Heath v. Charlotte-Mecklenburg Hospital Authority Brief for Plaintiff-Appellee
Public Court Documents
July 20, 1981

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Brief Collection, LDF Court Filings. Heath v. Charlotte-Mecklenburg Hospital Authority Brief for Plaintiff-Appellee, 1981. d95c9ae7-b79a-ee11-be36-6045bdeb8873. LDF Archives, Thurgood Marshall Institute. https://ldfrecollection.org/archives/archives-search/archives-item/be6fb9e7-08f0-4b38-8095-970f00c263de/heath-v-charlotte-mecklenburg-hospital-authority-brief-for-plaintiff-appellee. Accessed April 22, 2025.
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IN THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT NO. 81-1448 HAZELINE J. HEATH, Plaintiff-Appellee, CHARLOTTE-MECKLENBURG HOSPITAL AUTHORITY: COUNTY OF MECKLENBURG, Defendants-Appellants. On Appeal From The United States District Court For The Western District of North Carolina BRIEF FOR PLAINTIFF-APPELLEE JULIUS CHAMBERS Chambers, Ferguson, Watt, Wallas, Adkins & Fuller, P.A. 951 South Independence Boulevard Charlotte, North Carolina 28202 (704) 375-8471- JACK GREENBERG BETH J. LIEF Suite 2030 10 Columbus Circle New York, New York 10019 (212) 586-8397 Attorneys for Plaintiff-Appellee I N D E X Page Table of Authorities Issues Presented ........ . . . . . . . . . . . 1 Statement of the C a s e ................ 2 Statement of Facts .............................. 6 Argument......................................... 11 I. The District Court Correctly- Held That a Certificate of Need Is Required Before Defendants Can Close Community Hospital and Transfer Its Services to Huntersville Hospital................ .. ........... 11 A. Applicable Federal and State Statutes Require Certificate of Need Approval for a Plan to Close a Hospital Facility and Relocate or Redistribute Its Beds to Another Facility........ 11 B. The Authority's Plan to Close Community Hospital and to Convert 29 Beds to Nursing Beds and to Create an 8 Bed Detoxification Unit at Huntersville as Replacements for Community's Services Requires a Certificate of N e e d .............. .. 16 C. The Injunction Is Necessary to Comply with the Federal and State Certificate of Need Requirements . . . . . . . . . 20 II. The Hospital Authority Will Suffer No Harm 9 from Compliance with the Injunction; In Contrast, the Poor and Black Patients Who ̂ Depended Upon Community Will Be Substan tially Harmed by a S t a y .......... .. 22 A. The Hospital Authority Will Suffer No Harm Either from Proceedings with the Certificate of Need Application or from Maintaining Community in a Manner Which Will Allow Resumption of Service . . . . 22 l Page III. Conclusion B. The Poor Black Residents of Mecklenburg County Will Be Irreparably Harmed by the Issuance of the Stay or Dissolution of the Injunction and the Public Interest Will Be Served by Continuance of the Injunction...................... 25 The District Court Has Jurisdiction Over the Subject Matter of This Action. The Causes of Action Predicated on Title VI, 42 U.S.C. §§ 1981 and 1983 and the Constitu tion Are Not the Subject of This Appeal . . . 27 .............................. ..............33 ii TABLE OF AUTHORITIES Cases: Pages Anderson v. City of Albany, 321 F .2d 629 (5th Cir. 1963)........................ 20 Board of Education v. Califano, 582 F.2d 576 (2d Cir. 1978), aff'd sub nom, Board of Education v. Harris, 222 U.S. 130 (1979).............. .. 31 Bryan v. Koch, 627 F .2d 612 (2d Cir. 1980) . . . . 31,32 Cypress v. Newport News General S. Non-sectarian Hosp. Ass'n., 375 F .2d 628 (2th Cir. 1967) (en banc) ........................ 19 De La Cruz v. Tormey, 582 F .2d 25 (9th Cir. 1978) . . . 30 Fullilove v. Klutznick, 228 U.S. 228 (1980) . . . . . . 30 Guadalupe Organization, Inc. v. Tempe Elementary School District No. 3, 587 F .2d 1022 (9th Cir. 1978)............................ .. 29,30 Guardian's Ass'n. of NYC Police Dept., Inc. v. Civil Service Commission, 633 F.2d 232 (2d Cir. 1980) . . 31 Jersey Insurance Company of New York v. Hefron, 222 F . 2d 136 (2th Cir. 1957) . ........... 17 Jones v. Pitt County Bd. of Education, 528 F . 2d 212 (2th Cir. 1975) ..................... 17 Lau v. Nichols, 212 U.S. 563 (1972) . . . . . . . . . 29,31 Long v. Robinson, 232 F .2d 977 (2th Cir. 1970) . . . 11,21,22,22 Lora v. Board of Education, 623 F .2d 228 (2d Cir. 1980)................ .. 32 NAACP v. Wilmington Medical Center, F.2d No. 80-1893 (June 29, 1981) ....................... 30 Nationwide Mutual Insutrance Co. v. De Loach, 262 F . 2d 775 (2th Cir. 1959)........ .. 17 Park East Corp. v. Califano, 235 F .Supp. 26 (S.D.N.Y. 1977) ................ 27 Page Regents of the University of California v. Bakke, 438 U.S. 265 ( 1978) ..................... 