Cureton v. National Collegiate Athletic Ass'n

MeKEE, Circuit Judge,

concurring in part and dissenting in part.

I agree with the majority’s analysis insofar as my colleagues conclude that the District Court’s grant of summary judgment can not be sustained under the applicable regulations of the Departments of Health and Human Services and the De *119 partment of Education. As I discuss below, the language of the regulations those agencies adopted pursuant to §§ 601 and 602 of Title VI are program-specific. Accordingly, it appears that the relief for the discriminatory impact that the District Court found under Proposition 16 must be limited to the National Youth Sports Program (the “Fund”). However, I believe that the NCAA may well be subject to Title VI under the plaintiffs theory that the NCAA is a controlling entity of its member institutions, or the alternative alter ego theory advanced by the plaintiffs. Thus, I can not agree with the majority’s analysis insofar as it holds that the NCAA is entitled to summary judgment. Rather, I believe that we should remand for a trial to resolve the issue of whether the NCAA is a controlling entity under Title VI or the Fund is merely its alter ego. However, before explaining my position, a brief parenthetical is necessary.

Title VI extends protection based upon race, color or national origin. Accordingly, this dispute is framed by issues of race. Nevertheless, the issues here are of such gravity, and the social context in which they arise are of such magnitude, that I think it is important that an aspect of this controversy not be lost even though it is irrelevant to our legal analysis. Buried deep within this record is a statement that is of such consequence that it ought not to be ignored. Yet, that statement has been lost in the intensity of the debates underlying this legal dispute. The NCAA’s Rule Change Memorandum contains the following statement:

Low-income student-athletes also have been impacted to a greater degree than other student-athletes by Proposition 16 standards. For example, in 1997, 18 percent of all student-athletes with a self-reported family income below $30,-000 failed to qualify, whereas only 2.5 percent of student-athletes with a family income greater than $80,000 failed to qualify.

JA at 756a. Proposition 16 therefore has a disparate impact on poor student-athletes regardless of race. Thus, the dynamics of the disparate impact here are the dynamics of socio-economic status. These are issues of class; not race. Student athletes are more likely to be adversely affected by Proposition 16 whether they are Black or White if they are poor. Concomitantly, student athletes are more likely to be advantaged by Proposition 16 if they have attended schools with abundant resources and are from families that know about, and have the resources to avail themselves of, the proliferation of privately sponsored courses that prepare high school students for the SAT exam. See Los Angeles Times, More Latinos Take SAT Exams But Scores Lagging, Sept 2, 1998, at A1 (“Suburban and affluent students ... enjoy another advantage — greater access to commercial test preparation courses that can add 120 points or more to a student’s SAT score.”). The economic stratification that exists in out' society often means that issues of class are either translated into issues of race, or the two are so intertwined as to be inseparable.

Because we function as a court of law, and not as a legislature, the significance of the NCAA’s Memorandum can play no role in our adjudication of this appeal. However, the explosiveness of the issues lying coiled just below the surface of this dispute require that the broader implications of this debate be kept in proper perspective. 1

I. The Applicable Regulations.

I begin my legal analysis with the regulations that have been promulgated under Title VI. 34 C.F.R. § 100.3 promulgated by the Office of Civil Rights of the Department of Education provides in relevant part that:

*120 (b)(2) A recipient [of funds under Title VI], in determining the types of services, financial aid, or other benefits, ... or the class of individuals to whom, or the situations in which, such services, ... will be provided under any such program, or the class of individuals to be afforded an opportunity to participate in any such program, may not, directly or through contractual or other arrangements, utilize criteria or methods of administration which have the effect of subjecting individuals to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program as respect individuals of a particular race, color, or national origin.

34 C.F.R. § 100.3 (b)(2). The cited Authority for that regulation is “Sec. 601, 602, 604, Civil Rights Act of 1964; 78 Stat. 252 , 253, 42 U.S.C. §§ 2000d, 2000d-1, 2000d-3.” The Department of Health and Human Services promulgated an identical regulation at 45 C.F.R. § 80.3 (b)(2), and the identical provisions of The Civil Rights Act of 1964 are cited as authority for that regulation. As the .majority notes, the scope of these regulations is limited by 34 C.F.R. § 100.4 (d)(2) and 45 C.F.R. § 80.4 (d)(2) respectively. That limitation provides that the respective prohibition of discrimination “shall be applicable to the entire institution unless the applicant establishes ... that the institution’s practices in designated parts or programs of the institution will in no way affect its practices in the program of the institution for which Federal financial assistance is sought.” See Maj. Op. at 115. 2

