices." Cannon, 441 U.S. at
704. Several considerations support that conclusion. First, as the
district court recognized, 37 F. Supp.2d at 695, intercollegiate
athletics is unique in that it is "one of the few educational programs
of a college or university that cannot be conducted without the
creation of ~ separate entity to provide governance and
administration." Out of the necessity for a supervising authority
comes the NCAA's power to establish the rules, such as Proposition
16, governing eligibility for intercollegiate athletics at member
schools. "By joining the NCAA, each member agrees to abide by and
to enforce such rules." NCAA v. Tarkanian, 488 U.S. 179, 183 (1988).
Because the NCAA has effective control over eligibility
determinations for intercollegiate athletics, it is the entity most
responsible for any discrimination that enters into those
determinations.
If there is discrimination in the NCAA's rules, a member school
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may attempt to persuade the NCAA to change the rules, but if it is
unsuccessful, its only option is to withdraw from the NCAA. Since
the NCAA has a virtual monopoly on intercollegiate athletics, a school
that has withdrawn from the NCAA in order to satisfy its own Title
VI obligations could no longer offer intercollegiate athletic
opportunities to its students. That would leave victims of
discrimination without an effective remedy and deprive innocent third
parties of intercollegiate athletic opportunities as well. Those
harsh consequences may be avoided if victims of the NCAA's
discrimination may seek relief against the NCAA directly.
Firially, because of its unique power over intercollegiate
athletics, discrimination by the NCAA in the promulgation of its rules
has the capacity to result in discrimination at numerous member
schools simultaneously. Permitting a private right of action against
the NCAA provides a mechanism for stopping discrimination at its
source before it becomes entrenched at member schools.!/
ill A member school, of course, remains liable for any
discriminatory decision of the NCAA that it implements. For the
reasons discussed above, however, when the NCAA is the source of
the discrimination and uses its power over member schools to implement
that discrimination, a remedy against the NCAA is more appropriate
and efficacious than a remedy against member schools.
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Permitting a judicial cause of action against the NCAA is
consistent with the principle that entities should not be subjected
to liability under Title VI without adequate notice. See Gebser v.
Lago Vista Indep. School Dist., 118 S. Ct. 1989, 1997-1999 (1998).
Unlike the situation in Gebser, plaintiffs do not seek to hold the
NCAA liable for discrimination committed by others; rather,
plaintiffs seek to hold the NCAA liable for its own alleged
discrimination in the promulgation and continued use of Proposition
16. The text of the Title VI regulations provides sufficient notice
to the NCAA that it had an obligation not to use its authority over
an education program receiving federal assistance to subject an
individual to race-based discrimination under that program.!/
I f the NCAA did not wish to subject itself to Title VI obligations
on the basis of its relationship to member institutions that receive
assistance, it could have refrained from exercising governing
authority over intercollegiate athletics at those institutions.
Once the NCAA assumed that governing role, it also assumed an
obligation not to use that authority to discriminate on the basis
of race against individuals seeking access to intercollegiate
athletic programs at those institutions.
The NCAA argues (Br. 38-39) that it cannot be subject to Title
- Moreover, t h"
121 lS case lnvo 1 ves a calm for injunctive relief
1 .
only, and not money damages, and so many of the "notice" concerns
that played a particularly significant role in Gebser are not so
compelling in this context.
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VI coverage because it did not assume a contractual commitment not
to discriminate. The text of Title VI, however, is not framed
exclusively in contract terms, and a contractual commitment not to
discriminate is not a precondition to application of the statute.
If a contract analogy were needed, the relevant one would be
to the tort of intentional interference with a contract. Restatement
of Torts, 766 (one who intentionally and improperly interferes with
the performance of a contract between another and a third person by
inducing or otherwise causing the third person not to perform the
contract is subject to liability to the other). When an entity that
has been ceded controlling authority over a recipient requires the
recipient to act in a discriminatory manner by, for example, imposing
a discriminatory requirement for eligibility, it effectively causes
the recipient to breach its agreement with the federal funding agency.
Moreover, when an entity created by recipients makes and enforces
rules for recipients, it is on ample notice that it cannot do so in
a way that subj ects an individual to discrimination under the programs
of the recipients.
Finally, contrary to the NCAA's contention (Br. 37-39)
subjecting non-recipients that have been ceded controlling authority
over federally assisted programs to coverage under Title VI is not
in conflict with the Supreme Court's decision in United States
Department of Transportation v. Paralyzed Veterans, 477 U.S. 597
(1986). There are statements in that opinion that support the NCAA's
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argument that federal funding statutes like Title VI apply only to
recipients of federal financial assistance. 477 U.S. at 605-606.
The context of those statements makes clear, however, that the Court
was addressing only whether coverage should extend past recipients
to beneficiaries. The Court did not purport to address the entirely
different question whether an entity that has been ceded controlling
authority over a program receiving federal assistance violates Title
VI when it subjects an individual to discrimination under that
program. Because the airlines did not have controlling authority
over the federally assisted airport programs, the question at issue
here was simply not presented in Paralyzed Veterans.
Equally important, the Court's crucial concern in Paralyzed
Veterans was that expanding the funding statues to reach beneficiaries
of federal assistance would have resulted in "almost limitless
coverage" - - a result that was clearly at odds with Congress's intent.
477 U.S. at 608-609. The situation here is fundamentally different.
The class of non-recipients that has governing authority over
programs receiving assistance is limited, and permitting a private
right of acting against such entities when they subject persons to
discrimination under those programs advances the purposes of Title
VI.
CONCLUSION
For the foregoing reasons, the judgment should be affirmed
insofar as it (1) permits plaintiffs to bring an action to enforce
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the Title VI disparate impact regulations and (2) finds
that the NCAA is subject to Title VI coverage. Since the district
court properly determined that the disparate impact standards
developed in employment discrimination cases under Title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e et ~.) apply to claims
brought pursuant to the regulations implementing Title VI, the
judgment should also be affirmed if the facts relied upon in the
district court's rulings are correct
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-- a determination that .the parties are in the best position to assist
the Court in making.
Respectfully submitted,
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.O. Box 66078
Washington, D.C. 20035-6078
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-"
Chuck thought you might like to see this, too.
---------------------- Forwarded by Peter Rundlet/WHO/EOP on 06/15/99
03:53 PM ---------------------------
Peter Rundlet
06/15/99 03:04:19 PM
Record Type: Record
To: Charles F. Ruff/WHO/EOP@EOP
cc:
Subject: Cureton brief
I just received this draft of Justice's brief in the NCAA case (in which
the E.D. of Pennsylvania struck down the NCAA's use of the SAT as being
discriminatory under Title VI). Apparently, Justice and Education are in
agreement with the positions taken regarding: (1) the existence of a
private right of action for a disparate impact claim under Title VI and
(2) the NCAA's liabililty under Title VI because it receives federal
financial assistance through another entity (the National Youth Sports
Program) or because it has been ceded controlling authority by a recipient
over a program or activity receiving federal financial assistance.
However, there is some disagreement (see Anita Hodgkiss's note below)
about what position, if any, to take on the merits (i.e., whether the
court correctly applied the law to the facts in this case in finding the
NCAA violated Title VI) .
Anita said that Judy Winston and Norma did not want Justice to take a
position on the merits because it would hurt our efforts on issuing the
high-stakes testing. guidance (this view isn't entirely cle.ar to me, but it
may be that so much attention on the Title VI disparate impact regs may
invite Congressional meddling with them). Steve Winnick of Judy's office
stated that their concern is that some portions of the record are under
seal and so that it is imprudent to take a position on the merits absent
complete knowledge of the facts. With the 'exception of the sentence cited
in Anita's note, Justice has agreed not to address the merits in any
detail, but there is some concern there that the absence of support for
the merits will undermine the plaintiffs' argument.
The brief is due to be filed tomorrow. If you have any questions or
comments on it, please call.
---------------------- Forwarded by Peter Rundlet/WHO/EOP on 06/15/99
02:45 PM ---------------------------
Anita Hodgkiss
06/15/99 02:27:00 PM
Record Type: Record
To: Peter Rundlet/WHO/EOP
cc:
Subject: Cureton brief
Attached is our draft. The Department of Education was concerned about
the last sentence in the first paragraph of section 3 in the "Introduction
and Summary of Argument" (pp. 13-14 on my printed version). We are all
in agreement that this section should be expanded to better explain the
legal standard that the court applied. The brief must be filed tomorrow.
I
can ,explain in greater detail why this is so late if that's a question.
- CUREBRF.WPD
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04942078D252A7537B8500332E1B92D87DB56E6F49743C292E9FF5FED36E716D69A35484185266
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
TAl KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.O. Box 66078
washington, D.C. 20035-6078
(202) 514-3068
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FOR THE THIRD CIRCUIT
No. 99-1222
TAl KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
STATEMENT OF THE ISSUES
The United States will address the following issues:
1. Whether there is a private right of action for a claim of
discrimination based upon disparate impact under Title VI of the
Civil Rights Act of 1964, 42 U.S.C. 2000d et ~.
2. Whether the National Collegiate Athletic Association (NCAA)
is subject to the requirements of Title VI because it either receives
federal financial assistance through another recipient or has been
ceded controlling authority by a recipient over a program or activity
receiving federal financial assistance.
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-2-
IDENTITY AND INTEREST OF THE AMICUS CURIAE
The United States Department of Education extends financial
assistance to educational p'rograms and activi ties and is authorized
by Congress to ensure compliance with Title VI, 42 U.S.C. 2000d-l,
in the operation of those programs and activities. Pursuant to that
authority, the Department of Education has issued regulations that
define a recipient, 34 C.F.R. 100.13(i), and regulations that
prohibit use of criteria for determining the type of services,
financial aid, or other benefits a recipient will provide that have
a disparate impact based upon race, 34 C.F.R. 100.3(b) (2).
The united States Department of Health and Human Services (HHS)
provides federal financial assistance to the National Youth Sports
Program Fund, an entity that the district court found to be controlled
by the NCAA. HHS has also issued a regulation defining a recipient
that tracks the definition in the regulation issued by the Department
of Education, 45 C.F.R. 80.13(i), and a regulation that prohibits
the use of criteria that have a disparate impact based upon race.
45 C.F.R. 80.3 (b) (2).
The United States Department of Justice coordinates enforcement
of Ti tle VI by executive agencies. Exec. Order No. 12,250, 28 C. F. R.
0.51. The Department of Justice also has authority to enforce Title
VI in federal court upon a referral by an agency that extends federal
financial assistance to an education program or activity.
