Petition — Hufstedler v. Board of Education

- st RD ORNS I

teal

Gu the Suprene Court of the Wuited States

OCTOBER TERM, 1980

SHIRLEY M. HUFSTEDLER, SECRETARY OF THE

DEPARTMENT OF EDUCATION, ET AL., PETITIONERS

Uv.

BOARD OF EDUCATION OF THE Ciry SCHOOL DISTRICT

OF THE CITY OF NEW YORK, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SECOND CIRCUIT

WADE H. MCCREE, JR.

Solicitor General

Drew S. Days, III

Assistant Attorney General

Louis F. CLAIBORNE

Deputy Solicitor General

BARRY SULLIVAN

Assistant to the Solicitor General

BRIAN K. LANDSBERG

JESSICA DUNSAY SILVER

MARIE EVELYN KLIMESZ

Attorneys

Department of Justice

Washington, D.C. 20530

(202) 633-2217

In the Supreme Court of the United States

OCTOBER TERM, 1980

No.

SHIRLEY M. HUFSTEDLER. SECRETARY OF THE

DEPARTMENT OF EDUCATION, ET AL., PETITIONERS *

Vv.

BOARD OF EDUCATION OF THE CITY SCHOOL

DISTRICT OF THE CITY OF NEW YORK, ET AL.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SECOND CIRCUIT

QUESTION PRESENTED

Whether the Emergency School Aid Act of 1972, which

permits the granting of waivers of ineligibility when a ais-

qualifying “practice, policy, or procedure, or other activity

** * has ceased to exist or occur,” precludes grants to

school districts that have not yet eliminated the racial

identifiability of their faculties, but have agreed to do so in

the future.

* Additional petitioners are Herman R. Goldberg, Acting Deputy

Assistant Secretary for the Office of Educational Support, Department

of Education, and Cynthia G. Brown, Assistant Secretary for Civil

Rights, Department of Education. Secretary Hufstedler was substi-

tuted for former Secretary of Health, Education and Welfare Patricia

R. Harris, and Ms. Brown was substituted for David S. Tatel, formerly

Director of the Office for Civil Rights, Department of Health, Educ a-

tion and Welfare.

In addition to the Board of Education of the City School District of

the City of New York, Frank Macchiarola, its chancellor, is a re-

spondent.

I

II

TABLE OF CONTENTS

Page

Opinions below .........eeeeeereeeeccceseeeecees 1

cL. ase Cwaw tk enh ee ce ve saceavees 1

Statute and regulations involved .............+++. 1

to se ee res cde ceases eS seaee tes 3

Reasons for granting the petition ................ 7

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TABLE OF AUTHORITIES

Cases:

Board of Education v. Califano, 584 F.2d 576,

EE ME savcoscetdvuctosvendneus 13

Board of Education of the City School District

of the City of New York v. Harris, 444 U.S.

eee a sewsk ke kendee ne ees 24, 7,3,

9, 13, 14, 16

Caulfield v. Board of Education of the City of

New York, 449 F. Supp. 1203, rev’d, 583

F.2d 605, complaint dismissed, 486 F. Supp.

ne se EGR ECKTO Oa ce S RC SES ORDO RE 5

Ivan Allen Co. v. United States, 422 U.S. 617 15

Kelly v. Guinn, 456 F.2d 100 .............-- 13-14

Kelsey v. Weinberger, 498 F.2d 701..... 8, 12, 14-15

Statutes and regulations:

Department of Education Organization Act,

Pub. L. No. 96-88, Section 301(a)(2), 93

cia ks sabia ge nkS a vhw ed hek oes 3

Education Amendments of 1978, Pub. L. No.

95-561 92 Stat. 2143, 20 U.S.C. 3191 et seq. 2

III

Statutes and regulations— Continued: Page

Emergency School Aid Act of 1972, 20 U.S.C.

1601 et seq.:

Section 706(d)(1), 20 U.S.C. 1605(d)(1) . 1, 4, 5, 8

Section 706(d)(2), 20 U.S.C. 1605(d)(2)...

Section 706(d)(3), 20 U.S.C. 1605(d)(8) ...

Section 706(d)(4), 20 U.S.C. 1605(d)(4)... 11

co

Section 706(d)(6), 20 U.S.C. 1605(d)(6) ... )

Section 706(d)(1)(B), 20 U.S.C.

| MEE Goi donee cckvtkireane jens oe

, Section 706(d)(1)(C), 20 U.S.C.

SEED! cv nda i kavecesktheaueaie kee 4

Section 706(d)(1)(D), 20 U.S.C.

So ayss vb vnades chackenincees 4

BU SEL UPOEED osc cv coentdtavecsecs 12

ie op re ar eee 12

fie 8 ee er rrr re errr re 12

Pie oe SR rere er 12

Re Be 6 rere rE ere 12

Emergency School Assistance Program, Pub.

L. No. 91-380, 84 Stat. 800, 803-804....... 10

45 C.F.R. 181.6(a)(4)(vi) (1971) .............. 10

45 C.F.R. 181,6(a)(4)(vi) (1972) «0... ccc eee 10

a le PET os bbe v ended de is beste eewe 12

IE ini d osc bain Ks i Maite sa 3

eR Rees er ee 12

| Oe ae ie Ng hisk Sees A Cada rreacisacus 4

ke PEC PP UT VOT VET TCT ETT 4,9

BE C.F hy, FO hh enc estvevncncscssees a

ek ee | eer er reer errr re 4

eg Ss) ee er re ee Pee 9

45 C.F.R. 185.44(d)(3) (1973) ......... eee ee 15

Re me eee eee Pere 2

Miscellaneous:

TET Comm: Gee. TG ram CARVE) sce isd csvcccncs 11

38 Fed. Reg. 3463 (Feb. 6, 1973) ............ 15

~ IV

Miscellaneous—Continued: Page

38 Fed. Reg. 18899 (July 12, 1973) ........... 16

38 Fed. Reg. 21646-21647 (Aug. 10, 1973) .... 15-16

Emergency School Aid 1971: Hearings on S.

195, S.683 Before the Subcomm. on Education

of the Senate Comm. on Labor and Public

Welfare, 92d Cong., lst Sess. (1971) ........ 11

H.R. Conf. Rep. No. 95-1758, 95th Cong., 2d

ET BALSA) CORA ee UL Sap dnl 9 14

H.R. Rep. No. 95-1137, 95th Cong., 2d Sess.

DRE ET PCLT OP a eee 14

The Emergency School Assistance Program:

An Evaluation (Nov. 1970) ...........008. 10

The Solicitor General, on behalf of the Secretary of the

Department of Education and other federal parties, peti-

tions for a writ of certiorari to review the judgment of the

United States Court of Appeals for the Second Circuit in

this case.

OPINIONS BELOW

The opinion of the court of appeals (App. A, infra) is

reported at 622 F.2d 599. The order of the court of appeals

on denial of the petition for rehearing (App. C, infra) is

reported at 622 F.2d 619. The opinion of the district court

(App. E, infra) is reported at 464 F. Supp. 1114.

JURISDICTION

The judgment of the court of appeals was entered on

November 19, 1979 (App. B, infra). A timely petition for

rehearing was denied on May 19, 1980 (App. D, infra). On

August 12, 1980, Mr. Justice Marshall extended the time

for filing a petition for a writ of certiorari to and including

October 16, 1980. The jurisdiction of this Court is invoked

under 28 U.S.C. 1254(1).

STATUTE AND REGULATIONS INVOLVED

1. Section 706(d)(1) of the Emergency School Aid Act of

1972, 20 U.S.C. 1605(d)(1), provides in relevant part:

No educational agency shall be eligible for assist-

ance under this chapter if it has, after June 23, 1972—

* * * * *

(B) had in effect any practice, policy, or procedure

which results in the disproportionate demotion or

dismissal of instructional or other personnel from

minority groups in conjunction with desegregation or

the implementation of any plan or the conduct of any

activity described in this section, or otherwise en-

gaged in discrim nation based upon race, color, or na-

tional origin in the hiring, promotion, or assignment

of employees of the agency (or other personnel for

1 In November 1978, Congress technically repealed and reenacted

the Emergency School Aid Act of 1972 (ESAA), with amendments that

1

2

whom the agency has any administrative responsibil-

ity);

* * * * *

except that, in the case of any local educational

agency which is ineligible for assistance by reason of

clause * * * (B) * * *, such agency may make applica-

tion for a waiver of ineligibility, which application

shall specify the reason for its ineligibility, contain

such information and assurances as the Secretary

shall require by regulation in order to insure that any

practice, policy, or procedure, or other activity re-

sulting in the ineligibility has ceased to exist or occur

and include such provisions as are necessary to insure

that such activities do not reoccur after the submis-

sion of the application.

2. The regulations of the Department of Health, Educa-

tion, and Welfare? provide in pertinent part:

45 C.F.R. 185.44(d)(3):

In the case of ineligibility resulting from dis-

criminatory assignment of teachers as prohibited by

§ 185.43(b)(2), such applications for waiver shal! con-

tain evidence that such agency has assigned its full-

time classroom teachers to its schools so that no

school is identified as intended for students of a par-

ticular race, color, or national origin. Such nondis-

criminatory assignments shall, in the case of a local

educational agency implementing a plan described in

§ 185.11(a), conform to the requirements of such plan

with respect to the assignment of faculty. In the case

of local educational agencies not implementing such a

plan, or implementing such a plan which contains no

provision as to assignment of faculty, such assign-

are not relevant here, by enacting the Education Amendments of 1978,

- Pub. L. No. 95-561, 92 Stat. 2143. The 1972 Act was also recodified at

20 U.S.C. 3191 et seg. Because this case was brought before the re-

codification, and the decisions below refer to the Act as previously

codified, we also refer to the sections of the Act as they were codified

prior to November 1978.

2 All relevant administrative actions were taken by the Department

of Health, Education, and Welfare prior to the organization of the De-

partment of Education, to which responsibility for administration of

3

ments shall be made so that the proportion of minor-

ity group full-time classroom teachers at each school

is between 75 per centum and 125 per centum of the

proportion of such minority group teachers which

exists on the faculty as a whole.

45 C.F.R. 185.) 1(a):

Plans pursuant to court or agency order. (1) A local

educational agency may apply for assistance under

this subpart if it is implementing a plan which has

been undertaken pursuant to a final order issued by a

court of the United States, or a court of any State, or

any other State agency or official of competent juris-

diction, and which requires the desegregation of

minority group segregated children or faculty in the

elementary and secondary schools of such agency, or

otherwise requires the elimination or reduction of

minority group isolation in such schools. For purposes

of this subparagraph, a State agency or official of

competent jurisdiction means any State agency or of-

ficial authorized pursuant to State law to issue such

an order.

(2) A local educational agency may apply for assist-

ance under this subpart if it is implementing a plan

which has been approved by the Secretary as

adequate under title VI of the Civil Rights Act of

1964 for the desegregation of minority group segre-

gated children or faculty in the schools of such

agency.

STATEMENT

In Board of Education of the City School District of the

City of New York v. Harris, 444 U.S. 180 (1979), this

Court considered the eligibility of the New York City

Board of Education for a grant under the Emergency

School Aid Act of 1972 for the 1977-1978 school year. The

present case involves a like application for the 1978-1979

ESAA was transferred by Section 301(a)(2) of the Department of Edu-

cation Organization Act, Pub. L. No. 96-88, 93 Stat. 677. Con-

sequently, we will refer both to the Department of Education and to

the Department of Health, Education, and Welfare.

d

school year. The significant difference, however, is that,

while in Harris the question was whether the Board met

the initial statutory eligibility requirements for ESAA

grants, the issue here is whether the Board is entitled to a

waiver that would permit it to receive ESAA funds not-

withstanding its conceded initial ineligibility. See Board of

Education v. Harris, supra, 444 U.S. at 133 n.2.

1. The Board applied for ESAA grants totalling ap-

proximately $2.36 million for the 1978-1979 school year.

On June 20, 1978, the Secretary advised the Board that it

was ineligible for those grants, under 20 U.S.C.

1605(d)(1)(B) and 45 C.F.R. 185.48(b)(2), because of dis-

crimination in the hiring and assignment of teachers and

administrators.* Thereafter, on July 7, 1978, the Board

applied for a waiver of ineligibility. That was, however, a

protective measure, pending the Board’s appeal from a

district court order upholding the Secretary’s determina-

tion of ineligibility for the previous school year. See Board

of Education v. Harris, supra, 444 U.S. at 137. The Sec-

retary denied the Board’s application on September 26,

1978, and the Board instituted this action on the following

day.

Although the district court had upheld the Secretary’s

determination with respect to the Board’s 1977-1978 ap-

plication, the court declined to dismiss this action, which

was based upon the same facts and legal theories. Instead,

the district court took the unusual step of ordering the

Board to amend its complaint to allege that it was entitled

to a waiver of ineligibility under Section 706(d)(1), 20

U.S.C. 1605(d)(1), by virtue of a Memorandum of Under-

standing between HEW and the Board, concerning the lat-

3 The Secretary determined that the school district was ineligible on

two other grounds: (a) the existence of racially identifiable classes

within schools, 20 U.S.C. 1605(d)(1)(C), 45 C.F.R. 185.43(d)(5); and (b)

the imposition of disciplinary sanctions in a discriminatory manner, 20

U.S.C. 1605(d)(1)(D), 45 C.F.R. 185.43(d)(4). HEW subsequently

withdrew its determination as to racially identifiable classes at the

high school level, and the parties entered into a Letter of Agreement

concerning disciplinary sanctions and racially identifiable classes at the

elementary and junior high school levels.

<

5

ter’s compliance with Title VI of the Civil Rights Act of

1964. In the Memorandum of Understanding, which was

signed on September 7, 1977, the Board agreed to rectify

the racial identifiability of its faculties over a three-year

period, ending in September 1980.4 The district court

granted the Board’s motion for a temporary restraining

order on September 27, 1978, and a preliminary injunction

was entered on October 10, 1978.5

The Secretary contended in the district court that the

Board, merely by agreeing to take future action to rectify

the racial identifiability of its faculties, did not thereby be-

come entitled to a waiver because, under the statute, a

waiver may be issued only if the “practice, policy, or pro-

cedure, or other activity resulting in the ineligibility has

ceased to exist or occur” (20 U.S.C. 1605(d)(1)). The dis-

trict court concluded, however, that the Secretary’s in-

terpretation of her statutory power to grant a waiver was

“unduly limited” (App. E, infra, 45a). The court stated

(App. E, infra, 66a):

HEW may, but need not, grant a waiver where a

plan like the New York 1977 Memorandum of Under-

standing has been adopted terminating all active dis-

crimination and beginning prompt elimination of the

results of past discrimination, but where the effects of

past discriminatory teacher assignment [sic] have not

been fully eliminated.

* A group of teachers, principals, community school board officials,

and parent-teachers association officials challenged the validity of the

Memorandum of Understanding in Caulfield v. Board of Education of

the City of New York, 449 F. Supp. 1203 (E.D.N.Y.), rev’d, 583 F.2d

605 (2d Cir. 1978). The district court set aside the agreement on March

15, 1978, and the Board thereafter discontinued its implementation.

Implementation was resumed after the court of appeals reversed the

judgment of the district court. On October 10, 1978, the district court

vacated its prior order setting aside the agreement. The district court

subsequently upheld the agreement following trial (complaint dis-

missed 486 F. Supp. 862 (E.D.N.Y. 1979)), and the Second Circuit af-

firmed, No. 79-6191 (Sept. 22, 1980).

®* The court also set down the case for trial. The parties subsequently

agreed, however, to submit the matter upon the pleadings, the admin-

istrative record, and certain stipulated facts.

°%

6

On cross-motions for summary judgment, the court in-

validated the applicable HEW regulation to the extent

that the regulation conflicted with the court’s construction

of the statute.

2. The court of appeals affirmed by divided vote, con-

struing the statutory language to mean that all that “must

cease to exist or occur in order for an applicant to qualify

for a waiver of ineligibility is its current acceptance of the

status quo” (App. A, infra, 17a). The court reasoned that

(ibid. ):

if the Central Board has adopted a policy of eliminat-

ing discrimination in a manner approved by HEW, as

demonstrated by its commitment to the Memorandum

of Understanding, then “practices,” “procedures” and

“other activities,” undertaken in furtherance of that

policy cannot logically be described as having resulted

in the ineligibility. Simply put, they are not part of

the problem, but part of the cure. The fact that the

Central Board must tolerate segregative teacher as-

signments until the plan is fully implemented does

not, under the language of the statute, preclude it

from participation in ESAA.

The court of appeals found support for its holding in its

understanding of the congressional purpose underlying the

statute. The court rejected the Secretary’s interpretation

of the legislative history, noting that the statute con-

templated the award of grants only to applicants that were

implementing some plan for desegregation or the elimina-

tion of minority group isolation. The court reasoned that

Congress must have intended that school districts which

are initially ineligible for funding under the statute—

because they have engaged in disqualifying discrimination

since June 23, 1972—may qualify for a waiver despite their

failure to eliminate the “effects” of discrimination. In the

court’s view, the existence of such a plan !ogically presup-

poses the continued existence of some effects of prior dis-

crimination (App. A, infra, 22a-23a). Likewise, the court

noted, an applicant which had eliminated the effects of dis-

crimination would be unable to demonstrate its need for a

grant under the competitive criteria of the statute

7

(App. A, infra, 22a). Finally, the court expressed concern

with the inherently subjective nature of a determination

whether the effects of past discrimination have been

eliminated (App. A, infra, 21a).