As the majority explains, this limitation is a direct result of the original interpretation of Title VI. See Grove City v. Bell, 465 U.S. 555 , 104 S.Ct. 1211 , 79 L.Ed.2d 516 (1984). Maj. Op. at 115-16. However, Congress subsequently enacted the Civil Rights Restoration Act, 42 U.S.C. § 2000-4 , and thereby broadened the reach of Title VI beyond the offending program in response to Grove City . However, neither HHS nor the Department of Education amended the applicable regulations to make them coextensive with the expanded scope of the Civil Rights Restoration Act. Consequently, regulations that were initially designed to lengthen the reach of a statutory prohibition against discrimination by extending it to unintended discriminatory consequences (“disparate impact”) now appear to have a shorter reach than the statutory prohibition the regulations were supposed to expand.

My colleagues address the apparent tension between the Civil Rights Restoration Act and the regulations as follows:

We realize, of course, that arguably the Civil Rights Restoration Act implicitly expanded the scope of the “program” within 45 C.F.R. § 80.13 and 34 C.F.R. § 100.13 so that it is not limited to a specific activity; after all, without such expansion there would be no regulations dealing with disparate treatment by reason of race, color, or national origin beyond the program actually receiving Federal financial assistance. We, however, will not address that possibility here beyond pointing it out, as this case does not involve any allegation of disparate treatment. Consequently, we have no reason to consider whether the regulations under section 602 could be applied in disparate treatment cases on an institution-wide basis.

Maj. Op. at 116 (emphasis in original).

It may be that this regulatory anomaly is more the result of administrative inertia than studied decision making. However, the agencies ought not to assume that their regulations have been implicitly amended by the subsequent legislation. If our analysis of the explicit language of these regulations is not what the agencies *121 intend, I would hope that they take steps to promulgate amendments to their regulations that will clearly reflect the intended scope of the meaning of “program” as that term relates to Title VI, and similar prohibitions of discrimination.

Of course, this does not end the inquiry. As the majority notes, we must still determine “whether the NCAA is a recipient of Federal funds by reason of what the plaintiffs call its ‘controlling authority’ over programs or activities receiving Federal financial assistance.” Maj. Op. at 116. It is at this point that I part company with my colleagues as I believe that the NCAA may well be subject to Title VI because it may be a controlling authority, or because the Fund may be its alter ego. Although the Supreme Court held in NCAA v. Smith, 525 U.S. 459 , 119 S.Ct. 924, 926 , 142 L.Ed.2d 929 (1999), that dues payments to the NCAA from its member institutions, who are themselves recipients of Federal financial assistance, are not sufficient to subject the NCAA to Title IX, the Court refused to reject either of these two alternative theories as a bases of recovery under Title IX. Rather, the Court stated that it would not decide the question of whether the NCAA “directly and indirectly receives federal financial assistance” because of its relationship to the Fund, and the question of whether “when a recipient cedes controlling authority over a federally funded program to another entity, the controlling entity is covered by Title IX regardless [of] whether it is itself a recipient” because neither question was decided by the lower courts. Id. 119 S.Ct. at 930 . Thus, the Court left “resolution of those grounds to the courts below on remand.” Id. 119 S.Ct. at 926 . Those questions, albeit with regard to Title VI and not Title IX, are squarely before us now, and I do not believe that either proposition can be rejected as a matter of law.

II. The NCAA as a Controlling Authority.

As noted above, the NCAA is not subject to Title VI merely because it receives dues from member institutions who are themselves recipients of Federal assistance. Smith , 525 U.S. at-, 119 S.Ct. at 926 . The Federal funds going to the NCAA member institutions are not earmarked for NCAA dues, and therefore, although the NCAA is a beneficiary of those funds it is not a “recipient.” See United States Dep’t of Transp. v. Paralyzed Veterans of America, 477 U.S. 597, 605-07 , 106 S.Ct. 2705 , 91 L.Ed.2d 494 (1986).

