Board of Public Instruction of Taylor County, Fla. v. Finch

• Decision Date: 12 August 1969
• Docket Number: No. 26841.,26841.
• Citation: 414 F.2d 1068
• Parties: BOARD OF PUBLIC INSTRUCTION OF TAYLOR COUNTY, FLORIDA, Petitioner, v. Robert H. FINCH, Secretary of Health, Education and Welfare, Respondent.
• Court: U.S. Court of Appeals — Fifth Circuit

414 F.2d 1068 (1969)

BOARD OF PUBLIC INSTRUCTION OF TAYLOR COUNTY, FLORIDA, Petitioner, v. Robert H. FINCH, Secretary of Health, Education and Welfare, Respondent.

No. 26841.

United States Court of Appeals Fifth Circuit.

August 12, 1969.

COPYRIGHT MATERIAL OMITTED

Don Dansby, Perry, Fla., for appellant.

David L. Rose, David B. Marblestone, Civil Rights Division, Dept. of Justice, Washington, D. C., Edward F. Boardman, U. S. Atty., Tampa, Fla., Clinton Ashmore U. S. Atty., Tallahassee, Fla., Jerris Leonard, Asst. Atty. Gen., Dept. of Justice, Washington, D. C., for appellee.

Before BELL and GOLDBERG, Circuit Judges, and ATKINS, District Judge.

GOLDBERG, Circuit Judge:

Nominally, this case involves a challenge to the validity of an order by the Department of Health, Education and Welfare (HEW) terminating the payment of federal funds to the Board of Public Instruction of Taylor County, Florida, for violating Title VI of the Civil Rights Act of 1964.¹ Underlying this challenge, however, is a broader question concerning the character and reach of the limitations which Congress has placed upon the power of an administrative agency to cut off federal funds and the Congressional policy behind such limitations.

The facts of this case are undisputed. Appellant, the Board of Public Instruction of Taylor County, Florida (hereafter the School Board, operates a small district of eight public schools attended in recent years by approximately 2900 white students and 975 Negro students. Prior to the 1965-1966 school year, the Board maintained these schools on an entirely segregated basis. No white child attended class with any Negro child and no Negro child attended class with any white child.

Following the passage of the Civil Rights Act of 1964, the School Board adopted a "freedom of choice" plan and submitted it to the Commissioner of Education for approval. The plan was accepted by the Commissioner on July 26, 1965, as complying with the Civil Rights Act, the regulations issued thereunder, and the HEW policy statement known as the Guidelines. In March of 1966, following the issuance by the Commissioner of a Revised Statement of Policies for School Desegregation Plans, the School Board submitted to the Office of Education an assurance of compliance with the revised policies. Thereafter the School Board complied with the formal requirements of the original and revised Guidelines for the adoption of a freedom of choice plan, i. e., the notification of parents and students, the giving of public notice, etc., but did not, in HEW's view, comply with the Guideline requirements specifying an acceptable pace of desegregation. The record tends to confirm HEW's position.

In 1965-1966, approximately 10 Negro students attended certain of the formerly all-white schools, and no white student attended the one Negro school in the district. In February, 1967, only 38 Negro students (representing less than 4% of the Negro student population) were attending formerly all-white schools, and again no white student was in attendance at the Negro school. During both years the faculties in all schools were entirely segregated with the sole exception of a librarian who was assigned across racial lines. For the school year 1967-1968, School Board officials eventually agreed to the transfer of 74 Negro students and the assignment of 4 teachers across racial lines, but these concessions were well below the Guideline requirements. The Guidelines called for the transfer of 12% of the Negro students and the reassignment of at least 16 teachers.

Beginning in February of 1967, there began a series of meetings between representatives of HEW and school officials for the purpose of procuring voluntary compliance with the Guidelines. The meetings continued through the month of June, but finally ended when further negotiations appeared fruitless. The Commissioner of Education then advised the Board by letter that he was referring the matter to the HEW General Counsel for the initiation of administrative proceedings.

