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National Association for Advancement of Colored People v. Medical Center Inc.

decided: June 4, 1979.

NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE, 107 EAST NINTH STREET, WILMINGTON, DELAWARE, PUERTO RICAN CIVIL RIGHTS LEAGUE, INC., 1030 WEST THIRD STREET, WILMINGTON, DELAWARE, OLDER AMERICANS COALITION, 1300 NORTH BROOM STREET, WILMINGTON, DELAWARE, WILMINGTON UNITED NEIGHBORHOODS, 1300 NORTH BROOM STREET, WILMINGTON, DELAWARE, BRANDYWINE TRINITY UNITED METHODIST CHURCH, TWENTY-SECOND AND MARKET STREETS, WILMINGTON, DELAWARE, ON BEHALF OF THEIR MEMBERS AND OTHERS SIMILARLY SITUATED, AND SARAH BRATCHER, RAYMOND W. BROWN, MARIA GALINDEZ, FOR HERSELF AND AS PARENT AND GUARDIAN FOR HER MINOR CHILDREN, REYNALDO GALINDEZ, AND PEDRO GALINDEZ, MILAGRO QUINONES, DENISE SMOKES, MARIA MIRAN, ON BEHALF OF THEMSELVES AND OTHERS SIMILARLY SITUATED, CITY OF WILMINGTON, APPELLANTS,
v.
THE MEDICAL CENTER, INC.; DAVID MATHEWS, U.S. SECRETARY OF HEALTH, EDUCATION, AND WELFARE; AMOS BURKE, DIRECTOR OF THE BUREAU OF COMPREHENSIVE HEALTH PLANNING; WILLIAM C. GORDON, DIRECTOR OF THE HEALTH PLANNING COUNCIL, INC. APPELLEES



APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE D.C. Civil No. 76-298

Before Hunter and Garth, Circuit Judges, and Brotman,*fn* District Judge.

Author: Hunter

Opinion OF THE COURT

Appellants brought this action under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (1976), and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794 (1976), contending that a proposed health facility relocation would have a discriminatory impact. The district court directed appellants to pursue the administrative remedy provided by section 602 of Title VI. The court subsequently found that Title VI and section 504 do not create private rights of action to seek declaratory and injunctive relief for violations of the statutes, found that the administrative remedy was the sole remedy available to appellants, and then affirmed HEW's administrative decision that the proposed relocation would not have a discriminatory impact. Because we find that Title VI and section 504 create private rights of action for plaintiffs who seek relief other than funding termination,*fn1 we reverse and remand the case to the district court for a trial on the merits.*fn2

I.

Appellants are five organizations and six individuals representing minority and handicapped persons who reside in Wilmington, Delaware.*fn3 Defendants are the Wilmington Medical Center ("WMC"), the Secretary of the United States Department of Health, Education, and Welfare ("HEW"), the Director of the Bureau of Comprehensive Health Planning of Delaware ("BCHP"), and the Chairman of the Health Planning Council, Inc. ("HPC").*fn4

This case arises from the controversy surrounding the decision of the Wilmington Medical Center to relocate major tertiary care components of its medical system from existing inner-city divisions to an outlying suburban location. Plaintiffs contend that the relocation (pursuant to a proposal denominated "Plan Omega") will cause disparities in the accessibility and quality of medical care available to urban and suburban residents.*fn5 This action was commenced on September 10, 1976, in the United States District Court for the District of Delaware. Plaintiffs contended that Title VI and section 504 created private causes of action to seek enforcement in federal court of the rights guaranteed by those statutes. They sought: 1) a judgment declaring that the proposed relocation would subject plaintiffs to discrimination in violation of Title VI and section 504 of the Rehabilitation Act; and 2) an injunction against construction of the proposed suburban facilities pending a review by HEW of the compliance of Plan Omega with Title VI and section 504.

On November 3, 1976, HEW filed alternative motions to dismiss or for summary judgment. HEW argued that the Complaint should be dismissed because of plaintiffs' failure to exhaust the administrative remedy provided by section 602 of Title VI. Plaintiffs responded that resort to agency procedures would be futile, alleging that HEW had insufficient resources available to conduct an adequate compliance review.*fn6 On January 19, 1977, the district court denied HEW's motion to dismiss plaintiffs' action. Rather, the court directed HEW to treat the plaintiffs' Complaint as "information" sufficient to require HEW to initiate the compliance investigation and review mandated by section 602.*fn7 In its Opinion of April 7, 1978, affirming HEW's ultimate determination, the district court reviewed its January 19 Order and explained:

The decision to instruct the Secretary to develop the factual record on plaintiffs' complaint and to exercise his discretion in reviewing Plan Omega, reflected the Court's view that such a process would "carry out the Congressional expectation that Title VI be administered by the appropriate agency and that judicial review of the agency's decision follow traditional paths.'

453 F. Supp. 280, 290 (D.Del.1978), Quoting 426 F. Supp. 919, 925 (D.Del.1977).

HEW conducted the ordered compliance review. On July 5, 1977, in a Letter of Findings from its Office of Civil Rights, HEW determined that the relocation proposed by Plan Omega as then formulated would violate Title VI and section 504. The letter also enumerated 12 areas in which the Plan would have to be modified in order to be in compliance with those statutes and with the Secretary's regulations. Subsequently, the Secretary engaged in informal, voluntary efforts to secure the compliance of WMC. After more than three months of discussion HEW and WMC entered into a binding agreement on November 1, 1977, in which WMC agreed to cure those aspects of its proposal which, in HEW's opinion, constituted Title VI and section 504 violations. With this agreement executed, the Secretary concluded that Plan Omega, as modified, was in compliance with the statutes and regulations. Plaintiffs disagreed with the Secretary's conclusion, contending, Inter alia, that the modified plan was based on erroneous and inadequate findings and was not based on a consideration of the relevant factors. The case was presented to the district court on cross-motions for partial summary judgment filed by the plaintiffs and by HEW, and upon a motion for summary judgment filed by defendant WMC. The court concluded that the cross-motions called for what was essentially judicial review of the Secretary's informal administrative determination that the modified Plan Omega complied with Title VI and section 504.

The court also had before it a motion by plaintiffs to modify its Order of November 4, 1977, in which the court had determined that the scope of its review was to be governed by the arbitrary and capricious standard defined in the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A) (1976). By their motion, Plaintiffs sought judicial review under the trial De novo standard of the APA, 5 U.S.C. § 706(2)(F), contending that HEW's determination was "adjudicatory in nature." The court denied this motion. Accordingly, the court applied the arbitrary and capricious standard, and affirmed the Secretary's determination. In the course of its decision, the court found that the administrative remedy provided under section 602 was exclusive, and that, as a result, plaintiffs did not have a private cause of action under Title VI or section 504. Additionally, the court denied plaintiffs' motion to supplement the administrative record under review, and rejected plaintiffs' claim of a due process right to an evidentiary hearing before the agency.*fn8

On appeal, plaintiffs first contend that Title VI and section 504 create private causes of action, and that as a result the district court's initial referral of their complaint for administrative action was error.*fn9 Second, plaintiffs renew their contentions as to the appropriateness of the De novo review standard, the right to supplement the administrative record on review, and the right to a due process evidentiary hearing before the agency. Finally, they seek review of ...


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