Thus, plaintiffs’ “controlling authority argument can be sustained, if at all, only on some basis beyond the NCAA’s mere receipt of dues.” Maj. Op. at 116. For purposes of our discussion, there are two entities over which the NCAA may have controlling authority — the NCAA’s member institutions, and the Fund. I will first explain why I believe the plaintiffs have demonstrated that the NCAA may have controlling authority over its members, and then discuss the NCAA’s relationship to the Fund.

A. The NCAA’s Control of Member Institutions.

1. The NCAA Constitution

The constitution of the NCAA provides in part: “The control and responsibility for the conduct of intercollegiate athletics shall be exercised by the [member] institution itself.” NCAA Const., Art, 6, Rule 6.01.1. At first blush, this suggests that member institutions have not ceded controlling authority over intercollegiate sports to the NCAA because constituent colleges and universities retain responsibility for, and control of, their intercollegiate athletics.

However, the constitution also provides that one of the purposes of the NCAA is: “To uphold the principle of institutional control of, and responsibility for, all intercollegiate sports in conformity with the constitution and the bylaws of the Association.” NCAA Const., Art. I, Rule 1.2(b) *122 (emphasis added). The NCAA’s constitution also states: “It is the responsibility of each member institution to control its intercollegiate athletics program in compliance with the rules and regulations of the Association.” NCAA Const., Art. 2, Rule 2.1.1 (emphasis added). These two rules appear to be in tension with Rule 6.01.1 and appear to trump whatever authority member institutions might otherwise have under the NCAA’s constitution to retain control over their intercollegiate athletic programs. Consequently, I believe the plaintiffs here may be correct in their contention that the NCAA’s constitution requires NCAA members to effectively cede authority over their intercollegiate athletic programs to the NCAA. Moreover, plaintiffs’ position is clearly supported by the very precedent that my colleagues rely upon in granting summary judgment to the NCAA.

2. NCAA v. Tarkanian.

The majority relies heavily upon the Supreme Court’s decision in NCAA v. Tarkanian, 488 U.S. 179 , 109 S.Ct. 454 , 102 L.Ed.2d 469 (1988), to support its conclusion that the NCAA is not a controlling authority of the member institutions. However, Tarkanian proves just the opposite. Tarkanian illustrates the extent of absolute control the NCAA has over its member colleges and universities for purposes of our analysis, and the case establishes that the NCAA may well be a controlling authority to the extent that it should be subject to Title VI.

Tarkanian involved a dispute between UNLV and its basketball coach, Jerry Tarkanian. The Supreme Court began its analysis of the issues in that case with “a description of the relationship among the three parties — Tarkanian, UNLV, and the NCAA.” 488 U.S. at 182 , 109 S.Ct. 454 . Tarkanian had been hired as UNLV’s basketball coach in 1973. He “inherited a team with a mediocre 14-14 record.” Id. at 180 , 109 S.Ct. 454 . However, “[flour years [after Tarkanian became coach] the team won 29 out of 32 games and placed third in the championship tournament sponsored by the National Collegiate Athletic Association.” Id 3 In return, the university compensated Tarkanian at a level that reflected both his value to the university, and the university’s appreciation of his having transformed its basketball team into a national powerhouse. He “was initially employed on a year-to-year basis but became a tenured professor in 1977.” Id. at 182 , 109 S.Ct. 454 . As a tenured professor Tarkanian would have received an annual salary of $53,000. However, as head basketball coach his compensation was

$125,000, plus 10% of the net proceeds received by UNLV for participation in NCAA-authorized -championship games, plus fees from basketball camps and clinics, product endorsements, and income realized from writing a newspaper column, speaking on a radio program entitled ‘the jerry tarkanian show,’ and appearing on a television program bearing the same name. That compensation was entirely contingent on [Tarkanian’s] continued status as the Head Basketball Coach at UNLV.

Id. at 182, n. 1 , 109 S.Ct. 454 (internal quotation marks omitted). Despite Tarkanian’s success, and the university’s appreciation of it, in September of 1977, the university informed Tarkanian that he was going to be suspended.

No dissatisfaction with Tarkanian, once described as the winningest active bas *123 ketball coach, motivated his suspension. Rather, the impetus was a report by the NCAA detailing 38 violations of NCAA rules by UNLV personnel, including 10 involving Tarkanian. The NCAA had placed the university’s basketball team on probation for two years and ordered UNLV to show cause why the NCAA should not impose further penalties unless UNLV severed all ties during the probation between its intercollegiate athletic program and Tarkanian.