After a period of delay agreed upon by both sides, hearings were held on January 16 and January 17, 1968. On April 4, 1968, the HEW hearing examiner ruled that the Taylor County School Board was in violation of Title VI of the Civil Rights Act and no longer entitled to federal funds. He found that the School District's "progress toward student desegregation was inadequate," that it "had not made adequate progress toward teacher desegregation," and that the District was "seeking to perpetuate the dual school system through its construction program." Based on these findings, the examiner entered an order terminating "any classes of Federal financial assistance" to the Taylor County School District "arising under any Act of Congress" administered by HEW, the National Science Foundation, and the Department of the Interior until such time as the School District corrected its non-compliance with the Act.² On June 26, 1968, the HEW Reviewing Authority adopted this order along with the opinion of the hearing examiner after slight modifications not pertinent here. The order terminating funds to the District became operative on September 13, 1968. Its effect was to cut off all federal funds from the Taylor County School District in the following amounts and under the following Congressional grant statutes:

                Title II, Elementary and Secondary Education
                     Act of 1965, 20 U.S.C.A. §§
                     241a-m (Supp., 1969)
                                                   $99,622.20
                Title III, Elementary and Secondary Education
                     Act of 1965, 20 U.S.C.A. §§
                     841-848 (Supp., 1969)
                                                  $102,035.35
                Public Law 89-750, Basic Education
                    for Adults, 20 U.S.C.A. §§ 1201-1213
                    (Supp., 1969)
                                                    $2,000.00
                

Following the decision of the HEW Reviewing Authority, the Taylor County School Board sought review in the United States District Court for the Northern District of Florida, Parker v. Cohen, Tallahassee Civ. Action No. 1440. On September 24, 1968, the district court dismissed the action, holding that under the review provisions of the relevant grant statutes, see 20 U.S.C.A. § 241k, 20 U.S.C.A. § 844a(e) (3), 20 U.S.C.A. § 1207(b) (Supp., 1969), exclusive jurisdiction was in the court of appeals. See also 42 U.S.C.A. § 2000d-2 and 5 U.S. C.A. § 703, formerly 5 U.S.C.A. § 1009 Cf. Gardner v. State of Alabama, Dept. of Pensions & Security, 5 Cir. 1967, 385 F.2d 804, 810, cert. denied, 389 U.S. 1046, 88 S.Ct. 773, 19 L.Ed.2d 839. This action was then initiated.

I.

Two questions are tendered for consideration on this appeal. Petitioner asks us to consider whether the order entered by HEW in the proceedings below violates 42 U.S.C.A. § 2000d-1 (§ 602, Title VI) of the Civil Rights Act. That statute provides in relevant part that the termination of federal financial assistance shall be limited to programs or parts thereof found not in compliance with the Act:

"* * * Compliance with any requirement adopted pursuant to this section may be effected (1) by the termination of or refusal to grant or to continue assistance under such program or activity to any recipient as to whom there has been an express finding on the record, after opportunity for hearing, of a failure to comply with such requirement, but such termination or refusal shall be limited to the particular political entity, or part thereof, or other recipient as to whom such a finding has been made and, shall be limited in its effect to the particular program, or part thereof, in which such noncompliance has been so found * * *." Emphasis added.

The record shows that none of the findings of the HEW hearing examiner or of the HEW Reviewing Authority are programatically oriented, at least if the term "program" is understood to refer to the individual grant statutes under which aid was given to the Taylor County School District. It is also plain on the face of the order entered by HEW that the termination of federal funds is not "limited in its effect" to one or more of the federally financed activities described in the grant statutes, but extends to "any classes of Federal financial assistance arising under any Act of Congress. * * *" Emphasis added. Petitioner asks us to vacate the HEW order as a plain violation of the statute.

HEW argues that we must reject Petitioner's argument, not only on its merits, but because it was not raised at the administrative proceedings below. HEW contends that a question raised for the first time on this appeal is not properly before us.

After carefully considering the arguments on both sides, we are persuaded that this case must be reversed and remanded to HEW for further proceedings not inconsistent with this opinion.

II.

We first consider HEW's argument that the issue of statutory noncompliance is not properly before us. The general rule of appellate review from decisions of an administrative agency is "that courts should not topple over administrative decisions unless the administrative body not only has erred but has erred against objection made at the time appropriate under its practice." United States v. L. A. Tucker Truck Lines, Inc., 1952, 344 U.S. 33, 37, 73 S.Ct. 67, 69, 97 L.Ed. 54, 58. It has even been said that "A reviewing court usurps the agency's function when it sets aside the administrative determination upon a ground not theretofore presented * * *." Unemployment Comp. Com. v. Aragon, 1946, 329 U.S. 143, 154, 67 S.Ct. 245, 251, 91 L.Ed. 136, 145. But the rule is not inflexible.

"* * * There may always be exceptional cases or particular circumstances which will prompt a reviewing or appellate court, where injustice might otherwise result, to consider questions of law which were neither pressed nor passed upon by the court or administrative agency below. See Blair v. Oesterlein Machine Co., (1927) 275 U.S. 220, 225, 48 S.Ct. 87, 72 L.Ed. 249.

"Rules of practice and procedure are devised to

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