New Mexico Ass'n for Retarded Citizens v. State of N. M.

• Decision Date: 13 May 1982
• Docket Number: No. 80-1876,80-1876
• Parties: 4 Ed. Law Rep. 463 NEW MEXICO ASSOCIATION FOR RETARDED CITIZENS, et al., Plaintiffs-Appellees, v. The STATE OF NEW MEXICO, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 847

678 F.2d 847

4 Ed. Law Rep. 463

NEW MEXICO ASSOCIATION FOR RETARDED CITIZENS, et al., Plaintiffs-Appellees, v. The STATE OF NEW MEXICO, et al., Defendants-Appellants.

No. 80-1876.

United States Court of Appeals, Tenth Circuit.

May 13, 1982.

Rehearing Denied June 14, 1982.

John F. Kennedy, Asst. Atty. Gen., and Robert N. Hilgendorf, Sp. Asst. Atty. Gen., Santa Fe, N. M. (Jeff Bingaman, Atty. Gen., Santa Fe, N. M., with them on the brief), for defendants-appellants.

Marian Matthews of Matthews & Crider, P. C., Albuquerque, N. M. (Anson B. Levitan of Northern N. M. Legal Services, Inc., Santa Fe, N. M., with her on the brief), for plaintiffs-appellees.

C. Emery Cuddy, Jr. of White, Koch, Kelly & McCarthy, P. A., Santa Fe, N. M., filed an amicus curiae brief for New Mexico School Boards Assn.

Marianne Bennett, Albuquerque, N. M., filed an amicus curiae brief for Protection and Advocacy System for New Mexicans with Developmental Disabilities, Inc.

Before BARRETT and SEYMOUR, Circuit Judges, and BROWN, ^* Senior District Judge.

SEYMOUR, Circuit Judge.

This appeal necessitates a review of Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (Section 504). At issue is the scope of pre-college education rights afforded handicapped children under this statute and its compliance regulations. Our analysis of the question prompts reversal of the trial court decision and remand of this case for additional proceedings.

I. Background

In October 1975, the New Mexico Association for Retarded Citizens and others ¹ (Association) commenced a class action against the State of New Mexico and certain of its governing officers and bodies ² (State). The Association sought declaratory and injunctive relief on behalf of elementary and secondary school-age handicapped children allegedly denied certain federally guaranteed special education services.

The Association's original complaint was framed in eleven separate counts. Four of the counts raised constitutional issues, five of the counts posited pendant state law claims, and two of the counts charged violations of federal statutes. A three-judge district court dismissed the five state law claims for lack of jurisdiction and severed the four constitutional claims pending resolution of the federal statutory causes of action. One of the two remaining claims alleging violation of a federal statute was dismissed with prejudice by the court below and is not before us. In the only cause of action which survived trial, the Association asserts that the State's treatment of handicapped students in its school system violates Section 504.

Following a bench trial, the district court concluded that the State violates Section 504 by discriminating against handicapped children when providing educational services. The court found that: (1) occupational, physical, and speech therapies offered by the State are deficient; (2) handicapped diagnostic services provided by the State are insufficient; and (3) special education programs are inadequately funded by the State. 495 F.Supp. 391. The district court directed the State to submit a plan for compliance with the statute's regulations and permitted the Association to do likewise. ³ The State's plan was rejected as not sufficiently responsive to the regulations, and the trial court ultimately adopted the Association's plan after the State declined to submit a modified compliance proposal.

The State appeals the decision of the district court primarily on three grounds: (1) that the doctrines of exhaustion of administrative remedies and primary jurisdiction bar the Association's lawsuit; (2) that the district court incorrectly found the State in violation of Section 504; and (3) that the trial judge exceeded his authority by fashioning an overly broad remedy.

II. Exhausted Remedies and Primary Jurisdiction

The State vociferously argues that the doctrines of exhaustion of remedies and primary jurisdiction bar this lawsuit. It claims the Association's Section 504 action is fatally premature because the class did not exhaust its administrative remedies by initially submitting at least one claim in federally-authorized state agency proceedings. It also contends the district court should have invoked the doctrine of primary jurisdiction and permitted the Office of Civil Rights (OCR) to first complete its investigation into the charges.

