Lois Sharer v. State of Oregon

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LOIS SHARER; STEVEN HUMBER, 

Plaintiffs-Appellants, No. 08-35396

v.

 D.C. No.

3:04-CV-01690-BR

STATE OF OREGON; PETER OZANNE;

PETER GARTLAN, OPINION

Defendants-Appellees.



Appeal from the United States District Court

for the District of Oregon

Anna J. Brown, District Judge, Presiding

Argued and Submitted

June 3, 2009—Portland, Oregon

Filed September 21, 2009

Before: Alfred T. Goodwin, Diarmuid F. O’Scannlain and

Raymond C. Fisher, Circuit Judges.

Opinion by Judge Fisher

13693

13696 SHARER v. STATE OF OREGON

COUNSEL

Stephen L. Brischetto, Portland, Oregon, for the plaintiffs-

appellants.

John R. Kroger, Attorney General; Rolf C. Moan, Acting

Solicitor General; Leigh A. Salmon (argued), Assistant Attor-

ney General, Salem, Oregon, for defendants-appellees.

OPINION

FISHER, Circuit Judge:

Lois Sharer appeals from the district court’s grant of sum-

mary judgment to defendants on her disability discrimination

claim under section 504 of the Rehabilitation Act of 1973, 29

U.S.C. § 794. The district court determined that Oregon’s

Office of Public Defense Services (“OPDS”) was not a “pro-

gram or activity receiving Federal financial assistance” within

the meaning of section 504 during the period of alleged dis-

crimination. Id. § 794(a). Sharer also appeals the district

court’s denial of her claim under the Family and Medical

Leave Act (“FMLA”), 29 U.S.C. §§ 2601-54. We have juris-

diction under 28 U.S.C. § 1291, we review de novo a grant of

summary judgment, Mendez v. County of San Bernardino,

540 F.3d 1109, 1123 (9th Cir. 2008), and we affirm.1

1

We address appellant Steven Humber’s appeal in a concurrently filed

memorandum disposition.

SHARER v. STATE OF OREGON 13697

I. Background

Sharer was employed as a legal assistant for the OPDS and

its predecessor agency, the Oregon Public Defender Office,

from 1999 until May 2003. She alleged that she was a dis-

abled individual with post-traumatic stress disorder, anxiety

disorder, depression and agoraphobia. Sharer claimed that

defendants State of Oregon and two of her supervisors, Peter

Ozanne and Peter Gartlan, failed to provide her with reason-

able accommodation, terminated her because of an actual or

perceived disability and terminated her for asserting her feder-

ally protected rights to be free from discrimination on the

basis of disability. She alleged violations of section 504 and

the FMLA, as well as other claims not at issue on this appeal.

The district court granted defendants’ motion for summary

judgment on Sharer’s section 504 claim, concluding that she

failed to meet her burden of establishing that OPDS was a

“program or activity receiving Federal financial assistance.”

The court also granted summary judgment on her FMLA

claim. Sharer appealed.

II. Section 504

[1] Section 504 provides that “[n]o otherwise qualified

individual with a disability . . . shall, solely by reason of her

or his disability, be excluded from the participation in, be

denied the benefits of, or be subjected to discrimination under

any program or activity receiving Federal financial assis-

tance.” 29 U.S.C. § 794(a) (emphasis added). Defendants

argue that Sharer’s section 504 claim fails because OPDS was

not a “program or activity receiving Federal financial assis-

tance” at the time of the alleged discrimination. We agree.

[2] Section 504 defines “program or activity” to include

“all the operations of . . . a department, agency, special pur-

pose district, or other instrumentality of a State or of a local

government.” Id. § 794(b)(1)(A). Congress adopted this broad

definition in response to Consolidated Rail Corp. v. Darrone,

13698 SHARER v. STATE OF OREGON

465 U.S. 624, 635-36 (1984), where the Court narrowly con-

strued “program or activity” to reach “only the specific parts

of a recipient’s operation which directly benefited from fed-

eral assistance.” Haybarger v. Lawrence County Adult Prob.

