Bryan v Koch Reply Brief for Plaintiffs-Appellants

    IN THE UNITED STATES COURT OF APPEALS 

FOR THE SECOND CIRCUIT 
NO. 80-7401

DAVID E. BRYAN, JR., et al.,

Plaintiffs-Appellants, 
v .

EDWARD I. KOCH, et al_. ,

Defendants-Appellees.

DISTRICT COUNCIL 37, et al.,

Plaintiffs-Appellants,
v .

EDWARD I. KOCH, et al.,

Defendants-Appellees.

On Appeal From The United States District 
Court For-The Southern District of New York

REPLY BRIEF FOR PLAINTIFFS-APPELLANTS

BEVERLY CROSS 
KAREN SMITH 
JOEL GILLER

140 Park Place
New York, New York 10007

JACK GREENBERG 
BETH J. LIEF

10 Columbus Circle 
Suite 2030
New York, New York 10019

Attorneys for Plaintiffs, 
District Council 37 v. Koch Attorneys for Plaintiffs in 

Bryan v . Koch
HERBERT SEMMEL 
SANFORD J. NEWMAN

Center for Law and Social Policy 
1751 N Street, N.W.
Washington, D.C. 20036

Attorneys for individual Plaintiffs 
in District Council 37 v. Koch



IN THE UNITED STATES COURT OF APPEALS 
FOR THE SECOND CIRCUIT 

No. 80-7401

DAVID E. BRYAN, JR., e* ?!.,

Plaintiffs-Appe Hants, 
v .

EDWARD I. KOCh, et al..

Defendants-Appellees.

DISTRICT COUNCIL 37, et al..

Plaintiffs-Appellants, 
v .

EDWARD I. KOCH, et al.,

Defendancs-Appellees.

On Appeal From The United States District 
Court For The Southern District of New York

REPLY BRIEF FOR PLAINTIFFS-APPELLANTS

The complaints in these actions each alleged that the 
conduct of the defendants, in addition to violating Title VI, 

also contravened the requirements of the regulations issued 
by HHS. App. 12, 22, 246, 255. The trial court expressly 
recognized, as did the defendants below, that those regula­
tions, 42 C.F.R. § 80.3, establish a disparate impact 

standard. The court expressly held that the regulations,



together with the HHS opinions and r jcommendations elaborat­

ing on their meaning, are invalid. App. 590-600. In this 
Court appellees discussion of the regulations is largely- 

limited to the contention that the regulations are not entitled 

to deference in construing Title VI. Appellees Brief, pp. 31- 
35. We urge that, even if Title VI itself applies only to 
instances .of discriminatory purpose, the regulations forbid­

ding certain types of disparate racial impact would nonetheless 
be valid.

It is clear beyond peradventure that an agency authorized 
under a statute may at times establish by regulation new obliga­
tions not contained in the statute itself. "[T]he role of 

regulations is not merely interpretative; they may instead 

be designedly creative in a substantive sense, if so authorized 

Usery v. Turner Elkhorn Mining Co., 128 U.S. 1, 37, n. 40 (1976)
In Mourning v. Family Publications Service, 411 U.S. 356 

(1973), the Federal Reserve Board had promulgated a regulation 

under the Truth in Lending Act requiring the disclosure of 
certain information, such as the total cost of the goods, in 
any instalment transaction involving more than four payments.

12 C.F.R. '§ 226.2(k). Although the Truth in Lending Act itself 

required disclosures only if the case of transactions involving 

a finance charge, the Board's regulation required disclosures 
regardless of whether there was a finance charge so long as 
more than four instalment's were involved. The defendant in 

that case challenged the regulation, arguing it created obliga­

tions not contained in the statute itself, and was in excess

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of the Board's authority. The Supre le Court unanimously 
rejected that contention.

The defendant in Mourning, like the court below, recog­

nized that the power to issue regulations ordinarily authorized 

regulations "reasonably related to the purposes of the enabling 

legislation", Thorpe v. Housing Authority of Durham, 393 U.S. 

268, 280-81 (1969), but urged that the statute and regulation 

were "inconsistent" because the regulation created obligations 
not found in the statute." The purported conflict arises be­

cause the statute specifically mentions disclosure only in 
regard to transactions in which a finance charge is in fact 

imposed, although the rule requires disclosure in some cases 
in which no such charge exists." Mourning, 411 U.S. at 372. 

Compare App. 592-93. But the Supreme Court held that the im­
position of obligations on parties Vvuo might not be within 
the coverage of the statute was permissible. It recognized 
that some contracts providing for more than four instalments 

would involve hidden finance charges, and held that the Board 
was not obligated to determine in each case whether there was 
such a charge and the Act itself applied.

The fact that the regulation applied the obligations of 

the statute to some individuals who had not violated and were 

not covered by the act itself did not render the regulation 
invalid.

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Where, as here, the transaction or conduct 
which Congx ass seeks to administer occur in 
myriad and changing forms, a requirement that 
a line be drawn which insures that not one 
blameless individual will be subject to the 
provisions of an act would unreasonably encumber 
effective administration . . .

411 U.S, at 356.

The Court also sanctioned the ust of regulations broader 
than the underlying statute in Gem co v. Walling, 324 U.S.

