687 F.2d 684 (3rd Cir. 1982), 80-2383, Grove City College v. Bell

Docket Nº:80-2383, 80-2384.
Citation:687 F.2d 684
Party Name:GROVE CITY COLLEGE, individually and on behalf of its students; Marianne Sickafuse; Kenneth J. Hockenberry; Jennifer S. Smith and Victor E. Vouga, Appellant, v. T. H. BELL, Secretary of U. S. Department of Education; Harry M. Singleton, Acting Assistant Secretary for Civil Rights, U. S. Department of Education, Appellee. GROVE CITY COLLEGE, individ
Case Date:August 12, 1982
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 684

687 F.2d 684 (3rd Cir. 1982)

GROVE CITY COLLEGE, individually and on behalf of its

students; Marianne Sickafuse; Kenneth J.

Hockenberry; Jennifer S. Smith and

Victor E. Vouga, Appellant,

v.

T. H. BELL, Secretary of U. S. Department of Education;

Harry M. Singleton, Acting Assistant Secretary for

Civil Rights, U. S. Department of

Education, Appellee.

GROVE CITY COLLEGE, individually and on behalf of its

students; Marianne Sickafuse; Kenneth J.

Hockenberry; Jennifer S. Smith and

Victor E. Vouga, Appellees,

v.

T. H. BELL, Secretary of U. S. Department of Education;

Harry M. Singleton, Acting Assistant Secretary for

Civil Rights, U. S. Department of

Education, Appellant.

Nos. 80-2383, 80-2384.

United States Court of Appeals, Third Circuit

August 12, 1982

Argued June 21, 1982.

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David M. Lascell (argued), Nixon, Hargrave, Devans & Doyle, Rochester, N. Y., for appellant in No. 80-2383, appellee in No. 80-2384; David M. Lascell, David A. Stern, Robb M. Jones, Michael A. Hausknecht, Rochester, N. Y., of counsel.

William Bradford Reynolds, Asst. Atty. Gen., Brian K. Landsberg, Marie E. Klimesz (argued), Mark H. Gallant, of counsel, Dept. of Justice, Washington, D. C., for appellee in No. 80-2383, appellant in No. 80-2384.

Robert J. Cindrich, U. S. Atty., W. D. Pa., Pittsburgh, Pa., Myrna P. Field, Mid-Atlantic Legal Foundation, Philadelphia, Pa., for amicus curiae Rockford College.

James G. Watt, Maxwell A. Miller, Mountain States Legal Foundation, Denver, Colo., for amicus curiae.

Margaret A. Kohn, Marcia D. Greenberger, National Women's Law Center, Washington, D. C., Philip P. Frickey, Shea & Gardner, Washington, D. C., for amici curiae American Ass'n of University Women et al.

Before GARTH and BECKER, Circuit Judges, and MUIR [*], District Judge.

OPINION

GARTH, Circuit Judge.

This appeal involves the Department of Education's authority to enforce Title IX of the Education Amendments of 1972, 1 against a college which receives no direct funds from the federal government, but whose students receive federal grants. The district court granted Grove City College's motion for summary judgment and refused to permit the termination of Basic Educational Opportunity Grants to students at the College, holding that the Title IX enforcement regulations were invalid. We reverse.

I.

A.

Title IX proscribes gender discrimination in education programs and activities receiving federal financial assistance. Title IX "contains two core provisions." North Haven Bd. of Educ. v. Bell, --- U.S. ----, 102 S.Ct. 1912, 72 L.Ed.2d 299 (1982). Section 901(a) of the 1972 Act contains a program-specific ban of sex discrimination:

No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance....

20 U.S.C. § 1681 (emphasis added).

Under section 902, each agency awarding federal financial assistance "other than a contract of insurance or guaranty" to any education program or activity is authorized to promulgate regulations to insure compliance with section 901(a). If compliance cannot be secured by voluntary means, section 902 authorizes the termination of federal funds to the program in which noncompliance is found. 20 U.S.C. § 1682. 2

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The Department of Education is the primary administrator of federal financial assistance to education. 3 Pursuant to its regulations, 34 C.F.R. § 106.4(a), the Department requires each recipient of federal aid to file an Assurance of Compliance as a means of securing adherence to Title IX. 4 Under the Assurance in use at the time of this case was filed, the recipient agreed that it would

(c)omply, to the extent applicable to it, with Title IX ... and all requirements imposed by ... the Department's regulation ... the end that, in accordance with Title IX ... no person ... shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any education programs or activity for which the Applicant receives or benefits from federal financial assistance.... 5

In addition, recipients provided basic information about their programs, including a "self-evaluation" under Title IX (A. 18).