Judge Oakes dissented, emphasizing that the majority

had misread the Secretary’s regulation, which he found to

be rationally related to the objectives that Congress

sought to achieve when it created the ESAA program

(App. A, infra, 33a-36a). He also noted that the major-

ity’s discussion of the “effects” of past discrimination was

wholly gratuitous in that the present “effects” of past dis-

crimination were not disputed here (App. A, infra, 3la-

32a). The issue presented, according to Judge Oakes, was

whether the Board was entitled to a waiver simply be-

cause it had agreed to discontinue discriminatory assign-

ments in the future, when the governing statute required

that waivers be granted only when the “practice, policy,

or procedure or other activity resulting in the ineligibility

has ceased to exist or occur” and provisions have been

made “to insure that such activities do not reoccur”

(App. A, infra, 33a). In Judge Oakes’ view, the Secretary

had properly denied the Board’s application.

By divided vote, the court of appeals denied the Secre-

tary’s petition for rehearing and suggestion for rehearing

en banc. The court concluded that its decision was not in-

consistent with this Court’s holding in Board of Education

v. Harris, supra, 444 U.S. at 151, that “discriminatory

impact is the standard by which ineligibility under ESAA

is to be measured.” The court further stated (App. C,

infra, 41a; emphasis in original) that its decision “did not

distinguish between intentional and nonintentional dis-

crimination, but rather, between the maintenance of

either form of discrimination and a policy of elimination

of either form of discrimination.”

REASONS FOR GRANTING THE PETITION

In enacting the Emergency School Aid Act of 1972,

Congress committed the federal government to a carefully

8

structured scheme of financial assistance that would en-

courage the elimination of segregation and minority group

isolation in our nation’s elementary and secondary schools.

Since 1972, the ESAA program has proved to be one of the

most effective means to that end. The importance of the

program is amply demonstrated by the appropriation of

approximately $270 million for 1980-1981 school year

grants to school districts meeting the eligibility require-

ments set forth in the statute. In our view, the court of

appeals has substantially blunted the instrument that

Congress precisely fashioned to forward its goals in this

vital area. Moreover, the decision below conflicts in prin-

ciple with the decision of the District of Columbia Circuit

in Kelsey v. Weinberger, 498 F.2d 701 (1974), and the De-

partment of Education’s administration of the program

will be severely hampered unless this Court resolves that

conflict.

1. For present purposes, it is undisputed that the New

York City Board of Education does not satisfy the initial

eligibility standards of the Emergency School Aid Act be-

cause, after mid-1972, it continued to “engage[ ] in dis-

crimination based upon race * * * in the hiring, promotion,

or assignment of employees * * *.’’ 20 U.S.C.

1605(d)(1)(B). That obstacle is no different with respect to

the 1978-1979 school year than it was for the previous

year, at issue in Board of Education v. Harris, 444 U.S.

130 (1979). But, now as then, the hurdle can be overcome

if the Board qualifies for a “waiver” under the statute. /d.

at 133 n.2. ihe issue here is whether the Secretary rightly

denied such a waiver on the ground that the Board had not

yet eliminated a system of racially identifiable schools

based on faculty assignments.

Congress has carefully prescribed the grounds and con-

ditions upon which waivers of ineligibility may be granted.

An applicant must first provide “such information and as-

surances as the Secretary shall require by regulation in

order to insure that any practice, policy, or procedure, or

other activity resulting in the ineligibility has ceased to

exist or occur.” 20 U.S.C. 1605(d)(1). Moreover, waivers

may be granted only by the Secretary, whose authority

9

may not be delegated (20 U.S.C. 1605(d)(2)), and the Sec-

retary may grant a waiver only “upon determination that

any practice, policy, procedure or other activity resulting

in ineligibility has ceased to exist, and that the applicant

has given satisfactory assurance that the activities pro-

hibited in [section 1605(d)(1)] will not reoccur” (20 U.S.C.

1605(d)(3)). The Secretary’s determination must be made

in writing, and he must notify the appropriate committees

of the House and Senate before granting a waiver (20

U.S.C. 1605(d)(6)). When ineligibility is based on racial

identifiability of the school district’s faculties (20 U.S.C.

1605(d)(1)(B); 45 C.F.R. 185.48(b)(2)), the Secretary’s

regulations provide that the applicant must provide evi-

dence that it “has assigned its full-time classroom teachers

to its schools so that no school is identified as intended for

students of a particular race, color, or national origin” (45

C.F.R. 185.44(d)(8)).®

The question presented is straightforward: what must

“cease[ | to exist or occur” before the Secretary may issue

a waiver of ineligibility. The court of appeals determined

that all that “must cease to exist or occur in order for an

applicant to qualify for a waiver of ineligibility is its cur-

rent acceptance of the status quo” (App. A, infra, 17a).

We submit that that holding is inconsistent with the over-

all scheme and purpose of the statute, the legislative his-

tory, and this Court’s reasoning in Board of Education v.

Harris, supra, all of which support the Secretary’s view

that actual assignments of faculty must be altered in a way

that completely eliminates racial identifiability before a

waiver may be granted.

6 The regulation further provides that:

{such] nondiscriminatory assignments shall, in the case of a local

educational agency implementing a plan described in § 185.11(a),

conform to the requirements of such plan with respect to the as-

signment of faculty. In the case of local educational agencies not

implementing such a plan, or implementing such a plan which

contains no provision as to assignment of faculty, such assign-

ments shall be made so that the proportion of minority group

full-time classroom teachers at each school is between 75 per cen-

tum and 125 per centum of the proportion of such minority group

teachers which exists on the faculty as a whole.

10

a. Although the ESAA statute was not enacted until

1972, Congress first created a temporary program with

similar purposes, which was enacted as part of an appro-

priation measure on August 18, 1970. That act, the Emer-

gency School Assistance Program (“ESAP”), Pub. L.

No. 91-380, 84 Stat. 800, 803-804, provided immediate

financial assistance to desegregating school districts dur-

ing the two years that Congress was debating various

proposals for a more permanent and comprehensive pro-

gram. HEW was charged with the administration of ESAP

and promulgated implementing regulations. Among other

things, HEW’s initial regulations required that school dis-

tricts provide assurances “[t)hat [they] will take effective

action to ensure the assignment of staff members who

work directly with children at a school so that the ratio of

minority to nonminority group teachers in each school, and

the ratio of other staff in each, are substantially the same

as each such ratio is to the teachers and other staff, re-

spectively, in the entire school system” (45 C.F.R. 181.6

(a)(4)(vi)(1971)). The regulations relating to the 1971-1972

ESAP grant program likewise required an assurance

“(t]hat the local educational agency has assigned its full-

time classroom teachers for the 1971-72 academic year so

that the ratio of minority to non-minority group classroom

teachers in each school is substantially the same as the

ratio that exists in the faculty of the system as a whole”

(45 C.F.R. 181.6(a)(4)(vi) (1972)).

During the legislative process preceding the enactment

of ESAA, Congress received substantial evidence of non-

compliance by ESAP grant recipients with the non-

discrimination requirements established by the regula-

tions.” In addition, the Staff Director of the United States

7 Both the General Accounting Office and a coalition of public inter-

est groups issued detailed reports on the ESAP program. The coali-

tion’s report, The Emergency School Assistance Program: An Evalu-

ation (Nov. 1970) stated (at 2-3):

Large numbers of grants have gone to districts engaging in seri-

ous and widespread racial discrimination. Of the 295 ESAP-

assisted districts which we visited, 179 were engaged in practices

that rendered them ineligible for grants under the statute and

11

Commission on Civil Rights testified in Senate hearings,

where he criticized the “meaninglessness of paper assur-

ances” of compliance and emphasized the need for a pre-

grant mechanism for insuring that the applicant is not in-

eligible. Emergency School Aid 1971: Hearings on S.195,

S.683 Before the Subcomm. on Education of the Senate

Comm. on Labor and Public Welfare, 92d Cong., 1st Sess.

431-432 (1971) (testimony of Hc-vard A. Glickstein, Staff

Director, United States Commission on Civil Rights).

In enacting ESAA, Congress therefore sought to in-

clude safeguards to assure that the deficiencies and abuses

in the administration of ESAP would not reoccur. 117

Cong. Rec. 10758 (1971) (remarks of Senator Mondale).

The most important of these safeguards was the addition

of Section 165(d), which established specific eligibility re-

quirements and barred the Secretary from approving any

application for assistance without first determining that

the applicant was “not ineligible for reason of” its failure

to meet those requirements. 20 U.S.C. 1605(d)(4). As part

of the eligibility requirements contained in Section

1605(d), Congress specifically provided that the Secretary

could not grant a waiver unless the factor causing ineligi-

bility had ceased to exist or occur. Good intentions and

bald assurances concerning future conduct were no longer

to be deemed sufficient. Henceforth, applicants would be

required to supply evidence that they had actually cor-

rected the disqualifying condition.

The court of appeals noted that “to require that a waiver

candidate have already remedied ‘the effects of past dis-

crimination], which is the objective uf the integration plan

[it] is required to be presently effectuating, is contradic-

the Regulations. In 87 others, we found sufficient evidence to

consider the districts’ eligibility questionable. In only 29—less

than 10 percent —did we find no evidence of illegal practices.

Specifically, we found:

* * a * *

—62 clear and 4 questionable cases in which faculties and staff

had not been desegregated in accordance with applicable re-

quirements [.]

12

tory and does not comport with the statutory scheme con-

sidered as a whole” (App. A, infra, 23a). If the purpose of

the statute were to assist local officials in shouldering the

costs of the physicai process of desegregation, the court’s

observation would be well-taken. In fact, however, the

ESAA grant program was established not to finance con-

stitutionally required desegregation, but to assist local of-

ficials in meeting “the special needs incident to the elimi-

nation of minority group segregation and discrimination”

(20 U.S.C. 1601(b)(1)). Grants are awarded not to sub-

sidize the immediate costs of desegregation, but to assist

local schools in maintaining sound educational programs in

newly desegregated schools. Grants are authorized under

the statute, therefore, for programs such as curriculum

development, inservice teacher training, counseling, re-

medial services, bilingual education and educational tele-

vision. See 20 U.S.C. 1606, 1607, 1610. In Kelsey v.

Weinberger, supra, 498 F.2d at 711 (footnote omitted), the

District of Columbia Circuit clearly stated the distinction

overlooked by the courts below:

[T]he Act makes moneys available, not for the basic

desegregation activities themselves, but for auxiliary

programs designed to enhance the success of the de-

segregation effort and ameliorate the inroads of past

educational segregation. We find no provision in the

Act licensing expenditures simply for the purpose of

reassigning teachers * * *.

Under the Secretary’s regulations, grant applicants

compete with one another on the basis of “points,” which

measure the relative need of the applicants, as indicated

by the number and percentage of their minority group en-

rollments, and the proposed projects’ “effective net reduc-

tion in minority group isolation (in terms of the number

and percentage of children affected)” (45 C.F.R.

185.14(a)(2)). Significantly, the key statutory concept of

minority group isolation is defined in terms of student en-

rollments; the racial profile o1 faculty assignments is not

relevant. See 20 U.S.C. 1619(10); 45 C.F.R. 185.02(g).

Thus, a school district that had eliminated all racially iden-

tifiable school faculties would not be disadvantaged in the

13

ranking process; it would compete for a grant based upon

the extent to which its plan proposed to reduce minority

student isolation. Indeed, several component school dis-

tricts within the decentralized New York City system re-

ceived waivers and grants for the 1977-1978 school year,

after they had eliminated the racial identifiability of their

faculties. See Board of Education v. Califano, 584 F.2d

576, 585-586 n.32 (2d Cir. 1978), aff'd, 444 U.S. 130 (1979).

That fact illustrates the faulty premises upon which the

judgment of the court of appeals is based.

b. While the Secretary’s interpretation of the waiver

provision was not at issue in Board of Education v. Har-

ris, supra, the Court’s general analysis of the statute

there supports the Secretary’s interpretation. In Harris,

the Court noted that Congress intended that the ESAA

program should aid in the elimination of both de jure and

de facto segregation, and therefore held that the existence

of racially identifiable faculties should preclude assistance

under the program, regardless of whether that condition

resulted from purposeful discrimination. The Court stated

that “it would make no sense to allow a grant to a school

district that, although not violating the Constitution, was

maintaining a de facto segregated system” (444 U.S. at

142; emphasis in original). Likewise, we submit that it

would be exceedingly formalistic to declare that a school

district is ineligible because it maintains de facto segre-

gated faculties, but then to grant a waiver permitting the

award of a grant during the continued maintenance of such

segregation. If, as this Court has held, the existence of

segregation is the dispositive factor under ESAA, the dis-

qualifying discrimination cannot “cease to exist or occur”

until the condition—racially identifiable faculty assign-

ments—ceases to exist or occur. That New York may have

adopted a policy of eliminating such assignments for the

future is therefore immaterial because the “practice * * *

resulting in the ineligibility” has not ceased to exist.®

*The insufficiency of promised future compliance is particularly ob-

vious when ineligibility stems from racially identifiable faculty assign-

ments. As the Ninth Circuit correctly observed in Kelly v. Guinn, 456

14

The legislative history of the 1978 ESAA reenactment,

which the Court found relevant in Board of Education v.

Harris, supra, 444 U.S. at 148-149, also supports the Sec-

retary’s construction. During the legislative process, Con-

gress considered and rejected a proposal to amend the

statute so as to overrule the Secretary’s construction on

this point. As this Court noted, “(t]he House version in-

cluded a waiver-of-ineligibility provision to respond to

complaints [related to HEW’s] application of the regula-

tion to Los Angeles and New York City” (ibid.). The

House Committee report stated (H.R. Rep. No. 95-1137,

95th Cong., 2d Sess. 95-96 (1978)):

In an attempt to deal with [the problem of denial of

waivers for failure to fully integrate faculty], the

Committee bill adopts an amendment making clear

that school districts which are undertaking efforts to

integrate their faculty but which have not yet fully

achieved that goal may nonetheless obtain a waiver of

ineligibility. Presently, the Department of Health,

Education and Welfare is interpreting the law as re-

quiring school districts to complete faculty integra-

tion before they can apply for funds. The purpose of

this amendment is to assist those school districts

while they are trying to achieve that goal.

The House provision was deleted by the Conference Com-

mittee (H.R. Conf. Rep. No. 95-1753, 95th Cong., 2d

Sess. 286 (1978)), and the waiver provision remained un-

changed, which “strongly suggests that Congress ac-

quiesced in HEW’s interpretation of the statute” (Board

of Education v. Harris, supra, 444 U.S. at 149). What

Congress declined to do, the court of appeals has done.

2. While we concede that the facts of this case are

somewhat distinguishable® from those in Kelsey v. Wein-

F.2d 100, 107 (1972), “teacher assignment is * * * subject to the com-

plete control of school authorities, unfettered by such extrinsic factors

as neighborhood residential composition or transportation problems

*** ' Moreover, the record here is devoid of any suggestion that

teacher reassignments involve any financial expenditure.

*The court below distinguished the two cases on the ground that

here HEW had, for purposes of Title VI of the Civil Rights Act of

15

berger, 498 F.2d 701 (D.C. Cir. 1974), the two decisions

clearly present a “conflict in principle” on a narrow, but

important, question of federal law that should be resolved

by this Court. See Jvan Allen Co. v. United States, 422

U.S. 617, 623-624 (1975).

In Kelsey, parents of public school children in several

cities challenged an amendment to the waiver regulation

that the Secretary had promulgated in August 1973, appli-

cable to 1973-1974 school year ESAA grants. Under the

amendment, school districts that were ineligible for assist-

ance because of racially identifiable faculties were given a

maximum of two additional years (until the beginning of

the 1975-1976 school year) to desegregate their facul-

ties.!° The Secretary’s action was based upon his view that

1964, accepted the school district’s plan to eliminate racially identifi-

able faculties over a three-year period, ending September 1980,

whereas the school districts in Kelsey planned “to remedy the practice

only through a gradual and virtually open-ended process of attrition”

(App. A, infra, 23a n.11). The court’s distinction is not entirely sound,

however, because the portion of the regulation that was invalidated in

Kelsey required school districts to eliminate all racial identifiability of

faculties not later than the beginning of the 1975-1976 school year,

which actually provided those school districts with two years in which

to eliminate racial identifiability, rather than the three years provided

for in the Title VI plan here (see 45 C.F.R. 185.44(d) (3) (iv) (1973),

quoted infra, note 10, page 15). While it is true that Kelsey did not

involve a plan that HEW had formally accepted for purposes of Title

VI compliance, there would appear, for present purposes, no practical

or legal difference between such a plan and one accepted in exchange

for a waiver under ESAA.

1°Prior to the 1973 amendment, the regulation was virtually identical

to that which currently exists. See 38 Fed. Reg. 3463 (Feb. 6, 1973).

The third sentence of the regulation was amended to require, in the

case of school districts not implementing a court ordered plan or a Title

VlI-approved plan (88 Fed. Reg. 21646-21647 (Aug. 10, 1973); 45

C.F.R. 185.44(d) (3) (1973)):

(i) Adoption by such agency of a policy of nondiscriminatory as-

signment of faculty and staf” members;

(ii) Determination of all facvity and staff assignments made after

the date of application for waiver in a manner which does not

contribute to or reinforce the racial or ethnic identifiability of any

school operated by such agency;

16

he could, consistent with the statute, grant “a longer

period in which to complete corrective action” to school

districts which “had demonstrated a commitment to the

elimination of discrimination in faculty assignment,” but

ifatebeen “unable to alter the faculty assignment patterns

within the existing time constraints.” 38 Fed. Reg. 18899

(July 12, 1978).