244 (1945). In that case the Administrator of the Wage and 

Hour Division was charged with enforcing the minimum wage 
provisions of the Fair Labor Standards Act. Although the 

Act itself established no limitations on where workers could 
be employed, the Administrator forbade employers from giving 
their employees work to do at home. The Administrator reasoned 
that it could not effectively monitor the number of hours 

being worked. Gemsco, however, argued that the regulation 
was invalid, urging, not only that homework had not been for­
bidden by the act, but that it was "an independent subject 

matter wholly without the .statute1s purview . . .." 324 U.S.

at 261. 3ut the Court held that the regulation was lawful 

because it was reasonably directed at achieving the statutory 
objectives. 324 U.S. at 259.

Title VI, in addition to prohibiting discrimination, 
authorizes and directs every federal agency granting federal 
assistance "to effectuate the provisions of section 20006 of 
this title . . . by issuing rules, regulations, or orders of 

general applicability' . ..." 42 U.S.C. § 2000d-l. This is

on its face a grant cf authority comparable to that in Mourning,

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and broader than that in Gemsco, which was effectively limited

to preventing e\asion. See 324 U.S. at 248. As four members
of the Supreme Court noted in University of California Regents
v. Bakke, 438 U.S. 265 (1978).

Attorney General Robert Kennedy testified that 
regulations had not been written into the legislation 
itself because the rules and regulatxons defining dis­
crimination might differ from ore program to another 
so that the term would assume different meanings in 
different contexts. 438 U.S. at 343. (Opinion of 
Justices Brennan, Marshall, White and Blackmun)
(Emphasis added).

Clearly the definition of "discrimination" could only vary 
from program to program, as thus contemplated, if the agencies 
were authorized to define it as something other than just 
"purposeful discrimination." The action of eight Federal 

agencies in promulgating in 1964 substantive regulations 

demonstrates their view, to which deference is certainly due, 
that section 2000d-l authorized the establishment of such 
substantive requirements which did not merely incorporate 
the language of the statute or the Fourteenth Amendment.

The majority opinion .in Lau v. Nichols, 414 U.S. 563 

(1974), cited both Title VI and the regulations at issue in 
this case. While the majority seems to have read Title VI 

itself to create an effect standard, it held that the practices 

in Lau had the "earmarks of the discrimination banned by the 

regulations," 414 U.S...at 568. (Emphasis added),. Although 
the majority did not reach the question of the validity of 
the regulation section 80.3 if its commands exceeded those 

of the statute, three members of the Courc did so. Justice 
Stewart, in an opinion joined by Justice Blackmun and the

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Chief Justice, expressed doubts as to whether Title VI,
"standing alone, would render illegal the expenditure of
funds" on the disputed schools. 414 U.S. at 570.

On the other hand the interpretive guidelines 
published by the Office of Civil Rights of the 
Department of Health, Education and Welfare . . .
clearly indicate that affirmative efforts to give 
special training for non-English-speaking pupils 
are required by Title VI . . .. The critical
question is, therefore, whether the regulations and 
guidelines promulgated by HEW go beyond the authority 
of section 601.

414 U.S. at 570-71. Relying on Mourning, Justice Stewart 
held the disparate impact regulation valid as "reasonably 
related to the purposes of the enabling legislation." 414

U.S. at 571.
Although only three members of the Supreme Court have 

expressed an opinion as to whether, regulation section 80.3
V

would be valid even if Title VI itself required proof of dis­
criminatory purpose, Justice Stewart's view is clearly correct 
The regulations require remedial action where the conduct of 
a grant recipient has a disproportionately adverse impact on 

minorities and other means exist for achieving the purported 

purpose of that action. Certainly prohibiting grantee conduct 
which has such an impact furthers the anti-discriminatory 

policy of Title VI, regardless of whether Title VI itself 
applies only to intentional discrimination. The existence of 

such a disparate impact alone is clearly significant evidence
r '•of discriminatory purpose; where the recipient's professed 

purpose for its action could have been achieved without so 
burdening minorities, that fact raises serious questions as 
to whether tnat purpose was the actual or sole motive involved

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Thus the circumstances specified by the regulation, like

more than four instalmentcontracts in Mourning and the use 

of homework in Gemsco. gives substantial reason to believe 

that the underlying statute is being violated. HHS, like 
the Federal Reserve Board or the Wage and Hour Administrator, 
is not obligated to determine or consider on a case by case 

basis whether such a violation actually occurred. The problems 

involved in establishing the presence or absence of discrimina­
tory intent are enormously difficult, consistently confounding 

and dividing the federal courts. See, e.g., City of Mobile 

v. Bolden, 48 U.S.L.W. 4436 (1980). HHS was well within its 

authority in promulgating an adverse impact standard which, 

although cccasionally covering conduct and individuals not 
in violation of the Act, afforded a more administrable and 
predictable method by which HHS, the courts, and recipient 
agency themselves could test a proposed course of action.

Respectfully submitted,

JACK GREENBERG 
BETH LIEF

10 Columbus Circle 
Suite 2030
New York, New York 10019

Attorneys for Plaintiffs- 
Appellants in Bryan v . Koch

BEVERLY GROSS 
KAREN SMITH 
JOEL GILLER

140 Park Place 
New York, New York

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Attorneys for Plaintiffs- 
Appellants in District Council 
37 v. Koch



HERBERT SEMMEL 
SANFORD NEWMAN

Center for Law and Social 
Policy-

1751 N. Street, N.W. 
Washington, D.C. 20036

Attorneys for Plaintiffs- 
Appallants in District Council 
37 v. Koch

MARGARET MCFARLAND
University of Michigan 
Intern, Center for Law and 
Social Policy

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