DeVargas v. Mason & Hanger-Silas Mason Co., Inc., HANGER-SILAS

CourtUnited States Courts of Appeals. United States Court of Appeals (10th Circuit)
Writing for the CourtBefore TACHA and McWilliams, Circuit Judges, and CHRISTENSEN; TACHA
Citation911 F.2d 1377
Docket NumberHANGER-SILAS,No. 89-2061
Decision Date09 August 1990
Parties53 Fair Empl.Prac.Cas. 1241, 54 Empl. Prac. Dec. P 40,155, 59 USLW 2123, 62 Ed. Law Rep. 495, 1 A.D. Cases 1661 Alfredo DeVARGAS, Plaintiff-Appellant, v. MASON &MASON CO., INC.; T.R. Hook, individually and in his official capacity; Don Hardwick, individually and in his official capacity; John Does, One through Three, individually and in their official capacities; Los Alamos National Laboratory; Gary Granere, Acting Area Manager-Department of Energy Los Alamos Area Office; Regents of University of California; Donald Kerr, Director, Los Alamos National Laboratory; The United States Department of Energy; Robert Pogna, Employee Los Alamos National Laboratory; Ed C. Walterscheid, Employee Los Alamos National Laboratory; Donald Paul Hodel, Secretary of Department of Energy; and Richard Roes, One through Two, Individually and in their official capacities; and John S. Herrington, Defendants-Appellees.

Page 1377

911 F.2d 1377
53 Fair Empl.Prac.Cas. 1241,
54 Empl. Prac. Dec. P 40,155, 59 USLW 2123,
62 Ed. Law Rep. 495, 1 A.D. Cases 1661
Alfredo DeVARGAS, Plaintiff-Appellant,
v.
MASON & HANGER-SILAS MASON CO., INC.; T.R. Hook,
individually and in his official capacity; Don Hardwick,
individually and in his official capacity; John Does, One
through Three, individually and in their official
capacities; Los Alamos National Laboratory; Gary Granere,
Acting Area Manager-Department of Energy Los Alamos Area
Office; Regents of University of California; Donald Kerr,
Director, Los Alamos National Laboratory; The United States
Department of Energy; Robert Pogna, Employee Los Alamos
National Laboratory; Ed C. Walterscheid, Employee Los
Alamos National Laboratory; Donald Paul Hodel, Secretary of
Department of Energy; and Richard Roes, One through Two,
Individually and in their official capacities; and John S.
Herrington, Defendants-Appellees.
No. 89-2061.
United States Court of Appeals,
Tenth Circuit.
Aug. 9, 1990.

Page 1380

Richard Rosenstock (Steven Farber, Santa Fe, N.M., and Philip Davis, Legal Director, New Mexico Civ. Liberties Union, Albuquerque, N.M., of counsel, with him on the briefs), Chama, N.M., for plaintiff-appellant.

Michael E. Robinson (Stuart E. Schiffer, Acting Asst. Atty. Gen., William L. Lutz, U.S. Atty., and John F. Cordes, with him on the brief), Appellate Staff Civ. Div., Dept. of Justice, Washington, D.C., for federal defendants-appellees.

Joseph E. Earnest (Laurie A. Vogel, of Cherpelis, Vogel & Salazar, of Albuquerque, N.M., with him on the brief), Montgomery & Andrews, P.A., Santa Fe, New Mexico, for defendants-appellees the University and Mason & Hanger.

Before TACHA and McWilliams, Circuit Judges, and CHRISTENSEN, District Judge. *

TACHA, Circuit Judge.

This civil rights action arises from the refusal of Mason & Hanger-Silas Mason Company, Inc. ("Mason & Hanger") to consider Alfredo DeVargas for a position as a security inspector at the Los Alamos National Laboratory ("LANL") in Los Alamos, New Mexico. The district court granted the defendants' motion for summary judgment, and DeVargas appeals. We affirm.

I.

DeVargas applied for a security inspector position with Mason & Hanger in 1981 and 1983. Pursuant to a contract with the Regents of the University of California ("Regents"), Mason & Hanger supplies security inspectors for LANL. The Regents

Page 1381

operate LANL for the Department of Energy ("DOE"), which conducts nuclear weapon and energy research at LANL. The three individual LANL defendants, Donald Kerr, Robert Pogna, and Edward C. Walterscheid ("individual LANL defendants") are employees of the University of California ("University"). Gary Granere, the Acting Area Manager for the DOE's LANL office, is a federal employee.

In 1981, Mason & Hanger and its employees, T.R. Hook and Don Hardwick ("individual Mason & Hanger defendants"), refused to process DeVargas's employment application, relying on a then-applicable DOE regulation, Interim Management Directive No. 6102 Sec. A.6.b. (8) Appendix IV (IMD 6102), 1 which provided that "[a] one-eyed individual shall be medically disqualified for security inspector duties." DeVargas has vision in only one eye. When DeVargas reapplied in 1983, the Mason & Hanger defendants consulted with the individual LANL defendants, who agreed that IMD 6102 constituted a mandatory disqualification of one-eyed persons.