The Kelsey court found possible constitutional questions

raised by the Secretary’s construction (498 F.2d at 709-

710), and it held that waivers may not be granted until all

racial identifiability of faculties has been eliminated. Al-

though the court’s constitutional fears may now appear in-

substantial where ineligibility is based upon the effect of a

school district’s practice rather than its intent,1! we sub-

mit that the Kelsey court’s construction is nonetheless

more consistent with the purpose of the ESAA program

than is the construction adopted by the court below. At all

events, the courts’ differing views as to what the statute

requires before a waiver can be granted has created un-

certainty in the administration of the statute. If tle Secre-

tary receives a waiver application from a school district

that agrees to alter its assignment policy for the future,

(iii) Adoption of a plan to eliminate all fulltime teaching faculties

composed exclusively of members of a single racial or ethnic

group no later than the end of the period for which assistance is

to be awarded; and

(iv) Adoption of a plan for assignment of faculty and staff mem-

bers which will eliminate all racially or ethnically identifiable

faculties at schools operated by such agency within a reasonable

period of time but in no event later than the commencement of

the 1975-76 academic year. * * *

‘1The court based its holding in part upon the premise that constitu-

tional problems might result from the government’s grant of ESAA

funds to school districts that had not fully corrected the condition re-

sulting in ineligibility. The court assumed that the school districts’ in-

eligibility was necessarily based upon continuing constitutional viola-

tions (id. at 706 n.31), and that the federal government must not par-

ticipate in such violations. The judgment in Kelsey was rendered prior

to this Court’s decision in Board of Education v. Harris, supra, in

which the Court held that ineligibility under ESAA may be based upon

something less than a constitutional violation.

17

but proposes to remedy past assignments on a phased

basis, the Secretary will be placed in a position where her

decision will violate either the holding in Kelsey or the

decision below. The proper enforcement of the statute,

which is essential to this nation’s commitment to equal

educational opportunity, requires this Court’s resolution

of the question presented.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

OCTOBER 1980

WADE H. MCCREE, JR.

Solicitor General

Drew S. Days, III

Assistant Attorney General

LouISs F. CLAIBORNE

Deputy Solicitor General

BARRY SULLIVAN

Assistant to the Solicitor General

BRIAN K. LANDSBERG

JESSICA DUNSAY SILVER

MARIE EVELYN KLIMESZ

Attorneys

APPENDIX A

In the Wnited States Court of Appeals

for the Second Circuit

No. 79-6006

AUGUST TERM, 1978

No. 1079

(Argued June 5, 1979

Decided November 19, 1979)

Docket No. 79-6006

BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF

THE CITY OF NEW YORK AND FRANK MACCHIAROLA,

CHANCELLOR OF THE CITY SCHOOL DISTRICT OF THE

C1ITy OF NEW YORK, PLAINTIFFS/APPELLEES,

v.

PATRICIA R. HARRIS, SECRETARY, UNITED STATES DE-

PARTMENT OF HEALTH, EDUCATION AND WELFARE,

HERMAN R. GOLDBERG, ASSOCIATE COMMISSIONER,

EQUAL EDUCATION OPPORTUNITY PROGRAMS, UNITED

STATES DEPARTMENT OF HEALTH, EDUCATION AND

WELFARE, AND DAVID S. TATEL, OFFICE FOR CIVIL

RIGHTS, UNITED STATES DEPARTMENT OF HEALTH,

EDUCATION AND WELFARE, DEFENDANTS/ APPELLANTS.

Before: OAKES and MESKILL, Circuit Judges, and

STEWART, District Judge.*

*Honorable Charles E. Stewart, Jr., United States District Judge

for the Southern District of New York, sitting by designation.

la

2a

Appeal from an order entered in the United States Dis-

trict Court for the Eastern District of New York (Wein-

stein, District Judge) remanding for appellants’ further

administrative review appellees’ application for a waiver

of ineligibility under the Emergency School Appropria-

tions Act, 20 U.S.C. § 1605(d)(1).

Affirmed.

RICHARD P. CARO, Assistant United

States Attorney, Eastern District of

New York, Brooklyn, New York (Ed-

ward R. Korman, United States Attor-

ney, Harvey M. Stone, Assistant United

States Attorney, Eastern District of

New York, Brooklyn, New York, Lois

Hochhauser, Department of Health,

Education and Welfare, Washing-

ton, D.C., of counsel), for Defendants-

Appellants.

JOSEPH F. BRUNO, Office of the Corpo-

ration Counsel, New York, New York

(Allen G. Schwartz, Corporation Counsel

for the City of New York, Gregg M.

Mashberg, Ellen B. Fishman, Office of

the Corporation Counsel, New York,

New York, of counsel), for Plaintiffs-

Appellees.

MESKILL, Circuit Judge:

Three officials of the Department of Health, Education

and Welfare (collectively “HEW,” the “agency,” or “ap-

pellant”) including the Secretary’ appeal from an order of

1At the time this case was argued, Joseph A. Califano, Jr. was the

Secretary of the Department of Health, Education and Welfare. Prior

to the filing of this opinion, however, he had been replaced by Patricia

Harris, who has been substituted us an appellant herein pursuant to

Rule 43(c)(1), Fed. R. App. P.

3a

the United States District Court for the Eastern District

of New York remanding for further administrative review

the application of the Board of Education of the City

School District of the City of New York (the “Central

Board”) for a waiver of ineligibility under the Emergency

School Aid Act, 20 U.S.C. §§ 1601, et seq. ,? and enjoining

the appellant from expending funds originally designated

for appellees’ benefit pending such reconsideration. Pre-

viously, the Central Board had been denied funding under

the program on the ground that the Central Board’s as-

signment of black teachers to predominently black high

schools disqualified it from receiving such benefits, see 20

U.S.C. § 1605(d)(1)(B). An application for a waiver of in-

eligibility was summarily denied on the ground that the

agency lacked discretion to grant such relief in situations

where although the segregative assignment policy had

been repudiated, its “effects” still lingered. In reviewing

the agency’s action, the district judge found that HEW

had been entirely too modest in its view of its prerogatives

under the waiver provisions of the Act and ordered the

matter remanded for administrative reconsideration of the

merits of the Central Board’s application. Board of Edu-

cation of the City School District of the City of New York

v. Califano, 464 F.Supp. 1114 (E.D.N.Y. 1979) (“Califano

II”). We affirm.

I,

BACKGROUND

The instant appeal poses a very circumscribed issue. In

substance, we are called upon to decide whether HEW’s

2The version of the Emergency School Aid Act (“ESAA”) governing

this case was repealed, effective September 30, 1979, through passage

of the Education Amendments Act of 1978, Pub. L. 95-561, Title VI,

92 Stat. 2252, et. seg. ESAA has been substantially re-enacted there-

under, with some modifications not relevant to the matters presented

on this appeal, and has been codified at 20 U.S.C. §§3191-3207. Section

1605(d) of the old act, which is at issue herein, corresponds to newly

adopted section 3196(c).

7%

4a

summary rejection of the Central Board’s waiver applica-

tion on the ground that the “effects” of the now-repudiated

discriminatory practice had not. yet been entirely abated

was proper under the program’s statutes and regulations.

Before formulating a response, it is necessary to place this

appeal in its proper setting which, owing to the volume of

litigation which has preceeded it, is panoramic.

a. The ESAA Waiver Provision and Its Implementing

Regulation.

Recognizing that the cost of desegregating public school

systems or of maintaining adequate educational standards

in those schools which had achieved integration was be-

yond the means of many local boards, Congress in 1972,

after considerable debate, passed Title VII of the Educa-

tion Amendments of 1972, the Emergency School Aid Act

(““ESAA”), Pub. L. 92-318, Title VII, §§ 701-820, 86 Stat.

354 (1972), 20 U.S.C. §§ 1601, et seg. The announced pur-

poses of the legislation are “(1) to meet the special needs

incident to the elimination of minority group segregation

. . . (2) to encourage voluntary elimination . . . of minority

group isolation . . . and (3) to aid school children in over-

coming the educational disadvantages of minority group

isolation.” 20 U.S.C. § 1601(b). This Court has previously

characterized ESAA as “a program purposefully designed

to ‘aid in desegregating schools and support quality inte-

grated schools.’” Board of Education of the City School

District of the City of New York v. Califano, 584 F.2d

576, 578 (2d Cir. 1978), cert. granted, 47 U.S.L.W. 3554

(U.S. Feb. 21, 1979) (“Califano I’).

of New York v. Califano, 584 F.2d 576, 578 n.3 (2d Cir. 1978), cert.

granted, 47 U.S.L.W. 3554 (U.S. Feb. 21, 1979) (“Califano I"), quoting

Conf. Rep. No. 798, 92d Cong., 2d Sess. (1972): “The House amend-

ment stated the purpose of the title as providing financial assistance to

meet the special needs incident to desegration [sic] and to encourage

voluntary integration.... The conference substitute retains the

House provision. .. .” And see, H. Rep. No. 92-576 at 4, 92d Cong.,

Ist Sess. (1971) (“Most school districts, however, are pressed to meet

ordinary expenses. They are in no position to incur the added expense

5a

Funding under ESAA is available on a competitive

basis. Applicants must submit timely proposals which are

reviewed and ranked by the Assistant Secretary in ac-

cordance with the criteria set forth in agency regulations,

45 C.F.R. § 185.14, the most important of which is “the

effective net reduction in minority group isolation.” /d.

§ 185.14(a)(2)(i). See also Califano I, supra, 584 F.2d at

579 n.4. A local board whose proposal is deemed meritori-

ous must be in the active process of desegregation,

whether by mandatory court order, HEW-approved plan

or voluntarily adopted procedure, 20 U.S.C. § 1605(a),

and in addition, must demonstrate that subsequent to the

date of ESAA’s passage, June 23, 1972, it has not engaged

in any of the acts, practices, policies or procedures pro-

scribed under 20 U.S.C. § 1605(d)(1). Specifically included

as a category of disqualifying conduct is discrimination in

the “hiring, promotion, or assignment of employees . . .”

Id. § 1605(d)(1)(B). See generally Swann v. Charlotte-

Mecklenburg Board of Education, 402 U.S. 1 (1971). This

statutory prohibition is amplified in the regulation prom-

ulgated thereunder, 45 C.F.R. § 185.43(b)(2), which pro-

vides in pertinent part:

No educational agency shall be eligible for assistance

under the Act if, after June 23, 1972, it has had or

maintained in effect any other practice, policy, or

procedure which results in discrimination . . . includ-

ing the assignment of full-time classroom teachers to

the schools of such agency in such a manner as to

identify any of such schools as intended for students

of a particular race, color, or national origin.

Even though an applicant has been disqualified from the

program by virtue of the commission of proscribed activity

of achieving successful integration.”); 118 Cong. Rec. 18438-9, 92d

Cong., 2d Sess. (1972) (remarks of Sen. Pell). To similar effect were

the remarks of Senator Javits, describing the mission of the bill as pro-

viding federal funding to offset the “added costs of special programs

and staff required for effective desegregation and for meaningful ef-

forts to reduce, eliminate or prevent the isolation of minority group

children” and “to bring about better quality education,” 116 Cong. Rec.

44410, 91st Cong., 2d Sess. (1970).

6a

postdating June 23, 1972, it may nonetheless receive

ESAA funds if it can obtain a waiver of ineligibility under

20 U.S.C. § 1605(d)(1). That provision requires the appli-

cant to specify the reason for its exclusion from the pro-

gram, and set forth such assurances as the Secretary may

require to demonstrate that the disqualifying “practice,

policy, procedure or other activity . . . has ceased to exist

or occur,” and that such activities will not reoccur after

submission of the application. Although the legislative his-

tory is scant, Section 1605(d)(1) appears to have been

adopted as a safeguard against the channeling of ESAA

funds to any school district whose desegregation plan was

a sham or was in danger of being abandoned or flouted.

See Califano I1, supra, 464 F.Supp. at 1121 and legislative

history cited therein. In aid of this purpose the statute

further provides that the Secretary may not delegate the

duty of determining the adequacy of waiver applications,

20 U.S.C. § 1605(d)(2), that such applications must con-

form to the regulations promulgated thereunder, 20

U.S.C. § 1605(d)(5), that relevant committees in both

houses of Congress shall be notified of the Secretary’s

favorable review of such applications, and that final ap-

provals thereof will not formally be granted until 15 days

after Congress receives this notification, 20 U.S.C.

§ 1605(d)(6).

With regard to the waiver of ineligibility stemming from

discrimination in teacher assignments, the regulations

provide, 45 C.F.R. § 185.44(d)(3):

applications for waiver shall contain evidence that

such agency has assigned its full-time classroom

teachers to its schools so that no school is identified as

intended for students of a particular race, color, or

national origin.

b. The Central Board’s Attempts to Obtain ESAA

Funding.

In November, 1976, HEW’s Office of Civil Rights

notified the Central Board that its employment practices

were in violation of laws barring discrimination in feder-

ally funded programs, 42 U.S.C. § 2000d and 20 U.S.C.

Ta

§ 1681, in that the agency’s statistical data indicated that a

pattern existed whereby teachers of minority group back-

grounds were consistently assigned to schools whose stu-

dent populations were predominently of similar racial or

ethnic origin.4 When the Central Board applied for a

1977-78 ESAA grant, HEW, although finding one pro-

posal worthy of funding, denied the appropriation since its

figures demonstrated that some schools were identifiable

on the basis of segregative teacher assignments. The Cen-

tral Board attributed the pattern to (1) provisions of the

collective bargaining agreement between the Central

Board and the teachers’ union restricting the inter-school

transfer of some teachers; (2) the preference of senior

teachers for assignment to nonminority schools, together

with their unwillingness to teach elsewhere; and (3) the

unequal distribution of teaching licenses in specific areas.

In the ensuing litigation, this Court held that ESAA funds

could be properly withheld upon a simple showing that the

assignment method had a disparate impact upon different

groups, despite the absence of proof that the discrimina-

tory deployment was willful or intentional—which would

be required to support a finding that the Central Board’s

teacher assignment practices violated the Constitution.

Califano I, supra.

On September 7, 1977, the Central Board and HEW en-

tered into a detailed plan, entitled the “Memorandum of

4Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d) pro-

vides that: “No person in the United States shall, on the ground of

race, color, or national origin, be excluded from participation in, be

denied the benefits of, or be subjected to discrimination under any

program or activity receiving Federal financial assistance.” Title IX of

the Education Amendments of 1972 similarly prohibits discrimination

in federally assisted programs on the basis of sex..20 U.S.C. § 1681.

Only the racially discriminatory system of teacher assignments is

currently before this Court. As to this violation, HEW’s November,

1976, letter stated that “The New York City school system . . . has, on

the basis of race and national origin . . . assigned teachers, assistant

principals and principals in a manner that has created, confirmed and

reinforced the racial and/or ethnic identifiability of the system’s

schools... .”

8a

Understanding,” see Caulfield v. Board of Education of

the City of New York, 449 F.Supp. 1208, 1227 (E.D.N.Y.)

(“Caulfield I”), rev’d, 583 F.2d 605, 607 n.2 (24 Cir. 1978),

aimed inter alia at rectifying the objectionable mode of

teacher assignments. Pursuant to this agreement, the

Central Board undertook to phase out the practice over a

three year period, in exchange for which, HEW’s Office of

Civil Rights warranted that the Central Board would be in

compliance with Title VI of the Civil Rights Act of 1964,

42 U.S.C. § 2000d, et seq., and Title 1X of the Education

Amendments of 1972, 20 U.S.C. §§ 1681-86.

Implementation of the plan was hampered from the out-

set by individual teachers and principals and their unions.

It appears that while teacher and principal assignments

are, as a technical matter, made on an annual basis, cer-

tain collective bargaining agreements guarantee personnel

with some degree of seniority placement in the schools

where they have previously served. Claiming that the

Memorandum of Understanding mandated the assignment

of teachers to particular schools solely on the basis of race,

several teachers and principals commenced legal action.

On March 15, 1978, the district court, while not reaching

plaintiffs’ substantive claim, nonetheless found an abuse of

plaintiffs’ procedural due process rights to participate in

the negotiations which had led up to the drafting of the

desegregation plan, and vacated the Memorandum of Un-

derstanding, thereby halting its implementation, Caul-

field I, supra. Approximately six weeks thereafter, the

Central Board informed HEW that it would, for the pres-

ent, be unable to fulfill its objective of correcting the prior

pattern of discriminatory teacher assignments. For this

reason, the Central Board’s request for ESAA funding for

1978-79 was denied on June 20, 1978. An application for a

waiver of ineligibility, which has become the subject of

this appeal, was filed on July 7, 1978.

On September 5, 1978, this Court reversed Caulfield J,

supra, reinstating the Memorandum of Understanding,

and permitting the Central Board to renew immediately

9a

its corrective measures.® Despite the revival of the de-

segregation plan, HEW on September 26, 1978, informed

the Central Board that its waiver application had been de-

nied for the reason that the agency lacked evidence that

the prior mode of teacher assignment had ceased and

would not reoccur.

c. The Proceedings Below.

Claiming that the summary rejection of its waiver appli-

cation was an abuse of discretion, and seeking to enjoin

the expenditure of $2.36 million in ESAA grants ear-

marked for it for the 1978-79 school year, the Central

Board once again sought the intervention of the district

court. A temporary restraining order, issued on Sep-

tember 27, 1978, was converted into a preliminary injunc-

tion on October 10 of that year. An expedited trial on the

merits was scheduled for November 8 but both parties de-

clined the opportunity to present oral testimony, prefer-

ring to submit the matter upon the pleadings, the adminis-

trative record and certain stipulated facts.

HEW took the stance that although no further impedi-

ment to the full implementation of the Memorandum of

Understanding existed, it had properly denied the waiver

application because both the statute, 20 U.S.C.

§ 1605(d)(1), and its implementing regulation, 45 C.F.R.