This appeal presents the issue whether a private individual
may file a judicial action to enforce agency regulations that prohibit
the use by recipients of federal financial assistance of criteria
or methods of administration that have a disparate impact based upon
race. Because of the inherent limitations on administrative
enforcement mechanisms and on the litigation resources of the Uni ted
States, the United States has an interest in ensuring that both Title
VI and its implementing regulations may be enforced in federal court
by private parties acting as "private attorneys general." Such
private suits are critical to ensuring optimal enforcement of the
mandate of Title VI and the regulations. See Cannon v. University
of Chicago, 441 U.S. 677, 705-706 (1979) (permitting private citizens
to sue under Title VI is "fully consistent with -- and in some cases
even necessary to -- the orderly enforcement of the statute"). The
United States filed a brief as amicus curiae on that issue in Chester
Residents Concerned For Quality Living v. Seif, 132 F.3d 925 (3d
Cir. 1997), vacated as moot, 119 S. Ct. 22 (1998) i Powell v. Ridge,
No. 98-2096 (3dCir.)i andSandovalv. Hagan, No. 98-6598 (llthCir.).
This appeal also presents the issue whether the NCAA is subj ect
to coverage under Title VI. The United States filed a brief as amicus
curiae in National Collegiate Athletic Association v. Smith, 119
S. Ct. 924 (1999), which argued (at 19-20) that the NCAA could be
a recipient of federal financial assistance through a grant from
the Department of Health and Human Services, and (at 20-27) that
it could be subject to coverage under Title IX of the Education
Amendments of 1972,20 U.S.C. 1681, et .illL., without being a recipient
if it had been ceded control by a recipient over a program or activity
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receiving federal financial assistance. v The distrlct court has
held that the NCAA is subject to Title VI under both of those theories,
and this Court's resolution of this issue could affect the enforcement
of Title VI by the united States.
STATEMENT OF THE CASE
A. Course Of Proceedings And Disposition Below
In January 1997, plaintiffs Tai Kwan Cureton and Leatrice Shaw
filed a complaint individually and on behalf of a class of
African-American student-athletes claiming that the minimum
requirements of the National Collegiate Athletic Association (NCAA)
for freshman students to compete in intercollegiate activities and
to receive athletic scholarships discriminate against them on the
basis of race in violation of Title VI of the Civil Rights Act of
1964, 42 U.S.C. 2000d, et ~, and its implementing regulations.
Cureton v. National Collegiate Athletic Association, C .A. No. 97-131
(E. D. Pa.).
The NCAA filed a motion to dismiss the complaint, arguing that
(1) disparate impact discrimination is not actionable under Title
VI or its implementing regulations; (2) the NCAA is not a "program
or activity" within the meaning of 42 U.S.C. 2000d-4a; and (3) the
NCAA is not subject to Title VI because it does not receive federal
financial assistance. Plaintiffs opposed the motion to dismiss and
also filed a motion for partial summary judgment. On October 9,
11 The Supreme Court's decision did not address the validity
of either of .these theories. NCAA v. Smi th, 119 S. Ct. at 930.
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1997, the district court entered an order denying the NCAA's motion
to dismiss. The court also granted plaintiffs' motion for partial
summary judgment, holding that there is a private right of action
under the Title VI regulations for a claim of discrimination based
upon disparate impact. 1997 WL 634376, at *2. The district court
denied defendant's motion to certify the question for immediate
appeal, pursuant to 28 U.S.C. 1292(b), stating that there is not
a substantial ground for difference of opinion in light of the
"overwhelming circuit law" supporting the reasoning of its decision.
Cureton v. NCAA, Civ. A. No. 97-131, 1998 WL 726653, at *1. (E.D.
Pa., Oct. 16, 1998).
The October 9 order found that "the NCAA appears to be a program
or activity covered by Title VI" under the definition in 42 U.S.C.
2000d-4a(4), but found that the record was not sufficiently developed
to determine whether the NCAA receives federal financial assistance.
1997 WL 634376, at *2-*3. The court therefore left that
determination to a trial on the merits. Id. at *3.
The NCAA thereafter filed a motion for summary judgment, and
plaintiffs filed a cross-motion for summary judgment on the merits
of the alleged Title VI violation. On March 8, 1999, the district
court granted plaintiffs' motion for summary judgment.
The NCAA filed a timely notice of appeal on March 17, 1999 (JA
1250a). On April 8, 1999, plaintiffs filed a cross-appeal (JA
1414a) .
B. Statement Of Facts
1. Background.
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The NCAA is a voluntary, unincorporated association of
approximately 1200 members, consisting of colleges and universities,
conferences and aspociations, and other educational institutions.
Cureton v. NCAA, 37 F. Supp.2d 687, 690 (3d Cir. 1999). The NCAA
is responsible for promulgating rules governing all aspects of
intercollegiate athletics, including recruiting, eligibility of
student-athletes, and academic standards. Its member institutions
agree to abide by and enforce those rules. Id. at 695 & n.6. The
four-year colleges and universities that are the active members of
the NCAA are divided into Divisions I, II, and III. Id. at 690.
Some bylaws of the NCAA are applicable to all divisions. Each
division may, however, adopt additional bylaws applicable only to
that division. This case involves a bylaw that is applicable only
to Division I schools. Ibid.
In response to public perception that student athletes were
inadequately prepared to succeed academically and to receive an
undergraduate degree, the Division I membership adopted requirements
for high school graduates seeking to participate in athletics and
to receive athletically-related financial assistance during their
freshman year. Proposition 48, which was implemented during the
1986-1987 academic year, required high school graduates to have a
2.0 GPA in 11 core academic courses and a minimum score of 700 on
the SAT (or a composite score of 15 on the ACT) in order to participate
in freshman intercollegiate athletics. 37 F. Supp.2d at 690.
In 1992, these initial eligibility rules were modified through
the adoption of Proposition 16. As fully implemented effective
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August 1, 1996, Proposition 16 increased the number of core courses
required to 13 and introduced an initial eligibility index. Under
the index, a student-athlete could establish eligibility with a GPA
of 2.0 only if combined with an SAT score of 1010 (or an ACT sum
score of 86) .11 A student with a GPA of 2.5 or higher was required
to have an SAT score of 820 (or an ACT sum score of 68). Since the
core GPA cutoff score of 2.0 is two standard deviations below the
national mean, while the SAT/ACT cutoff score is only one standard
deviation below the national mean, Proposition 16 results in a
"heavier weighting of the standardized test. " 37 F. Supp. 2d at 691.
2. Federal financial assistance
y In 1995, the College Board recentered the score scales for
the SAT. After recentering, a test score of 700 on the old scale
is approximately equivalent to a score of 830 on the recentered scale.
Cureton v. NCAA, 37 F. Supp.2d at 690 n.2.
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In 1969, the NCAA began receiving federal financial assistance
for the operation of the National Youth Sports Program (NYSP).V
From that time until 1991, the NCAA was a direct recipient of federal
financial assistance from the Department of HHS to operate the NYSP
(JA 145a-146a; JA 511a-516a). On October 3, 1989, the NCAA created
the NYSP Foundation as a nonprofit corporation under the laws of
Missouri (JA 506a-509a). It was later renamed the NYSP fund (see
JA 147a, Marshall 7/2/97 Dep. at 29-30). The Fund was created "to
insure that [the NCAA] is not a recipient or a contractor of the
federal government" (JA 147a-148a, Marshall 7/2/97 Dep. at 31-33).
On August 9, 1991, Edward Thiebe, the Director of Youth Sports for
the NCAA, sent a letter to HHS requesting that its Fiscal Year 1991
grant application for the NYSP be amended to designate the NYSP Fund
as the grantee (JA 151a-152a). From 1992 to the present, the federal
grant has been made to the NYSP Fund. In Fiscal Year 1996, the federal
grant from HHS was $11,520,000 (JA 74a, see also JA 261a (HHS press
release announcing that "$11,520,000 was awarded to the NCAA")).
JI Through subgrantees, the NYSP offers sports instruction and
instruction in life skills, science, and math to poor and
disadvantaged youths (JA 520a) .
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Nonetheless, "Guidelines for the 1993 National Youth Sports
Program," which are prepared by the NYSP Committee as a required
part of the grant application process, listed the NCAA, not the Fund,
as the grantee of the HHS grant (JA 254a-259a; see Marshall 6/30/97
Dep. at 28-30). The guidelines stated that "[t]he NCAA has been
awarded a grant by the [Office of Community Services]" of HHS (JA
258a). The guideliness also stated that a "specified amount of funds
shall be made available to participating institutions through the
National Collegiate Athletic Association to conduct projects" (JA
257a) and invited applications to be submitted to the NCAA at its
office address in Overland, Kansas (ibid.).ll
Pursuant to its Bylaws, the Fund has four directors, three of
whom are NCAA officers or employees (JA 229a) .11 The Fund itself
has no offices, no employees, and no letterhead (JA 143a, JA 161a,
Marshall 7/2/97 Dep. at 13, 85; JA 196a, Thiebe Dep. at 44). The
Fund has never had a Board of Directors meeting, but rather has
"handled any business that needed to be taken care of through * *
* consent minutes" (JA 158a). The Fund's bank account is entitled:
"The National Collegiate Athletic Association -- The National Youth
Sports Program" (JA 505a). The staff of the NCAA, as well as the
11 In a document dated 2/3/9,5 that was attached to one of its
own pleadings in the district court, the NCAA is listed as the
"Applicant organization" for the NYSP grant (JA310a - Assurances
given in connection with grant) .
~ The bylaws mandate that the Executive Director and Assistant
Executive Director of the NCAA, and the chairperson of the NYSP
Committee of the NCAA be members of the NYSP Fund Board (JA 229a) .
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fund, has authority to draw from the federal government's grant
through that account (JA 156a-157a, Marshall 7/2/97 Dep. at 68-69).
Through 1994, the NCAA, "d/b/a the National Youth Sports
Program," was the named insured on liability policies covering the
activities of the NYSP (JA 526a-629a) .11 The Fund's Articles of
Incorporation provide that upon the dissolution of the Fund, the
assets of the Fund shall be distributed exclusively to the NCAA,
provided the NCAA continues to be an education organization within
the meaning of 501(c) (3) of the Internal Revenue Code (JA 508a).
Perhaps most important, it is the NCAA's NYSP committee, and
not the Fund, that makes all of the decisions about the NYSP and
the use of the federal funds. For example, the NYSP committee has
final approval over which colleges and universities receive subgrants
to operate the NYSP's instructional and educational programs (JA
200a). The NCAA stipulated that once the NCAA's NYSP committee makes
a decision, no further action is required to implement that decision
(JA 209a-210a) .
