Argued May 1, 1981.
Decided Sept. 23, 1981.
Rehearing and Rehearing En Banc Denied Nov. 23, 1981.
George M. Strickler, Jr., Ann Woolhandler, Michael g. Collins, New Orleans, La., for plaintiff-appellant.
Stuart Bernstein, Mayer Brown Platt, Chicago, Ill., for defendants-appellees.
Before SWYGERT, Senior Circuit Judge, PELL, Circuit Judge, and CAMPBELL, Senior District Judge.
WILLIAM J. CAMPBELL, Senior District Judge.
Plaintiff, Judy Lieberman, filed this lawsuit against the University of Chicago, its medical school (The Pritzker School of Medicine), the Dean of Students of the Division of Biological Sciences, and the Medical School Admissions Committee, claiming that she was denied admission to the medical school as a result of sexual discrimination in violation of Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681(a). In her complaint, plaintiff sought declaratory and injunctive relief as well as compensatory and punitive damages. Defendants' answer admits that the University of Chicago and its medical school receive federal financial assistance, but denies the allegations of discrimination.
Plaintiff had applied for admission to the 1977 entering class at the Pritzker School of Medicine. At that time she lived in Oak Park, Illinois with her husband and desired to remain in the Chicago area. Although placed on the "waiting list" at Pritzker, she was never offered admission and eventually accepted a place in the 1977 entering class at Harvard Medical School. The plaintiff seeks compensatory damages for, inter alia, her moving expenses, pain and suffering, and loss of consortium.
The defendants moved for and obtained summary judgment. The District Court concluded that, based on the plaintiff's admitted intention to complete her medical education at Harvard, the request for injunctive relief was moot. The plaintiff does not attack that decision on appeal. However, the court also determined that the prayer for declaratory relief was moot, and that, as a matter of law, Title IX does not provide a damage remedy. The plaintiff appeals both of those decisions.
The issue of whether Title IX provides a damages remedy is conceded by the parties to be a question of first impression. The District Court based its decision on Cannon v. University of Chicago, 441 U.S. 677, 99 S.Ct. 1946, 60 L.Ed.2d 560 (1979), (hereafter Cannon I) and both sides argue that case as compelling support for their positions. In Cannon I, the court held that Title IX contains an implied private right of action for an individual injured by a violation of 20 U.S.C. § 1681(a), and found injunctive relief appropriate. The question whether the plaintiff was entitled to damages was not addressed. The Supreme Court has stated that:
the question whether a litigant has a "cause of action" is analytically distinct and prior to the question of what relief, if any, a litigant may be entitled to receive. Davis v. Passman, 442 U.S. 228, 99 S.Ct. 2264, 2274, 60 L.Ed.2d 846 (1979).
Therefore, while Cannon I is certainly an important source of guidance for the issue before this court, we do not perceive it as dispositive of the question presented.
The exhaustive analysis of the legislative history of Title IX contained in Cannon I provides a foundation for our inquiry here. The legislation had two objects, to avoid the use of federal funds to support discrimination and to provide individual citizens effective protection against such practices, Cannon I, 99 S.Ct. at 1961. Title IX was intended by Congress to be interpreted and applied as Title VI, upon which it was modeled, Cannon I, 99 S.Ct. at 1957. Based on that premise this Court recently held, after a thorough analysis, that § 1681(a) only prohibits intentional discriminatory acts, Cannon v. University of Chicago, 648 F.2d 1104 (7th Cir., 1981) (hereafter Cannon II).
Our analysis of Title IX proceeds with the observation that it was part of a bill designed to assist institutions of higher education adjust to a situation of "acute financial distress," 2 U.S.Code Cong. & Admin.News 1972, pp. 2462, 2463. The legislation increased federal funding of higher education, both public and private, by expanding existing programs and initiating others, Ibid. Thus, Title IX, as an integral part of this legislative scheme, must be deemed an exercise of Congress' Spending Power, that is, the imposition of the statutory prohibition is justified by the expenditure of federal funds, see Cannon I, 99 S.Ct. at 1963.
In Pennhurst State School and Hospital v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981), the Court provided guidelines for construing implied rights and remedies in the context of funding legislation:
.... (L)egislation enacted pursuant to the Spending Power is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions. The legitimacy of Congress' power to legislate under the Spending Power thus rests on whether the State voluntarily and knowingly accepts the terms of the "contract." (citations omitted) 101 S.Ct. at 1539.
In order to ensure a "meeting of the minds," the conditions to be imposed by Congress must be stated in unambiguous terms. For that reason, the Court in Pennhurst declined to impose certain obligations on the defendants (and create concomitant rights to enforcement for the plaintiffs) despite suggestive language in the legislation. The Court buttressed its decision by noting that it would be inconsistent with the legislative intent of assisting the defendants to fund certain programs to impose additional financial obligations on them.