§ 185.44(d)(3), require that the waiver applicant alleviate

both the cause and the remaining “effects” of prior dis-

criminatory teacher assignments in order to qualify for

ESAA funds. The district court upheld the agency’s de-

termination that the Central Board was ineligible for di-

rect ESAA funding by virtue of discriminatory behavior

postdating June 23, 1972. However, the court rejected

HEW’s contention that its option to grant a waiver was

foreclosed because, in the agency’s view, the waiver stat-

ute and relevant regulation require not only that the ap-

5Other claims advanced by the Caulfield plaintiffs were recently

rejected by the district court in Caulfield v. New York City Board of

Education, 77-C-2155 (E.D.N.Y. August 27, 1979) (Weinstein, J.)

10a

plicant have desisted from the proscribed activity, but

also, in the case of segregative teacher assignments, that

the applicant have fully eliminated the effects of the prior

misconduct. After a canvass of the legislative history and

a close analysis of congressional purpose, Judge Weinstein

found that such was not the intent of the waiver statute.

While he agreed that the regulation demanded that the

waiver applicant cure both the cause and effect of past ac-

tions, he found the provision invalid as contrary to the

legislation’s objectives. Accordingly, he remanded the

waiver application to the agency for reassessment on its

merits, clearly indicating that evidence of the Central

Board’s backsliding, bad faith, or simple failure to imple-

ment the teacher assignment reforms on schedule could be

considered as bearing upon the likelihood that the dis-

criminatory practice might reoccur, and explicitly leaving

the ultimate resolution of the application to the sound dis-

cretion of the Secretary. Califano II, supra, 464 F.Supp.

at 1127. This appeal followed.

IT,

JURISDICTION AND THE PROPRIETY OF ITS

EXERCISE

a. Waiver of Objection and Primary Agency Jurisdic-

tion.

As a preliminary matter, we must determine whether

the district court properly entertained this action. Appel-

lants claim that by failing to advocate the position while

the matter was still under administrative study, the Cen-

tral Board “waived” its right to challenge, under the

theory ultimately adopted by the court below, HEW’s de-

nial of their waiver application.

It is true that as a general rule subject only to certain

narrowly drawn exceptions, courts will not review objec-

tions to an agency’s procedures not raised at the adminis-

trative level, United States v. L. A. Tucker Truck Lines,

Inc., 344 U.S. 33, 37 (1952); NLRB v. Newton-New Haven

Co., 506 F.2d 1035, 1038 (2d Cir. 1974); KFC National

lla

Management Corp. v. NLRB, 497 F.2d 298,. 300 n.1 (2d

Cir. 1974), cert. denied, 423 U.S. 1087 (1976). However,

the theory that the implementation of the Memorandum of

Understanding absolved the Central Board of its current

discriminatory teacher assignments could not have been

raised prior to September 5, 1978, the date on which this

Court resurrected the plan, by which time the waiver of

ineligibility application had already been pending before

HEW for two months. Moreover, there is some evidence

to suggest that the agency did in fact weigh the prospect

of the Memorandum’s revival before finally denying the

application. In its letter of September 28, 1978, formally

notifying the Central Board of its action, HEW indicated

that its unfavorable action might in some degree be attrib-

uted to its belief that the desegregation plan, even if im-

plemented, was insufficient compliance with the nondis-

crimination requirements of the ESAA program. Thus, it

seems that the theory was not in fact “waived” in any

meaningful sense.

Apart from the factual infirmities of the contention, the

notion of “waiver of objection” is inappropriate to the cir-

cumstances of this case. That concept is applicable where a

petitioner before an agency belatedly seeks to challenge a

procedure employed by the administrative tribunal, e,

e.g., KFC National Management Corp. v. NLRB, supra;

NLRB v. Newton-New Haven Co., supra (Court of Ap-

peals refuses to allow unsuccessful petitioner to challenge,

for the first time, the composition of the agency’s review-

ing panel). What is involved here, however, is not an ob-

jection to the manner in which the agency has proceeded,

or a claim which has been unjustifiably withheld from its

review, but a question of the interpretation of the statute

which regulates the appellees’ access to the administrative

review process itself. The essential issue is not one of

waiver of objection or deliberate by-pass of a claim or

theory before the agency tribunal. The essential issue is

whether the courts or HEW should be given the first op-

portunity to construe the statute. Thus the controversy

actually centers on whether, under the doctrine of primary

b 12a

agency jurisdiction, the district court should have stayed

its hand in deference to HEW.®

Primary agency jurisdiction is a flexible concept, con-

cerned with “promoting proper relationships between the

courts and administrative agencies charged with particular

regulatory duties,” Nader v. Allegheny Airlines, Inc.,

426 U.S. 290, 303 (1976), quoting United States v. West-

ern Pacific R. Co., 352 U.S. 59, 63 (1956). It is called into

play when a court, having unquestioned jurisdiction over a

case involving matters governed by an administrative

agency, determines which tribunal should make the initial

adjudication, United States v. Philadelphia National

Bank, 374 U.S. 321, 358 (1963) (Court’s jurisdiction not

ousted, but only postponed). The exercise of the court’s

discretion is guided in this situation by a desire for uni-

formity of regulation and the need for initial consideration

by a body possessing special expertise in the issue pre-

sented. U.S. Tour Operators Ass’n v. Trans World Air-

lines, Inc., 556 F.2d 126, 180 (2d Cir. 1977); Danna v. Air

France, 463 F.2d 407, 412 (2d Cir. 1972).

Although we do not in any sense disparage this salutary

doctrine, its underlying policies would not be served by its

application in the instant case. Both parties, perceiving

the issue presented as a purely legal one, abjured the dis-

trict judge’s invitation to present oral testimony and sub-

mitted the matter upon a stipulated set of facts and upon

their respective briefs. It is well established that the

courts need not defer to an agency where the issue in-™

volved is a strictly legal one, involving neither the

agency’s particular expertise nor its fact findings prowess.

FTC v. Feldman, 532 F.2d 1092, 1096 (7th Cir. 1976); ef.

McKart v. United States, 395 U.S. 185, 198 (1969).

Moreover, it has been recognized that where resort to

the agency would plainly be unavailing in light of its man-

ifest opposition or because it has already evinced its “spe-

®For the same reason, the related notion of exhaustion of adminis-

trative remedies is not appropriate to these circumstances. See Touche

Ross & Co. v. SEC, slip op. 2561, 2567-74 (2d Cir. May 10, 1979); ef.

McKart v. United States, 395 U.S. 185, 193 (1969).

13a

cial competence” in a manner hostile to petitioner, courts

need not bow to the primary jurisdiction of the administra-

tive body. See, e.g., ICC v. Maine Central R. Co., 505

F.2d 590, 594 (2d Cir. 1974); CAB v. Aeromatic Travel

Corp., 489 F.2d 251, 254 (2d Cir. 1974); see also Porter

County Chapter of the Izaak Walton League of America,

Inc. v. Costle, 571 F.2d 359, 363-64 (7th Cir. 1978), cert.

denied, 47 U.S.L.W. 3222 (U.S. Oct. 2, 1978). Such is the

ease here, for at no time prior to appeal has HEW given

the slightest inkling that, if asked to review the waiver

application in light of the reinstatement of the Memoran-

dum of Understanding, it would consider the matter

afresh. On the contrary, without itself having raised the

issue of “waiver of objection” below, HEW fully briefed

and hotly contested the issue on appeal. Elsewhere in the

brief it submitted to this Court HEW has challenged the

“mpropriety of the district court’s issuance of injunctive re-

lief on the ground that there was no likelihood that the

Central Board would persuade HEW to alter its determi-

nation to deny the waiver of ineligibility. It ill behooves

appellant under these circumstances and at this stage of

the proceedings to claim that the court below erred in ad-

judicating the merits of the case.

b. “Effects” and Estoppet.

Having determined that the district court properly

exercised jurisdiction over this matter, we are neverthe-

less reluctant to adjudicate on the merits the contested

questions of statutory interpretation. Our apprehension

stems from an uneasy sense that the principal issue

framed by the facts of this case has been artfully avoided.

This issue is whether HEW, having induced and ac-

quiesced in the Memorandum of Understanding, may now

assert that its effectuation constitutes insufficient com-

pliance with federal non-discrimination requirements to

permit the Central Board to participate in the ESAA pro-

gram.

HEW urges that 20 U.S.C. § 1605(d)(1) requires con-

vincing proof that a waiver applicant has alleviated the

14a

“effects” of its prior conduct. Yet nowhere in its briefs or

argument has HEW defined the term “effects.” Upon

examination the term appears to refer simply to the con-

tinued discriminatory deployment of teachers, specifically

contemplated by the Memorandum of Understanding as a

temporary but necessary stage in the gradual phase-out of

improper methods of teacher assignment. Thus, when all

is said and done, HEW’s view is quite simply that not-

withstanding its approval of the Memorandum of Under-

standing, its warranty that the adoption and effectuation

of the agreement would constitute compliance with Title

VI of the Civil Rights Act of 1964, and Title IX of the

Education Amendments of 1972, and the Central Board’s

partial performance thereof, the Central Board is not enti-

tled to a waiver of ineligibility during the interim period.

While the estoppel issue looms shadowlike over these

proceedings, we choose to rest our decision upon other

grounds for several reasons. First, although the historic

barriers to the imposition of an estoppel against the

United States, see United States v. San Francisco, 310

U.S. 16, 32 (1940), quoting Utah Power & Light Co. v.

United States, 243 U.S. 389, 409 (1917); United States v.

Socony-Vacuum Oil Co., 310 U.S. 150, 226-27 (1940),

have recently been breached in at least one jurisdiction,

see, e.g., United States v. Lazy FC Franch, 481 F.2d 985

(9th Cir. 1973); Brandt v. Hickel, 427 F.2d 53 (9th Cir.

1970), the law in this Circuit is unsettled, compare

Corniel-Rodriguez v. INS, 582 F.2d 301, 306-7 (2d Cir.

1976) (government estopped in deportation proceeding due

to its employee’s noncompliance with affirmatively re-

quired duty) with Goldberg v. Weinberger, 546 F.2d 477,

480-81 (2d Cir. 1976), cert. denied, 431 U.S. 937 (1977)

(estoppel will not lie against government due to unau-

thorized misrepresentation made by agency employee).

See also REA Express, Inc. v. United States, 568 F.2d

940, 948-49 n.10 (2d Cir. 1977), cert. denied, 46 U.S.L.W.

3586 (U.S. Mar. 20, 1978) (“highly dubious” that govern-

ment agency can be equitably estopped). Second, the par-

ties have not addressed this issue, and on the basis of the

record before us we are unable to determine with cer-

15a

tainty that the requisite elements of an estoppel have been

satisfied.?7 Lastly, we are in accord with the result reached

by the court below. Therefore, rather than striking out on

this inviting though uncharted course, we proceed to the

merits of the case as articulated by the parties.

III.

INTERPRETATION OF THE ESAA WAIVER PROVISION

Putting these reservations to one side and proceeding on

the assumption that appellant may complain of the Central

Board’s system of teacher assignments during the three

year phase-in period, or alternatively, that there continue

to exist unspecified, detrimental “effects” of the prior

practice, we must next consider the validity of HEW’s

contention that such failings disqualify the Central Board

from obtaining a waiver of ineligibility under 20 U.S.C.

§ 1605(d)(1).

a. Statutory Text.

“(T]he starting point in every case involving construc-

tion of a statute is the language itself.” Greyhound Corp.

v. Mt. Hood Stages, Inc., 487 U.S. 322, 330 (1978), quot-

ing Blue Chips Stamps v. Manor Drug Stores, 421 U.S.

7 An estoppel in this circumstance would require a misrepresentation

by an agent of the federal government made within the scope of his

authority, which was justifiably relied upon by the appellee to its de-

triment thereby making the denial of equitable relief unconscionable,

see generally New York Athletic Supply Co., Inc. v. United States,

450 F. Supp. 469, 471 (S.D.N.Y. 1978); Tonkonogy v. United States,

417 F. Supp. 78, 79 (S.D.N.Y. 1976).

We cannot say with complete certainty that the expressed quid pro

quo for implementing the agreement was the Central Board’s im-

mediate acceptance into the ESAA program, although such was the

apparent expectation. Moreover, we would not eagerly hold that the

Central Board suffered a detriment by reforming a practice which, al-

though not necessarily unconstitutional, was sufficiently improper as to

disqualify it from federal assistance under the Civil Rights Act of 1964,

42 U.S.C. § 2000d.

l6a

723, 756 (1975) (Powell, /., concurring). Section 1605(d)(1)

in pertinent part provides:

in the case of any local educational agency which is

ineligible for assistance by reason of [the commission

of certain discriminatory acts], such agency may make

application for a waiver of ineligibility, which applica-

tion shall specify the reason for its ineligibility, con-

tain such information and assurances as the Secretary

shall require by regulation in order to insure that any

practice, policy, or procedure, or other activity re-

sulting in the ineligibility has ceased to exist or occur

and include such provisions as are necessary to insure

that such activities do not reoccur after the submis-

sion of the application.

Appellant interprets this language to require that a

waiver applicant not only demonstrate that it has desisted

from its discriminatory activity, but also show that it has

fully eradicated the vestiges of its past misconduct. HEW

reasons that if the effects are still present, the cause must

be extant, and if the cause is still operative, the applicant

is perforce in violation of the statute’s ban on current seg-

regative activity.

However, the statute clearly states that what must

cease to exist or occur is the practice, policy, procedure or

other activity which has resulted in the applicant’s ineligi-

bility. There is simply no indication in the text that the

residue of past misconduct must also be eliminated, al-

though Congress could certainly have made that an ex-

press condition, had such been its intent. “[W]hen words

are free from doubt they must be taken as the final ex-

pression of the legislative intent, and are not to be added

to or subtracted from by considerations drawn ... from

any extraneous source.” Caminetti v. United States, 242

U.S. 470, 490 (1917); see also Tennessee Valley Authority

v. Hill, 487 U.S. 158, 173 n.18 (1978); New York State

Commission on Cable Television v. FCC, 571 F.2d 95, 100

(2d Cir.), cert. denied, 47 U.S.L.W. 3221 (U.S. Oct. 2,

1978) (Friendly, J., dissenting) (‘‘we have not quite

reached the Humpty Dumpty era where a word ‘means

just what I choose it to mean, neither more nor less.’”’)

17a

Moreover, the listing of the operative words, “policy,”

“practice,” “procedure” and “other activity,” may provide

some insight into Congress’ intent. While the latter three

are ambiguous the term “policy” connotes conscious, in-

stitutional decision-making, or adoption of a future goal

and the intention to achieve it through deliberate steps. It

is opposed to mere drift or acquiescence in the present

state of affairs. This meaning reflects upon the other

terms, for words grouped together derive meaning from

one another, Jarecki v. G.D. Searle & Co., 367 U.S. 308,

307 (1961). What must cease to exist or occur in order for

an applicant to qualify for a waiver of ineligibility is its

current acceptance of the status quo. It would seem

therefore, that if the Central Board has adopted a policy of

eliminating discrimination in a manner approved by HEW,

as demonstrated by its commitment to the Memorandum

of Understanding, then “practices,” “procedures” and

“other activities,” undertaken in furtherance of that policy

cannot logically be described as having resulted in the in-

eligibility. Simply put, they are not part of the problem,

but part of the cure. The fact that the Central Board must

tolerate segregative teacher assignments until the plan is

fully implemented does not, under the language of the

statute, preclude it from participation in ESAA. There is

nothing in the statute’s language which supports a con-

trary reading. Where the literal meaning of the statute is

clear in its context, and where such a plain reading is not

inconsistent with the scheme’s objectives, that interpreta-

tion must prevail, and further inquiry may be unneces-

sary. Ex Parte Collett, 337 U.S. 55, 61 (1949); In re

Trans-Alaska Pipeline Rate Cases, 436 U.S. 631, 643

(1978), quoting CIR v. Brown, 380 U.S. 563, 571 (1965);

Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201 (1976).

Although this alone would be sufficient ground on which to

reject appellant’s construction there are other reasons

supporting the same result.

b. Legislative History.

Two other courts have reviewed the legislative history

of 20 U.S.C. § 1605(d)(1), and their research has yielded

18a

no clues as to Congress’ views on the question now before

us, see Kelsey v. Weinberger, 498 F.2d 701, 707, 708 (D.C.

Cir. 1974); Califano I], supra, 464 F. Supp. at 1121-22.

From what is available, it can be deduced only that Con-

gress wished to ensure that ESAA grants not be distrib-

uted to school districts which had reverted to or continued

to engage in proscribed segregative activity, and that this

resolve was embodied in section 1605(d)’s explicit re-

quirements that waiver candidates (1) demonstrably have

ceased their disqualifying activity, (2) provide acceptable

assurances that such conduct will not reoccur, and (3) have

their applications reviewed at the highest administrative

level and, if acted upon favorably, subjected to congres-

sional oversight. We have scanned the legislative history ®

relevant to the waiver statute and have found nothing to

indicate that its drafters intended to establish additional

safeguards such as the remedy of the effects of past mal-

feasance.

To support its contrary interpretation, HEW cites cer-

tain circumstances surrounding ESAA’s enactment. In

particular, it is noted that the operation of a forerunner

program to ESAA® was marred by its distribution of funds

to school districts later found to have been engaging in

discriminatory practices. Noting that Congress’ ire had

been aroused by this failing, see, e.g., 117 Cong. Ree.

10759, 92nd Cong., Ist Sess. (1971) (remarks of Sen. Mon-

dale), appellant argues that ESAA’s drafters intended to

place an additional burden on those who, in disregard of

the law, discriminated after the date of ESAA’s enact-

ment. HEW asserts that Congress meant for these defiant

applicants to be banned from the program unless they did

®See 117 Cong. Rec. 511-12, 92d Cong., 1st Sess. (1971) (remarks of

Rep. Bell); Hearings on H.R. 17846 before the General Subcommittee

on Education of the House Committee on Education and Labor, p. 570,

Yist Cong., 2d Sess. (1970); Hearings on S. 3883 before the Subcom-

mittee on Education of the Senate Committee on Labor and Public

Welfare, pp. 94-97, 91st Cong., 2d Sess. (1970).