& Parole, 551 F.3d 193, 199 (3d Cir. 2008); see also Civil

Rights Restoration Act of 1987, Pub. L. No. 100-259, §§ 2, 4,

102 Stat. 28 (1988). To honor Congress’ intent, we “inter-

pret[ ] ‘program or activity’ broadly.” Haybarger, 551 F.3d at

200.

[3] At the same time, “to avoid deciding difficult constitu-

tional questions where the text fairly admits of a less problem-

atic construction,” Pub. Citizen v. DOJ, 491 U.S. 440, 455

(1989), we interpret “program or activity” to place meaning-

ful constraints on section 504’s scope. The “program or activ-

ity” language has constitutional significance because it limits

section 504’s reach so that it “does not encompass all the

activities of the State,” thus ensuring Congress acted within

its Spending Clause power “when it conditioned the receipt of

[section 504] funds on a waiver of sovereign immunity.” Lov-

ell v. Chandler, 303 F.3d 1039, 1051 (9th Cir. 2002); see also

Jim C. v. United States, 235 F.3d 1079, 1081 (8th Cir. 2000)

(en banc) (explaining section 504 does not violate the Spend-

ing Clause because “[a] State and its instrumentalities can

avoid Section 504’s waiver requirement on a piecemeal basis,

by simply accepting federal funds for some departments and

declining them for others”). Mindful of these considerations,

we conclude OPDS is not a “program or activity receiving

Federal financial assistance,” and the State therefore did not

waive immunity for claims brought against the agency under

section 504.

A. Oregon’s “Judicial Department”

Whether a particular state entity is a program or activity

receiving federal financial assistance within the meaning of

section 504, though itself “a question of federal law[,] . . . can

be answered only after considering the provisions of state law

SHARER v. STATE OF OREGON 13699

that define the agency’s character.” Regents of Univ. of Cal.

v. Doe, 519 U.S. 425, 429 n.5 (1997) (discussing whether an

agency is “an arm of the State” for Eleventh Amendment sov-

ereign immunity purposes); see also Haybarger, 551 F.3d at

201 (“[t]hough not dispositive, a State’s characterization of an

entity under state law is significant” in determining whether

that entity is a “program or activity” under section 504).

Therefore, we look to the state constitutional and statutory

regime governing OPDS to determine whether it is, for sec-

tion 504 purposes, a “program or activity receiving Federal

financial assistance.”

[4] Sharer contends that OPDS, together with Oregon’s

state courts and their administrative apparatus, comprise a

uniform “judicial department” organized under Article III of

the Oregon Constitution. This article provides that “[t]he

powers of Government shall be divided into three separate

[sic] departments, the Legislative, the Executive, including

the administrative, and the Judicial.” Or. Const. art. III, § 1

(emphasis added). Defendants concede that Oregon’s judicial

branch of government receives federal financial assistance. It

follows from this concession that, insofar as OPDS is orga-

nized under the State’s judicial branch, and that branch should

be considered a unitary “department” or “agency” for section

504 purposes, Sharer would be entitled to pursue her disabil-

ity discrimination claim. See 29 U.S.C. § 794(b)(1)(A).

[5] During the relevant period, OPDS was located within

the judicial branch of Oregon’s government. A 2001 Oregon

session law reorganizing the State’s public defender system

established a Public Defense Services Commission

(“Commission”) “in the judicial branch of state government,”

Or. Rev. Stat. § 151.213(1), and charged the Commission

with establishing the OPDS “to carry out the administrative

policies and procedures for the public defense system,” id.

§§ 151.216(1)(b), 151.211(5). See 2001 Or. Laws ch. 962.2

2

Although portions of the 2001 session law did not become effective

until October 1, 2003, all portions relevant to this analysis were operative

as of October 1, 2001. See 2001 Or. Laws ch. 962, § 15.

13700 SHARER v. STATE OF OREGON

Thus, OPDS was established within Oregon’s “judicial

department” — that is, the judicial branch of Oregon’s gov-

ernment — as the administrative arm of the Commission.