Id. at 180-81 , 109 S.Ct. 454 (emphasis added). NCAA rules did not allow it to directly sanction Tarkanian for his role in the purported rules violations. Accordingly, the NCAA had “proposed a series of sanctions against UNLV including a 2-year period of probation during which its basketball team could not participate in postseason games or appear on television.” Id. at 186 , 109 S.Ct. 454 . However, the NCAA also required the University “to show cause why additional penalties should not be imposed against UNLV if it failed to discipline Tarkanian by removing him completely from the University’s intercollegiate athletic program during the probation period.” Id. at 187 , 109 S.Ct. 454 .

In response, the president of the University directed the vice president to conduct a hearing to determine what the University should do. “Tarkanian and UNLV were, represented at the hearing; the NCAA was not.” Id. at 186 , 109 S.Ct. 454 . Following that hearing, the vice president of the University “expressed doubt concerning the sufficiency of the evidence supporting the [NCAA’s] findings.” Id. Nevertheless, “he concluded that given the terms of our adherence to the NCAA we cannot substitute — biased as we must be— our own judgment on the credibility of witnesses for that of the infractions committee and the Council [of the NCAA].” Id. at 186-7 , 109 S.Ct. 454 (emphasis added). He advised the University’s president that the NCAA’s ultimatum that the University sever all ties to its intercollegiate athletic program and Tarkanian “or else,” left the University with but three alternatives. The University could

1. Reject the sanction requiring [disas-sociatio n] from Coach Tarkanian from the athletic program and take the risk of still heavier sanctions, e.g., possible extra years of probation.

2. Recognize the University’s delegation to the NCAA of the power to act as ultimate arbiter of these matters, thus reassigning Mr. Tarkanian from his present position — though tenured and without adequate notice — even while believing that the NCAA was wrong.

3. Pull out of the NCAA completely on the grounds that [the University] will not execute what [it] hold[s] to be their unjust judgments.

488 U.S. at 187 , 109 S.Ct. 454 (emphasis added). Faced with an offer it could not refuse, the University “accepted the second option and notified Tarkanian that he was to be ‘completely severed of any and all relations, formal or informal with the University’s Intercollegiate athletic program during the period of the University’s NCAA probation,’ ” Id., just as the NCAA wished. Thereafter Tarkanian filed suit under 42 U.S.C. § 1983 against the UNLV arguing that its actions had deprived him of property and liberty without due process of law. He brought a second civil rights action against the NCAA. The two suits were consolidated on appeal to the Supreme Court. The Court concluded that Tarkanian had no cause of action against the NCAA under § 1983 because the alleged deprivations did not arise from state action as required for liability under § 1983. The Court stated:

it was UNLV, the state entity, that actually suspended Tarkanian. Thus the question is not whether UNLV participated to a critical extent in the NCAA’s activities, but whether UNLV’s actions in compliance with the NCAA rules and recommendations turned the NCAA’s conduct into state action.

Id. at 193, 109 S.Ct. 454 . The Court held that it did not because “the source of the *124 legislation adopted by the NCAA is not Nevada but the collective membership, speaking through an organization that is independent of any particular state.” Id. The Court noted that the NCAA might still be a state actor if “UNLV, by embracing the NCAA’s rules, transformed them into state rules and the NCAA into a state actor.” Id. However, the Court concluded that the nexus between UNLV and the NCAA was not sufficient to cloak the NCAA with the state authority vested in the University.

Contrary to being an agent of the state, the NCAA had acted in opposition to, rather than in compliance with, the wishes of the state agency. “During the several years that the NCAA investigated the alleged violations, the NCAA and UNLV acted more like adversaries than like partners ... ”, Id. at 196 , 109 S.Ct. 454 . Here, the majority concludes that “the Supreme Court’s decision in NCAA v. Tarkanian, is instructive, as that case makes clear that the NCAA does not ‘control’ its members.” Maj. Op. at 111. However, Tarkanian proves the reverse. The issue there was not whether the NCAA controlled its members, but whether a state institution that was a member of the NCAA controlled that organization to the point of transforming the NCAA into a state actor. My colleagues therefore look at Tarkanian through the wrong end of the telescope. We are not focused upon a university’s control of the NCAA. Rather, we must focus upon the NCAA’s control of the colleges and universities that comprise its membership. Tarkanian is compelling support for the plaintiffs’ argument that the NCAA does exercise sufficient control over members’ intercollegiate athletic programs to subject it to Title VI. The fact that UNLV was coerced into accepting the only viable option among the three choices left it by the NCAA’s ultimatum in that case demonstrates just how much control the NCAA has over member institutions’ athletic programs. Although that control may not be as great outside of Division I, the control certainly seems pervasive insofar as those schools that are subject to Proposition 16 are concerned.