®The Emergency School Assistance Program, Pub. L. 91-380, 84

Stat. 800 (1970).

19a

an additional penance, namely, the eradication of the ef-

fects of their recent misconduct.

This scenario seems improbable, for several reasons.

First, it is unsubstantiated by the legislative history. The

passages cited by appellant simply do not evince an intent

on the part of the Congress to be especially punitive to-

wards post-enactment discriminators. While the state-

ments alluded to by HEW convey Congress’ concern over

the wrongful appropriation of funds to school districts

which had either resumed discriminatory activities or

which hae never departed from them, they do not indicate

that in order to solve the problem, Congress meant to bar

from waiver eligibility those applicants who had not eradi-

cated the effects of this recent malfeasance. Rather, the

approach seems to have been to add the administrative

and congressional safeguards noted above.

Second, we agree with the court below that HEW’s in-

terpretation is belied by the prominence it gives to June

23, 1972—the date of the Act’s passage—in determining

the widely different requirements which candidates must

satisfy in order to obtain ESAA funds. Under appellant’s

construction, this date serves as a River Acheron,

separating those who by virtue of post-1972 discrimination

are almost certainly condemned to perpetual rejection,

and those who may enjoy ESAA’s benefits because they

cease their disqualifying conduct prior to that fateful day.

Yet for all the significance HEW attaches to the precise

time of the Act’s passage, that date was in reality entirely

fortuitous. Had Congress truly intended to warn school

districts that segregative practices beyond a certain date

would result in virtually incurable ineligibility for ESAA

benefits, they would have set that date for some time in

the future, giving school boards time in which to reform

themselves. As Judge Weinstein aptly noted:

No one could have predicted that date as a cut off of

the power to grant a waiver. Had the date been fixed

some years prospectively, the argument might make

some sense since Congress might have set it as a

warning that corrective action must be taken before

that date or funds under ESAA would be forever

20a

barred. But no school board could have responded to

the Act by shutting off discriminatory acts on less

than 24 hours notice; institutions cannot be turned on

and off by the flick of a switch.

Califano II, supra, 464 F. Supp. at 1121.

c. Legislative Objectives.

Indisputably, today’s choice between conflicting statut-

ory interpretations will have broad consequences for the

administration of an important federal program. Mindful

that our function is to construe, not rewrite legislation,

United Steelworkers of America v. Weber, 47 U.S.L.W.

4851, 4859 (U.S. June 27, 1979) (Rehnquist, J., dissent-

ing), we seek to discover Congress’ intent and to decide

which of the two proferred interpretations is most likely to

further the announced objectives of the legislation. We

conclude that the Central Board’s understanding will more

probably fulfill the goals of ESAA.

Congress clearly intended that school districts which

had discriminated after June 23, 1972, not be irrevocably

barred from participation in the ESAA program. Other-

wise, the list of eligible applicants, as a practical matter,

would have been forever frozen on the date of ESAA’s

enactment. School districts which had truly ceased seg-

regative activity that had been practiced subsequent to

the program’s passage would have been permanently de-

nied federal funding despite their good intentions and de-

spite their potential benefit. Indeed, thus interpreted, the

program would fail to provide any incentive to integrate in

the case of school districts found to have been engaged in

proscribed segregative activity after 1972.

Additionally, the drafters might have recognized that

the concept of discrimination itself is constantly undergo-

ing revision. If such was their perception, it has been vali-

dated. Some parties considered by a lower court to be dis-

criminators have later been exonerated by the Supreme

Court. See, e.g., Village of Arlington Heights v. Met-

ropolitan Housing Development Corp., 429 U.S. 252

(1977); Washington v. Davis, 426 U.S. 229 (1976). Con-

2la

versely, some who might have been considered within the

law as it stood on the date of ESAA’s passage have now

been deemed violators. Cf. Regents of the University of

California v. Bakke, 46 U.S.L.W. 4896 (U.S. June 28,

1978). The evolving contours of the concept of discrimina-

tion plainly warranted the adoption in the ESAA program

of a provision giving its administrators the flexibility to

deal with these developments.

Were we to read into the statute the requirement that a

waiver applicant eradicate the “effects” of prior segrega-

tion, we would render that necessary section, in operation,

a nullity. First, the notion of “effects” is simply too elusive

and subjective; in a real sense, a complete cure may not be

possible, for the consequences of past segregation may be

viewed by the agency as lingering for a generation, or

longer. Cf. Debra P. v. Turlington, 78-892—Civ-T-C

(M.D. Fla. July 12, 1979) (functional literacy test, made

prerequisite to granting of high school diploma enjoined

for four year period since many black students had at-

tended segregated schools and were therefore disadvan-

taged). No school district, however genuine its reforming

zeal, could be certain that it had satisfied that condition,

and the Secretary might find such a determination far

more difficult than predicting whether an applicant was

apt to revert to prior prohibited practices or policies. Sec-

ond, HEW’s interpretation does not indicate whether the

effects which must be eradicated are only those which flow

from the proscribed post-1972 activity, or all effects from

whatever cause. If appellants opt for the former, such an

interpretation would kindle irresolvable debate over which

effect to attribute to which activity; if the latter, it may

place at a severe disadvantage those school districts with a

long history of de jure segregation, contrary to ESAA’s

insistence on a single national standard for the distribution

of these federal funds. 20 U.S.C. § 1602.1°

10Section 1602(b) of 20 U.S.C. provides:

It is the policy of the United States that guidelines and criteria

established pursuant to title VI of the Civil Rights Act of 1964

and section 182 of the Elementary and Secondary Education

22a

More importantly, an applicant who could satisfy that

burden would thereby dramatically demonstrate its lack of

need for an ESAA grant under the program’s own com-

petitive criteria. As previously noted, in judging which of

the numerous proposals are the most meritorious, the key

factor, to put it succinctly, is desegregation per dollar: the

rating system puts a premium on those plans which will

achieve the most “effective net reduction in minority

group isolation,” 45 C.F.R. § 185.14. An applicant which

has ceased its active segregation and has alleviated the

effects of its prior misconduct could not, under these

guidelines, hope to be awarded an ESAA grant, since the

net effective reduction would be zero.

Realistically, HEW’s contention would abolish the

waiver provision from the program. An applicant ineligible

for participation by virtue of discriminatory activity an-

tecedent to 1972 could only obtain ESAA funding through

a waiver of ineligibility; such a waiver would be granted

only if the applicant had already been so successful in

ameliorating minority group isolation that it could no

longer competitively qualify for ESAA benefits. We would

not attribute such an absurd intention to the drafters of

ESAA. See Bird v. United States, 187 U.S. 118, 224

(1902); Platt v. Union Pacific R.R. Co., 99 U.S. 48, 58

(1878); United States v. Blasius, 397 F.2d 203, 207 n.9 (2d

Cir. 1968).

Finally, we think that HEW’s understanding of the re-

quirements of the waiver statute is in conflict with other

significant features of the legislation, specifically the

qualification that local boards seeking ESAA funding be

currently undergoing desegregation pursuant to either a

mandatory or voluntary plan. 20 U.S.C. § 1605(a)(1). The

existence of such a plan, which is a condition of eligibility

for waiver applicants as well as others, surely implies that

Amendments of 1966 shall be applied uniformly in all regions of

the United States in dealing with conditions of segregation by

race whether de jure or de facto in the schools of the local educa-

tional agencies of any State without regard to the origin or cause

of such segregation.

23a

the effects of prior discrimination or minority group isola-

tion still persist. Thus, to require that a waiver candidate

have already remedied these effects, which is the objec-

tive of the integration plan is required to be presently ef-

fectuating, is contradictory and does not comport with the

statutory scheme considered as a whole. United States v.

Menasche, 348 U.S. 528, 5388-39 (1955); McDonald v.

Thompson, 305 U.S. 263, 266 (1938).

Thus, the language of the statute, its legislative history,

and its internal logic lead us to conclude that section

1605(d)(1) does not demand, as a prerequisite, that a

waiver applicant have previously eradicated the effects of

prior discrimination. !!

IV.

THE IMPLEMENTING REGULATION

Alternatively, appellants argue that wholly apart from

the dictates of the statute, the pertinent regulation prom-

ulgated thereunder, 45 C.F.R. § 185.44(d)(3), sets forth a

legal duty on the part of waiver applicants to rectify the

effects of prior discrmination in teacher assignments.

11The result reached today is not necessarily incompatible with the

holding in Kelsey v. Weinberger, 498 F.2d 701 (D.C. Cir. 1974). There,

the predecessor regulation to the current 45 C.F.R. § 185.44(d)(3) was

held to be invalid insofar as it permitted a waiver to be granted to

school districts which had suffered from racially motivated teacher as-

signments, and which warranted to remedy the practice only through a

gradual and virtually open-ended process of attrition. Fearing that this

offended constitutional prohibitions against the federal funding of dis-

criminatory activities, the Court deemed the regulation to be contrary

to the statute.

In our view, the requirement in the present regulation that the

waiver candidate be proceeding in accordance with an HEW-approved

plan which will achieve its goal in .. reasonable period of time is suffi-

cient to allay the concerns, both statutory and constitutional, ex-

pressed by the court in Kelsey, supra. To the extent that the cases are

not distinguishable on their facts, we are in substantial agreement with

the position taken by Judge Weinstein in declining to adopt the con-

stitutional analysis of the District of Columbia Circuit Court. Califano

II, supra, 464 F. Supp. at 1125-26. °

24a

HEW contends that the regulation is “legislative” rather

than merely interpretive, and as such, is binding upon the

courts. It is presumed that the provision must be read in

the manner suggested by the appellant. We disagree on all

points.

Recent opinions of the Supreme Court, see, e.g.,

Chrysler Corp. v. Brown, 47 U.S.L.W. 4434, 4440-44

(U.S. April 18, 1979); Batterton v. Francis, 432 U.S. 416,

424-26 (1977); General Electric Co. v. Gilbert, 429 U.S.

125, 140-45 (1976), and the enactment of Section 4 of The

Administrative Procedure Act, 5 U.S.C. § 553, have rein-

forced the distinction first enunciated in Skidmore v.

Swift & Co., 323 U.S. 184 (1944), between legislative and

interpretive regulations. The former are issued pursuant

to a lawful, express delegation of authority from Congress

to the administrative agency to formulate rules having the

force or effect of law. As the primary source of legal obli-

gation, they are entitled “to more than mere deference or

weight,” Batterton v. Francis, supra, 432 U.S. at 426;

they are subject to judicial revision only if they are prom-

ulgated in excess of the granted power or in contravention

of proper procedure, or are utterly capricious and arbi-

trary. Interpretative rules are administrative regulations

issued pursuant to a lesser degree of delegated authority,

and in such cases the statute remains the basis for the im-

position of liability. The deference which interpretive reg-

ulations are accorded depends on such factors as the cir-

cumstances of their promulgation, the consistency with

which the agency has adhered to the position announced,

the evident consideration which has gone into its formula-

tion and the nature of the agency’s expertise. Batterton v.

Francis, supra, 432 U.S. at 425 n.9; Skidmore v. Swift &

Co., supra, 323 U.S. at 140.

Thus, legislative rules are reviewed only in terms of

validity, while interpretive rules are considered in the

more expansive light of their reasonableness, or their ra-

tional relationship to their statute’s objective. The divid-

ing line is found in the nature of the delegation: always,

the question is whether Congress intended to confer upon

the agency the power to issue rules having the force and

25a

effect of law. See, e.g., National Nutritional Foods As-

sociation v. Weinberger, 512 F.2d 688, 696-97 (2d Cir.),

cert. denied, 423 U.S. 827 (1975); see also Joseph v. In-

terstates Civil Service Commission, 554 F.2d 1140,

1152-54 (D.C. Cir. 1977).

The grant of rulemaking authority involved herein is set

forth in 20 U.S.C. § 1605(d)(1), which empowers the Sec-

retary to require in the waiver application such informa-

tion as may be deemed necessary to the decision, and in

section 1605(d)(5) which provides:

All determinations pursuant to this subsection shall

be carried out in accordance with criteria and inves-

tigative procedures established by regulations of the

Secretary for the purpose of compliance with this

subsection.

This delegation of authority is hardly of the same order as

that found in Batterton v. Francis, supra (definition of

“unemployed” in 42 U.S.C. § 607(a) to be determined “in

accordance with standards prescribed by the Secretary”).

The grant here is simply a procedural assurance that deci-

sions will be made on the basis of standards publicly elabo-

rated by the Secretary: it does not expressly indicate that

those standards themselves shall have the force and effect

of law.

Furthermore, the regulation in issue lacks the hallmarks

of a legislative rule. Applicants do not assert that it was

promulgated in compliance with 5 U.S.C. § 553, requiring

notice and opportunity for written comments. Also, HE W

has never before asserted that the regulation is of the

legislative variety, and the District of Columbia Circuit, in

its review of a forerunner provision, proceeded on the im-

plicit assumption, apparently without the agency’s objec-

tion, that it was an interpretive rule only. Kelsey v.

Weinberger, supra.

Having reached this conclusion, we need say little more

about 45 C.F.R. § 185.44(d)(3). Insofar as it has been in-

terpreted to require a waiver applicant to prove that the

effects of past discriminatory teacher assignments have

been remedied, it is invalid as not being rationally related

26a

to the objectives of the ESAA program. Moreover, to the

extent that its administrative construction reflects upon

Congress’ intent, it tends to discredit appellant’s position,

since the Secretary previously understood a predecessor

provision not to require the eradication of discriminatory

effects, and the present regulation and its interpretation

have only recently been adopted,' see Califano II, supra,

464 F. Supp. at 1122-24.

In light of the foregoing conclusion, we need not reach

the question of whether HEW’s interpretation of the reg-

ulation is requiring immediate and complete remedy of the

effects of past misconduct is correct. Although an adminis-

trative agency’s construction of its own regulation is nor-

mally binding upon a reviewing court, United States v.

Larionoff, 431 U.S. 864, 872 (1977), quoting Bowles v.

Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945), we

note that the interpretation espoused by the Secretary is

12The district court has aptly set forth the chronology as follows:

The original text of the regulation was identical to its present

language... . On July 16, 1973, the Secretary of HEW in a

notice of proposed rulemaking announced a modification of the

regulation to permit waivers of ineligibility for school districts

which had not yet fully rectified the effects of the past dis-

criminatory practices in teacher assignments. 39 Fed. Reg. 18894

(1973)

Responding to criticism that the modified regulation conflicted

with the statutory standards, the Secretary cogently argued that

section 1605 (d)(1) did not require as a condition for granting a

waiver the elimination of all effects of past discriminatory prac-

tices. He pointed out that the elimination of the actice practice

and the adoption of a plan to eliminate the effects satisfied the

statutory standard... .

The present language of the regulation—conflicting with the

Secretary’s interpretation—was adopted by HEW only after the

Court of Appeals for the District of Columbia, in Kelsey v.

Weinberger, [498] F. 2d 701 (1974), held the then existing regula-

tion invalid.

Califano II, supra, 464 F. Supp. at 1122-24. See also 38 Fed. Reg.

18899, 21646 (1973); 40 Fed. Reg. 14167 (1975).

27a

in.no way compelled by the plain language of the regula-

tion.'* Our reservations are further heightened by the fact

that companion provisions explicitly require the ameliora-

tion of the effects of prior discrimination, see, e.g., 45

C.F.R. § 185.44(f), and consequently, it is at least argu-

able that the Secretary deliberately omitted such a condi-

tion from the regulation at issue in recognition of the fact

that teachers’ rights are often established by contract and

are not amen.ble to overnight change.

V.

OTHER CLAIMS

Finally, appellants contend that the district court

abused its discretion in issuing a “preliminary injunction.”

In particular, HEW complains that Judge Weinstein failed

to elaborate the requisite findings of fact, and alleges that

he reached erroneous conclusions with respect to the ir-

reparable injury and probable success on the merits re-

quirements of the preliminary injunction test. Selchow &

Righter Co. v. McGraw Hill Books Co., 580 F.2d 25, 27

(2d Cir. 1978); Treibwasser & Katz v. American Tele-

'3Tn full text, the regulation provides:

In the case of ineligibility resulting from discriminatory as-

signment of teachers as pronibited by § 185.43(b)(2), such appli-

cations for waiver shall contain evidence that such agency has

assigned its full-time classroom teachers to its schools so that no

school is identified as intended for students of a particular race,

color, or national origin. Such nondiscriminatory assignments

shall, in the case of a local educational agency implementing a

plan described in § 185.11(a), conform to the requirements of

such plan with respect to the assignment of faculty. In the case of

local educational agencies not implementing such a plan, or im-

plementing such a plan which contains no provision as to assign-

ment of faculty, such assignments shall be made so that the pro-

portion of minority group full-time classroom teachers at each

school is between 75 per centum and 125 per centum of the pro-

portion of such minority group teachers which exists on the fac-

ulty as a whole.

45 C.F.R. § 185.44(d)(3).

28a

phone & Telegraph Co., 5385 F.2d 1356, 1858 (2d

Cir. 1976).

A cursory review of the record below plainly reveals

that what is before this Court is an appeal from the grant

of a permanent injunction following an expedited trial on

the merits held in accordance with Rule 65(a)(2), Fed. R.