Both Title IX and its legislative history are silent as to the existence of a damage remedy for sexual discrimination. However, appellant argues that it is a small step from the implied private cause of action created in Cannon I to an implied remedy in damages. But the decision in Cannon I did not significantly alter the conditions upon which the recipients accepted federal funds. The injunctive relief authorized in Cannon I merely permits the courts to require the institutions to comply with one of the unambiguous terms of the agreement. While the Court did expand the class of plaintiffs who could enforce the "contract," the remedy created did not impose any additional burdens on the recipients of the funds.
However, the implication of a damages remedy would impose a potentially massive financial liability upon the institutions whose "acute financial distress" triggered the legislation. Theoretically, this liability could exceed the amount of the federal funds received. In any event, this potential liability would be a significant factor which the recipients would need to consider before it could be said that they had exercised their choice "knowingly, cognizant of the consequences of their participation," Pennhurst, 101 S.Ct. at 1540. Therefore, as a matter of statutory construction, we must assume that if Congress had intended to create a remedy for damages it would have done so explicitly.
Appellant argues that the implication of a damages remedy would create an extremely effective means of enforcing § 1681. However, as noted previously, we do not perceive that remedy as entirely consistent with the legislative purpose. Furthermore, in light of the implied private cause of action for injunctive relief authorized by Cannon I, coupled with the provision for an award of attorneys' fees contained in 42 U.S.C. § 1988, aggrieved individuals have at least one effective means of enforcement. 20 U.S.C. § 1682 also provides means for federal administrative enforcement. Therefore, based upon the considerations discussed above, we consider it unwise to imply an additional remedy. If a damages remedy is to be created, it should be fashioned by Congress and not by the Courts, thus providing the institutions with ample notice and an opportunity to reconsider their acceptance of federal aid.
As to the request for declaratory relief, we agree with the District Court that that issue is moot, see Hansen v. Ahlgrimm, 520 F.2d 768 (7th Cir. 1975).
For the above-stated reasons, the judgment of the District Court is affirmed.
SWYGERT, Senior Circuit Judge, dissenting.
I respectfully dissent from a decision which only can be read as an evisceration of the ban against sex discrimination contained in Title IX.
The analysis of the majority opinion rests on the Supreme Court's recent decision in Pennhurst State School & Hospital v. Halderman, 451 U.S. 1, 101 S.Ct. 1531, 67 L.Ed.2d 694 (1981). Although Pennhurst is the linchpin of the majority's reasoning, the majority opinion fails to provide a description of the facts and issues in Pennhurst.
Pennhurst concerned the Developmentally Disabled Assistance and Bill of Rights Act (Act), 42 U.S.C. § 6000 et seq. The Act creates a federal-state grant program through which the federal government provides funding to states that choose to participate. The funding is to aid participating states in designing programs for the care and treatment of the developmentally disabled. As is true with such federal grant programs, states that choose to accept the federal funds must comply with the conditions of the Act.
At issue in Pennhurst was section 6010 of the Act, the "bill of rights" provision. Section 6010 provides for a right to treatment which is to maximize the developmental potential of the individual and is to be provided in the setting least restrictive of the individual's liberty. In contrast to other sections of the Act, section 6010 does not specifically state that compliance with the provisions of that section is a condition for receipt of funding.
The court of appeals held that the provisions in section 6010 were conditions of receipt and that plaintiffs had standing to bring a private cause of action for the state's failure to comply with that section. The Supreme Court reversed, holding simply that section 6010 was not a condition of receipt of federal funding. The Court remanded for a determination of whether plaintiffs had an implied private cause of action under other provisions of the Act.
While the majority accurately characterizes the Court's reasoning in Pennhurst, it provides no analysis as to why the reasoning of Pennhurst must apply. The only clue we receive is that both Title IX and the Act in Pennhurst were passed pursuant to the spending power. This superficial similarity does exist. Yet the present case involves issues vastly different from those in Pennhurst.
The majority relies on the following language from Pennhurst :
... (L)egislation enacted pursuant to the Spending Power is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions. The legitimacy of Congress' power to legislate under the Spending Power thus rests on whether the State voluntarily and knowingly accepts the terms of the "contract."
101 S.Ct. at 1539.
A careful reading of this passage in Pennhurst reveals that it simply is inapplicable to the present case. The Court in Pennhurst was not faced with implying a damage remedy nor even with implying a private cause of action. Rather, the Court had to decide whether the provisions contained in section 6010 were even a condition of receipt of federal funding. The Court made clear only the obvious that in deciding whether to accept federal funding the state must be aware of its statutory obligations. A condition of receipt of funding must be made explicit. This has absolutely no bearing on the existence of a damage remedy or a private cause of action.