The NCAA's Executive Director has stated that "[t]he NYSP is
one of the NCAA's best-kept secrets, yet it is consistently one of
our most successful and influential programs. Our partnership wi th
the federal Government, local civic organizations and individual
colleges and universities perfectly embodies the NCAA's team spirit"
~ In the NCAA's 1995-1996 Annual Report, the Fund is included
in the NCAA's financial statements (JA 517a-520a). In contrast,
the NCAA Foundation is described in the Annual Report as "a separate
legal entity" not included in the NCAA's financial statements (JA
520a) .
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(JA 263a) .
C. The Decision Below
In granting summary. judgment to the plaintiffs, the district
court held that the NCAA is subject to Title VI, and that Proposition
16 violates the disparate impact prohibition of the Title VI
regulations. The court's earlier partial grant of summary judgment
held that plaintiffs have a private right of action to enforce the
Title VI regulation prohibiting disparate impact discrimination (see
page , supra).
1. Coverage of NCAA under Title VI.
Plaintiffs raised several theories under which the NCAA would
be subject to Title VI. First, they contended that the NCAA receives
federal financial assistance indirectly through the receipt of dues
from its member schools, all of whom receive federal financial
assistance. The district court rejected that theory based upon the
Supreme Court's decision in NCAA v. Smith, 119 S. Ct. 924 (1999).
37 F. Supp.2d at 693.
Plaintiffs also argued that the NCAA directly receives federal
financial assistance through the National Youth Sports Program Fund
because the Fund is nothing more than the alter ego of the NCAA.
The district court found that plaintiffs "failed to sustain their
heavy burden of 'piercing the corporate veil' sufficient to have
the Fund construed as the NCAA's alter ego." 3 7 F. SUpp. 2d at 694.
However, the court found "overwhelming evidence" supporting the
fact that "the Fund is ultimately being controlled by the NCAA,"
ibid., and thus concluded that plaintiffs had sustained their burden
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of proving that the NCAA "exercises effective control and operation
of the" grant given by HHS to the Fund "to be construed as an indirect
recipient of federal financial assistance." Ibid. The court found
that "although the Fund is the named recipient of the block grant,
it is merely a conduit through which the NCAA makes all of the
decisions about the Fund and the use of the federal funds." Ibid.
Finally, the court found that plaintiffs also proved that the
NCAA is subject to suit under Title VI regardless of whether it
receives federal financial assistance, "because member schools (who
themselves indisputably receive federal funds) have ceded
controlling authority over federally funded programs to the NCAA."
37 F. Supp.2d at 694. It found that the "member colleges and
universities have granted to the NCAA the authority to promulgate
rules affecting intercollegiate athletics that the members are
obligated to abide by and enforce." Id. at 696. Accordingly,
"because there is a nexus between the NCAA's allegedly discriminatory
conduct wi th regards to intercollegiate athletics and the sponsorship
of such programs by federal fund recipients, the NCAA is subject
to Title VI for a challenge to Proposition 16." Ibid.
2. The decision on the merits
The district court held that the disparate impact standard
developed under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et ~, in the employment context is applicable to a claim
of disparate impact in educational testing. 37 F. Supp.2d at
696-697. Applying that standard, the court held that Proposition
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16 causes a racially disproportionate effect on African-Americans
(id. at 697-701); that Proposition 16 is not justified by any
legitimate educational necessity (id. at 701-712); and that, in any
event, plaintiffs had demonstrated that there are equally effective
alternative practices to Proposition 16 having less adverse effect
upon African-Americans (id. at 713-714). Accordingly, the court
granted plaintiffs' motion for summary judgment (id. at 714).
INTRODUCTION AND SUMMARY OF ARGUMENT
1. This Court in Chester Residents Concerned For Ouali ty Living
v. Seif, 132 F.3d 925 (1997), vacated as moot, 119 S. Ct. 22 (1998),
correctly held that "private plaintiffs may maintain an action under
discriminatory effect regulations promulgated by federal
administrative agencies pursuant to section 602 of Title VI of the
Civil Rights Act of 1964," and that decision should be reinstated
as the law in this Circuit. The reasoning of Chester Residents is
still persuasive authority. See Polychrome Int'l Corp. v. Krigger,
5 F.3d 1522, 1534 (3d Cir. 1993); Finberg v. Sullivan, 658 F.2d 93,
100 n.14 (3d Cir. 1981) (en banc). Moreover, the holding in Chester
Residents was consistent with that of every other court of appeals
to consider the issue. 132 F.3d at 936-937. The NCAA has presented
no "compelling basis" for this Court to disregard that holding.
Wagner v. PennWest Farm Credit, ACA, 109 F.3d 909, 912 (3d Cir. 1997).
2. In Part II, we argue that the NCAA is subject to coverage
under Title VI both because it receives federal financial assistance
indirectly through the NSYP Fund, which it controls, and because it
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has been conceded controlling authority over the intercollegiate
athletics programs of its member colleges and universities, which
receive federal financial assistance directly.
3. With respect to the district court's ruling that the minimum
standardized test score cutoff in Proposition 16 violates Title VI
of the Civil Rights Act of 1964, the court correctly held (37 F. Supp.
2d at 696-697) -- and the NCAA does not dispute -- that the disparate
impact standards developed in employment discrimination cases under
Title VII of the civil Rights Act of 1964 (42 U.S.C. 2000e et seg.)
apply to claims brought pursuant to the regulations implementing Title
VI. See,~, Georgia State Conference of Branches of NAACP v.
Georgia, 775F.2d1403, 1417 (llthCir. 1985); NAACPv. Medical Center,
Inc., 657 F.2d 1322, 1331 (3d Cir. 1981); Larry P. v. Riles, 793 F.2d
969, 982 nn.9-10(9th Cir. 1984). Thus, i f the facts relied upon
in the district court's rulings (which are based in large measure
on the NCAA's own studies) are right, it would appear that the district
court correctly held that Proposition 16's cutoff score violates the
effects test of the Title VI regulation. v
li The district court mentioned, but did not apply to Title
VI, the 1991 amendments to Title VII that require a defendant to
bear both a burden of production and persuasion on its business
necessity justification. 37 F. Supp. 2d at 697. See 42 U.S.C.
2000e(m), 2000e-2k(1) (A). Although the alleged discrimination in
this case occurred after 1991, the court appears to have applied
the previous standard, set out in Wards Cove packing Co. v. Atonio,
490 U.S. 642 (1989), that the defendant bears only a burden of
producing evidence that the challenged employment practice has a
legitimate business justification. If this Court agrees with the
district court's ruling that the NCAA failed to meet its burden under
Wards Cove because it "has not produced any evidence demonstrating
that the cutoff score used in Proposi tion 16 serves, in a significant
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way, the goal of ralslng student-athlete graduation rates" (37 F.
Supp. at 712), it will be unnecessary for the Court to determine
whether the district court erred in failing to require the. NCAA to
satisfy the heavier burden imposed by the Civil Rights Act of 1991.
Cf. Elston v. Talladega County Bd. of Educ., 997 F. 2d 1394, 1407
n.14 (11th Cir. 1993). In any event, this Court should not resolve
this important issue without the benefit of full briefing from the
parties (see NCAA Br. at 47 n.19, Cureton Br. at 36 n.19).
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We do not take a position on the factual questions raised in
this appeal. Because parts of the record relating to this issue
remain under seal (see NCAA Br. at 8 n.3), we have not had access
to the information necessary to ascertain whether the district court
correctly determined that Proposition 16's cutoff score causes a
racially disproportionate effect; that the NCAA had not demonstrated
that the cutoff score significantly serves the goal of raising
student-athlete graduation rates; and that, in any event, the
plaintiffs established the existence of alternative practices that
serve the goal of raising student-athlete graduation rates and that
have less of an adverse impact upon African-Americans. These are
highly fact-bound determinations, and we believe the parties are in
the best position to assist the Court in determining whether the
district court erred in any of these rulings.
ARGUMENT
I
PRIVATE PLAINTIFFS MAY SUE TO ENFORCE THE DISPARATE IMPACT
STANDARD IN AGENCY REGULATIONS IMPLEMENTING TITLE VI
Plaintiffs sought to enforce regulations of the Departments of
Education and Health and Human Services promulgated under Section
602 of Title VI of the Civil Rights Act, 42 U.S.C.
2000d-1 (JA 28a). Those regulations prohibit a recipient of federal
financial assistance from using "criteria or methods of
administration which have the effect of subjecting individuals to
discrimination because of their race." 34 C.F.R. 100.3(b) (2); 45
C.F.R. 80.3 (b) (2) (emphasis added). This Court in Chester Residents
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Concerned For Quality Living v. Seif, 132 F.3d 925 (1997), vacated
as moot, 119 S. Ct. 22 (1998), held that "private plaintiffs may
maintain an action under discriminatory effect regulations
promulgated by federal administrative agencies pursuant to. section
602 of Title VI of the Civil Rights Act of 1964." Although that
decision is no longer binding circuit precedent, the opinion in
Chester Residents retains its persuasive authority. See Polychrome
Int'l Corp. v. Krigger, 5 F.3d 1522, 1534 (3d Cir. 1993); Finberg
v. Sullivan, 658 F.2d 93, 100 n.14 (3d Cir. 1981) (en banc) ("Even
if a decision is vacated, however, the force of its reasoning remains,
and the opinion of the Court may influence resolution of future
disputes. "). In addition, the holding. in Chester Residents was
consistent with that of every other court of appeals to consider the
issue. 132 F.3d at 936-937 (collecting cases from the First, Second,
Fifth, Seventh, Ninth, Tenth, and Eleventh Circuits). This Court
has noted that" [i]n light of such an array of precedent, [it] would
require a compelling basis to hold otherwise before effecting a
circuit split." Wagner v. PennWest Farm Credit, ACA, 109 F.3d 909,
912 (3d Cir. 1997).
The NCAA has provided no such "compelling basis." All of the
arguments raised by the NCAA (Br. 17-25) were correctly rejected by
the panel in Chester Residents and should likewise be rej ected here.
First, the NCAA (Br. 18-20) attacks the district court's decision
for relying on an overly broad reading of Guardians. The district
court, however, issued its decision concluding that there is a private
right of action to enforce the Title VI regulations in October 1997,
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some two months before the decision in Chester Residents. Thus, its
conclusion that the Supreme Court in Guardians had resolved the issue
could not have anticipated this Court's conclusion in Chester
Residents that Guardians is not dispositive, 132 F.3d at 930, and
that the Supreme Court's decision in Alexander v. Choate provided
"no direct authority * * * that either confirms or denies the existence
of a private right of action," 132 F.3d at 931. In any event, the
district court's holding that there is a private right of action to
enforce the disparate impact regulation is, of course, entirely
consistent with this Court's Chester Residents holding.