30 Serna v. Portales Municipal Schools, 499 F . 2d 1147 (10th Cir. 1974)............ .. . 29 Stiers v. Martin, 264 F .2d 795 (4th Cir. 1959) . . . 18 United States v. Warwick Mobile Home Estates, Inc., 537 F.2d 1148 (4th Cir. 1976) . . 17 Virginia Petroleum Jobbers Assoc, v. Federal Power Comm'n., 259 F.2d 921 (D.C. Cir. 1958) . . . 24 Washington v. Davis, 426 U.S. 229 ( 1976)............ 30 Constitutional and Statutory Provisions: Fourteenth Amendment .............. . . . . . . . . . 2,28 National Health Planning, Resources and Development Act, 42 U.S.C. § 300(k), et seq. . . . 3,11,12,27 42 U.S.C. § 1981 ................................... . 2,28,29 42 U.S.C. § 1983 . . . . . . . . . . ........ . . . . 2,28 Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000(d) . . . . . . . . . . . . . . . 2,3,28,29,30 N.C.G.S. § 131-175................................... 14 N.C.G.S. § 131-176(17) . . . . . . . . . . . . . . . . 15,16 N.C.G.S. § 131-178(a) ........ . . . . . . . . . . . . 15 North Carolina Certificate of Need Program Administrative Regulations § .0102(a) . . . . . . . 15 Other Authorities: North Carolina Certificate of Need Program Administrative Regulations § .0103 . . . . . . . . . 15 North Carolina Certificate of Need Program Administrative Regulations § .0104(26)(c) . . . . 15 North Carolina Certificate of Need Program Administrative Regulations § .0406(a) .......... 15 Federal Rules of Civil Procedure 52a .......... . . . 17 iv Page 42 C.F.R. § 123.4-01 et seq............................. 12 4-2 C.F.R. § 123.404................................... 15 42 C.F.R. § 123.404(a)(2)............................. 13 42 C.F.R. § 123.404(a)(3)........ .................. 13,15 42 U.S.C. § 123.404(a) ( c ) ....................... .. . 14 42 C.F.R. § 123.409 . ........................... 13,16,20 42 Fed. Reg. 4008 ................... ................ 13 45 Fed. Reg. 69746-7 et seq........................ .. 14 v IN THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT NO. 81-1448 HAZELINE J. HEATH, Plaintiff-Appellee, v . CHARLOTTE-MECKLENBURG HOSPITAL AUTHORITY; COUNTY OF MECKLENBURG, Defendants-Appellants. On Appeal From The United States District Court For The Western District of North Carolina BRIEF FOR PLAINTIFF-APPELLEE Issues Presented 1. Whether the Charlotte-Mecklenburg Hospital Authority is under a duty of law to secure a Certificate of Need before it can close Community Hospital; provide twenty-nine beds at Huntersville Hospital as replacement for Community Hospital services; establish a detoxification unit at Huntersville; and receive additional needy patients at Huntersville for extended nursing services. 2. Whether defendant-appellant should be granted a stay of the injunction pending appeal where it has made no show ing of harm, let alone irreparable harm, from the issuance of the injunction. Statement of the Case This case is before the Court on an appeal from an injunc tion requiring defendant Charlotte-Mecklenberg Hospital Authority (hereinafter Hospital Authority) (a) to seek certificate of need approval for its plan to close hospital services at Community Hospital and to relocate its services to Huntersville Hospital; and (b) during the period reasonably required to process a certificate of need, not to take any action which might materially interfere with resumption of services at Community Hospital. Defendant Hospital Authority also seeks "suspension" of the injunction pending this appeal. On May 11, 1981, Hazeline Heath, a low income black person who depends upon the services provided by Charlotte Community Hospital for the medical needs of herself and her disabled hus band, filed this action on behalf of herself and a class of poor, black citizens of Mecklenburg County,to challenge as discrimina tory the closing of Charlotte Community Hospital. The complaint charged that the closing of Community Hospital and the redistri bution and relocation of some of its beds violated plaintiff's rights and the rights of the class under Title VI of the Civil Rights Act of 1964-, 4-2 U.S.C. § 2000(d) et seq. and the rules and regulations promulgated thereunder; 4-2 U.S.C. §§ 1981 and 1983; the Fourteenth Amendment, and the requirement of the 2 National Health Planning, Resources and Development Act, 42 U.S.C. § 300(k) et seq. that defendants obtain a Certificate of Need for its plan. On May 12, 1981 plaintiff moved for preliminary relief enjoining defendants from taking any further action to close Community Hospital on the grounds that defendant did not obtain a certificate of need as required by federal and state law and regulations and that the closing of Community Hospital violates Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000(d) et seq. After a hearing on May 15, 1981, during which time witnesses were called and written evidence received, and after considering memoranda of law from all parties, the district court found, inter alia, that after the Hospital Authority lost its subsidy to operate Community Hospital, it voted to transfer its patients and functions to its facility in Huntersville, which is twelve or fourteen miles north of Charlotte (P.1.0. 