Of course, I realize that the Court in Tarkanian recognized that “UNLV could have retained its coach and risked additional sanctions, perhaps even expulsion from the NCAA, or it could have withdrawn voluntarily from the Association,” Id. It should come as no great surprise that it did neither. That is consistent with the Court’s conclusion that the NCAA was not a state actor. However, it is also consistent with, and I think illustrative of, the NCAA’s near total control of its members insofar as the amenities that are tethered to Division I athletic dominance in a “money sport” like college basketball. UNLV knew it had an alternative to suspending Tarkanian. The University clearly did not want to suspend him. The University thought that doing so was unjust and unjustifiable. Yet, Tarkanian was suspended just as the NCAA had commanded. The Supreme Court expressed skepticism over whether those circumstances established the NCAA’s state authority, but the Court clearly entertained the possibility that those circumstances established the NCAA’s control of UNLV’s athletic program.

Tarkanian argues that the power of the NCAA is so great that the UNLV had no practical alternative to compliance with its demands. We are not at all sure this is true, but even if we assume that a private monopolist can impose its will on a state agency by a threatened refusal to deal with it, it does not follow that such a private party is therefore acting under color of state law.

In the final analysis the question is whether the conduct allegedly causing the deprivation of a federal right [can] be fairly attributable to the State. It would be ironic indeed to conclude that the NCAA’s imposition of sanctions against UNLV — sanctions that UNLV and its counsel including the Attorney General of Nevada, steadfastly opposed during protracted adversary proceed *125 ings — is fairly attributable to the State of Nevada. It would be more appropriate to conclude that UNLV has conducted its athletic program under color of the policies adopted by the NCAA, rather than that those policies were developed and enforced under color of Nevada law.

Id. at 199 , 109 S.Ct. 454 . (emphasis added).

Therefore, I believe a fact finder could reasonably conclude that the member institutions have ceded control over their intercollegiate programs to the NCAA, and this could subject the organization to Title VI. However, even if the NCAA is not a controlling authority, I think a reasonable inference could be drawn that the Fund is the alter ego of the NCAA, and therefore the latter is actually a recipient of Federal assistance under Title VI.

B. The NCAA’s Control Over the Fund

It is undisputed that the NCAA created the Fund in an attempt to insulate itself from being considered a recipient of Federal assistance. Frank Marshall, the NCAA’s Group Executive Director for Finance and Business Services and the See-retary/Treasurer of the Fund, testified at his deposition as follows:

Over time the NCAA has wanted to insure that it is not a recipient or a contractor of the federal government and has tried to manage the NYSP program in accordance with that. The NYSP Fund I believe was created to be the grant recipient related to the NYSP grant to help insure that distinction.

App. at 147a.

That motivation is not, by itself, a justification for viewing the NCAA and the Fund as a single entity. However, I think that a genuine question remains as to whether the Fund has an existence separate and apart from the NCAA.

1. Arguments in favor of the Fund as alter ego

Plaintiffs argue the following to support their claim that the Fund has no separate' existence and is, therefore, the alter ego of the NCAA:

• Pursuant to the Funds’ bylaws, the Funds’ Board of Directors is composed solely of high-level NCAA employees and the chair of the NCAA’s NYSP Committee.

• All of the decisions regarding the NYSP Fund’s operations and use of federal funds are made by the NCAA’s NYSP Committee.

• The NCAA’s NYSP Committee has final approval over which colleges and universities may participate in the NYSP as subgrantees and over which schools may continue to participate in the program.

• The NCAA performs all of the NYSP’s administrative services, pursuant to a contract, for annual consideration of one dollar.

• The administrative services include handling the receipt and the disbursement of the federal grant money through a bank account that bears the name, “The National Collegiate Athletic Association — The National Youth Sports Program.”

• Upon dissolution of the Fund, all of the Funds’ assets are to be transferred to the NCAA.