Civ. P. The relief ordered following that proceeding has

not yet been entered as a final judgment since the court

below is awaiting the results of the administrative re-

mand. Nonetheless, there is no doubt that Judge Weins-

tein has gone beyond the issuance of a provisional remedy,

and has, following a plenary proceeding concerning which

appellant had notice and full opportunity to adduce evi-

dence, found in favor of the Central Board and granted the

appropriate equitable relief. Under these circumstances,

procedural and substantive standards relating to the is-

suance of preliminary injunctions simply have no applica-

tion.

The order of the district court is, in all respects, af-

firmed. The matter is remanded to the Secretary for fur-

ther proceedings not inconsistent with this opinion.

29a

#79-6006 Bb. oF EDUC.

U~.

Patricia R. Harris

I dissent with opinion

JAMES L. OAKES

OAKES, Circuit Judge (dissenting):

The majority has gone out of its way to invalidate a reg-

ulation of an administrative agency as contrary to con-

gressional mandate. But when one looks at the regulation

itself, 45 C.F.R. § 185.44(d)(3), one finds that it does not

say what the majority says it says, or what the majority

says the agency says it says, but something else. And if

the regulation is compared to the underlying statute, it

becomes clear that Congress quite expressly authorized,

as it so often does, the agency to use its discretion in de-

vising regulations to implement the congressional man-

date. I accordingly dissent. I think it serious business

and a serious matter of judicial interference with the

executive branch of the federal government—so lightly to

overturn an administrative regulation.

What this case involves is a city school system which has

been found ineligible for Emergency School Aid Act

(ESAA) funds for the school year 1978-79 because of dis-

crimination inter alia in the hiring and in the assignment

of full-time teachers, principals, and assistant principals to

schools in sich a manner as to identify certain schools as

intended for a particular race or ethnic group.! The school

system sought a waiver of ineligibility pursuant to 20

‘This ineligibility was mandated by 20 U.S.C. § 1605(d)(1)(B) and 45

C.F.R. § 185.43(b)(2). See Board of Educ. v. Califano, 584 F.2d 576,

588 (2d Cir. 1978), cert. granted, 99 S. Ct. 1211 (1979) (Califano J).

Califano I dealt with ESAA funds for the-school year 1977-78.

30a

U.S.C. § 1605(d)? and 45 C.F.R. § 185.44(d)(3).° The rea-

sons given for the denial of the waiver by then HEW Sec-

retary Califano to Chancellor Macchiarola are in pertinent

part set forth in the margin. The accompanying report of

Mr. Tatel of the Office for Civil Rights is also in pertinent

2The statute provides that

[njo educational agency shall be eligible for assistance under this

chapter if it has, after June 23, 1972 [engaged in certain dis-

criminatory practices] except that, in the case of any local educa-

tional agency which is ineligible for assistance [for this reason],

such agency may make application for a waiver of ineligibility,

which application shall specify the reason for its ineligibility, con-

tain such information and assurances as the Secretary shall re-

quire by regulation in order to insure that any practice, policy, or

procedure, or other activity resulting in the ineligibility has

ceased to exist or occur and include such provisions as are neces-

sary to insure that such activities do not reoccur after the sub-

mission of the application.

20 U.S.C. § 1605(d)(1).

3This regulation is quoted in full in note 13 of the majority opinion.

4The Secretary stated:

On June 20, 1978, Dr. Herman R. Goldberg, Associate Commis-

sioner, Equal Educational Opportunity Programs, Office of Edu-

cation, notified you that your district was ineligible for assist-

ance. This notification was a consequence of your district’s failure

to meet the requirements for eligibility established by section

706(d) of the Act and sections 185.43(b)(2), 185.43(d)(4), and

185.43(d)(5) of the implementing regulations. Your school district

has provided acceptable plans to remedy the discrimination in the

assignment of students to racially identifiable or isolated regular

classes and in imposing disciplinary sanctions. Nevertheless,

your district has failed to remedy the discrimination in the hiring

and assignment of minority administrators and teachers.

Your district applied for a waiver of ineligibility of July 7,

1978. However, it failed to provide evidence that the discrimina-

tion in the hiring and assignment of minority administrators and

teachers had ceased to exist and would not reoccur.

The grounds for my decision to deny your application are set

forth in the enclosed report from Mr. David S. Tatel, Director of

this Department’s Office for Civil Rights. From this report I

have determined that your school district has not corrected the

violation of section 185.43(b)(2) of the ESAA....

Letter from Secretary Califano to Chancellor Macchiarola (Sept. 28,

1978).

3la

part set forth.5 Neither the letter denying the waiver, the

report accompanying it, nor the regulation under which

the denial is made and which the report mentions refer in

any place whatsoever to the “effects” of past discrimina-

5The report stated:

On September 7, 1977, the Central Board and OCR entered

into a Memorandum of Understanding that would have remedied

the discrimination in hiring and assignment of minority adminis-

trators and teachers by 1980. Because the Memorandum of Un-

derstanding provided for a phased remedial plan that would not

have eliminated the discrimination in hiring and assigning

minority administrators and teachers by September 1977, the

Department denied the Central Board’s request for an ESAA

waiver of ineligibility for the 1977-78 funding cycle. Fur-

thermore, the Central Board subsequently abandoned the terms

of the Memorandum of Understanding after Judge Weinstein in-

validated the agreement on procedural grounds in Caulfield v.

Board of Education, No. 77-C-2155 (E.D.N.Y. Mar. 15, 1978),

appeal pending, No. 78-6035 (2d Cir. filed Feb. 28, 1978).

On July 7, 1978, the Central Board applied for a waiver of in-

eligibility based on its pending appeal of Judge Weinstein’s deci-

sion in Board of Education v. Califano, No. 77-C-1928

(E.D.N.Y. April 18, 1978), upholding the Department’s denial of

ESAA funds to the Central Board for 1977-78. The Central

Board offered no explanation why the pending of the appeal

would justify granting an ESAA waiver of ineligibility. More sig-

nificantly, on August 21, 1978, the United States Court of Ap-

peals for the Second Circuit affirmed Judge Weinstein’s decision.

Board of Education v. Califano, No. 78-6083, 78-6088, 78-8180

(2d Cir. Aug. 21, 1978).

The Central Board has submitted no information or evidence to

demonstrate that the discrimination in hiring and assigning

minority administrators and teachers has been or will be cor-

rected prior to the commencement of the school year in Sep-

tember 1978. Therefore, the Central Board is not eligible for an

ESAA waiver of ineligibility on this issue.

Report by David S. Tatel, Office for Civil Rights.

®See 45 C.F.R. § 185.44(d)(3), quoted in majority opinion, note 13

supra; 45 C.F.R. § 185.44(b) (“An application for waiver . . . shall con-

tain such information and assurances as will insure that any practice,

policy, procedure, or other activity resulting in ineligibility has ceased

to exist or occur, and shall include such provisions as are necessary to

insure that such practice, policy, procedure, or activity will not reoccur

after the submission of such application.”).

32a

tion, a straw man set up in the majority opinion and the

opinion below, aided to some extent however by the fed-

eral government’s arguments in this litigation.

In fact, the denial of the waiver was based on a failure

“to remedy the discrimination in the hiring and assign-

ment of minority administrators and teachers.” Letter

from Secretary Califano, supra note 4. This omission was

accompanied by a failure to submit “information or evi-

dence to demonstrate that the discrimination in hiring and

assigning minority administrators and teachers has been

or will be corrected prior to the commencement of the

school year in September 1978.” Report of David S. Tatel,

Office for Civil Rights, supra note 5.

The Central Board evidently thinks and the majority

implicitly holds that the entry by the Central Board into

the Memorandum of Understanding of September 7, 1977,

with its phased remedial plan, see Caulfield v. Board of

Education, 583 F.2d 605 (2d Cir. 1978), may be enough in

and of itself to restore its eligibility for ESAA funds and

permit the granting of a waiver. To my mind, the Secre-

tary’s determination to the contrary was within his own

Department’s regulations and the regulations, thus

applied, conform to the statute.? Rather than deciding

these issues as they are presented here, the majority deals

exclusively with the hypothetical questions of whether a

waiver must, under the regulations, be preceded by the

elimination of all the effects of past discrimination and

whether, if so, the regulations are valid under the statute.

The determinations arrived at are therefore unwarranted

in the present context.

Let me be more precise. There are several ways in

which a school district may, under 20 U.S.C. § 1605(d),

discriminate and render itself ineligible for ESAA funds.

It may aid segregated private schools, discriminate in its

dealings with staff, segregate children within a school for

a significant portion of the day, or take other actions,

“such as limiting curricular or extracurricular activities,”

720 U.S.C. § 1605(d).

33a

that discriminate among children on the basis of race or

ethnic origin. Jd. § 1605(d)(1). Before a waiver is granted,

the Secretary must ensure that any such “practice, policy,

or procedure, or other activity resulting in the ineligibil-

ity” has ceased to exist or occur and will not reoccur. Jd.

The New York City Central Board had engaged in sev-

eral of the disqualifying violations enumerated in the stat-

ute and regulations. They were violating § 1605(d)(1)(B)

(demotion or dismissal of minority group personnel) and

§ 1605(d)(1)(D) (imposing disciplinary sanctions against

children in a discriminatory way), as well as teacher and

administrator assignment provisions of § 1605(d)(1)(B).

But the ESAA funds were denied only because of a failure

to correct the discriminatory assignment of teachers and

administrators. HEW took this action because its regula-

tion requires that, prior to any waiver, “the proportion of

minority group full-time classroom teachers at each school

[be] between 75 per centum and 125 per centum of the

proportion of such minority group teachers which exists on

the faculty as a whole.” 45 C.F.R. § 185.44(d)(3). This

provision is similar to the other waiver regulations, which

generally require that the disqualifying violation be cor-

rected prior to a waiver, although there is provision for a

gradual remedy when the violation is disproportionate

dismissal or demotion of personnel. Jd. § 185.44(d)(1)(i).

Clearly, HEW correctly applied its regulation, because

the district had failed to alter its teacher assignments in

any way. The Memorandum of Understanding that was

entered into on September 7, 1977, which was to provide a

phased remedial plan, did not, in itself, effect any change

at all. It was not even aimed at obtaining ESAA funds. As

the opinion in Caulfield v. Board of Education, 583 F.2d

605, 607-10 (2d Cir. 1978), discussing that Memorandum

makes very clear, it was aimed at securing compliance

with Title VI of the Civil Rights Act of 1964, 42 U.S.C.

§ 2000d to 2000d-6, and Title IX of the Education

Amendments of 1972, 20 U.S.C. §§ 1681-1686.® Because

®Title IX deals with practices discriminatory against females. The

Title VI violations involved discriminatory teacher selection and test-

34a

the City Board had to come to terms with the teachers’

union, perhaps for other reasons, all of which are immate-

rial here, the compliance by it was to be phased in so as

“to remedy the discriminatory effect of those practices on

a phased basis by 1980.” Caulfield, supra, 583 F.2d at

607.

Thus, what the majority does now is to deny HEW’s

power to implement the statute by the present reguia-

tions. It does so by imagining an entirely different

regulation—one requiring the prior eradication of all the

lingering, indirect effects of past discrimination—and con-

cluding that such a rule is undesirable because effects of

discrimination may last “for a generation, or longer.”

Majority opinion at 20. The majority also makes one more

fundamental error in its reading of the statute. it

suggests, majority opinion at 21-22, that segregation of

children within a district as a whole is a violation that may

disqualify a district. It goes on to conclude that, under its

existing regulations, HEW would grant a waiver only to

districts that have already fully desegregated—i.e., dis-

tricts that no longer really need the money. /d. This result

would indeed be somewhat absurd, but the structure of

the Act as a whole makes it clear that funds may be

granted to districts that are still implementing plans for

desegregating student bodies, see 20 U.S.C. § 1605(a)(1),

and that existing school segregation itself was not in-

tended as a violation that would cause ineligibility, see id.

§ 1605(d)(1) (listing violations). Referring to the list of

disqualifying violations, then Senator Mondale stated:

“The application of these safeguards is crucial. The value

of integrated education to the children involved in the

programs under this act will be lost if discrimination con-

tinues to be practiced within schools which are desegre-

gated.” 117 Cong. Rec. 10758 (1971) (emphasis added). The

ing procedures and racially identifiable employment pools as well as

teacher and administrator assignments reinforcing racial/ethnic iden-

tifiability (also, concededly, involved in the instant case) and assign-

ment of less experienced, lower salaried, less qualified teachers to

minority-preponderant schools. Caulfield v. Board of Educ., 583 F.2d

605, 608 n.3 (2d Cir. 1978).

35a

violations are thus discrete actions, other than segregation

of students itself, that may take place in the context of an

overall process of school desegregation.

This conclusion fits well with the overall statutory

scheme. ESAA, as Califano I attempted to point out, 584

F.2d at 578-81, is a special funding act, supplementing an

eligible nondiscriminatory school district’s funds “to aid in

desegregating schools and support quality integrated

schools.” S. Rep. No. 604, 92d Cong., 2d Sess. (1972), re-

printed in [1972] U.S. Code Cong. & Ad. News 2595, 2600.

These funds, which are limited in amount in any given

school year in accordance with congressionally set national

priorities, are in effect awarded on a competitive, “merit,”

point-award basis to those school districts that have dem-

onstrated eligibility by “objective criteria,” Califano J,

supra, 584 F.2d at 579 n.4. Funds are awarded “to qual-

ified applicants in the order in which their applications are

ranked.” Jd. at 579. Congress was extremely careful to

make sure that the requirements were uniform nationwide

irrespective of the type of discrimination practiced, de

facto or de jure. Jd. at 578 n.8. The Act was thus both a

carrot and a stick, to North and South alike, affirmatively

promoting the policies of Brown v. Board of Education,

347 U.S. 483 (1954).

The Act specifically set forth strict criteria for the

award of funds, in the words of Senator Mondale, “strong

safeguards,” “administrative guidelines,” and “mandatory

directions”? to try to assure proper administration of the

Act. And Congress was very specific in its waiver provi-

sions to provide nondelegable approval only by the Secre-

®117 Cong. Rec. 10758 (1971). The Senator stated:

It is because of the history of the emergency school assistance

program that the Labor Committee has included in the bill strong

safeguards modeled upon those added in the Senate to the emer-

gency school assistance program appropriation. The committee

has also, both in the bill and the report set forth mandatory di-

rections to the Commissioner to try to assure proper administra-

tion of this program.

36a

tary himself, 20 U.S.C. § 1605(d)(2),'° with a grant to be

made only “upon determination that any practice, policy,

procedure or other activity resulting in ineligibility has

ceased to exist... .,” id. at § 1605(d)(3), and with his de-

termination to be “carried out in accordance with criteria

and investigative procedures established by regulations of

the Secretary for the purpose of compliance with this sub-

section.” Jd. at § 1605(d)(5). To suggest, as the majority

opinion does, that the grant of power here is “simply a

procedural assurance,” majority opinion at 24, and that

the regulation here in question, 25 C.F.R. § 185.44 (d)(3),

is not “rationally related to the objectives of the ESAA

program,” majority opinion at 24, is to usurp the agency’s

functions.

To give the majority their due, I do not believe that a

regulation adopting their view would necessarily be in-

valid, but see Kelsey v. Weinberger, 498 F.2d 701 (D.C.

Cir. 1974), despite the apparently clear statutory re-

quirement that the practice of assigning teachers to ra-

cially identifiable schools cease to exist or occur prior to a

waiver. See 20 U.S.C. § 1605(d)(1). HEW should have,

and I believe was given by Congress, certain flexibility in

this area. In addition, there is a certain ambiguity in the

statute created by the fact that faculty segregation is in-

cluded both in § 1605(a), which discusses the kinds of on-

going desegregation that the Act seeks to encourage

through funding, and in § 1605(d)(1), which, as I have

noted, lists various practices that, until corrected, dis-

qualify a district from receiving funds to aid its overall de-

segregation effort. Faced with this apparent contradiction,

the administering agency might reasonably conclude that

faculties need not be desegregated before a waiver is

granted. But it might also conclude that the process of

faculty desegregation, unlike that of student desegrega-

tion, is, because of § 1605(d)(1), only intended to be funded

10 All waivers must also be in writing, with prior notice given to spe-

cific congressional committees, 20 U.S.C. § 1605(d)(6). These extraor-

dinary requirements to me demonstrate that Congress was extremely

fearful that waivers would be granted too quickly or easily.

37a

after the remedy has been substantially effected. A situa-

tion of such apparent ambiguity is, it seems to me, clearly

one where deference to the HEW interpretation is war-

ranted, indeed required, regardless of whether the regula-

tions are deemed “interpretive” or “legislative.” See gen-

erally Batterton v. Francis, 482 U.S. 416, 424-26 (1977).

When two interpretations are possible, and neither would

frustrate the legislative scheme, we should follow the reg-

ulation.

The majority opinion ultimately fails to state what HEW

may now do. It may be that their invalidation of the stat-

ute means that HEW must now grant the waiver, because

the Memorandum is a sufficient indication that the district

will no longer discriminate. If so, I am concerned about

how today’s decision will affect future school desegrega-

tion.

Presumably the Department will be reluctant to enter

into memoranda of understanding similar to the one en-

tered into here, providing for phased-in compliance, lest

agreement thereto immediately render eligible for ESAA

funds, on the basis of its “good intentions,” a district that

has highly segregated faculty assignments. This would be

a sorry combination of events since there is a statutory

admonition to all federal agencies under the Civil Rights

act of 1964, 42 U.S.C. § 2000d-1, to secure voluntary com-

pliance with that Act’s provisions. And, while I agree with

the majority in that I do not believe Congress necessarily

meant defiant applicants to do “an additional penance,”

majority opinion at 17, I do believe that Congress knows

as well as any other branch of government with what the

road to Hell is paved. I think Congress was perfectly pre-

pared to permit the Department under Department regu-

lations to insist upon a little more from its ESAA appli-

cants than the paving stones the majority relies on here.