It does not follow, however, that Oregon’s judicial “depart-

ment” of government comprises a unitary “department” or

“agency” within the meaning of section 504. Oregon’s stat-

utes draw a distinction between the State’s “judicial depart-

ment” (lower case), which refers to the judicial branch of

government in its entirety, and the “Judicial Department”

(upper case), which refers to the predominant administrative

agency within the judicial branch. Section 1.002(1), for exam-

ple, provides that the Oregon Supreme Court “is the highest

judicial tribunal of the judicial department of government in

this state,” but that the Chief Justice may “[s]et staffing levels

for all courts of the state operating under the Judicial Depart-

ment and for all operations in the Judicial Department,”

“[e]stablish budgets for the Judicial Department and all courts

operating under the Judicial Department” and “[a]ssign or

reassign all court staff of courts operating under the Judicial

Department.” Or. Rev. Stat. § 1.002(1) (emphasis added).

Similarly, section 8.125 provides that “[t]he State Court

Administrator shall, to the extent directed by the Chief Justice

of the Supreme Court . . . [s]upervise and maintain the law

libraries of the judicial department of government of this

state,” but that he or she shall “[e]nter into contracts on behalf

of the Judicial Department.” Id. § 8.125.3 Oregon’s statutes

also make clear that the Commission and the Judicial Depart-

ment are distinct administrative entities. A statute pertaining

to the State’s financial administration, for example, defines

“state agency” to include “the courts and their officers and

committees . . ., at their option,” and — separately — “the

Public Defense Services Commission, at the option of the

3

Reenforcing this distinction, the Oregon Governor’s 2005-2007 recom-

mended budget for the state, defines the “Judicial Department” to include,

among other things, the operations of the courts and the State Court

Administrator, but not the Commission.

SHARER v. STATE OF OREGON 13701

commission.” Id. § 291.030. Another statute authorizes the

state treasurer to establish “procedures for the efficient han-

dling of cash and cash equivalents under the control of the . . .

the Judicial Department” and — again, separately — “the

Public Defense Services Commission.” Id. § 293.875(1).

Because the Commission (of which OPDS is a subunit) and

the Judicial Department are distinct entities within Oregon’s

judicial branch, we next must consider whether these entities

are sufficiently independent from one another to constitute

separate “department[s]” or “agenc[ies]” under section 504.

Cf. Haybarger, 551 F.3d at 202 (holding that parole officer

employed by a “subunit” of a Pennsylvania state judicial dis-

trict could bring a claim under section 504 because a different

subunit within the district received federal funds); Thomlison

v. City of Omaha, 63 F.3d 786, 789 (8th Cir. 1995) (holding

that an employee of public safety department’s “Fire Divi-

sion” could bring a section 504 claim where the department’s

“Police Division” received federal funds). Oregon’s statutes

demonstrate that these entities, though part of the same branch

of government, have distinct funding sources and administra-

tive apparatuses. With regard to their funding, the Commis-

sion is financed through an account in the State’s “General

Fund,” Or. Rev. Stat. § 151.225(1), whereas the Judicial

Department is financed through an “Operating Account” in

the State Treasury that is “separate and distinct from the Gen-

eral Fund.” Id. § 1.009(1). In terms of their administration, the

Chief Justice of the Oregon Supreme Court is “the administra-

tive head of the judicial department of government,” includ-

ing OPDS. Id. § 1.002(1). The Chief Justice’s statutory

authority over the Commission, however, is considerably

more circumscribed than his authority over the Judicial

Department. The Chief Justice is authorized to appoint the

seven members of Commission, and serves as a nonvoting, ex

officio member. See id. § 151.213(2). “Except for the appoint-

ment or removal of commission members,” however, “the

commission and employees of the commission are not subject

to the exercise of administrative authority and supervision by

13702 SHARER v. STATE OF OREGON

the Chief Justice of the Supreme Court as the administrative

head of the Judicial Department.” Id. § 151.213(1). By con-

trast, the Chief Justice’s broad authority over the Judicial

Department includes the power to establish its budgets, set its

staffing levels and “[a]ssign or reassign all court staff.” Id.

§ 1.002(1).

[6] In light of the Judicial Department and Commission’s

distinct funding sources and administration, we conclude that

the entities are not “linked . . . by virtue of their status under

[Oregon] law.” Haybarger, 551 F.3d at 202. Unlike the “sub-

units” of government considered in Haybarger, the Commis-

sion is “independent” from the Judicial Department in terms

of its administrative structure, and the judicial branch’s fed-

eral funds “are [not] imputed” to the Commission. Id. We

therefore hold that the Commission — and hence OPDS — is

not a “program or activity receiving Federal financial assis-

tance” within the meaning of section 504 simply by virtue of

the Judicial Department’s receipt of federal funds.