1)— ̂The court concluded that defendants had largely closed and proposed to complete the shutting down of Community Hospital without complying.with federal and state regulations which re quire the issuance of a certificate of need in such circumstances, that plaintiff and other patients would be irreparably harmed, and that defendants would suffer no substantial harm if federal and state regulations were complied with prior to any final decision as to the future of the Hospital (P.1.0. 2,3). Accordingly, a preliminary injunction was issued enjoining the 1/ Preliminary Injunction opinion, dated May 15, 1981. 3 defendants (1) not to evict the remaining patients at Community Hospital until they are afforded reasonable time to be relocated in appropriate treatment centers; and (2) to maintain in good order and repair the physical plant and equip ment at Community Hospital, and not to take any action which would or might materially interfere with possible rapid and orderly resumption of services until defendants followed the procedures for seeking and obtaining a certificate of need (P.1.0, k). The district court made no conclusions of law ex plicitly under Title VI but found as fact that the closing of Community Hospital would have a substantial adverse impact upon many poor and black present and future patients (P.1.0. 2). Defendant Hospital Authority filed a motion to suspend Preliminary Injunction Pending Appeal and for Expedited Appeal on June 1, 1981 and this Court heard oral argument on the motion on June 2, 1981. By order dated June 3, 1981, this Court remanded the action to the district court and continued the temporary injunction on condition that the district court hold a further hearing and enter a final order by June 23, 1981 as to one issue: whether a certificate of need is required under the circumstances of this 2/case.— 2/ A copy of the order and the district court's opinion on the preliminary injunction is annexed to plaintiffs' appendix bn appeal. The Court of Appeal's order states the issue as being whether the Authority has a duty under law to secure a Certifi cate of Need before it can close Community Hospital, but, as is evident from the opinions of the district court and the memoranda submitted by both parties, the district court found that the Authority was closing Community Hospital and transferring its functions to Huntersville Hospital. The issue is whether a certificate of need is required in this circumstance, and/or whether that finding was clearly erroneous. See infra. k Pursuant to the remand, a hearing was held on June 15, 1981 and the district court issued a memorandum opinion and order on June 22, 1981. In that opinion, the court found as facts that "the decisions (a) to close Community Hospital; (b) to provide twenty-nine beds at Huntersville as replacement for Community Hospital services; (c) to establish a detoxifi cation unit at Huntersville; and (d) to receive these addition al needy patients at Huntersville for extended nursing services, 3 /were all and are still all parts of an overall plan (M.O. 7).— The court further found that this is both a "reduction or elim ination" of a service and a plan which "distributes beds among various categories, or relocates such beds from one physical facility or site to another" within the meaning of federal and state health planning statutes and regulations, and concluded that "for such action a certificate of need is required by law" (M.O. 7-8). The court also found that the action will cause the people formerly served by Community Hospital, almost all of whom are poor or black or both, irreparable harm and that the defen dants are suffering and will suffer no likelihood of being harmed if the preliminary injunction order stays in effect dur ing the period reasonably required to process a certificate of need (M.O. 8, 10). On July 1, 1981, defendant Hospital Authority reviewed its Motion to Suspend Preliminary Injunction and for Expedited Appeal. 3/ A copy of the district court’s June 22, 1981 opinion and order is annexed to defendant's motion and memorandum. 