• The Fund does not observe standard corporate formalities. It has no offices, no employees and no letterhead. It has never had a Board of Directors meeting nor has the Fund performed anything other than ministerial functions since its inception.

• In 1993, the NCAA prepared and submitted form guidelines to HHS on the Fund’s behalf, which identified the NCAA and not the Fund as the grantee. The guidelines specified that the NCAA was responsible for the program’s direction and control.

• Four years after the Fund became the named grantee, HHS issued a press *126 release identifying the NCAA as recipient of the annual grant to operate the NYSP.

• In 1994, The Department of Health and Human Service’s Office of Civil Rights investigated allegations that the NCAA engaged in discrimination in violation of Title IX based on HHS’ determination that the NCAA was the recipient of federal funds.

2. Arguments Against Viewing the Fund as an Alter Ego.

The NCAA disagrees. It argues that it successfully created the Fund as a separate entity, and that there was nothing wrong with doing so. In support of its assertion that the Fund is a separate entity the NCAA submits:

• All of the federal funds received by the Fund are sub-granted to third parties, and none have ever been diverted to or for the benefit of the NCAA.

• Since its creation, the NYSP Fund has remained separate and distinct from the NCAA and the Fund’s separate and distinct character is evidenced by the fact that the Fund contracts with third parties for services, maintains its own insurance 4 and Federal Employee Identification Number (“E.I.N.”), and has been sued in its own name. In addition, the Fund’s fiscal year runs from June 1 through May 31, while the NCAA’s fiscal year runs from September 1 through August 31.

• The Fund pays individuals to perform evaluations of the program.

• The NCAA only provides free administrative services to the Fund pursuant to a written contract.

• Although the NYSP Committee was created by the NCAA and although the NYSP Committee makes final determinations with respect to the disposition of funds, the NYSP Committee is not controlled by the NCAA. According to the NCAA, the NYSP Committee has no NCAA employees. Rather, it is composed of representatives from five participating NYSP institutions and three ex-officio members, including two representatives from the federal government.

• In 1989, the Department of Education’s Office of Civil Rights declined to investigate an allegation that Proposition 48 discriminated against students with learning disabilities in violation of § 504 of the Rehabilitation Act of 1973 based on its determination that the NCAA was not a recipient of federal funds.

3. More Than One Inference Can Be Drawn From Undisputed Facts.

Of course, this matter is before us on appeal from the District Court’s grant of summary judgment. The parties did agree at oral argument that there are no genuine issues of disputed material fact. Nevertheless, unlike my colleagues, I do not think that the purported absence of disputed facts necessarily warrants a grant of summary judgment because the undisputed facts allow for more than one interpretation of the relationship of the Fund to the NCAA. Thus, I believe that summary judgment to either party is inappropriate. See Nathanson v. Medical College of Pennsylvania, 926 F.2d 1368, 1380 (3d Cir.1991) (“Summary judgment may not be granted ... if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed.”).

The conflict between Rule 6.01.1, on the one hand, and Rules 1.2(b) and 2.1.1, on the other hand viewed in context with the realities of the importance of NCAA membership to Division I schools places the issue of the NCAA’s control of member institutions into a posture that can only be resolved by a trier of fact. Similarly, is *127 sues remain as to whether the Fund is an alter ego of the NCAA. For example, both parties here rely on the undisputed fact that the NCAA provides administrative services to the Fund for a nominal yearly fee as support for their completely opposite conclusions. Similarly, it is undisputed that the Fund’s Board of Directors is composed of high-level NCAA employees, that the NYSP Committee is a NCAA committee, and that the NYSP Committee makes final determinations with respect to the disposition of the HHS grant. However, it is also undisputed that no NCAA employees are members of the NYSP Committee. Rather, the NYSP Committee is comprised of representatives from five participating NYSP institutions and three ex-officio members, including two representatives from the federal government. I believe that more than one conclusion can reasonably be drawn from the undisputed facts. Consequently, I believe that the matter should be remanded for trial.