DeVargas filed suit, alleging in his first amended complaint that the defendants violated sections 504 and 505 of the Rehabilitation Act of 1973, 29 U.S.C. Secs. 794-94a, and that the defendants unlawfully discriminated against him on the basis of his ancestry and handicap, in violation of the Civil Rights Act of 1871, 42 U.S.C. Sec. 1983, and the fifth and fourteenth amendments, U.S. Const. amends. V, XIV. DeVargas also alleged that the DOE promulgated IMD 6102 in violation of section 504 and the fifth amendment.

On April 9, 1986, the district court granted the defendants' motion for summary judgment on the section 504 and fifth amendment claims. The court dismissed all claims against the Regents and LANL based on their eleventh amendment immunity. 2 The court did not extend eleventh amendment immunity to Kerr, Pogna, and Walterscheid, the LANL defendants, because they were sued only in their individual capacity. The DOE, Secretary of Energy Donald Paul Hodel, and Gary Granere moved to dismiss all claims for monetary damages based on the defense of sovereign immunity. The court permitted only DeVargas's claims for injunctive, nonmonetary relief to continue against these defendants in their official capacities. 3 See 5 U.S.C. Sec. 702. The court did not dismiss the claims for monetary damages against Hodel and Granere in their individual capacities.

The defendants also raised the defense of qualified immunity against DeVargas's claim that they unlawfully discriminated against him on the basis of his ancestry and handicap in violation of 42 U.S.C. section 1983 and Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). In October, 1986, the district court ruled that the individual LANL and DOE defendants enjoyed qualified immunity from DeVargas's claims for damages against them in their individual capacities. The court rejected the request of the Mason & Hanger defendants for qualified immunity. Pursuant to an interlocutory appeal, this court reversed, ruling that Mason & Hanger and the individual Mason & Hanger defendants also possess

Page 1382

qualified immunity in spite of Mason & Hanger's status as a private corporation. See DeVargas v. Mason & Hanger-Silas Mason Co., Inc., 844 F.2d 714 (10th Cir.1988) (DeVargas I ). We also held that the conduct of the Mason & Hanger defendants did not violate clearly established law under either IMD 6102 or the equal protection clause of the fourteenth amendment. 4 Id. at 724-25. Following remand, the district court permitted DeVargas to file a second amended complaint. The court entered summary judgment against DeVargas's remaining claims on December 14, 1988.

DeVargas limits his appeal to the following arguments: (1) the defendants violated section 504; (2) the trial court erred by refusing to permit further discovery prior to ruling on the section 504 claim; (3) the defendants' application of IMD 6102 deprived DeVargas of his clearly established right to substantive due process of law under the fifth and fourteenth amendments; and (4) the defendants violated 42 U.S.C. section 1983.

II.

We first determine whether the Mason & Hanger defendants violated section 504, which prohibits discrimination against handicapped persons by "any program or activity receiving federal financial assistance." 29 U.S.C. Sec. 794. The district court granted summary judgment in favor of Mason & Hanger, concluding that liability could not lie against the Mason & Hanger defendants because Mason & Hanger's operations were not programs or activities that received federal financial assistance. DeVargas insists that the available evidence indicates that Mason & Hanger received federal financial assistance.

In our review of grants of summary judgment, we must reverse if there is a genuine issue concerning a material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). We review all legal questions de novo. See Carey v. United States Postal Serv., 812 F.2d 621, 623 (10th Cir.1987).

The term "financial assistance" is not defined in the Rehabilitation Act. We apply the ordinary meaning of the term and conclude that an entity receives financial assistance when it receives a subsidy. See Jacobson v. Delta Airlines, Inc., 742 F.2d 1202, 1208-09 (9th Cir.1984), cert. dismissed, 471 U.S. 1062, 105 S.Ct. 2129, 85 L.Ed.2d 493 (1985).

In determining whether a party has obtained federal financial assistance under section 504, we decline to scrutinize the fair market value of every transaction as if we were article III accountants. See id. at 1210 (outlining practical problems of a test based solely on fair market value). We do not read section 504 to declare that a contractor receives federal financial assistance whenever the contractor negotiates a contract with favorable terms that compensate the contractor at a rate above the fair market value. We agree with the Jacobson court's conclusion that "in determining which programs are subject to the civil rights laws, courts should focus not on market value but on the intention of the government " to give a subsidy, as opposed to government intent to provide compensation. Id. at 1210 (emphasis added). We conclude that to determine the applicability of section 504, we must determine whether the government intended to give Mason & Hanger a subsidy.

In this case there is little doubt that Congress did not intend to subsidize Mason & Hanger's operations. Prior to the decision to replace the former government guards with private employees, the DOE conducted a study which concluded that the government would save approximately $3.5 million by contracting out guard services. Moreover, the government awarded the contract to Mason & Hanger only after a competitive bidding process. Both of these factors lead us to conclude that there was

Page 1383

no governmental intent to give Mason & Hanger a subsidy.