B.

Grove City College (Grove) is a private co-educational institution of higher education affiliated with the United Presbyterian Church and located in Grove City, Pennsylvania. Approximately 2,200 students attend Grove (A. 33). One hundred forty of Grove's students are eligible to receive Basic Educational Opportunity Grants (BEOGs) appropriated by Congress and allocated by the Department pursuant to 20 U.S.C. § 1070a. Three hundred forty-two of Grove's current students have obtained Guaranteed Student Loans (GSLs). 6 Other than through the BEOG or GSL programs,

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Grove receives no federal or state financial assistance. 7

BEOGs are paid by the Department directly to the eligible students attending Grove. Grove, however, executes the institutional section to the students' BEOG applications and certifies data involving the student applicants' costs and enrollment status so that the students might receive federal financial assistance. 8

In July, 1976 the Department began efforts to secure an Assurance of Compliance from Grove based upon the receipt of BEOGs and GSLs by Grove students. Grove refused to execute the Assurance, asserting that it received no federal financial assistance. The Department then initiated administrative proceedings to terminate grants and loans to students attending Grove.

After an administrative hearing, an Administrative Law Judge (ALJ) concluded that Grove was a recipient of federal financial assistance within the meaning of Title IX and that the allocation of BEOG's and GSL's could be terminated for Grove's refusal to execute an Assurance of Compliance. Since Grove conceded that it did not file an Assurance of Compliance, the ALJ entered an order prohibiting the payment of BEOG's or GSL's to students attending Grove.

C.

On November 29, 1978, Grove, joined by four student BEOG and GSL recipients, 9 commenced this suit. The plaintiffs sought an order which would declare void the Department's termination of BEOG and GSL assistance. Additionally, they sought to enjoin the Department from requiring Grove to file an Assurance of Compliance as a condition of preserving its eligibility in the BEOG and GSL programs. Finally, the complaint sought a declaration that the anti-sex discrimination regulations promulgated by the Department went beyond the authority contained in Title IX, or alternatively, that those regulations were unconstitutional as applied to Grove. Cross-motions for summary judgment were filed on the basis of affidavits and the administrative record (A. 30, 101).

D.

In an amended opinion on June 26, 1980 the district court granted Grove's motion for summary judgment and denied the cross-motion of the Department. Although the Court agreed with the Department that BEOGs and GSLs constituted "federal financial assistance" to Grove within the meaning of Title IX, it concluded that the Department could not terminate federal assistance to Grove City students because of Grove's refusal to sign an Assurance of Compliance.

The district court set forth several alternative rationales for its conclusions. First, the court held that 20 U.S.C. § 1682, which denies Title IX enforcement authority with

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respect to "a contract of insurance or guarantee," precluded the Department from terminating GSLs. 10 Second, the court concluded that the Department could not require Grove to sign an Assurance of Compliance since subpart E of the Department's regulations which prohibit discrimination in employment was held to be invalid. Alternatively, the court held that the Department had unlawfully terminated Grove's federal financial assistance based solely upon Grove's refusal to sign the Assurance. The court concluded that such a termination is authorized by Title IX only upon an actual finding of sex discrimination (A. 134-38), a finding which the Department had not made. Finally, the court held that the Department was barred by the due process clause of the fifth amendment from terminating the BEOGs without first affording hearings to all students who would be adversely affected (A. 132-133).

The court's final amended order (1) declared that the Assurance of Compliance form (HEW Form 639A) was invalid; (2) enjoined the Department from using the Assurance of Compliance form; (3) enjoined the termination of financial assistance to the plaintiffs unless actual sex discrimination was proved at an administrative hearing with notice to all those affected by the proceeding; and (4) enjoined the termination of GSL's to students.

The Department's appeal, No. 80-2384, and Grove's cross-appeal, No. 80-2383 followed. 11

II.

At the outset, we consider Grove's cross-appeal because a threshold question on this appeal is whether Grove, which has refused all federal financial assistance, nevertheless is to be considered a recipient of such assistance within the meaning of section 901(a) because its students receive federal grants.

The Department has construed the phrase "federal financial assistance" to include educational grants paid to students, and, thus, received indirectly by the schools which they attend. The regulation defines federal financial assistance in relevant part as

(1) A grant or loan of Federal financial assistance, including funds made available for:

(ii) Scholarships, loans, grants, wages or other funds extended to any entity for payment to or on behalf of students admitted to that entity, or extended directly...

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