5 Statement of Facts Charlotte Community Hospital (formerly Good Samaritan Hospital) was established in the 1880's as a hospital for black persons. For approximately twenty years, it has been operated by the Charlotte-Mecklenburg Hospital Authority (M.O.4; P.1.0. 1). Community Hospital is located in a pre dominately black neighborhood; its patients have traditionally been poor and black (P.1.0. 2). Community Hospital has mainly provided hospital care for the chronically ill (M.O. 4; Ex.l, p.l; 5/15/81, Tr. 6).—^ In addition to providing long-term hospital care, Community also housed, until its closure, a detoxification unit and a "stroke unit" where persons suffering from strokes received 7 /special services (M.O. 5; Tr. 83-84).— The Hospital Authority also operates Charlotte Memorial Hospital and Huntersville Hospital. The costs of hospital services at Memorial Hospital, a large tertiary care facility, are far greater than at Community or Huntersville (Tr. 38). The majority of patients at Community were referred to the hospital from Memorial Hospital (Ex. C., p. 1) because Memorial does not accept or retain indigent patients who need long-term care (5/15/81 Tr.38; Tr.69-70). Huntersville Hospital, which is located fourteen miles north of Charlotte, has 83 acute care beds and 274 nursing home beds (Tr.61-63), and is the only location in the public hospital system where patients who formerly went to Community can hope to go or are likely to go (Id; M.O. 7). 6/ The hospital is classified as an "acute care" hospital because there is no state reimbursement classification for long-term care for the chronically ill. 7/ "Tr." refers to transcript of June 15, 1981 hearing on remand A copy of the transcript is included in Plaintiff's Appendix. In 1977, federal authorities adopted a "three-day rule" pursuant to which federal reimbursement for hospital costs would cease within three days after notification that a patient no longer required or justified hospital level care (M.O. 5). This rule precipitated fiscal problems at Community because so many of its patients needed nursing home rather than acute care hospital services (Ex. 3, p. 4), but had difficulty finding placement in alternate facilities (Tr. 84K Given the financial difficulties, the Executive Committee of the Hospital Authority voted on January 20, 1981 to instruct Community Hospital to develop a plan to close (Ex. 1, p.2). On February 2, 1981, the chairman of the Authority met with the Mecklenburg County Board of Commissioners to explain the closure. Due to concern that the facility's closure would have detrimental effects on the provision of health services for the community',; the County Commissioners voted to establish a task force to study the issue and develop a report by May 1, 1981. During this period, the Commissioners agreed to provide a subsi dy of $75,000.00 to continue Community's operation (Id). A twelve-person task force was appointed. As Erwin Laxton, chairman of that task force testified (5/15/81 Tr. p. 22, quoted in M .0. 5): [A ]t the final meeting there were ten members present of the twelve. It was suggested by the committee that we give the County Commissioners a preference. We weren't voting on which of the three to recommend. We simply indicated to them the preferences as we saw it. On option 1, to continue the operation, I re ceived no preference votes. Option 2 which was to continue and convert 54 beds to skilled nursing, had eight preference votes. Option 3, 7 which was to close and move to Huntersville, had two votes. [Emphasis in opinion). Despite the task force consensus that Community Hospital be kept open, the County Commissioners chose option 3. Thus, on May 4, 1981, the Commissioners voted, three to two, to discontinue the County's subsidy to Community Hospital. A second motion, which requested the Hospital Authority to con vert twenty-nine beds at the Huntersville Hospital to skilled nursing, then passed on the same day four to one (M .0.6;Ex.4,p .350). Immediately following the vote of the County Commission, the Authority, on May 5, 1981, decided to put the plan to close Community Hospital into effect immediately and to provide for an orderly transfer of patients to Huntersville or else where (Ex. 5b). The Authority and Huntersville Hospital also continued to implement the redistribution and relocation of beds and services from Community to Huntersville. Thus, on May 5, 1981, as re quested, the Administration of Huntersville received the Medi- care/Medicaid application to convert 29 acute care beds at Huntersville to skilled nursing beds (Ex. 8P). The budgets for Huntersville were based on the assumption that the 29 beds would be converted (Ex.8a) and the Board of Directors of Huntersville authorized the conversion, subject only to a vote by the County Board