If, on the other hand, under the majority opinion and

“remand” HEW still has some power to deny the waiver

sought by appellee—a power based on the statutory re-

quirement that the Secretary ensure that the discrimina-

tion has ceased—it is unclear how the majority decision

38a

has altered the status quo under the regulations. Such a

power is no more and no less than what the regulations

have embodied all along—the power to make sure that

teachers are no longer assigned to schools on the basis of

race or ethnic origin.

But perhaps the majority has yet a third view. Maybe it

feels that HEW can require more than a Memorandum of

Understanding, but less than a real change in teacher as-

signments. If so, that view is nowhere spelled out or ex-

plained. The opinion, where light is needed, creates only

fog or, if under the first alternative suggested it requires

the agency to treat the mere entering into the Memoran-

dum of Understanding as sufficient to constitute com-

pliance, darkness. I therefore dissent.

39a

APPENDIX B

United States Court of Appeals

for the Second Circuit

19-6006

At a stated term of the United States Court of Appeals, in

and for the Second Circuit, held at the United States

Courthouse in the City of New York, on the nineteenth

day of November, one thousand nine hundred and

seventy-nine.

N.B. Since this statement does not constitute a formal

opinion of this court and is not uniformly available to all

parties, it shall not be reported, cited or otherwise used in

unrelated cases before this or any other court.

Present: Hon. JAMES L. OAKES, Circuit Judge

Hon. THOMAS J. MESKILL, Circuit Judge

Hon. CHARLES E. STEWART, District Judge

BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF

THE CITY OF NEW YORK, et al. Plaintiffs-Appellee

v.

JOSEPH A. CALIFANO, JR., et al. Defendants-Appellants

Appeal from the United States District Court for the

Eastern District of New York.

This cause came on to be heard on the transcript of rec-

ord from the United States District Court for the Eastern

District of New York, and was argued by counsel.

ON CONSIDERATION WHEREOF, it is now hereby

ordered, adjudged, and decreed that the order of said Dis-

trict Court be and it hereby is affirmed in accordance with

the opinion of this court with costs to be taxed against the

appellants.

A. DANIEL FUSARO,

Clerk

/s/

BY: ARTHUR HELLER,

Deputy Clerk

40a

APPENDIX C

United States Court of Appeals

for the Second Circuit

ORDER ON PETITION FOR REHEARING

No. 1079—August Term, 1978

(Argued June 5, 1979

Decided November 19, 1979)

(Petition for rehearing filed December 14, 1979

Decided May 19, 1980)

Docket No. 79-6006

BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF

THE CITY OF NEW YORK AND FRANK MACCHIAROLA,

CHANCELLOR OF THE CITY SCHOOL DISTRICT OF THE CITY

oF NEw York, Plaintiffs-Appellees,

v.

PATRICIA R. HARRIS, SECRETARY, UNITED STATES DE-

PARTMENT OF HEALTH, EDUCATION AND WELFARE,

HERMAN B. GOLDBERG, ASSOCIATE COMMISSIONER,

EQUAL EDUCATION OPPORTUNITY PROGRAMS, UNITED

STATES DEPARTMENT OF HEALTH, EDUCATION AND

WELFARE AND DAVID S. TATEL OFFICE FOR CIVIL

RIGHTS, UNITED STATES DEPARTMENT OF HEALTH,

EDUCATION AND WELFARE, Defendants-Appellants.

Before: OAKES AND MESKILL, Circuit Judges, AND

STEWART, District Judge.*

“* Honorable Charles E. Stewart, Jr., United States District Judge

for the Southern District of New York, sitting by designation.

4la

MESKILL, Circuit Judge:

The government, in its brief, contends that our opinion

is inconsistent with the subsequent Supreme Court deci-

sion in Board of Education of the City School District of

New York v. Harris, 48 U.S.L.W. 4035 (U.S. Nov. 28,

1979). Not only do we think our decision is not inconsistent

with the Court’s decision, we think it is in fact supported

by the language of that opinion.

The Government contends that we had construed the

statute as requiring the application of an intentional [dis-

crimination] standard while the Court held that the Act

was intended to apply to de facto as well as de jure dis-

crimination. For the same reason the amicus brief argues

that we improperly relied upon the Memorandum of Un-

derstanding’s compliance with Title VI of the Civil Rights

Act of 1964. Both briefs simply overlook what we decided.

We explicitly stated that ESAA insists “on a single na-

tional standard for the distribution of these federal funds,”

citing to Section 1602(b) of 20 U.S.C. which provides:

It is the policy of the United States that guidelines

and criteria established pursuant to title VI of the

Civil Rights Act of 1964 and section 182 of the

Elementary and Secondary Education Amendments

of 1966 shall be applied uniformly in all regions of the

United States in dealing with conditions of segrega-

tion by race whether dejure or de facto in the schools

of the local educational agencies of any State without

regard to the origin or cause of such segregation.

Slip op. 5426 and at n. 10. We did not distinguish between

intentional and nonintentional discrimination, but rather,

between the maintenance of either form of discrimination

and a policy of elimination of either form of discrimina-

tion:

What must cease to exist or occur in order for an ap-

plicant to qualify for a waiver of ineligibility is its

current acceptance of the status quo. It would seem

therefore, that if the Central Board has adopted a

policy of eliminating discrimination in a manner ap-

proved by HEW, as demonstrated by its commitment

to the Memorandum of Understanding, then “prac-

42a

tices,” “procedures” and “other activities,” underta-

ken in furtherance of that policy cannot logically be

described as having resulted in the ineligibility.

Slip op. at 5420.

The government and the amicus briefs argue that we

overlooked the portion of legislative history referred to in

the Supreme Court’s opinion, 48 U.S.L.W. at 4040 and

n.12. Although referred to by the Court as having “some

significance,” the Court does not indicate in what manner

it would affect the construction of the waiver-of-

ineligibility provisions. Indeed, the Court’s statement, a

few paragraphs later, that “. .. ESAA funds are available

for the furtherance of a plan to combat de facto segrega-

tion,” 48 U.S.L.W. at 4040 (emphasis added), indicates

that, whatever the significance of this legislative history,

our construction of the waiver-of-ineligibility provision

comports with the Court’s perception of the objectives of

the statute.

For these reasons we do not think a different result is

mandated by the subsequent Supreme Court opinion in

Board of Education of the City School District of New

York v. Harris, supra.

Petition for rehearing is denied.?

1 Judge Oakes adheres to his previous view.

i

43a

APPENDIX D

United States Court of Appeals

SECOND CIRCUIT

79-6006

At a stated term of the United States Court of Appeals, in

and for the Second Circuit, held at the United States

Court House, in the City of New York, on the nineteenth

day of May, one thousand nine hundred and eighty.

BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF

THE CITY OF NEW YORK AND FRANK MACCHIAROLA,

CHANCELLOR OF THE CITY SCHOOL DISTRICT OF NYC.

Plaintiffs-Appellees,

Vv.

JOSEPH A CALIFANO, JR. Secretary, U.S. Dept. of Health,

Education and Welfare, HERMAN B. GOLDBERG, Associate

Commissioner, Equal Educational Opportunity Programs,

UNITED STATES DEPARTMENT OF HEALTH, EDUCATION

AND WELFARE AND DAVID S. TATEL, Office for Civil

Rights, U.S. Dept. of Health, Education and Welfare,

Defendants-Appellants

A petition for rehearing containing a suggestion that the

action be reheard en banc having been filed herein by

counsel for the Appellants, and a poll of the active judges

having been taken, and a majority thereof having voted

against rehearing en banc,

Upon consideration thereof, it is

Ordered that said petition be and it hereby is DENIED.

Judges Oakes, Newman, and Kearse voted in favor of

rehearing en banc.

| SES Oe RT SS SOMES La See Brae

IRVING R. KAUFMAN,

Chief Judge

44a

APPENDIX E

United States District Court

Eastern District of Nef York

78-C-2135

BOARD OF EDUCATION OF THE CITY SCHOOL DISTRICT OF

THE CITY OF NEW YORK, ET AL., PLAINTIFFS,

v.

JOSEPH CALIFANO, JR., SECRETARY OF THE DEPARTMENT

OF HEALTH, EDUCATION AND WELFARE, ET AL.,

DEFENDANTS.

AMENDED, MEMORANDUM AND ORDER

WEINSTEIN, D.J.

An application by the plaintiff, the New York City

Board of Education, for 1978-79 funding under the Emer-

gency School Aid Act (ESAA), 20 U.S.C. § 1601 et seq,

(Supp. II 1972) has been denied by the defendant, the De-

partment of Health, Education and Welfare (HEW) on the

ground that the Board is ineligible because it “had in effect

... [a] practice, policy or procedure” of discrimination on

the basis of race in assigning teachers after June 23, 1972.

20 U.S.C. § 1605(d)(1)(B) (Supp. II 1972). The Board’s re-

quest for a waiver of ineligibility, pursuant to 20 U.S.C.

§ 1605(d)(3) (Supp. II 1972), has also been denied on the

theory that a waiver is not available until the effect of the

discriminatory practice has been fully eliminated; HEW

maintains that teachers must have been reassigned “so

that no school is identified as intended for students of a

particular race.” 45 C.F.R. § 185.44(d)(3).

45a

HEW has an unduly limited view of its statutory discre-

tionary powers to grant waiver. Since this misapprehen-

sion is based upon an error of law, this court has power to

grant relief. 5 U.S.C. § 706. For the reasons discussed

below, the matter must be remanded for further consid-

eration.

I. PRECEDING EVENTS

A. Underlying Facts

An explanation of HEW’s denial of the Board’s applica-

tion for 1978-79 funding requires some retracing of the

events of the past three years.

In March of 1976 HEW’s Office of Civil Rights (OCR)

notified the Board that its employment practices, particu-

larly the discriminatory methods of selection and assign-

ment of teachers, violated laws barring discrimination in

federally financed programs. 42 U.S.C. § 2000d; 20 U.S.C.

§ 1681. Among OCR’s findings was one that the Board had

“assigned teachers, assistant principals and principals in a

manner that has created, confirmed and reinforced the ra-

cial and/or ethnic identifiability of the system’s schools.”

Caulfield v. Board of Ed. of City of New York, 583 F.2d

605, 608 n. 3 (2d Cir. 1978). OCR requested a remedial

plan.

An application for 1977-78 ESAA funding was filed by

the Board in January, 1977. HEW denied the application

because of the Board’s discriminatory teacher assignment

practices. OCR’s findings made the Board ineligible for

ESAA funding under the statute and regulations absent a

waiver by HEW.

Opinions by this court and the Court of Appeals have

found substantial basis for these administrative decisions.

See Board of Ed. of City Sch. Dist. Etc. v. Califano, 584

F.2d 576 (2d Cir.), petition for rehearing denied, —

F’.2d—(1978); Board of Education v. Califano, No. 77-

C-1928 (E.D.N.Y. 1977). A writ of certiorari challenging

denial of 1977-78 funds is now before the Supreme Court.

The Court of Appeals has stayed the transfer of the

1977-78 ESAA funds previously earmarked for the Board

pending a determination by the Supreme Court.

46a

On September 7, 1977, the Board and OCR entered into

a Memorandum of Understanding detailing a plan to rem-

edy the challenged employment practices. This Memoran-

dum obligated the Board to promptly begin a program that

would within three years eliminate the effects of the al-

leged discrimination in the selection or assignment of

teachers and supervisors. Execution of the plan, OCR has

agreed, will constitute compliance with federal statutes. |

The full text of the agreement is set out as an appendix to

the opinion of this court in Caulfield v. Board of Ed. of

City of N.Y., 449 F.Supp. 1208, 1227-1230 (E.D.N.Y.

1978) which describes its history in some detail.

New York City teachers, supervisors, and adminis-

trators have brought two related actions challenging the

implementation of the September 7 agreement. See gener-

ally Caulfield v. Board of Ed. of City of N.Y., 449

F.Supp. 1203 (E.D.N.Y. 1978). A procedural due process

objection to the proceedings leading to development of the

plan has been rejected by the Court of Appeals. See

Caulfield v. Board of Ed. of City of New York, 583 F.2d

505 (2d Cir. 1978), reversing Caulfield v. Board of Ed. of

City of N.Y., 449 F.Supp. 1203 (E.D.N.Y. 1978). Substan-

tive objections to the legality and constitutionality of the

plan, however, are still before this court.

The present action concerns the Board’s application for

1978-79 ESAA funding. In June 1978, HEW informed the

Board that it was still ineligible under the ESAA statute

and regulations. This determination of ineligibility relied

in large part upon the data collected in the 1976 OCR in-

vestigation that had also constituted the basis for the de-

nial of 1977-78 ESAA funding. Reliance for the ruling was

placed on 20 U.S.C. § 1605(d)(1)(B) (Supp. II 1972), and

its implementing regulation, 45 C.F.R. § 185.43(b)(2).

Both trigger ineligibility upon any discriminatory hiring or

assignment practice that occurs “after June 23, 1972”

(emphasis supplied); thus, the 1975-76 data collected in

the OCR investigation can constitute a basis of ineligibility

for the application for 1977-78, 1978-79, and any following

years.

47a

Subsequently the Board filed an application for a waiver

of ineligibility for 1978-79 funding pursuant to 20 U.S.C.

§ 1605 (Supp. II 1972) and its implementing regulations,

45 C.F.R. 185.43(b)(2), 185.43(d)(4) and 185.43(d)(5). By

letter dated September 28, 1978, HEW denied the applica-

tion on the ground that a waiver is possible only when the

effects of the discriminatory practice have been fully

eliminated, that is, when teachers and supervisors have

actually been reassigned “so that no school is identified as

intended for students of a particular race.” 45 C.F.R.

§ 185.44(d)(3).

B. Procedure in this Court

This court has held hearings on applications for a tem-

porary restraining order and preliminary injunction re-

quiring HEW to preserve and set aside the 1978-79 ESAA

funds for which the Board appeared to be eligible absent

findings of discrimination. Without such a stay and injunc-

tion the funds previously set aside by HEW for the Board

for the 1978-79 school year would have been reallocated to

other school districts; both the City and the students in its

schools would have suffered a permanent loss. Upon ap-

propriate findings, preliminary relief was granted. The

parties agreed that no oral testimony would be offered and

that the application for a final injunction should be decided

upon the administrative record and other documents sub-

mitted to the court.

II. Statutory Scheme

Congress passed ESAA as Title VII of the Education

Amendments of 1972. Pub. L. No. 92-318, tit. VII,

§ 701-720, 86 Stat. 354 (1972), 20 U.S.C. §§ 1601 et seq.

(Supp. II 1972). The Act provides financial assistance to

local educational agencies and other eligible organizations

to promote the elimination of the effects of discrimination

and other minority disadvantages. 20 U.S.C. § 1601(b)

(Supp. II 1972). Funding is available for a variety of

enumerated activities that further these goals. 20 U.S.C.

§§ 1606-1608, 1610 (Supp. II 1972). The Second Circuit

48a

has described the legislation as “a program purposefully

designed ‘to aid in desegregating schools and support

quality integrated schools.’” Board of Ed. of City Sch.

Dist., Etc. v. Califano, 584 F.2d 576, 578 (2d Cir. 1978),

quoting S. Rep. No. 604, 92d Cong., 2d Sess. (1972).

L.stribution of ESAA funds is administered by HEW’s

Assistant Secretary for Education. His discretion is lim-

ited both by the Act and by administrative regulations

adopted pursuant to the Act by HEW’s Office of Educa-

tion. 45 C.F.R. § 185.01 et seq., 38 Fed. Reg. 3452 (Feb.

6, 1973).

An applicant must demonstrate that it is implementing

one of three types of desegregation plans: “a plan under-

taken pursuant to the order of a court or other appropriate

body, a plan approved by HEW as adequate under Title

VI, or one of several types of voluntary plans.” Robinson

v. Vollert, 411 F.Supp. 461, 465 (S.D. Texas 1976) (sum-

marizing 20 U.S.C. § 1605(a)). In addition to establishing

eligibility, an applicant must also show that it has not be-

come ineligible by engaging in any of the disqualifying

acts, practices, policies or procedures prohibited by the

statutes and regulations. 20 U.S.C. § 1605(d)(1) (Supp. II

1972); 45 C.F.R. § 185.13(1). The statutory disqualifying

provision involved in this case makes ineligible any local

educational agency that has in effect, after June 23, 1972,

a practice, policy or procedure of discrimination in the

hiring, promotion or assignment of its employees. 20

U.S.C. § 1605(d)(1)(B) (Supp. II 1972). It provides:

(d)(1) No educational agency shall be eligible for

assistance under this chapter if it has, after June 23,

1972—

* * *

(B) had in effect any practice, policy, or procedure

which results in the disproportionate demotion or

dismissal of instructional or other personnel from

minority groups in conjunction with desegregation or

the implementation of any plan or the conduct of any

activity described in this section, or otherwise en-

gaged in discrimination based upon race, color, or na-

tional origin in the hiring, promotion, or assignment

49a

of employees of the agency (or other personnel for

whom the agency has any administrative responsibil-

ity);

The accompanying administrative regulation prohibits the

assignment of full time teachers “in such a manner as to

identify any of such schools as intended for students of a

particular race, color or national origin.” It reads:

(2) No educational agency shall be eligible for as-

sistance under the Act if, after June 23, 1972, it has

had or maintained in effect any other practice, policy,

or procedure which results in discrimination on the

basis of race, color, or national origin in the recruit-

ing, hiring, promotion, payment, demotion, dismissal,

or assignment of any of its employees (or other per-

sonnel for which such agency has any administrative

responsibility), including the assignment of full-time

classroom teachers to the schools of such agency in

such a manner as to identify any of such schools as

intended for students of a particular race, color, or

national origin.