Our conclusion is consistent with departmental regulations. The Department of Energy's implementing regulations state that the provisions of the Rehabilitation Act do not apply to government procurement contracts, see 10 C.F.R. Sec. 1040.2(b)(3) (1985), which are defined as, inter alia, contracts to purchase services from nonfederal sources, see 41 C.F.R. Sec. 1-1.209 (1984) (former provision). Under this regulation, the purchase from Mason & Hanger of nonpersonal services is a procurement contract outside the reach of the Rehabilitation Act. 5 We hold that the...

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164 practice notes
  • Rodgers v. Univ. of Missouri Bd. of Curators, Case No. 4:11CV0515 JAR
    • United States
    • United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
    • September 4, 2012
    ...person in any of its programs on the basis of race, color, or national origin.")(citing DeVargas v. Mason & Hanger-Silas Mason Co., Inc., 911 F.2d 1377, 1383-84 (10th Cir. 1990)). Private individuals may sue to enforce § 601 of Title VI and obtain both injunctive relief and damages. Alexand......
  • Sandoval v. Hagan, No. Civ.A. 96-D-1875-N.
    • United States
    • United States District Courts. 11th Circuit. Middle District of Alabama
    • January 1, 1999
    ...v. Marion Center Area School District, et al., 917 F.2d 779, 783 (3rd Cir.1990); DeVargas v. Mason & Hanger-Silas Mason Co., Inc., 911 F.2d 1377, 1384 (10th Cir.1990); Lussier v. Dugger, 904 F.2d 661, 664-65 (11th Cir.1990); Knight v. State of Alabama, 787 F.Supp. 1030, 1364 (N.D.Ala.1991),......
  • Mary Jo C. v. N.Y. State & Local Ret. Sys., Docket No. 11–2215.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • January 29, 2013
    ...568 (1984) (quoting 29 U.S.C. § 701(8)), superseded by statute on other grounds as stated in DeVargas v. Mason & Hanger–Silas Mason Co., 911 F.2d 1377, 1383–84 (10th Cir.1990). Section 504 of the Rehabilitation Act provides that “[n]o otherwise qualified individual with a disability ... sha......
  • U.S. v. Griffin, Nos. 94-3030
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • May 22, 1996
    ...Cir.1993) (en banc), cert. denied, --- U.S. ----, 114 S.Ct. 1643, 128 L.Ed.2d 363 (1994); DeVargas v. Mason & Hanger-Silas Mason Co., 911 F.2d 1377, 1387-93 (10th Cir.1990), cert. denied, 498 U.S. 1074, 111 S.Ct. 799, 112 L.Ed.2d 860 The Supreme Court did not articulate in Ratzlaf a precise......
  • Request a trial to view additional results
164 cases
  • Rodgers v. Univ. of Missouri Bd. of Curators, Case No. 4:11CV0515 JAR
    • United States
    • United States District Courts. 8th Circuit. United States District Court (Eastern District of Missouri)
    • September 4, 2012
    ...person in any of its programs on the basis of race, color, or national origin.")(citing DeVargas v. Mason & Hanger-Silas Mason Co., Inc., 911 F.2d 1377, 1383-84 (10th Cir. 1990)). Private individuals may sue to enforce § 601 of Title VI and obtain both injunctive relief and damages. Alexand......
  • Sandoval v. Hagan, No. Civ.A. 96-D-1875-N.
    • United States
    • United States District Courts. 11th Circuit. Middle District of Alabama
    • January 1, 1999
    ...v. Marion Center Area School District, et al., 917 F.2d 779, 783 (3rd Cir.1990); DeVargas v. Mason & Hanger-Silas Mason Co., Inc., 911 F.2d 1377, 1384 (10th Cir.1990); Lussier v. Dugger, 904 F.2d 661, 664-65 (11th Cir.1990); Knight v. State of Alabama, 787 F.Supp. 1030, 1364 (N.D.Ala.1991),......
  • Mary Jo C. v. N.Y. State & Local Ret. Sys., Docket No. 11–2215.
    • United States
    • U.S. Court of Appeals — Second Circuit
    • January 29, 2013
    ...568 (1984) (quoting 29 U.S.C. § 701(8)), superseded by statute on other grounds as stated in DeVargas v. Mason & Hanger–Silas Mason Co., 911 F.2d 1377, 1383–84 (10th Cir.1990). Section 504 of the Rehabilitation Act provides that “[n]o otherwise qualified individual with a disability ... sha......
  • U.S. v. Griffin, Nos. 94-3030
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • May 22, 1996
    ...Cir.1993) (en banc), cert. denied, --- U.S. ----, 114 S.Ct. 1643, 128 L.Ed.2d 363 (1994); DeVargas v. Mason & Hanger-Silas Mason Co., 911 F.2d 1377, 1387-93 (10th Cir.1990), cert. denied, 498 U.S. 1074, 111 S.Ct. 799, 112 L.Ed.2d 860 The Supreme Court did not articulate in Ratzlaf a precise......
  • Request a trial to view additional results

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