of Commissioners to underwrite the finances of the project (Tr. 79). Although the Southern Piedmont Health Systems Agency, a government agency responsible for local health planning, recom mended conversion of the 29 beds at Huntersville to nursing beds 8 beginning in late 1979 (Ex. 8b), since September, 1980 the option of converting the 29 beds has been tied to the closing of Community Hospital (Ex. 8a; Ex. 8c'Item No. 6; Ex. 5C, minutes of 4/27/81 Authority Board Meeting) . The action taken by the County Board of Commissioners on May 4, 1981 laid the ground work for implementation of the conversion (Ex. 8o; see Ex. 8k referring to "consolidation of Community and Huntersville"). The intent of the task force was that the conversion of the twenty-nine beds would take the place of the beds for people formerly served by Community Hospital (M.O. 7; Tr. 86). Although the conversion of the beds at Huntersville was to "nursing bedd' and Community Hospital had been technically labeled as an "acute care hospital," a large percentage of patients at Community in fact needed long-term nursing care (Ex. C pp 1,4,5; Tr. 86). Huntersville has also initiated the Certificate of Need process to obtain approval of an eight bed detoxification unit to replace the one formerly located at Community Hospital (Ex. 28). In the words of the Administrator of Huntersville, "[W]e would like to request a transfer of that service from Community Hospital to Huntersville Hospital." (Id). Based upon this, and other evidence, the district court found as fact that "[T]he decisions (a) to close Community Hospital; (b) to provide twenty-nine beds at Huntersville as replacement for Community Hospital services; (c) to establish a detoxification unit at Huntersville; and (d) to receive these additional needy patients at Huntersville for extended nursing services, were all and are still all parts of an overall plan." (M.O. 7) . 9 The Hospital Authority did not seek or obtain a Certifi cate of Need prior to closing Community Hospital. It has not sought a Certificate of Need to encompass its overall plan, but has begun separate application procedures for the 8 bed detoxification unit and the conversion of the 29 beds at Huntersville. (Ex.28; Ex. 8P..);. As cal remilteof the dis'tr.fct' court1 s order of May 15, 1981 the Authority wrote to the Health Systems Agency (HSA) to inquire whether a Certificate of Need is necessary for the closing of Community, but did not describe its overall plan to the HSA (Ex.31). The Authority has received no response to that letter (Tr.108-109). No city buses travel from Charlotte to Huntersville (M.O. 7;Ex.23); a one-way taxi trip from midtown Charlotte to Huntersville Hospital costs $21.00 (M.O. 7;Ex.22). It will be extremely difficult for the poor, black residents of Charlotte to reach Huntersville Hospital (Ex.21). 10 ARGUMENT I. THE DISTRICT COURT CORRECTLY HELD THAT A CERTIFICATE OF NEED IS REQUIRED BEFORE DEFENDANTS CAN CLOSE COMMUNITY HOSPITAL AND TRANSFER ITS SERVICES TO HUNTERSVILLE HOSPITAL Defendant Hospital Authority has renewed its motion to suspend the injunction first issued by the District Court on May 15, 1981 and reaffirmed on June 22, 1981. As this Court stated in Long v. Robinson, 4-32 F. 2d 977, 979 (4-th Cir. 1970): "... Briefly stated, a party seeking a stay must show (1) that he will likely prevail on the merits of the appeal, (-2) that he will suffer irreparable injury if the stay is denied, (3) that other parties will not be substantially harmed by the stay, and (4.) that the public interest will be served by granting the stay." The issue on appeal, as indicated by this Court's order of remand, is whether the plans and actions of defendant Hospital Authority, in closing Community Hospital, and relocating and redistributing services and beds to Huntersville Hospital, re quire the Authority to obtain a Certificate of Need pursuant to federal and state health planning laws. The district court's findings of fact and conclusions of law make clear that a Certificate of Need is required and that the issuance of an in junction requiring the Authority to obtain one is proper and should be affirmed. A. Applicable Federal and State Statutes Require Certificate of Need Approval for a Plan to Close a Hospital Facility and Relocate or Redistribute its Beds to Another Facility The National Health Planning and Resources Development Act of 1974, 42 U.S.C. §§ 300k et seq. was promulgated 11 to facilitate the development of recommendations for a national health planning policy to augment areawide and State planning for health services, manpower and facilities, and to authorize financial assistance for the development of resources to fur ther that policy. 