Hillsdale College v. Department of Health, Educ. and Welfare
| Decision Date | 16 December 1982 |
| Docket Number | No. 80-3207,80-3207 |
| Citation | 696 F.2d 418 |
| Parties | 8 Ed. Law Rep. 565 HILLSDALE COLLEGE, Petitioner, v. DEPARTMENT OF HEALTH, EDUCATION AND WELFARE, et al., Respondents. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Betsy Levin, Gen. Counsel, Dept. of Educ., Washington, D.C., Karl M. Lehring, Kathleen Flake, Robert A. Derengoski, Sol. Gen., Lansing, Mich., Alice Daniel, Anthony J. Steinmeyer, Adrian L. Steel, Jr., Brian Landsberg, Dept. of Justice, Civ. Div., Appellate Section, Marie Klimesz (argued), Dept. of Justice, Civ. Rights Div., Appellate Section, Washington, D.C., for respondent Dept. of Educ.
John M. Facciola, Gordon Coffman (argued), Wilkinson, Cragun & Barker, Washington, D.C., for Hillsdale College.
Roger W. Boer, Grand Rapids, Mich., for appellant.
Maxwell A. Miller, James G. Watt, Mountain States Legal Foundation, Denver, Colo., amicus curiae.
Before EDWARDS, Chief Judge, CECIL * and BROWN **, Senior Circuit Judges.
This appeal arises out of a compliance proceeding initiated against Hillsdale College by the General Counsel of the Department of Health, Education, and Welfare ("HEW") 1 in December, 1977, pursuant to the provisions of Section 902 of Title IX of the Education Amendments of 1972, 20 U.S.C. Secs. 1681-1686 (1976) ("Title IX"), and the regulations promulgated thereunder. 2 HEW sought an order terminating the financial assistance Hillsdale College students receive through various federal student loan and grant programs because of Hillsdale's refusal to file HEW Form 639A ("Assurance of Compliance with Title IX Regulations") as required by 34 C.F.R. Sec. 106.4 (1981). 3 Hillsdale's refusal to execute the Assurance of Compliance is the only basis for the HEW enforcement action; no allegations of actual sex discrimination on the part of the college have been made or are before this court. For the reasons stated herein, we hold that Hillsdale College is not required to execute the Assurance of Compliance as a condition of its students' continued receipt of federal financial assistance and hereby reverse the Order issued below to that effect.
In an administrative proceeding before the HEW Civil Rights Reviewing Authority it was held that Hillsdale may be required to execute the Assurance of Compliance as a condition of its students' continued receipt of federal financial assistance. This appeal followed. 20 U.S.C. Sec. 1683 (1976).
Hillsdale College is a private, nonsectarian, coeducational college located in Hillsdale, Michigan with an enrollment of approximately 1,000 students. Since its founding in 1844, Hillsdale College has refused to accept any federal or state aid. Certain of its students, however, individually secure loans or grants to pay the costs of their education under four federal programs: the National Direct Student Loan ("NDSL") Program, 4 the Basic Educational Opportunity Grant ("BEOG") Program, 5 the Supplementary Educational Opportunity ("SEOG") Program, 6 and the Guaranteed Student Loan ("GSL") Program. 7 In the year ending June 30, 1978, approximately one-fourth of Hillsdale's student body received aid under these loan and grant programs.
Title IX, enacted into law on June 23, 1972, is designed to prevent sex discrimination in federally assisted education programs and activities. Section 901(a) of Title IX provides as follows:
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. Sec. 1681(a) (1976). Section 902 of Title IX, which provides for the enforcement of Section 901, authorizes HEW to issue regulations to implement Section 901 and to enforce such regulations by administrative enforcement proceedings. 8 The ultimate sanction for noncompliance is the termination of federal assistance to any program in which noncompliance is found. Section 903, 20 U.S.C. Sec. 1683 (1976), provides for judicial review of any department or agency action taken pursuant to Section 902. These sections of Title IX were derived from the virtually identical language of Title VI of the Civil Rights Act of 1964, which prohibits race discrimination in federally assisted programs. 9
On June 4, 1975, HEW issued final regulations to "effectuate Title IX of the Education Amendments of 1972...." 34 C.F.R. Sec. 106.1 (1981). The portions of the regulations at issue in this case deal with the definitions of "recipient" and "federal financial assistance." Section 106.2(g)(1)(ii) defines "federal financial assistance" to include:
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 to such students for payment to that entity.