Second, the NCAA argues (Br. 20-23) that Section 602 does not
permit an implied private right of action, in part because Section
602 "prohibits any enforcement of the regulations" until the federal
funding agency gives the alleged violator notice and an opportunity
to comply voluntarily (Br. 22, emphasis in original). But, as the
Court noted in Chester Residents, 132 F.3d at 935, "a private lawsuit
also affords a fund recipient similar notice." Moreover, the
requirements of Section 602 "were designed to cushion the blow of
a result that private plaintiffs cannot effectuate," i.e.,
termination of funding. Id. at 936. The Court in Chester Residents
therefore properly found that "a private right of action would be
consistent with the legislative scheme of Title VI." Ibid. In
addition, if the NCAA were correct in its reading of the statute,
then a private right of action to enforce the prohibition on
intentional discrimination (which the federal government also
enforces through the procedures established in Section 602) would
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also be barred, a result clearly foreclosed by the Supreme Court's
decision in Cannon v. University of Chicago, 441 U.s. 677' (1979) .
Finally, the NCAA argues (Br. 23-25) that the legislative history
of Title VI does not support the implication of a private right of
action for unintentional discrimination. It attempts to diminish
the import of the legislative history of the Civil Rights Restoration
Act of 1987, Pub. L. No. 100-259, 102 Stat. 28 (1988), discussed by
this Court in Chester Residents, noting (NCAA Br. at 24) that Chester
Residents relied on comments from opponents of the 1987 legislation
that "do not shed light on the purpose or intent behind Titl~ VI."
But Chester Residents was following the well-accepted rule that when
there is evidence that Congress understands that a private right of
action was available under a statutory scheme, and amends the statute
without demonstrating any intent to disapprove of such suits, it has
ratified tha.t private right of action. See Herman & MacLean v.
Huddleston, 459 U.S. 375, 386 (1983); Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Curran, 456 U.S. 353, 381-382 (1982); see also Cannon,
441 U.S. at 687 n.7; Lindahl v. OPM, 470 U.s. 768, 787-788 (1985).
And while much of the discussion of private enforcement of the
discriminatory effects regulations came from opponents to the bill,
"they are nevertheless relevant and useful, especially where, as here,
the proponents of the bill made no response." Arizona v. California,
373 U.S. 546, 583 n.85 (1963).
The NCAA has not articulated a compelling basis for this Court
to discard the holding of Chester Residents and reject the result
reached by the other circuits th.at have addressed the question. This
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Court should reinstate the holding of Chester Residents here. v
II
THE NCAA IS SUBJECT TO THE REQUIREMENTS OF TITLE VI BECAUSE
IT RECEIVES ASSISTANCE THROUGH ANOTHER RECIPIENT AND
BECAUSE IT HAS BEEN CEDED CONTROLLING AUTHORITY BY A
RECIPIENT OVER A PROGRAM OR ACTIVITY RECEIVING FEDERAL
FINANCIAL ASSISTANCE
A. The NCAA Receives Federal Financial Assistance
Through Another Recipient.
~ By the time this Court considers the issue whether there is
a private right of action to enforce the disparate impact regulations
under Title VI in this case, the issue may have been resolved by
the panel in Powell v. Ridge, No. 98-2096 (3d Cir.), in which oral
argument was held on June 9, 1999. The panel in powell, however,
does not need to reach that issue if it decides that the Title VI
discriminatory effect regulations may be enforced through 42 u. S. C.
1983.
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The regulations of the Departments of Education and HHS define
a recipient of federal financial assistance as any entity "to whom
Federal financial assistance is extended directly or through another
recipient, for any program" (34 C.F.R. 100.13 (i); 45 C.F.R. 80.13 (i)).
From 1969 through 1991, the NCAA directly received federal financial
assistance for the NYSP in its own name. After passage of the Civil
Rights Restoration Act, the NCAA named the NYSP Fund to be the grant
recipient for federal funding in order "to insure that [the NCAA]
is not a recipient or a contractor of the federal government" (JA
147a-148a, Marshall 7/2/97 Dep at 31-33). The evidence relied upon
by the district court, some of which is recited at pp. , supra,
demonstrates, however, that the incorporation of the NYSP Fund was
largely a formality and that the NCAA itself, through the NYSP
Committee, continues to administer the grant program. The NYSP Fund
as the listed grantee is itself a direct recipient of federal financial
assistance subject to coverage under Title VI. But the NCAA receives
federal financial assistance indirectly through its continued control
of the NYSP grant, notwithstanding its attempt to distance itself
from federal oversight. 11 Indeed, the Department of HHS has on two
occasions (in 1994 and 1998) taken the position that the NCAA is a
'J!The NCAA's assertion (Br. 32) that "there is no evidence
to suggest that the NCAA has diverted any federal funds to its own
coffers" is beside the point. A recipient of federal financial
assistance is required by law to use that assistance to fulfill the
ultimate purpose of the grant, and there is no allegation here that
the NCAA has not done so. The claim here is not that the NCAA has
violated the law by setting up the NYSP Fund as the named grantee,
but rather that it cannot escape responsibility under Title VI if
it controls the administration of the grant.
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recipient of federal financial assistance through a Community
Development Block Grant from HHS and has accepted complaints of
discrimination for investigation (JA 12S7a-1261a) .
Based upon the "overwhelming evidence," 37 F. Supp.2d at 694,
the district court properly found that "the Fund is ultimately being
controlled by the NCAA," and thus that the NCAA is the indirect
recipient of federal financial assistance through the NYSP Fund.
Ibid.
B. The NCAA Is Subject To Title VI Because It Has Been
Ceded Controlling Authority Over The Intercollegiate
Athletic Programs Of Its Member Colleges And
Universities, Which Receive Federal Financial
Assistance.
The district court found that "the NCAA is subject to suit
under Title VI irrespective of whether it receives federal funds,
directly or indirectly, because member schools (who themselves
indisputably receive federal funds) have,ceded controlling authority
over federally funded programs to the NCAA." 37 F.3d at 694.
Although the district court did not articulate the statutory basis
for this theory of coverage, the United States believes that it is
firmly rooted in the text of Title VI.
Ti tIe VI proves in relevant part that "[n] 0 person in the Uni ted
States shall, on the ground of race, color, or national origin, be
excluded from participation in, be denied the benefits of, or be
subjected to discrimination under any program or activity receiving
Federal financial assistance." 42 U.S.C. 2000d. As that statutory
text makes clear, Ti tie VI, like Ti tie IX of the Education Amendments
of 1972, 20 U.S.C. 1681(a), was not drafted "simply as a ban on
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discriminatory conduct by recipients of federal funds." Cannon v.
University of Chicago, 441 u.s. 677, 691-692 (1979) i see Chowdhury
v. Reading Hospital and Medical Center, 677 F.2d 317, 318 & n.2 (3d
Cir. 1982) (language of Cannon applicable to Title VI). Instead,
the "unmistakable focus" of the statutory text is on the protection
of "the benefitted class." Id. at 691. The text itself does not
specifically identify the class of potential violators. But given
the focus of the text on protection for the individual, and the absence
of any language limiting the class of violators to recipients, Title
VI is most naturally read as prohibiting any entity that has governing
authority over a program from subjecting an individual to race-based
discrimination under it. l i
Although recipients are the principal class of entities that
may subject an individual to discrimination under a program, they
are not the only ones. When a recipient cedes governing authority
over a program receiving assistance to another entity, and that entity
subjects an individual to discrimination under the program, that
entity violates Title VI, regardless of whether it is a recipient
lQI Congress has constitutional authority to reach the conduct
of anyone who threatens "the integrity and proper operation of [a]
federal program." See Salinas v. United States, 118 S. Ct. 469,
475 (1997) (upholding constitutionality of a statute that prohibits
the acceptance of bribes by employees of state and local agencies
that receive federal funds, as applied to a case in which a county
received funds for the operation of a jail and the sheriff and deputy
sheriff at the jail accepted bribes in violation of the statute) .
Since the NCAA's actions, if discriminatory, pose a threat to the
integrity and proper operation of the federally assisted programs
at member schools, Congress had constitutional authority to subject
the NCAA to liability for such discrimination.
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itself.
That commonsense reading of Title vI furthers its central
purposes -- "to avoid the use of federal resources to support
discriminatory practices" and to "provide individual citizens
effective protection against those practices." Cannon, 441 u.s. at
704. Several considerations support that conclusion. First, as the
district court recognized, 37 F. Supp.2d at 695, intercollegiate
athletics is unique in that it is "one of the few educational programs
of a college or university that cannot be conducted without the
creation of a separate entity to provide governance and
administration." Out of the necessity for a supervising authority
comes the NCAA's power to establish the rules, such as Proposition
16, governing eligibility for intercollegiate athletics at member
schools. "By joining the NCAA, each member agrees to abide by and
to enforce such rules." NCAAv. Tarkanian, 488 u.S. 179,183 (1988).
Because the NCAA has effective control over eligibility
determinations for intercollegiate athletics, it is the entity most
responsible for any discrimination that enters into those
determinations.
If there is discrimination in the NCAA's rules, a member school
may attempt to persuade the NCAA to change the rules, but if it is
unsuccessful, its only option is to withdraw from the NCAA. Since
the NCAA has a virtual monopoly on intercollegiate athletics, a school
that has withdrawn from the NCAA in order to satisfy its own Title
VI obligations could no longer offer intercollegiate athletic
opportunities to its students. That would leave victims of
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discrimination without an effective remedy and deprive innocent third
parties of intercollegiate athletic opportunities as well. Those
harsh consequences may be avoided if victims of the NCAA's
discrimination may seek relief against the NCAA directly.
Finally, because of its unique power over intercollegiate
athletics, discrimination by the NCAA in the promulgation of its rules
has the capacity to result in discrimination at numerous member
schools simultaneously. Permitting a private right of action against
the NCAA provides a mechanism for stopping discrimination at its
source before it becomes entrenched at member schools.lI
ill A member school, of course, remains liable for any
discriminatory decision of the NCAA that it implements. For the
reasons discussed above, however, when the NCAA is the source of
the discrimination and uses its power over member schools to implement
that discrimination, a remedy against the NCAA is more appropriate
and efficacious than a remedy against member schools.
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Permitting a judicial cause of action against the NCAA is
consistent with the principle that entities should not be subjected
to liability under Title VI without adequate notice. See Gebser v.
Lago Vista Indep. School Dist., 118 S. Ct. 1989, 1997-1999 (1998).