4-2 U.S.C. § 300k(b). Section 300k-2 of the Act states in pertinent part: (a) The Congress finds that the following deserve prior ity consideration in the formulation of national health planning goals and in the development and operation of Federal, State, and area health planning and resources development programs: (1) The provision of primary care services for medically underserved populations, especially those which are located in rural or economically depressed areas. ***** (5) The development of multi-institutional arrange ments for the sharing of support services necessary to all health service institutions. 'k'k'kieJc (7) The development by health service institutions of the capacity to provide various levels of care (including intensive care, acute general care, and extended care) on a geographically integrated basis. [Emphasis added by District Court. M.O. 2] Section 300m-2 of the Act provides that each state shall designate a particular agency to establish and administer a "certificate of need" program which "shall provide for procedures o and penalties to enforce the requirements of the program." Federal regulations promulgated pursuant to the National Health Planning and Resources Development Act set forth the health services subject to review under a state certificate of need program. See 42 C.F.R. §§ 123.4-01-123.411. Specifically, these regulations, issued April 2, 1979, as amended, April 25, 1979, provide: 12 §123.4.04- New institutional health services subject to review. (a) All new institutional health services proposed to be offered or developed within the State by any person shall be subject to review under this subpart. For purposes of this subpart, "New institutional health services" shall include: * * * * * (3) A change in bed capacity of a health care facility or HMO which increases the total number of beds (or distributes beds among various categories, or relocates such beds from one physical facility or site to another) by more than 10 beds or more than 10 per cent of total bed capacity as defined by the State, whichever is less, over a two-year period. [Emphasis added by District Court. M.O. 2] Although some other changes in health services are not subject to Certificate of Need review unless a minimum capital expendi ture is made (compare 42 C.F.R. § 123.404(a)(2) April 25, 1979 version), relocation of more than 10 beds or services is subject to review regardless of whether any capital expenditure is in volved. See 42 Fed. Reg. 4008 (January 21, 1977)(preamble to final implementation of regulations at 42 C.F.R. § 123.404(a)(3)). Section 123.409 of the regulations reads in part- as follows §123.409 Criteria for State agency review. (a) The State Agency shall adopt, and utilize as appropriate, specific criteria for conducting the reviews covered by this subpart. The criteria shall include at least the following general considerations listed below, ... icic -k ■& ic (3)(i) The need that the population served or to be served has for the services proposed to be offered or expanded, and the extent to which low income persons, racial and ethnic minorities, women, handi capped persons, and other underserved groups are likely to have access to those services. 13 (ii) In the case of a reduction or elimination of a service, including the relocation of a facility or a service, the need that the population presently served has for the service, the extent to which that need will be met adequately by the proposed relocation or by alternative arrangements, and the effect of the reduc tion, elimination or relocation of the service on the ability of low income persons, racial and ethnic minori ties, women, handicapped persons, and other underserved groups to obtain needed health care. [Emphasis added by * 2 District Court M.O. 3]. As the district court observed (M.O. 3), in October, 1980, a slightly revised edition of the Federal Regulations was adopted, 4-5 Fed. Reg. 69746-7 et seq. (Oct. 21, 1980), including § 123.404 (a)(2), which reads: (2) Bed capacity. The obligation of any capital expenditure by or on behalf of a health care facility which -- (i) increases or decreases the total number of beds, (ii) redistributes beds among various cate gories, or (iii) relocates beds from one physical facility or site to another -- by ten beds or ten percent, whichever is less, in any two-year period. [Emphasis added by District Court (M.O. 3)]. Since these regulations have not yet become effective in North Carolina, the district court explicitly stated that it did not rely upon them' either in its original decision or in its opinion of June 22, 1981 (Id). The regulations are instructive, however, as to "the continuing purpose of Congress in respect of a certi ficate of need in such cases." (Id. ) To conform with the National Health Planning Act, North Carolina in 1977 adopted a Certificate of Need Law. N.C.G.S. § 131-175. The statute provides: That a certificate of need law is required by P.L. 93-641 as a condition for receipt of federal funds. If these funds were withdrawn the State of North Carolina would lose in excess of fifty-five million dollars ($55,000,000). § 131-175(5). 