The term "recipient" is defined in the regulations to mean:
[A]ny State or political subdivision thereof, or any instrumentality of a State or political subdivision thereof, any public or private agency, institution, or organization, or other entity, or any person, to whom Federal financial assistance is extended directly or through another recipient and which operates an education program or activity which receives or benefits from such assistance, including any subunit, successor, assignee, or transferee thereof.
34 C.F.R. Sec. 106.2(h) (1981) (emphasis added). An exception to this definition is found in 34 C.F.R. Sec. 106.2(g)(5) (1981) which, in accordance with Section 902 of Title IX, exempts financial assistance in the form of contracts of insurance or guaranty from the enforcement authority of HEW.
The regulations, under Section 106.4(a), further provide that each "recipient" of "federal financial assistance," as defined above, must submit to HEW an "Assurance of Compliance" with Title IX, stating that each education program or activity operated by the institution to which the regulations apply will be conducted in compliance with Title IX and the regulations. 10
Because Hillsdale College refused to execute such an Assurance of Compliance, HEW instituted these proceedings. Hillsdale's basic arguments as to why the order cutting off funds is invalid are as follows. First, it argues that, because it does not operate any "education program or activity receiving Federal financial assistance," 20 U.S.C. Sec. 1681(a) (1976), it is not a "recipient" of such assistance within the meaning of Title IX and therefore, contrary to the regulations, is not covered by Title IX at all. Stated slightly differently, Hillsdale contends that the receipt by its students of federal financial assistance does not make it, the institution, a "recipient" under Title IX. Second, Hillsdale argues that the federal loans and grants cannot be terminated because of its failure to sign an Assurance of Compliance with Title IX regulations since enforcement under Title IX is "program-specific" and it can be required to assure compliance only as to programs actually receiving federal assistance. Implicit in this argument is the proposition that it is, at the most, subject to regulation under Title IX only as to its administration of the student loan and grant programs. While recognizing that under the Assurance the recipient agrees only to comply with the regulations to the extent applicable to it, Hillsdale points out that it is HEW's very theory that the entire institution is subject to such regulation. 11 Third, Hillsdale argues that termination of federal assistance, under the statute, cannot in any event be done unless there has been a showing of actual sex discrimination in the program receiving federal assistance.
The matter was referred to an Administrative Law Judge ("ALJ") upon a joint stipulation of facts and, on August 23, 1978, the ALJ issued his Initial Decision denying HEW's request for an order terminating federal financial assistance to Hillsdale's students.
The ALJ initially found that, under the definitions set forth in the regulations, the payments by HEW to the students under the NDSL, SEOG, and BEOG programs constituted federal financial assistance received by Hillsdale:
The financial assistance helps students pay for their education at Hillsdale by defraying their costs of tuition, books, room and board and other expenses incurred in attending Hillsdale. Since funds are provided which Hillsdale would otherwise have to supply from its own resources, the total funds available to Hillsdale to carry on its education programs will also allow students to attend Hillsdale who would otherwise not have the financial means to do so, and so enlarge the population on which Hillside can draw for students.
This finding by the ALJ that Hillsdale was a recipient of federal financial assistance under the regulations and Title IX was held to be "persuasively supported" by the case of Bob Jones University v. Johnson, 396 F.Supp. 597 (D.S.C.1974), aff'd without opinion, 529 F.2d 514 (4th Cir.1975). Bob Jones arose under Title VI of the Civil Rights Act of 1964 and involved the payment of veterans' benefits to veterans attending Bob Jones University in Greenville, South Carolina. The University, which had a policy of denying admission to unmarried nonwhite students for religious reasons, refused to sign an Assurance of Compliance with Title VI. As a result, all VA assistance to the University was terminated.
The district court in Bob Jones upheld the termination, finding the veterans' benefits to be federal financial assistance "received" by the University. 396 F.Supp. at 601-602. In addition, the court held that the veterans' payments were "specifically tied to the beneficiary's participation in an educational program or activity," equating the statutory phrase "program or activity" with the entire institution. Id. at 602. Relying on such language, the ALJ found that, insofar as...
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