Exhaustion of remedies and primary jurisdiction are closely connected doctrines. Both principles promote proper relationships between courts and administrative bodies through a policy of suspending judicial consideration pending agency action. See United States v. Western Pacific Railroad, 352 U.S. 59, 63-64, 77 S.Ct. 161, 164-165, 1 L.Ed.2d 126 (1956). Exhaustion requires agency determination of claims initially cognizable exclusively at the administrative level prior to court intervention. See United States v. Radio Corp., 358 U.S. 334, 346 n.14, 79 S.Ct. 457, 464 n.14, 3 L.Ed.2d 354 (1959). Primary jurisdiction mandates similar judicial restraint: disputes properly pressed in either the courts or administrative bodies are to be first decided by an agency specifically equipped with expertise to resolve the regulatory issues raised. Id.

The exhaustion principle is not indiscriminately applied to block judicial action in every circumstance where a litigant has failed to explore his administrative avenues of relief. See Martinez v. Richardson, 472 F.2d 1121, 1125 (10th Cir. 1973). "(I)mprobability of obtaining adequate relief by pursuing administrative remedies is often a reason for dispensing with the exhaustion requirement." 3 K. Davis, Administrative Law § 20.07 at 97 (1958) (Davis). See Pushkin v. University of Colorado, 658 F.2d 1372, 1380-82 (10th Cir. 1981); Martinez, 472 F.2d at 1125. Also, a party need not procure administrative review of its claim if resulting time delays would subject substantive rights to irreparable harm. Martinez, 472 F.2d at 1125 & n.10; see Cannon v. University of Chicago, 441 U.S. 677, 706 n.41, 99 S.Ct. 1946, 1962 n.41, 60 L.Ed.2d 560 (1979). Such limitations on exhaustion have been employed in Section 504 litigation. See, e.g., Pushkin, 658 F.2d at 1380-82; Kling v. Los Angeles, 633 F.2d 876, 879 (9th Cir. 1980); Camenisch v. University of Texas, 616 F.2d 127, 133-35 (5th Cir. 1980) vacated on other grounds, 451 U.S. 390, 101 S.Ct. 1830, 68 L.Ed.2d (1981); Sherry v. Education Department, 479 F.Supp. 1328, 1334 (W.D.N.Y.1979).

A review of the federally-authorized state administrative remedy at issue here reveals that it is directed toward resolving disputes over the "identification, evaluation and placement" of handicapped students within the State's existing special education system. ⁴ Rec., vol. XXIII, ex. NM-A, § 3.4 et seq. This procedure empowers the hearing authority to find State placements and identifications appropriate or inappropriate, and to suggest alternative programming within the State system in the latter instance. There is no provision in the State scheme for class claims to be presented before the hearing authority.

The State administrative process provided in this case poses both quality of relief and time lapse problems to the class. The gravamen of the Association's lawsuit is that the entire special education service system offered by the State is infirm. The remedies offered at the administrative level-primarily reassignment of students within existing programs-do not include a restructuring of the State's system to comply with Section 504 as sought by the class in this case. Exigent time factors involved in this action further underscore the inadequacy of the State's individualized proceedings for purposes of curing alleged system-wide defects. See Cannon, 441 U.S. at 707 n.41, 99 S.Ct. at 1963 n.41. Six school years have already been irretrievably lost while this litigation has run its course. To subject this sizeable class of handicapped children to further delay in obtaining adequate services would jeopardize its receipt of appropriate education at the precollege level. Accordingly, we hold that the Association is not required to exhaust its state administrative remedy.

Neither is the court below required to invoke the doctrine of primary jurisdiction and await the outcome of OCR's investigation before proceeding in this action. "The principal criterion in deciding whether the doctrine is applicable ... usually is judicial appraisal of need or lack of need for resort to administrative judgment." Davis, supra, § 19.09 at 53. The only enforcement tool available to the OCR is a cutoff of federal funding to the offending recipient. See Pushkin, 658 F.2d at 1381; 29 U.S.C. § 794a(a)(2); 45 C.F.R. § 84 et seq. (1980). We recently held that this narrow purse-string discipline does not afford Section 504 plaintiffs an immediate and effective means of vindicating their rights by procurement of necessary educational services. See Pushkin, 658 F.2d at 1381. The trial judge did not err in electing to proceed in this action prior to completion of OCR's efforts.

III. Section 504

Section 504 of the Rehabilitation Act of 1973 forms the core of this lawsuit. It provides:

"No otherwise qualified handicapped individual in the United States, as defined in section 706(7) of this title (title 29), shall, solely by reason of his handicap, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance ...."

29 U.S.C. § 794. This statute is not aimed solely at recipients of funds for education; rather, it constitutes an across-the-board requirement of nondiscrimination in all federally assisted programs.

Section 504 was initially silent on the subject of compliance regulations. The Senate Public Welfare Committee subsequently explained that although the statute did "not specifically require the issuance of regulations or expressly provide for...