Unlike the situation in Gebser, plaintiffs do not seek to hold the
NCAA liable for discrimination committed by others; rather,
plaintiffs seek to hold the NCAA liable for its own alleged
discrimination in the promulgation and continued use of Proposition
16. The text of the Title VI regulations provides sufficient notice
to the NCAA that it had an obligation not to use its authority over
an education program receiving federal assistance to subject an
individual to race-based discrimination under that program. l i
If the NCAA did not wish to subject itself to Title VI obligations
on the basis of its relationship to member institutions that receive
assistance, it could have refrained from exercising governing
authority over intercollegiate athletics at those institutions.
Once the NCAA assumed that governing role, it also assumed an
obligation not to use that authority to discriminate on the basis
of race against individuals seeking access to intercollegiate
athletic programs at those institutions.
The NCAA argues (Br. 38-39) that it cannot be subject to Title
VI coverage because it did not assume a contractual commitment not
-121 Moreover, t h
1S case 1nvo 1 ves a calm for injunctive relief
. . 1
only, and not money damages, and so many of the "notice" concerns
that played a particularly significant role in Gebser are not so
compelling in this context.
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to discriminate. The text of Title VI, however, is not framed
exclusively in contract terms, and a contractual commitment not to
discriminate is not a precondition to application of the statute.
If a contract analogy were needed, the relevant one would be
to the tort of intentional interference wi th a contract. Restatement
of Torts, 766 (one who intentionally and improperly interferes with
the performance of a contract between another and a third person by
inducing or otherwise causing the third person not to perform the
contract is subject to liability to the other). When an entity that
has been ceded controlling authority over a recipient requires the
recipient to act in a discriminatory manner by, for example, imposing
a discriminatory requirement for eligibility, it effectively causes
the recipient to breach its agreement wi th the federal funding agency.
Moreover, when an entity created by recipients makes and enforces
rules for recipients, it is on ample notice that it cannot do so in
a way that subjects an individual to discrimination under the programs
of the recipients.
Finally, contrary to the NCAA's contention (Br. 37-39)
subjecting non-recipients that have been ceded controlling authority
over federally assisted programs to coverage under Title VI is not
in conflict with the Supreme Court's decision in United States
Department of Transportation v. Paralyzed Veterans, 477 U.S. 597
(1986). There are statements in that opinion that support the NCAA's
argument that federal funding statutes like Title VI apply only to
recipients of federal financial assistance. 477 U.S. at 605-606.
The context of those statements makes clear, however, that the Court
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was addressing only whether coverage should extend past recipients
to beneficiaries. The Court did not purport to address the entirely
different question whether an entity that has been ceded controlling
authority over a program receiving federal assistance violates Title
VI when it subjects an individual to discrimination under that
program. Because the airlines did not have controlling authority
over the federally assisted airport programs, the question at issue
here was simply not presented in Paralyzed Veterans.
Equally important, the Court's crucial concern in Paralyzed
Veterans was that expanding the funding statues to reach beneficiaries
of federal assistance would have resulted in "almost limitless
coverage" -- a result that was clearly at odds with Congress's intent.
477 U. S. at 608-609. The si tuation here is fundamentally different.
The class of non-recipients that has governing authority over
programs receiving assistance is limited, and permitting a private
right of acting against such entities when they subject persons to
discrimination under those programs advances the purposes of Title
VI.
CONCLUSION
For the foregoing reasons, the judgment should be affirmed
insofar as it (1) permits plaintiffs to bring an action to enforce
the Title VI disparate impact regulations and (2) finds
that the NCAA is subject to Title VI coverage. Since the district
court properly determined that the disparate impact standards
developed in employment discrimination cases under Title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) apply to claims
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brought pursuant to the regulations implementing Title VI, the
judgment should also be affirmed if the facts relied upon in the
district court's rulings are correct
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-- a determination that the parties are in the best position to assist
the Court in making.
Respectfully submitted,
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.o. Box 66078
Washington, D.C. 20035-6078
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==================== ATTACHMENT 1 ====================
ATT CREATION TIME/DATE: 0 00:00:00.00
TEXT:
Unable to convert ARMS_EXT: [ATTACH.D86]ARMS24932737C.136 to ASCII,
The following is a HEX DUMP:
FF57504390290000010A02010000000205000000A3F80000000200005E9C3202CED98C7371D938
04942078D252A7537B8500332E1B92D87DB56E6F49743C292E9FF5FED36E716D69A35484185266
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
TAl KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.O. Box 66078
washington, D.C. 20035-6078
(202) 514-3068
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FOR THE THIRD CIRCUIT
No. 99-1222
TAl KWAN CURETON, et al.,
Plaintiffs-Appellees
v.
NATIONAL COLLEGIATE ATHLETIC ASSOCIATION,
Defendant-Appellant
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
SUPPORTING APPELLEES URGING AFFIRMANCE
STATEMENT OF THE ISSUES
The United States will address the following issues:
1. Whether there is a private right of action for a claim of
discrimination based upon disparate impact under Title VI of the
Civil Rights Act of 1964, 42 U.S.C. 2000d et ~.
2. Whether the National Collegiate Athletic Association (NCAA)
is subject to the requirements of Title VI because it either receives
federal financial assistance through another recipient or has been
ceded controlling authority by a recipient over a program or activity
receiving federal financial assistance.
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-2-
IDENTITY AND INTEREST OF THE AMICUS CURIAE
The United States Department of Education extends financial
assistance to educational p'rograms and activi ties and is authorized
by Congress to ensure compliance with Title VI, 42 U.S.C. 2000d-l,
in the operation of those programs and activities. Pursuant to that
authority, the Department of Education has issued regulations that
define a recipient, 34 C.F.R. 100.13(i), and regulations that
prohibit use of criteria for determining the type of services,
financial aid, or other benefits a recipient will provide that have
a disparate impact based upon race, 34 C.F.R. 100.3(b) (2).
The united States Department of Health and Human Services (HHS)
provides federal financial assistance to the National Youth Sports
Program Fund, an entity that the district court found to be controlled
by the NCAA. HHS has also issued a regulation defining a recipient
that tracks the definition in the regulation issued by the Department
of Education, 45 C.F.R. 80.13(i), and a regulation that prohibits
the use of criteria that have a disparate impact based upon race.
45 C.F.R. 80.3 (b) (2).
The United States Department of Justice coordinates enforcement
of Ti tle VI by executive agencies. Exec. Order No. 12,250, 28 C. F. R.
0.51. The Department of Justice also has authority to enforce Title
VI in federal court upon a referral by an agency that extends federal
financial assistance to an education program or activity.
This appeal presents the issue whether a private individual
may file a judicial action to enforce agency regulations that prohibit
the use by recipients of federal financial assistance of criteria
or methods of administration that have a disparate impact based upon
race. Because of the inherent limitations on administrative
enforcement mechanisms and on the litigation resources of the Uni ted
States, the United States has an interest in ensuring that both Title
VI and its implementing regulations may be enforced in federal court
by private parties acting as "private attorneys general." Such
private suits are critical to ensuring optimal enforcement of the
mandate of Title VI and the regulations. See Cannon v. University
of Chicago, 441 U.S. 677, 705-706 (1979) (permitting private citizens
to sue under Title VI is "fully consistent with -- and in some cases
even necessary to -- the orderly enforcement of the statute"). The
United States filed a brief as amicus curiae on that issue in Chester
Residents Concerned For Quality Living v. Seif, 132 F.3d 925 (3d
Cir. 1997), vacated as moot, 119 S. Ct. 22 (1998) i Powell v. Ridge,
No. 98-2096 (3dCir.)i andSandovalv. Hagan, No. 98-6598 (llthCir.).
This appeal also presents the issue whether the NCAA is subj ect
to coverage under Title VI. The United States filed a brief as amicus
curiae in National Collegiate Athletic Association v. Smith, 119
S. Ct. 924 (1999), which argued (at 19-20) that the NCAA could be
a recipient of federal financial assistance through a grant from
the Department of Health and Human Services, and (at 20-27) that
it could be subject to coverage under Title IX of the Education
Amendments of 1972,20 U.S.C. 1681, et .illL., without being a recipient
if it had been ceded control by a recipient over a program or activity
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receiving federal financial assistance. v The distrlct court has
held that the NCAA is subject to Title VI under both of those theories,
and this Court's resolution of this issue could affect the enforcement
of Title VI by the united States.
STATEMENT OF THE CASE
A. Course Of Proceedings And Disposition Below
In January 1997, plaintiffs Tai Kwan Cureton and Leatrice Shaw
filed a complaint individually and on behalf of a class of
African-American student-athletes claiming that the minimum
requirements of the National Collegiate Athletic Association (NCAA)
for freshman students to compete in intercollegiate activities and
to receive athletic scholarships discriminate against them on the
basis of race in violation of Title VI of the Civil Rights Act of
1964, 42 U.S.C. 2000d, et ~, and its implementing regulations.
Cureton v. National Collegiate Athletic Association, C .A. No. 97-131
(E. D. Pa.).
The NCAA filed a motion to dismiss the complaint, arguing that
(1) disparate impact discrimination is not actionable under Title
VI or its implementing regulations; (2) the NCAA is not a "program
or activity" within the meaning of 42 U.S.C. 2000d-4a; and (3) the
NCAA is not subject to Title VI because it does not receive federal
financial assistance. Plaintiffs opposed the motion to dismiss and
also filed a motion for partial summary judgment. On October 9,
11 The Supreme Court's decision did not address the validity
of either of .these theories. NCAA v. Smi th, 119 S. Ct. at 930.
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1997, the district court entered an order denying the NCAA's motion
to dismiss. The court also granted plaintiffs' motion for partial
summary judgment, holding that there is a private right of action
under the Title VI regulations for a claim of discrimination based
upon disparate impact. 1997 WL 634376, at *2. The district court
denied defendant's motion to certify the question for immediate
appeal, pursuant to 28 U.S.C. 1292(b), stating that there is not
a substantial ground for difference of opinion in light of the
"overwhelming circuit law" supporting the reasoning of its decision.
Cureton v. NCAA, Civ. A. No. 97-131, 1998 WL 726653, at *1. (E.D.
Pa., Oct. 16, 1998).
The October 9 order found that "the NCAA appears to be a program
or activity covered by Title VI" under the definition in 42 U.S.C.
2000d-4a(4), but found that the record was not sufficiently developed
to determine whether the NCAA receives federal financial assistance.
1997 WL 634376, at *2-*3. The court therefore left that
determination to a trial on the merits. Id. at *3.
The NCAA thereafter filed a motion for summary judgment, and
plaintiffs filed a cross-motion for summary judgment on the merits
of the alleged Title VI violation. On March 8, 1999, the district
court granted plaintiffs' motion for summary judgment.