III. Limitations Imposed Under The Spending Clause

If the NCAA is found to be a controlling authority of its members, the NCAA may still not be subject to Title VI. As the majority correctly notes, Title VI is Spending Clause legislation. Maj. Op. at 118. Title Vi’s character as a “typical ‘contractual’ spending power provision,” Guardians Ass’n v. Civil Service Comm’n, 463 U.S. 582, 599 , 103 S.Ct. 3221 , 77 L.Ed.2d 866 (1983), raises a crucial question that was not addressed by the District Court. The majority claims that there is “no contractual privity between the Departments of Health and Human Services and Education and the NCAA with respect to Federal financial assistance to NCAA members.” Maj. Op. at 118. However, I do not think we can jump to that conclusion without a proper privity analysis, and the District Court never conducted one. Moreover, if a fact finder concludes that the Fund is merely an alter ego of the NCAA, the privity hurdle may be cleared. 5 Similarly, if member institutions have ceded control of their programs to the NCAA, one could logically conclude that Congress intended to include the NCAA (as the authority actually controlling the programs receiving the Federal assistance) within the contractual obligations required of a grantee under Title VI. 6 I do not think that Congress intended to enter into contractual obligations with colleges and universities in return for giving Federal assistance, and then allow those same institutions to keep the assistance while evading their contractual obligations by turning control of their intercollegiate athletics over to a purported insulated third party.

I agree that Spending Clause jurisprudence dictates that we should be “circumspect in imposing Title VI obligations on an entity which is not a direct recipient of *128 Federal financial assistance.” Maj. Op. at 118. However, that does not preclude our requiring the District Court to undertake a privity analysis after resolution of the competing inferences arising from the undisputed facts to determine whether the NCAA’s own conduct or structure subjects it the restrictions of Title VI. Moreover, if the Fund is merely the alter ego of the NCAA the latter may be the recipient, and we ought not treat the Fund as a separate entity. Accordingly, I conclude that the only appropriate course here is to reverse the District Court’s grant of summary judgment, and remand the matter for trial.

IV. CONCLUSION

For the foregoing reasons, I respectfully dissent from the majority opinion and would, instead, remand for resolution of the competing inferences that can arise from the undisputed facts. Once the inferences are drawn, a proper analysis of the NCAA’s privity of contract under the Spending Clause can proceed.

. This observation is not intended to detract from, or add to, the discussion of the cultural bias that many believe also influences SAT scores.

. Here, there is nothing to demonstrate that practices of the Fund (the direct recipient of Title VI funds) affect the broader practices of the NCAA.

. The importance of the NCAA's Basketball tournament — popularly referred to as “March Madness” — is evidenced by the fact that a major television network recently paid $6 billion for the rights to broadcast the tournament for the next eleven years. See CBS Signs $6 Billion Deal With NCAA, Wall St. J. Nov 19, 1999, at A3 ("To keep the tournament CBS had to withstand strong competition from Walt Disney Co., which wanted the tournament for its ABC and ESPN Networks and News Corp.’s Fox network and its sports cable outlets .... with the internet and new-media rights as part of the deal, some industry observers wondered if CBS didn’t get a bargain.") (emphasis added).

. This assertion is not entirely true. Although the Fund has been the named recipient of federal funds since 1992, the named insured on the insurance policies has not always been the Fund. From June 1, 1992 to June 1, 1994, the named insured was "National Collegiate Athletic Association, d/b/a National Youth Sports Program.” It is only from June 1, 1994, that the named insured has been "National Youth Sports Program Fund.”

. Under the traditional application of the alter ego doctrine, corporate form may be disregarded when the corporation is "the mere instrumentality or business conduit of another corporation or person.” 1 Fletcher Cyclopedia of Private Corp. § 41.10(perm. ed. rev. vol. 1999).

“The effect of applying the alter ego doctrine ... is that the corporation and the person who dominates it are treated as one person, so that any act committed by one is attributed to both, and if either is bound, by contract, judgment or otherwise, both are equally bound....” Dudley v. Smith, 504 F.2d 979, 982 (5th Cir.1974) (citation omitted) (emphasis added). Thus, I believe it is an open question as to whether the program-specific limitation of the regulations can reach the NCAA if the Fund is truly its alter ego and was established solely to provide interference for an end run around Title VI. See Maj. Op. at 116.

. In Paralyzed Veterans of Am, when considering the application of the Spending Clause to the limitations imposed upon recipients of Federal assistance under § 504 of the Rehabilitation Act, the Supreme Court stated: "[b]y limiting coverage to recipients, Congress imposes the obligations of § 504 upon those who are in a position to accept or reject those obligations as a part of the decision whether or not to 'receive' federal funds.” Id. at 606.