B. Financial Assistance to OPDS

[7] Sharer further argues that, regardless of whether OPDS

and the Judicial Department are distinct departments or agen-

cies under section 504, OPDS itself received two kinds of fed-

eral financial assistance. First, Sharer contends that she was

initially hired in November 1997 by OPDS’s predecessor

agency through a program under which Oregon’s Department

of Vocational Rehabilitation (“DVR”) subsidized her wages

using federal funds. Section 504’s reach, however, encom-

passes a department or agency receiving federal funds in

“only those periods during which the funds are accepted.”

Garcia v. SUNY Health Scis. Ctr., 280 F.3d 98, 113 n.2 (2d

Cir. 2001). Therefore, the circumstances of Sharer’s hiring in

1997 are irrelevant to whether she can bring a section 504

claim based on discrimination that allegedly occurred in 2003.4

4

Sharer testified that she was aware of another employee OPDS hired

through the federally funded DVR program, but she did not state the

SHARER v. STATE OF OREGON 13703

[8] Second, Sharer contends OPDS received federal finan-

cial assistance by relying on the Judicial Department (which

defendants concede received federal financial assistance) to

subsidize the costs of ordering transcripts for indigent defen-

dants. Sharer is correct that, for purposes of section 504,

“[f]ederal financial assistance can be direct or indirect.” Her-

man v. United Bhd. of Carpenters, 60 F.3d 1375, 1381 (9th

Cir. 1995). But while “[e]ntities that receive federal assistance

. . . through an intermediary[ ] are recipients” under section

504, “entities that only benefit economically from federal

assistance are not.” NCAA v. Smith, 525 U.S. 459, 468 (1999)

(holding that the NCAA’s acceptance of dues from colleges

receiving federal funding did not render the NCAA liable

under Title IX); see id. at 466 n.3 (noting scope of the federal

funding requirements of “several other federal antidiscrimina-

tion measures,” including section 504, “is defined in nearly

identical terms” to the Title IX requirement).

[9] Here, there is no evidence that the Judicial Department

financed OPDS’s provision of transcripts “with federal funds

earmarked for that purpose.” Id. at 468. Indeed, under the stat-

utory framework operative during the relevant period, the

costs of indigent defendants’ transcripts were “paid by the

state from funds for that purpose.” Or. Rev. Stat. § 138.500(5)

(1999).5 We therefore conclude that, at most, OPDS “only

benefit[s] economically from federal assistance” in receiving

period during which the other employee was hired. Therefore, this testi-

mony likewise fails to establish that Oregon waived immunity with respect

to OPDS during the period of Sharer’s alleged discrimination.

5

Oregon Revised Statute § 138.500(5) was amended by the 2001 ses-

sion law establishing the Commission such that “[t]he cost of the tran-

script preparation” for indigent defendants is now “paid for as provided by

the policies, procedures, standards and guidelines of the Public Defense

Services Commission.” See 2001 Or. Laws ch. 962, § 29 (codified at Or.

Rev. Stat. § 138.500(3)(b)). This provision, however did not become oper-

ative until October 1, 2003, subsequent to the period of Sharer’s alleged

discrimination. See id. § 15.

13704 SHARER v. STATE OF OREGON

aid from Oregon’s Judicial Department for the provision of

transcripts.

[10] Accordingly, we hold that, notwithstanding defen-

dants’ concession that the Judicial Department received fed-

eral funds, Sharer was not “subjected to discrimination under

any program or activity receiving Federal financial assis-

tance.” 29 U.S.C. § 794(a).

III. Family and Medical Leave Act

[11] Sharer also appeals from the district court’s grant of

summary judgment to defendants on her claim under the Fam-

ily and Medical Leave Act, 29 U.S.C. §§ 2601-54. We con-

clude that Sharer’s FMLA claim is without merit. Even

assuming she could be found to have invoked her FMLA

rights, the record shows her claim to be without merit. We

therefore affirm the district court’s entry of summary judg-

ment on that claim.

AFFIRMED.