The NCAA filed a timely notice of appeal on March 17, 1999 (JA
1250a). On April 8, 1999, plaintiffs filed a cross-appeal (JA
1414a) .
B. Statement Of Facts
1. Background.
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The NCAA is a voluntary, unincorporated association of
approximately 1200 members, consisting of colleges and universities,
conferences and aspociations, and other educational institutions.
Cureton v. NCAA, 37 F. Supp.2d 687, 690 (3d Cir. 1999). The NCAA
is responsible for promulgating rules governing all aspects of
intercollegiate athletics, including recruiting, eligibility of
student-athletes, and academic standards. Its member institutions
agree to abide by and enforce those rules. Id. at 695 & n.6. The
four-year colleges and universities that are the active members of
the NCAA are divided into Divisions I, II, and III. Id. at 690.
Some bylaws of the NCAA are applicable to all divisions. Each
division may, however, adopt additional bylaws applicable only to
that division. This case involves a bylaw that is applicable only
to Division I schools. Ibid.
In response to public perception that student athletes were
inadequately prepared to succeed academically and to receive an
undergraduate degree, the Division I membership adopted requirements
for high school graduates seeking to participate in athletics and
to receive athletically-related financial assistance during their
freshman year. Proposition 48, which was implemented during the
1986-1987 academic year, required high school graduates to have a
2.0 GPA in 11 core academic courses and a minimum score of 700 on
the SAT (or a composite score of 15 on the ACT) in order to participate
in freshman intercollegiate athletics. 37 F. Supp.2d at 690.
In 1992, these initial eligibility rules were modified through
the adoption of Proposition 16. As fully implemented effective
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August 1, 1996, Proposition 16 increased the number of core courses
required to 13 and introduced an initial eligibility index. Under
the index, a student-athlete could establish eligibility with a GPA
of 2.0 only if combined with an SAT score of 1010 (or an ACT sum
score of 86) .11 A student with a GPA of 2.5 or higher was required
to have an SAT score of 820 (or an ACT sum score of 68). Since the
core GPA cutoff score of 2.0 is two standard deviations below the
national mean, while the SAT/ACT cutoff score is only one standard
deviation below the national mean, Proposition 16 results in a
"heavier weighting of the standardized test. " 37 F. Supp. 2d at 691.
2. Federal financial assistance
y In 1995, the College Board recentered the score scales for
the SAT. After recentering, a test score of 700 on the old scale
is approximately equivalent to a score of 830 on the recentered scale.
Cureton v. NCAA, 37 F. Supp.2d at 690 n.2.
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In 1969, the NCAA began receiving federal financial assistance
for the operation of the National Youth Sports Program (NYSP).V
From that time until 1991, the NCAA was a direct recipient of federal
financial assistance from the Department of HHS to operate the NYSP
(JA 145a-146a; JA 511a-516a). On October 3, 1989, the NCAA created
the NYSP Foundation as a nonprofit corporation under the laws of
Missouri (JA 506a-509a). It was later renamed the NYSP fund (see
JA 147a, Marshall 7/2/97 Dep. at 29-30). The Fund was created "to
insure that [the NCAA] is not a recipient or a contractor of the
federal government" (JA 147a-148a, Marshall 7/2/97 Dep. at 31-33).
On August 9, 1991, Edward Thiebe, the Director of Youth Sports for
the NCAA, sent a letter to HHS requesting that its Fiscal Year 1991
grant application for the NYSP be amended to designate the NYSP Fund
as the grantee (JA 151a-152a). From 1992 to the present, the federal
grant has been made to the NYSP Fund. In Fiscal Year 1996, the federal
grant from HHS was $11,520,000 (JA 74a, see also JA 261a (HHS press
release announcing that "$11,520,000 was awarded to the NCAA")).
JI Through subgrantees, the NYSP offers sports instruction and
instruction in life skills, science, and math to poor and
disadvantaged youths (JA 520a) .
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Nonetheless, "Guidelines for the 1993 National Youth Sports
Program," which are prepared by the NYSP Committee as a required
part of the grant application process, listed the NCAA, not the Fund,
as the grantee of the HHS grant (JA 254a-259a; see Marshall 6/30/97
Dep. at 28-30). The guidelines stated that "[t]he NCAA has been
awarded a grant by the [Office of Community Services]" of HHS (JA
258a). The guideliness also stated that a "specified amount of funds
shall be made available to participating institutions through the
National Collegiate Athletic Association to conduct projects" (JA
257a) and invited applications to be submitted to the NCAA at its
office address in Overland, Kansas (ibid.).ll
Pursuant to its Bylaws, the Fund has four directors, three of
whom are NCAA officers or employees (JA 229a) .11 The Fund itself
has no offices, no employees, and no letterhead (JA 143a, JA 161a,
Marshall 7/2/97 Dep. at 13, 85; JA 196a, Thiebe Dep. at 44). The
Fund has never had a Board of Directors meeting, but rather has
"handled any business that needed to be taken care of through * *
* consent minutes" (JA 158a). The Fund's bank account is entitled:
"The National Collegiate Athletic Association -- The National Youth
Sports Program" (JA 505a). The staff of the NCAA, as well as the
11 In a document dated 2/3/9,5 that was attached to one of its
own pleadings in the district court, the NCAA is listed as the
"Applicant organization" for the NYSP grant (JA310a - Assurances
given in connection with grant) .
~ The bylaws mandate that the Executive Director and Assistant
Executive Director of the NCAA, and the chairperson of the NYSP
Committee of the NCAA be members of the NYSP Fund Board (JA 229a) .
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fund, has authority to draw from the federal government's grant
through that account (JA 156a-157a, Marshall 7/2/97 Dep. at 68-69).
Through 1994, the NCAA, "d/b/a the National Youth Sports
Program," was the named insured on liability policies covering the
activities of the NYSP (JA 526a-629a) .11 The Fund's Articles of
Incorporation provide that upon the dissolution of the Fund, the
assets of the Fund shall be distributed exclusively to the NCAA,
provided the NCAA continues to be an education organization within
the meaning of 501(c) (3) of the Internal Revenue Code (JA 508a).
Perhaps most important, it is the NCAA's NYSP committee, and
not the Fund, that makes all of the decisions about the NYSP and
the use of the federal funds. For example, the NYSP committee has
final approval over which colleges and universities receive subgrants
to operate the NYSP's instructional and educational programs (JA
200a). The NCAA stipulated that once the NCAA's NYSP committee makes
a decision, no further action is required to implement that decision
(JA 209a-210a) .
The NCAA's Executive Director has stated that "[t]he NYSP is
one of the NCAA's best-kept secrets, yet it is consistently one of
our most successful and influential programs. Our partnership wi th
the federal Government, local civic organizations and individual
colleges and universities perfectly embodies the NCAA's team spirit"
~ In the NCAA's 1995-1996 Annual Report, the Fund is included
in the NCAA's financial statements (JA 517a-520a). In contrast,
the NCAA Foundation is described in the Annual Report as "a separate
legal entity" not included in the NCAA's financial statements (JA
520a) .
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(JA 263a) .
C. The Decision Below
In granting summary. judgment to the plaintiffs, the district
court held that the NCAA is subject to Title VI, and that Proposition
16 violates the disparate impact prohibition of the Title VI
regulations. The court's earlier partial grant of summary judgment
held that plaintiffs have a private right of action to enforce the
Title VI regulation prohibiting disparate impact discrimination (see
page , supra).
1. Coverage of NCAA under Title VI.
Plaintiffs raised several theories under which the NCAA would
be subject to Title VI. First, they contended that the NCAA receives
federal financial assistance indirectly through the receipt of dues
from its member schools, all of whom receive federal financial
assistance. The district court rejected that theory based upon the
Supreme Court's decision in NCAA v. Smith, 119 S. Ct. 924 (1999).
37 F. Supp.2d at 693.
Plaintiffs also argued that the NCAA directly receives federal
financial assistance through the National Youth Sports Program Fund
because the Fund is nothing more than the alter ego of the NCAA.
The district court found that plaintiffs "failed to sustain their
heavy burden of 'piercing the corporate veil' sufficient to have
the Fund construed as the NCAA's alter ego." 3 7 F. SUpp. 2d at 694.
However, the court found "overwhelming evidence" supporting the
fact that "the Fund is ultimately being controlled by the NCAA,"
ibid., and thus concluded that plaintiffs had sustained their burden
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of proving that the NCAA "exercises effective control and operation
of the" grant given by HHS to the Fund "to be construed as an indirect
recipient of federal financial assistance." Ibid. The court found
that "although the Fund is the named recipient of the block grant,
it is merely a conduit through which the NCAA makes all of the
decisions about the Fund and the use of the federal funds." Ibid.
Finally, the court found that plaintiffs also proved that the
NCAA is subject to suit under Title VI regardless of whether it
receives federal financial assistance, "because member schools (who
themselves indisputably receive federal funds) have ceded
controlling authority over federally funded programs to the NCAA."
37 F. Supp.2d at 694. It found that the "member colleges and
universities have granted to the NCAA the authority to promulgate
rules affecting intercollegiate athletics that the members are
obligated to abide by and enforce." Id. at 696. Accordingly,
"because there is a nexus between the NCAA's allegedly discriminatory
conduct wi th regards to intercollegiate athletics and the sponsorship
of such programs by federal fund recipients, the NCAA is subject
to Title VI for a challenge to Proposition 16." Ibid.
2. The decision on the merits
The district court held that the disparate impact standard
developed under Title VII of the Civil Rights Act of 1964, 42 U.S.C.
2000e et ~, in the employment context is applicable to a claim
of disparate impact in educational testing. 37 F. Supp.2d at
696-697. Applying that standard, the court held that Proposition
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16 causes a racially disproportionate effect on African-Americans
(id. at 697-701); that Proposition 16 is not justified by any
legitimate educational necessity (id. at 701-712); and that, in any
event, plaintiffs had demonstrated that there are equally effective
alternative practices to Proposition 16 having less adverse effect
upon African-Americans (id. at 713-714). Accordingly, the court
granted plaintiffs' motion for summary judgment (id. at 714).
INTRODUCTION AND SUMMARY OF ARGUMENT
1. This Court in Chester Residents Concerned For Ouali ty Living
v. Seif, 132 F.3d 925 (1997), vacated as moot, 119 S. Ct. 22 (1998),
correctly held that "private plaintiffs may maintain an action under
discriminatory effect regulations promulgated by federal
administrative agencies pursuant to section 602 of Title VI of the
Civil Rights Act of 1964," and that decision should be reinstated
as the law in this Circuit. The reasoning of Chester Residents is
still persuasive authority. See Polychrome Int'l Corp. v. Krigger,
5 F.3d 1522, 1534 (3d Cir. 1993); Finberg v. Sullivan, 658 F.2d 93,
100 n.14 (3d Cir. 1981) (en banc). Moreover, the holding in Chester
Residents was consistent with that of every other court of appeals
to consider the issue. 132 F.3d at 936-937. The NCAA has presented
no "compelling basis" for this Court to disregard that holding.