Indeed, the Court in Pennhurst explicitly stated the issue as
(W)hether Congress in § 6010 imposed an obligation on the States to spend state money to fund certain rights as a condition of receiving federal moneys under the Act or whether it spoke merely in precatory terms.
101 S.Ct. at 1540. Also, the Court was careful to distinguish the possibility that an implied private cause of action may exist under other provisions of the Act. This issue was remanded to the court of appeals. 101 S.Ct. at 1545-46. Cf. id. at 1545 n.21 ("Because we conclude that § 6010 confers no substantive rights we need not reach the question whether there is a private cause of action under 42 U.S.C. § 1983 to enforce those rights."). Pennhurst concerned what obligations were imposed upon recipients of funds, not what consequences flow from a violation of statutory conditions. In the present case it is not disputed that Title IX is a condition of a receipt of federal funding. Thus, the analysis in Pennhurst is simply irrelevant.
The majority's reasoning appears even weaker when analyzed in light of the Supreme Court's decision in Cannon which implied a private cause of action under Title IX. The majority reasons that Congress must explicitly provide for a damage remedy because it is a condition of the "contract" between the federal government and the receiving institution. This overlooks the obvious fact that the Supreme Court in Cannon determined that an implied private cause of action exists under Title IX. Thus, the majority concludes that Congress can, by implication, create a private cause of action on behalf of an individual, but that it must expressly provide for a damage remedy. Even if I were to accept the logic of such a proposition, it appears that the existence of the implied cause of action is the more important policy decision which Congress would have to make regarding the passage of a statute. Therefore, it seems somewhat curious to conclude that Congress need not be explicit in creating standing for a violation of a statute, but must explicitly provide for a damage remedy.
Also, the logic of the majority is hardly flawless. The majority reasons that Congress must expressly provide for a damage remedy. This cannot possibly be reconciled with the Supreme Court's determination in Cannon that Congress implicitly created a private cause of action. The majority would apparently have asked Congress to write in an express damage remedy for a private cause of action for which it did not expressly provide. Obviously, if the damage remedy is to be expressly provided, there must be an express provision for a private cause of action. Thus, the majority's analysis is internally inconsistent as well as inconsistent with the Supreme Court's decision in Cannon.
The only attempt that the majority makes to reconcile the Cannon decision with its reasoning is to state that Cannon did not alter the conditions upon which a recipient accepted federal funds. The injunctive relief merely permits courts to require that receiving institutions comply with the conditions of the agreement. This attempt to minimize the impact of the holding in Cannon, that a private cause of action exists, is patently unpersuasive. Prior to the Supreme Court's decision in Cannon it was not certain whether a receiving institution would have to defend actions brought by individuals under Title IX. This was not made clear until the Cannon decision. The majority downplays the effect of this "surprise" condition by concluding that it does not alter the conditions of receipt because at most the injunctive relief will require that the receiving institution comply with the explicit conditions of Title IX. This ignores several practicalities. First, the holding in Cannon imposes the unexpected burden on the recipient of hiring legal counsel and defending an action in court. The Court in Cannon explicitly recognized this in rejecting respondent's contention that defending individual Title IX actions would be costly. 441 U.S. at 709, 99 S.Ct. at 1964. Second, it ignores the potential monetary liability that a recipient may incur as a result of having to pay attorney's fees to prevailing parties. See 42 U.S.C. § 1988. Finally, it ignores the costs of complying with injunctive relief obtained by an individual. In sum, the majority's attempt to conclude that Cannon imposed no added conditions on a receiving institution is without support. Cannon imposed potential financial costs on a receiving institution which were unanticipated or unknown at the time funding was accepted.
The Supreme Court's decisions in Cannon and Pennhurst indicate that in cases involving federal funding statutes, there are three analytically distinguishable issues. As Pennhurst makes clear, the first issue is what substantive conditions Congress intended to impose on a recipient of funding. Those conditions, Pennhurst concludes, must be explicitly stated by Congress. The majority constantly refers to the implication of a damage remedy as a condition of receipt of funding. This is inaccurate and manifests a misunderstanding of the structure of federal funding and the availability of individual relief for violation of the statutes.
The second issue, whether an implied cause of action exists, is a separate inquiry. The Supreme Court made that clear in Pennhurst when it remanded to the court of appeals the issue of whether an implied right of action exists under other statutory provisions. Resolution of that issue requires an analysis of the four factors set out in Cort v. Ash, 422 U.S. 66, 95 S.Ct. 2080, 45 L.Ed.2d 26 (1975); Pennhurst, 101 S.Ct. at 1548, 1557 (White, J., dissenting).