45 C.F.R. § 185.43(b)(2).

Once an applicant has been found ineligible, ESAA

funds are available only if a waiver of ineligibility is

granted. The Act conditions the granting of a waiver upon

the cessation of the activity which led to ineligibility.

There must be a:

determination that any practice, policy, procedure or

other activity resulting in ineligibility has ceased to

exist, and that the applicant has given satisfactory

assurance that the activities prohibited in [the sub-

section defining ineligibility] will not reoccur.

20 U.S.C. § 1605(d)(3) (Supp. II 1972). Promulgation of

waiver regulations which “insure that any practice, policy

or procedure, or other activity resulting in the ineligibility

has ceased to exist or occur . . . [and] that such activities

do not reoccur ....” is permitted by the Act. 20 U.S.C.

§ 1605(d)(1) (Supp. II 1972). The regulation governing the

requirements for a waiver when the ineligibility resulted

from the discriminatory assignment of teachers provides

that no school shall be identified by race on the basis of the

50a

teachers assigned to it, and specifies allowable ranges of

racial disparities.

(3) In the case of ineligibility resulting from dis-

criminatory assignment of teachers as prohibited by

§ 185.43(b)(2, such applications for waiver shall con-

tain evidence that such agency has assigned its full-

time classroom teachers to its schools so that no

school is identified as intended for students of a par-

ticular race, color, or national origin. Such nondis-

criminatory assignments shall, in the case of a local

educational agency implementing a plan described in

§ 185.11(a), conform to the requirements of such plan

with respect to the assignment of faculty. In the case

of local educational agencies not implementing such a

plan, or implementing such a plan which contains no

provision as to assignment of faculty, such assign-

ments shall be made so that the proportion of minor-

ity group full-time classroom teachers at each school

is between 75 per centum and 125 per centum of the

proportion of such minority group teachers which

exists on the faculty as a whole.

45 C.F.R. § 185.44(d)(3).

III. DENIAL OF THE APPLICATION FOR A

WAIVER

The Board’s challenge to the validity of HEW’s denial of

the application for a waiver of ineligibility for 1978-79

ESAA funding is the issue now before us.

A. Statutory Text

HEW primarily argues from the text of the statute. Sec-

tion 1605(d)(1) provides that a waiver is available only

when the discriminatory “practice, policy, procedure or

other activity” that created the ineligibility has “ceased to

exist or occur.” 20 U.S.C. § 1605(d)(1) (Supp. II 1972).

The plain meaning of this language, it is urged, requires

the Board to establish (1) that any past discriminatory

teacher assignment practices have ceased, and (2) that the

effects of such past policies have been eliminated:

_-*»

5la

What must “cease to exist” is not only the causes but

also the effects for until the effects have been suffi-

ciently corrected, the causes cannot be said to no

longer be operative .... The maintenance of a dis-

criminatory state of affairs thus also constitutes a

practice, policy, procedure or activity which continues

to render a district ineligible.

Supplemental Memorandum in Opposition to Plaintiffs’

Motion for a Preliminary Injunction and in Support of De-

fendants’ Cross-Motion for Summary Judgment, pp. 6-7.

We reject HEW’s reading of the statute. To be sure,

section 1605(d)(1) requires that something have “ceased to

exist” before a waiver can be granted, but the provision

defines that something as the past “practice,” “policy,”

“procedure,” or “activity” of the applicant. These are all

active nouns; they look to the past conduct or “intentional”

non-action of the applicant, not to the present effects of

that conduct. Accepting HEW’s suggestion that eliminat-

ing causes also requires the elimination of all traces of ef-

fects would blur distinctions between the concepts of cause

and effect. To argue that the continued existence of the

effects of past discrimination alone constitutes a present

policy of discrimination makes little sense in the context of

this case when the applicant Board has committed itself, in

the Memorandum of Understanding, to a program of

eliminating those effects. A school board’s inaction, in the

face of knowledge of past discrimination and its effects,

might itself be deemed a “‘policy’’ of intentional

discrimination—for the “foreseeable consequences” of

such nonaction might well be the perpetuation of dis-

criminatory practices and effects, Hart v. Community

School Board of Education, New York School District

#21, 512 F.2d 37, 51 (2d Cir. 1975). But we need not now

determine whether such culpable inaction is present in this

case—initially that is a determination for HEW to make

upon remand.

Had Congress intended to condition the granting of a

waiver upon the elimination of all the effects of past dis-

crimination, it could have added a term to its enumeration

of “practice,” “policy,” “procedure,” and “activity” to con-

52a

vey that intent. As the language now stands, it must be

read to permit HEW to allow or deny a waiver to an appli-

cant that has eliminated past discriminatory practices but

not yet all their effects. HEW is not, of course, precluded

in the exercise of its discretion to grant a waiver, from

considering such factors as the time that has elapsed since

adoption of the Act, the extent of the remaining effects,

and the speed with which those effects are being elimi-

nated.

B. Legislative History

Analysis of the legislative history supports this conclu-

sion. The debates preceding the enactment of ESAA re-

flect Congressional awareness that solutions to the innum-

erable problems accompanying desegregation often cost

more than school districts can afford:

The implementation of desegregation plans and the

elimination of dual systems have drained the re-

sources of many school districts threatening the qual-

ity of education for all children .... We know that

there are added costs of special programs and person-

nel to effect segregation with the minimum possible

disruption to the primary educational function of our

schools. It is only fair that the Federal Government

should assume part of the financial burden.

117 Cong. Rec. 5285-86, 92d Cong., lst Sess. (1971) (re-

marks of Representative Fascell). Numerous educational

organizations had called upon Congress for federal funding

to help ease this financial strain:

The bill recognizes that desegregation costs money.

In many cases, to achieve successful desegregation or

reduction or prevention of racial isolation, a school

district will have to undertake new and expensive

programs .... The Legislative Conference of Na-

tional Organizations, representing the American As-

sociation of School Administrators, the Council of

Chief State School Officers, the National Association

of State Boards of Education, the National Congress

of Parents and Teachers, the National Education As-

sociation, placed assistence for desegregating school

districts high on their list of priorities in their

58a

January 12 statement of proposal for education legis-

lation. In this statement, they urged the Congress to

pass legislation recognizing the additional costs en-

tailed by court ordered or voluntary desegregation.

117 Cong. Rec. 511-12, 92d Cong., Ist Sess. (1971) (re-

marks by Representative Bell, introducing a version of the

Act). Congress made this need for federal financial sup-

port of desegregation the premise of the Act in its state-

ment of findings and purpose:

The Congress finds that the process of eliminating or

preventing minority group isolation and improving

the quality of education for all children often involves

the expenditure of additional funds to which local

educational agencies do not have access.

20 U.S.C. § 1601 (Supp. II 1972).

There can be no doubt that Congress expected that

ESAA funds would be used to assist the process of de-

segregation. The committee reports contain numerous

declarations that ESAA funding was intended to aid local

school districts to “plan comprehensively for the elimina-

tion of racial minority group isolation in their schools

.... H.R. Rep. No. 576, p. 1, 92d Cong., 1st Sess.

(1972), and to “implement plans for a variety of programs

designed to end minority group isolation.” S. Rep. No.

604, p. 8, 92d Cong., 2d Sess. (1972). See S. Rep. No. 61,

p. 2, 92d Cong., lst Sess. (1972). The Act’s statement of

purpose declares this same goal of funding efforts to elimi-

nate the effects and indicia of segregation:

The purpose of this chapter is to provide financial

assistance—

(1) to meet the special needs incident to the elimi-

nation of minority group segregation and discrimina-

tion among students and faculty in elementary and

secondary schools;

(2) to encourage the voluntary elimination, reduc-

tion, or prevention of minority group isolation in

elementary and secondary schools with substantial

proportions of minority group students; and

(3) to aid school children in overcoming the educa-

tional disadvantages of minority group isolation.

54a

20 U.S.C. § 1601 (Supp. IT 1972).

The scheme of the Act reflects the same legislative in-

tent. The threshold requirement for eligiblity for funding

is the existence of an approved desegregation plan. See 20

U.S.C. § 1605 (Supp. II 1972); H.R. Rep. No. 576, p. 2,

92d Cong., Ist Sess. (1972); S. Rep. No. 61, p. 2, 92d

Cong., 1st Sess. (1971). Funding is available to school dis-

tricts voluntarily choosing to desegregate and to school

districts compelled to desegregate by court or agency

order—dramatically indicating that the overriding legisla-

tive goal was to support the process of desegregation, re-

gardless of past culpability of the school district. See 20

U.S.C. § 1605 (Supp. II 1972); H.R. Rep. No. 576, p. 2,

92d Cong., lst Sess. (1972); S. Rep. No. 61, p. 2, 92d

Cong., Ist Sess. (1971); 117 Cong. Ree. 38485, 92d Cong.,

lst Sess. (1972) (remarks of Mr. Bell, a co-sponsor of one

version of the Act); 117 Cong. Rec. 38491, 92d Cong., 1st

Sess. (1971).

The clear implication of this legislative history is that

Congress intended, as a basic principle of the legislation,

that ESAA funding be available for school districts that

had not yet eliminated all the effects of past discriminat-

ory practices. It is almost too obvious to state that this

principle must be implicit in an Act that requires appli-

cants for funding to have plans to eliminate the effects of

past discriminatory policies, see 20 U.S.C. § 1605(1)(A)()

and (ii), and that directs HEW to evaluate the applications

by the degree to which they will eliminate such effects.

See 20 U.S.C. § 1609(C)(2) (Supp. II 1972); 20 U.S.C.

§ 1609(a)(7) (Supp. II 1972).

HEW contends, however, that this basic legislative in-

tent to fund the elimination of the effects of past dis-

criminatory practices does not apply equally to the differ-

ent classifications of applicants established by the Act.

Section 1605 classifies applicants for ESAA funding into

three groups: (1) applicants with a “plan” satisfying the

threshold eligibility requirements: (2) applicants who have

satisfied the threshold eligibility requirements but who

are ineligible because they have committed one of the pro-

hibited practices after the cut off date of June 28, 1973;

55a

and (3) ineligible applicants who have obtained a waiver of

ineligibility. 20 U.S.C. § 1605 (Supp. II 1972). HEW ar-

gues that Congress intended to finance the elimination of

the effects of discrimination in only those school districts

that have not committed one of the prohibited practices

after the cut off date; any school district committing such a

practice after that date can, it is urged, receive funding

only when the effects of the past discriminatory practice

have been eliminated.

We reject HEW’s contention. The basic purpose of the

Act—funding the process of desegregation—would be

frustrated by attaching such critical significance to June

23, 1972. Our interpretation is that discriminatory prac-

tices after that date make ESAA funds unavailable unless

the practice has ceased and a waiver is obtained so that

ESAA funds can be used to eliminate the effects of past

discrimination.

The date itself indicates the untenability of HEW’s posi-

tion. It is the date on which the provision was adopted. 20

U.S.C. § 1601, p. 559 (West 1978). No one could have pre-

dicted that date as a cut off of the power to grant a

waiver. Had the date been fixed so..1e years prospectively,

the argument might make some sense since Congress

might have set it as a warning that corrective action must

be taken before that date or funds under ESAA would be

forever barred. But no school board could have responded

to the Act by shutting off discriminatory acts on less than

24 hours notice; institutions cannot be turned on and off by

the flick of a switch. Schools then discriminating were not

barred absolutely from ESAA funds on the same date the

Act became effective. Even the use of the word

“waive’—“to refrain from pressing (an objection .. .)”

Oxford Universal Dictionary (3d ed.)—connotes forgive-

ness on conditions, rather than unrelenting punishment.

No substantial legislative history exists explaining the

purpose of either the cut off date creating automatic in-

eligibility or the waiver procedure. The scraps of legisla-

tive history that do exist suggest only a recognition of the

need for a safeguard procedure to ensure that ESAA funds

56a

were not channeled to school districts that continued to

discriminate. See 117 Cong. Rec. 512, 92d Cong., 1st Sess.

(1971) (remarks of Representative Bell, an introducer of

the bill); 117 Cong. Rec. 10759, 92d Cong., 1st Sess. (1971)

(remarks of Senator Mondale, Chairman of the Labor

Committee); Hearings on H.R. 17846 before the General

Subcommittee on Education of the House Committee on

Education and Labor, p. 570, 91st Cong., 2d Sess. (1971);

Hearings on S. 3883 before the Subcommittee on Educa-

tion of the Senate Committee on Labor and Public Wel-

fare, p. 97, 91st Cong., 2d Sess. (1971). An applicant for

funding like the Board which has adopted an HEW ap-

proved Memorandum of Understanding ending past dis-

criminatory practices and planning concrete steps to

eliminate their effects poses no such danger. The im-

plementation of the HEW approved Memorandum insures

satisfaction of the legislative intent that funds be denied to

school districts actively discriminating; the Memorandum

initiates a program of active desegregation. Thus, the

basic legislative design of funding desegregation would be

best promoted by permitting HEW to exercise its discre-

tion to grant or withhold a waiver to an applicant that has

adopted a plan to eliminate the results of a past dis-

criminatory practice that created ineligibility, is promptly,

actively and in good faith carrying out that plan, but has

not yet fully eliminated that practice’s effects. Surely it

would be anamolous, in the face of the clear Congressional

desire to fund desegregation efforts, if the statute were

read to preclude any possibility of a waiver and funding to

an applicant that has agreed to an HEW approved plan

designed to eliminate the effects of discriminatory teacher

assignments.

The legislative intent would, of course, be frustrated if

an applicant could agree to plan to end discriminatory

practices, receive federal funding, and then continue those

practices. This possibility poses little danger, however,

since HEW retains the power to cut off funding on the

ground that the past “practice” or “policy” of discrimina-

tion has not “ceased to exist” as section 1605(d)(1) re-

quires. Cf. Board of Education, Cincinnati v. H.E.W.,

57a

396 F.Supp. 203, 239 n. 22 (S.D. Ohio 1975), rev'd in part

on other grounds, 582 F.2d 1070 (6th Cir. 1976) (suggest-

ing that HEW could sue for injunctive relief to enforce

such a plan).

C. History of the Implementing Regulation

HEW regulation 45 C.F.R. 185.44(d)(8) does require a

waiver applicant, ineligible due to discriminatory teacher

assignments, to demonstrate that the effects of such past

discriminatory practices have been eliminated—i.e., that

“such agency has assigned its full-time classroom teachers

to its schools so that no school is identified as intended for

students of a particular race, color or national origin.” If

this regulation were even “reasonably related” to the pur-

poses and provisions of the Act we would be constrained to

enforce it. See, e.g., Lau v. Nichols, 414 U.S. 568 (1974).

It is not so related. The regulation’s requirement that the

effects of past discriminatory practices be totally elimi-

nated frustrates both the primary purpose of the Act and

the statutory provision, 20 U.S.C. § 1605(d)(1) (Supp. II

1972), defining the standard for granting a waiver. Regu-

lation 45 C.F.R. 185.44(d)(3) is invalid to the extent that it

prevents such a waiver.

This regulation’s admirtistrative history supports the in-

terpretation of the statutory waiver standard that we

adopt. The original text of the regulation was identical to

its present language. 38 Fed. Reg. 3463, 45 C.F.R.

§ 185.44(d)(3). On July 16, 1978, the Secretary of HEW in

a notice of proposed rulemaking announced a modification

of the regulation to permit waivers of ineligibility for

school districts which had not yet fully rectified the effects

of the past discriminatory practices in teacher assign-

ments. 39 Fed. Reg. 18894 (1973). The new regulation re-

quired only that school districts adopt a plan designed to

eliminate all racially or ethnically identifiable schools

within a reasonable time but in no event later than the two

year period ending with the commencement of the 1975-76

school year. This regulation, promulgated on August 16,

1973, provided:

58a

§ 185.44 Waiver of ineligibility.

* * * * *

(d) Demotion or dismissal of minority group per-

sonnel:

* * * * *

(3) In the case of ineligibility resulting from dis-

criminatory assignment of teachers as prohibited by

§ 185.43(b)(2), such applications for waiver shall con-

tain evidence that such agency has adopted and im-

plemented a nondiscriminatory assignment policy. In

the case of a local educational agency implementing a

plan described in § 185.11(a), such evidence shall indi-

cate that such agency is complying with the require-

ments of such plan with respect to the assignment of

faculty. In the case of local educational agencies not

implementing such a plan, or implementing such a

plan which contains no provision as to assignment of

faculty such evidence shall include at a minimum:

(i) Adoption by such agency of a policy of nondis-

criminatory assignment of faculty and staff members;

(ii) Determination of all faculty and staff assign-

ments made after the date of application for waiver in

a manner which does not contribute to or reinforce

the facial or ethnic identifiability of any school oper-

ated by such agency;

(iii) Adoption of a plan to eliminate all full-time

teaching faculties composed exclusively of members

of a single racial or ethnic group no later than the end

of the period for which assistance is to be awarded;

and

(iv) Adoption of a plan for assignment of faculty

and staff members which will eliminate all racially or

ethnically identifiable faculties at schools operated by

such agency within a reasonable period of time but in

no event later than the commencement of the 1975-76

academic year. In the case of school districts in which

the percentage of minority group members on the

full-time teaching faculty is less than the percentage

of minority group members in the student body, such

plans shall include a plan of affirmative action to in-

crease the percentage of minority group members on

the full-time teaching faculty of such agency.

59a

38 Fed. Reg. 21646.

The notice of proposed rulemaking declared that the

original regulation requiring the elimination of the effects

of past discrimination frustrated the primary purpose of

the legislation by denying support to desegregating school

districts in serious need of financial aid:

In the administration of the Emergency School Aid

Act it was determined that in some cases major met-

ropolitan school districts,

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