Wagner v. PennWest Farm Credit, ACA, 109 F.3d 909, 912 (3d Cir. 1997).
2. In Part II, we argue that the NCAA is subject to coverage
under Title VI both because it receives federal financial assistance
indirectly through the NSYP Fund, which it controls, and because it
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has been conceded controlling authority over the intercollegiate
athletics programs of its member colleges and universities, which
receive federal financial assistance directly.
3. With respect to the district court's ruling that the minimum
standardized test score cutoff in Proposition 16 violates Title VI
of the Civil Rights Act of 1964, the court correctly held (37 F. Supp.
2d at 696-697) -- and the NCAA does not dispute -- that the disparate
impact standards developed in employment discrimination cases under
Title VII of the civil Rights Act of 1964 (42 U.S.C. 2000e et seg.)
apply to claims brought pursuant to the regulations implementing Title
VI. See,~, Georgia State Conference of Branches of NAACP v.
Georgia, 775F.2d1403, 1417 (llthCir. 1985); NAACPv. Medical Center,
Inc., 657 F.2d 1322, 1331 (3d Cir. 1981); Larry P. v. Riles, 793 F.2d
969, 982 nn.9-10(9th Cir. 1984). Thus, i f the facts relied upon
in the district court's rulings (which are based in large measure
on the NCAA's own studies) are right, it would appear that the district
court correctly held that Proposition 16's cutoff score violates the
effects test of the Title VI regulation. v
li The district court mentioned, but did not apply to Title
VI, the 1991 amendments to Title VII that require a defendant to
bear both a burden of production and persuasion on its business
necessity justification. 37 F. Supp. 2d at 697. See 42 U.S.C.
2000e(m), 2000e-2k(1) (A). Although the alleged discrimination in
this case occurred after 1991, the court appears to have applied
the previous standard, set out in Wards Cove packing Co. v. Atonio,
490 U.S. 642 (1989), that the defendant bears only a burden of
producing evidence that the challenged employment practice has a
legitimate business justification. If this Court agrees with the
district court's ruling that the NCAA failed to meet its burden under
Wards Cove because it "has not produced any evidence demonstrating
that the cutoff score used in Proposi tion 16 serves, in a significant
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way, the goal of ralslng student-athlete graduation rates" (37 F.
Supp. at 712), it will be unnecessary for the Court to determine
whether the district court erred in failing to require the. NCAA to
satisfy the heavier burden imposed by the Civil Rights Act of 1991.
Cf. Elston v. Talladega County Bd. of Educ., 997 F. 2d 1394, 1407
n.14 (11th Cir. 1993). In any event, this Court should not resolve
this important issue without the benefit of full briefing from the
parties (see NCAA Br. at 47 n.19, Cureton Br. at 36 n.19).
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We do not take a position on the factual questions raised in
this appeal. Because parts of the record relating to this issue
remain under seal (see NCAA Br. at 8 n.3), we have not had access
to the information necessary to ascertain whether the district court
correctly determined that Proposition 16's cutoff score causes a
racially disproportionate effect; that the NCAA had not demonstrated
that the cutoff score significantly serves the goal of raising
student-athlete graduation rates; and that, in any event, the
plaintiffs established the existence of alternative practices that
serve the goal of raising student-athlete graduation rates and that
have less of an adverse impact upon African-Americans. These are
highly fact-bound determinations, and we believe the parties are in
the best position to assist the Court in determining whether the
district court erred in any of these rulings.
ARGUMENT
I
PRIVATE PLAINTIFFS MAY SUE TO ENFORCE THE DISPARATE IMPACT
STANDARD IN AGENCY REGULATIONS IMPLEMENTING TITLE VI
Plaintiffs sought to enforce regulations of the Departments of
Education and Health and Human Services promulgated under Section
602 of Title VI of the Civil Rights Act, 42 U.S.C.
2000d-1 (JA 28a). Those regulations prohibit a recipient of federal
financial assistance from using "criteria or methods of
administration which have the effect of subjecting individuals to
discrimination because of their race." 34 C.F.R. 100.3(b) (2); 45
C.F.R. 80.3 (b) (2) (emphasis added). This Court in Chester Residents
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Concerned For Quality Living v. Seif, 132 F.3d 925 (1997), vacated
as moot, 119 S. Ct. 22 (1998), held that "private plaintiffs may
maintain an action under discriminatory effect regulations
promulgated by federal administrative agencies pursuant to. section
602 of Title VI of the Civil Rights Act of 1964." Although that
decision is no longer binding circuit precedent, the opinion in
Chester Residents retains its persuasive authority. See Polychrome
Int'l Corp. v. Krigger, 5 F.3d 1522, 1534 (3d Cir. 1993); Finberg
v. Sullivan, 658 F.2d 93, 100 n.14 (3d Cir. 1981) (en banc) ("Even
if a decision is vacated, however, the force of its reasoning remains,
and the opinion of the Court may influence resolution of future
disputes. "). In addition, the holding. in Chester Residents was
consistent with that of every other court of appeals to consider the
issue. 132 F.3d at 936-937 (collecting cases from the First, Second,
Fifth, Seventh, Ninth, Tenth, and Eleventh Circuits). This Court
has noted that" [i]n light of such an array of precedent, [it] would
require a compelling basis to hold otherwise before effecting a
circuit split." Wagner v. PennWest Farm Credit, ACA, 109 F.3d 909,
912 (3d Cir. 1997).
The NCAA has provided no such "compelling basis." All of the
arguments raised by the NCAA (Br. 17-25) were correctly rejected by
the panel in Chester Residents and should likewise be rej ected here.
First, the NCAA (Br. 18-20) attacks the district court's decision
for relying on an overly broad reading of Guardians. The district
court, however, issued its decision concluding that there is a private
right of action to enforce the Title VI regulations in October 1997,
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some two months before the decision in Chester Residents. Thus, its
conclusion that the Supreme Court in Guardians had resolved the issue
could not have anticipated this Court's conclusion in Chester
Residents that Guardians is not dispositive, 132 F.3d at 930, and
that the Supreme Court's decision in Alexander v. Choate provided
"no direct authority * * * that either confirms or denies the existence
of a private right of action," 132 F.3d at 931. In any event, the
district court's holding that there is a private right of action to
enforce the disparate impact regulation is, of course, entirely
consistent with this Court's Chester Residents holding.
Second, the NCAA argues (Br. 20-23) that Section 602 does not
permit an implied private right of action, in part because Section
602 "prohibits any enforcement of the regulations" until the federal
funding agency gives the alleged violator notice and an opportunity
to comply voluntarily (Br. 22, emphasis in original). But, as the
Court noted in Chester Residents, 132 F.3d at 935, "a private lawsuit
also affords a fund recipient similar notice." Moreover, the
requirements of Section 602 "were designed to cushion the blow of
a result that private plaintiffs cannot effectuate," i.e.,
termination of funding. Id. at 936. The Court in Chester Residents
therefore properly found that "a private right of action would be
consistent with the legislative scheme of Title VI." Ibid. In
addition, if the NCAA were correct in its reading of the statute,
then a private right of action to enforce the prohibition on
intentional discrimination (which the federal government also
enforces through the procedures established in Section 602) would
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also be barred, a result clearly foreclosed by the Supreme Court's
decision in Cannon v. University of Chicago, 441 U.s. 677' (1979) .
Finally, the NCAA argues (Br. 23-25) that the legislative history
of Title VI does not support the implication of a private right of
action for unintentional discrimination. It attempts to diminish
the import of the legislative history of the Civil Rights Restoration
Act of 1987, Pub. L. No. 100-259, 102 Stat. 28 (1988), discussed by
this Court in Chester Residents, noting (NCAA Br. at 24) that Chester
Residents relied on comments from opponents of the 1987 legislation
that "do not shed light on the purpose or intent behind Titl~ VI."
But Chester Residents was following the well-accepted rule that when
there is evidence that Congress understands that a private right of
action was available under a statutory scheme, and amends the statute
without demonstrating any intent to disapprove of such suits, it has
ratified tha.t private right of action. See Herman & MacLean v.
Huddleston, 459 U.S. 375, 386 (1983); Merrill Lynch, Pierce, Fenner
& Smith, Inc. v. Curran, 456 U.S. 353, 381-382 (1982); see also Cannon,
441 U.S. at 687 n.7; Lindahl v. OPM, 470 U.s. 768, 787-788 (1985).
And while much of the discussion of private enforcement of the
discriminatory effects regulations came from opponents to the bill,
"they are nevertheless relevant and useful, especially where, as here,
the proponents of the bill made no response." Arizona v. California,
373 U.S. 546, 583 n.85 (1963).
The NCAA has not articulated a compelling basis for this Court
to discard the holding of Chester Residents and reject the result
reached by the other circuits th.at have addressed the question. This
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Court should reinstate the holding of Chester Residents here. v
II
THE NCAA IS SUBJECT TO THE REQUIREMENTS OF TITLE VI BECAUSE
IT RECEIVES ASSISTANCE THROUGH ANOTHER RECIPIENT AND
BECAUSE IT HAS BEEN CEDED CONTROLLING AUTHORITY BY A
RECIPIENT OVER A PROGRAM OR ACTIVITY RECEIVING FEDERAL
FINANCIAL ASSISTANCE
A. The NCAA Receives Federal Financial Assistance
Through Another Recipient.
~ By the time this Court considers the issue whether there is
a private right of action to enforce the disparate impact regulations
under Title VI in this case, the issue may have been resolved by
the panel in Powell v. Ridge, No. 98-2096 (3d Cir.), in which oral
argument was held on June 9, 1999. The panel in powell, however,
does not need to reach that issue if it decides that the Title VI
discriminatory effect regulations may be enforced through 42 u. S. C.
1983.
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The regulations of the Departments of Education and HHS define
a recipient of federal financial assistance as any entity "to whom
Federal financial assistance is extended directly or through another
recipient, for any program" (34 C.F.R. 100.13 (i); 45 C.F.R. 80.13 (i)).