14 The state certificate of need statute § 131-176(17) tracks the 1979 federal regulation, 42 C.F.R. § 123.4-04 by defining "new institutional health services" to include: a. The construction, development, or other estab lishment of a new health care facility; ***** c. A change in bed capacity of a health care facility which increases the total number of beds, or which distributes beds among various categories, subject to the provisions of paragraph j of this subdivi sion, or relocates such beds from one physical facility or site to another. Such bed capacity change is subject to review regardless of whether a capital expenditure is made ... [Emphasis added.] The statute then specifically provides at § 131-178(a) that: (a) No person shall undertake new institutional health services or health care facilities without first having obtained a certificate of need as provided by this Article. Accord, North Carolina Certificate of Need Program Administra tive Regulations, § .0104(26)(c); § .0103(a) & (b); § .0102(a).— Thus, on the face of both the federal and state statutes and regulations cited above, a certificate of need is required before the Authority distributes beds among various categories or relocates such beds from one physical facility or site to another. As set forth below, the evidence established, and the district court found that this is precisely what the Authority has planned. 8/ The Administrative Regulations, § .0406(a) further provide: (a) Unless the state agency action is reversed through available appeals mechanisms, the effect of not issuing a certificate of need to a proponent prohibits that person from developing or offering the proposed new institutional health service within the state. 15 B The Authority's Plan to Close Community Hospital and to Convert 29 Beds to Nursing Beds and to Create an 8 Bed Detoxification Unit at Huntersville as Replacements for Community's Services Requires a Certificate of Need After considering oral testimony and receiving written evidence at two separate hearings, the district court found as facts, inter alia: 1. that the decisions (a) to close Community Hospital; (b) to provide twenty-nine beds at Huntersville as replacements for Community Hospital services; (c) to establish a detoxifi cation unit at Huntersville; and (d) to receive these additional needy patients at Huntersville for extended nursing services, were all and are still all parts of an overall plan. (M.O. 7). The court further found as fact: 2. that this plan is both a "reduction or elimination" of a service, and a plan which "distributes beds among various categories, or relocates such beds from one physical facility or site to another" within the meaning of the federal and state regulations above quoted j 4-2 C.F.R. § 123.404(a)(3), § 123.409 ( a ) ( 3 ) ( ii ) , N.C.G.S. § 131-176(17) (c) . 3 3. That,for such action a certificate of need is re quired by law. (M.O. 8). The Hospital Authority apparently concedes (Memorandum 9) that if it were distributing or proposing to distribute beds at Community Hospital among various categories at Huntersville, certificate of need approval would be required. Indeed, given the explicit wording of the statutes and regulations, defendant would be hard put to contend otherwise. Thus., the sole basis of the appeal is the district court's finding of fact that the Authority has planned to relocate and redistribute beds and services from Community to Huntersville. 16 The district court's finding cannot be reversed upon appeal unless "clearly erroneous." Fed. Rules Civ. Pro. 52a. As this Court has stated, it "will not disturb [a District Court's] findings merely because [we] doubt their correctness." Jersey Insurance Company of New York v. Hefron, 24-2 F . 