From 1969 through 1991, the NCAA directly received federal financial
assistance for the NYSP in its own name. After passage of the Civil
Rights Restoration Act, the NCAA named the NYSP Fund to be the grant
recipient for federal funding in order "to insure that [the NCAA]
is not a recipient or a contractor of the federal government" (JA
147a-148a, Marshall 7/2/97 Dep at 31-33). The evidence relied upon
by the district court, some of which is recited at pp. , supra,
demonstrates, however, that the incorporation of the NYSP Fund was
largely a formality and that the NCAA itself, through the NYSP
Committee, continues to administer the grant program. The NYSP Fund
as the listed grantee is itself a direct recipient of federal financial
assistance subject to coverage under Title VI. But the NCAA receives
federal financial assistance indirectly through its continued control
of the NYSP grant, notwithstanding its attempt to distance itself
from federal oversight. 11 Indeed, the Department of HHS has on two
occasions (in 1994 and 1998) taken the position that the NCAA is a
'J!The NCAA's assertion (Br. 32) that "there is no evidence
to suggest that the NCAA has diverted any federal funds to its own
coffers" is beside the point. A recipient of federal financial
assistance is required by law to use that assistance to fulfill the
ultimate purpose of the grant, and there is no allegation here that
the NCAA has not done so. The claim here is not that the NCAA has
violated the law by setting up the NYSP Fund as the named grantee,
but rather that it cannot escape responsibility under Title VI if
it controls the administration of the grant.
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recipient of federal financial assistance through a Community
Development Block Grant from HHS and has accepted complaints of
discrimination for investigation (JA 12S7a-1261a) .
Based upon the "overwhelming evidence," 37 F. Supp.2d at 694,
the district court properly found that "the Fund is ultimately being
controlled by the NCAA," and thus that the NCAA is the indirect
recipient of federal financial assistance through the NYSP Fund.
Ibid.
B. The NCAA Is Subject To Title VI Because It Has Been
Ceded Controlling Authority Over The Intercollegiate
Athletic Programs Of Its Member Colleges And
Universities, Which Receive Federal Financial
Assistance.
The district court found that "the NCAA is subject to suit
under Title VI irrespective of whether it receives federal funds,
directly or indirectly, because member schools (who themselves
indisputably receive federal funds) have,ceded controlling authority
over federally funded programs to the NCAA." 37 F.3d at 694.
Although the district court did not articulate the statutory basis
for this theory of coverage, the United States believes that it is
firmly rooted in the text of Title VI.
Ti tIe VI proves in relevant part that "[n] 0 person in the Uni ted
States shall, on the ground of race, color, or national origin, be
excluded from participation in, be denied the benefits of, or be
subjected to discrimination under any program or activity receiving
Federal financial assistance." 42 U.S.C. 2000d. As that statutory
text makes clear, Ti tie VI, like Ti tie IX of the Education Amendments
of 1972, 20 U.S.C. 1681(a), was not drafted "simply as a ban on
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discriminatory conduct by recipients of federal funds." Cannon v.
University of Chicago, 441 u.s. 677, 691-692 (1979) i see Chowdhury
v. Reading Hospital and Medical Center, 677 F.2d 317, 318 & n.2 (3d
Cir. 1982) (language of Cannon applicable to Title VI). Instead,
the "unmistakable focus" of the statutory text is on the protection
of "the benefitted class." Id. at 691. The text itself does not
specifically identify the class of potential violators. But given
the focus of the text on protection for the individual, and the absence
of any language limiting the class of violators to recipients, Title
VI is most naturally read as prohibiting any entity that has governing
authority over a program from subjecting an individual to race-based
discrimination under it. l i
Although recipients are the principal class of entities that
may subject an individual to discrimination under a program, they
are not the only ones. When a recipient cedes governing authority
over a program receiving assistance to another entity, and that entity
subjects an individual to discrimination under the program, that
entity violates Title VI, regardless of whether it is a recipient
lQI Congress has constitutional authority to reach the conduct
of anyone who threatens "the integrity and proper operation of [a]
federal program." See Salinas v. United States, 118 S. Ct. 469,
475 (1997) (upholding constitutionality of a statute that prohibits
the acceptance of bribes by employees of state and local agencies
that receive federal funds, as applied to a case in which a county
received funds for the operation of a jail and the sheriff and deputy
sheriff at the jail accepted bribes in violation of the statute) .
Since the NCAA's actions, if discriminatory, pose a threat to the
integrity and proper operation of the federally assisted programs
at member schools, Congress had constitutional authority to subject
the NCAA to liability for such discrimination.
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itself.
That commonsense reading of Title vI furthers its central
purposes -- "to avoid the use of federal resources to support
discriminatory practices" and to "provide individual citizens
effective protection against those practices." Cannon, 441 u.s. at
704. Several considerations support that conclusion. First, as the
district court recognized, 37 F. Supp.2d at 695, intercollegiate
athletics is unique in that it is "one of the few educational programs
of a college or university that cannot be conducted without the
creation of a separate entity to provide governance and
administration." Out of the necessity for a supervising authority
comes the NCAA's power to establish the rules, such as Proposition
16, governing eligibility for intercollegiate athletics at member
schools. "By joining the NCAA, each member agrees to abide by and
to enforce such rules." NCAAv. Tarkanian, 488 u.S. 179,183 (1988).
Because the NCAA has effective control over eligibility
determinations for intercollegiate athletics, it is the entity most
responsible for any discrimination that enters into those
determinations.
If there is discrimination in the NCAA's rules, a member school
may attempt to persuade the NCAA to change the rules, but if it is
unsuccessful, its only option is to withdraw from the NCAA. Since
the NCAA has a virtual monopoly on intercollegiate athletics, a school
that has withdrawn from the NCAA in order to satisfy its own Title
VI obligations could no longer offer intercollegiate athletic
opportunities to its students. That would leave victims of
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discrimination without an effective remedy and deprive innocent third
parties of intercollegiate athletic opportunities as well. Those
harsh consequences may be avoided if victims of the NCAA's
discrimination may seek relief against the NCAA directly.
Finally, because of its unique power over intercollegiate
athletics, discrimination by the NCAA in the promulgation of its rules
has the capacity to result in discrimination at numerous member
schools simultaneously. Permitting a private right of action against
the NCAA provides a mechanism for stopping discrimination at its
source before it becomes entrenched at member schools.lI
ill A member school, of course, remains liable for any
discriminatory decision of the NCAA that it implements. For the
reasons discussed above, however, when the NCAA is the source of
the discrimination and uses its power over member schools to implement
that discrimination, a remedy against the NCAA is more appropriate
and efficacious than a remedy against member schools.
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Permitting a judicial cause of action against the NCAA is
consistent with the principle that entities should not be subjected
to liability under Title VI without adequate notice. See Gebser v.
Lago Vista Indep. School Dist., 118 S. Ct. 1989, 1997-1999 (1998).
Unlike the situation in Gebser, plaintiffs do not seek to hold the
NCAA liable for discrimination committed by others; rather,
plaintiffs seek to hold the NCAA liable for its own alleged
discrimination in the promulgation and continued use of Proposition
16. The text of the Title VI regulations provides sufficient notice
to the NCAA that it had an obligation not to use its authority over
an education program receiving federal assistance to subject an
individual to race-based discrimination under that program. l i
If the NCAA did not wish to subject itself to Title VI obligations
on the basis of its relationship to member institutions that receive
assistance, it could have refrained from exercising governing
authority over intercollegiate athletics at those institutions.
Once the NCAA assumed that governing role, it also assumed an
obligation not to use that authority to discriminate on the basis
of race against individuals seeking access to intercollegiate
athletic programs at those institutions.
The NCAA argues (Br. 38-39) that it cannot be subject to Title
VI coverage because it did not assume a contractual commitment not
-121 Moreover, t h
1S case 1nvo 1 ves a calm for injunctive relief
. . 1
only, and not money damages, and so many of the "notice" concerns
that played a particularly significant role in Gebser are not so
compelling in this context.
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to discriminate. The text of Title VI, however, is not framed
exclusively in contract terms, and a contractual commitment not to
discriminate is not a precondition to application of the statute.
If a contract analogy were needed, the relevant one would be
to the tort of intentional interference wi th a contract. Restatement
of Torts, 766 (one who intentionally and improperly interferes with
the performance of a contract between another and a third person by
inducing or otherwise causing the third person not to perform the
contract is subject to liability to the other). When an entity that
has been ceded controlling authority over a recipient requires the
recipient to act in a discriminatory manner by, for example, imposing
a discriminatory requirement for eligibility, it effectively causes
the recipient to breach its agreement wi th the federal funding agency.
Moreover, when an entity created by recipients makes and enforces
rules for recipients, it is on ample notice that it cannot do so in
a way that subjects an individual to discrimination under the programs
of the recipients.
Finally, contrary to the NCAA's contention (Br. 37-39)
subjecting non-recipients that have been ceded controlling authority
over federally assisted programs to coverage under Title VI is not
in conflict with the Supreme Court's decision in United States
Department of Transportation v. Paralyzed Veterans, 477 U.S. 597
(1986). There are statements in that opinion that support the NCAA's
argument that federal funding statutes like Title VI apply only to
recipients of federal financial assistance. 477 U.S. at 605-606.
The context of those statements makes clear, however, that the Court
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was addressing only whether coverage should extend past recipients
to beneficiaries. The Court did not purport to address the entirely
different question whether an entity that has been ceded controlling
authority over a program receiving federal assistance violates Title
VI when it subjects an individual to discrimination under that
program. Because the airlines did not have controlling authority
over the federally assisted airport programs, the question at issue
here was simply not presented in Paralyzed Veterans.
Equally important, the Court's crucial concern in Paralyzed
Veterans was that expanding the funding statues to reach beneficiaries
of federal assistance would have resulted in "almost limitless
coverage" -- a result that was clearly at odds with Congress's intent.
477 U. S. at 608-609. The si tuation here is fundamentally different.
The class of non-recipients that has governing authority over
programs receiving assistance is limited, and permitting a private
right of acting against such entities when they subject persons to
discrimination under those programs advances the purposes of Title
VI.
CONCLUSION
For the foregoing reasons, the judgment should be affirmed
insofar as it (1) permits plaintiffs to bring an action to enforce
the Title VI disparate impact regulations and (2) finds
that the NCAA is subject to Title VI coverage. Since the district
court properly determined that the disparate impact standards
developed in employment discrimination cases under Title VII of the
Civil Rights Act of 1964 (42 U.S.C. 2000e et seq.) apply to claims
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brought pursuant to the regulations implementing Title VI, the
judgment should also be affirmed if the facts relied upon in the
district court's rulings are correct
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-- a determination that the parties are in the best position to assist
the Court in making.
Respectfully submitted,
BILL LANN LEE
Acting Assistant Attorney General
DENNIS J. DIMSEY
MARIE K. McELDERRY
Attorneys
Department of Justice
P.o. Box 66078
Washington, D.C. 20035-6078
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