2d 136, 139 (4th Cir. 1957). A finding of fact will only be reversed as "clearly erroneous" when the reviewing court is left with the definite and firm conviction that a mistake has been commited. Nationwide Mutual Insurance Co. v. DeLoach, 262 F .2d 775, 778 (4th Cir. 1959); accord, e.g., United States v . Warwick Mobile Home Estates, Inc., 537 F.2d 1148, 1150 (4th Cir. 1976), Jones v. Pitt County Bd. of Education, 528 F.2d 414, 418 (4th Cir. 1975). The Authority's assertion (Motion 2) that the district court findings are "totally unsupported by the record" is patently absurd. Both testimony and written evidence established that defendant's plan is to close Community and relocate at Huntersville. Erwin Laxton, Secretary and Treasurer of the Authority as well as chairman of the task forces testified at the first hearing that the third option presented by the task force "was to close [Community] and move to Huntersville." (5/15/81 Tr.22; M.O. 5). As the district court noted, no one at the first hearing divorced the relocation of services at Huntersville from the closing down of Community Hospital (M.O. 6). The Board of County Commissioners vote to discontinue funding of Community was followed on the same day by a vote to request the Authority to convert twenty-nine beds at Huntersville to skilled nursing 17 beds. (Ex.4-, p.350). The intention of the task force was to set up the twenty-nine beds as replacement for Community's long-term care beds (Tr.86). There is no dispute that the Authority immediately put into effect that part of the plan which was to close Community and provide a transfer of patients to Huntersville or elsewhere (Ex.5b). The written evidence also established that defendants began to implement the redistribution and re location of beds and services to Huntersville. The Administrator of Huntersville received on May 5, 1981 - the same day the Authority voted to close Community - an application to convert the 29 beds at Huntersville to nursing beds (Ex.8P). The bud gets for Huntersville assume the 29 beds will be converted (Ex.8a) and Huntersville's Board of Directors has authorized the conversion. See also Statement of Facts, infra., pp.8-9. Huntersville has also initiated a Certificate of Need application to transfer the detoxification beds from Community to Huntersville (Ex.28). After-the-fact attempts by the Authority at the second hearing to separate the closure of Community from the relocation of the detoxification and nursing beds at Huntersville cannot and do not detract from the evidence described above. As this court has noted in Stiers v. Martin, 264 F .2d 795, 797 (4th Cir. 1959), "The District Court, sitting without a jury as the trier of facts, determines the credibility of all the witnesses and the weight to be accorded their testimony." Rule 52a itself re quires that "due regard be given to the opportunity of the trial court to judge the credibility of witnesses." The district 18 court's finding that the Authority's testimony was a mere sem antic effort to divorce an interrelated plan should thus not be disturbed. Plaintiff submits that there were more than reasonable grounds to dismiss the Authority's testimony as mere semantics. Thus, for example, Erwin Laxton's testimony at the second hear ing (Tr.121) directly contradicted his prior testimony that the task force's option three was to close Community and move to Huntersville (5/15/81 Tr. p.22, quoted in M.O. 5). As this Court noted in similar circumstances, "Such a last minute change of heart is suspect, to say the least." Cypress v. Newport News General £■ Nonsectarian Hosp. Ass 'n. , 375 F. 2d 64-8,658 (en banc) Q 3. /(4th Cir. 1967).— Likewise, the testimony of R. S. Dickson, Chairman of the Authority, that the task force's recommendation to convert beds at Huntersville was unrelated to Community "other than the fact that both task forces were looking into ... both institutions" (Tr.45) flies in the face of the final report of the task force which makes clear that the task force was asked to look at options for Community, not the entire public hospital system, and that the task force studied Hunters ville only in conjunction with the closure of Community (Ex. 1). Thus the recommendation to convert 29 beds at Huntersville-.could only have been and was meant as a relocation of Community Hospi- 8a/ The draft minutes of the Board of Directors of the Authority' May 5, 1981 meeting state that the closure of Community Hospital and the conversion of 29 beds at Huntersville Hospital were dis cussed together, as presented by the task force in option 3. (Ex.5a). After the issuance of the preliminary injunction, Mr. Laxton on June 6, 1981 wrote a memorandum to the Board which changed the draft Board minutes to delete the reference to the conversion of the 29 beds (Ex.5b). tal's long-term care services (Tr.86). Finally, even if imple mentation of the relocation and redistribution of beds at Huntersville has not proceeded since the first hearing in this action, the written evidence at both hearings and the testimony at the first hearing demonstrated that the plans had been pro ceeding up to that point. As was observed in a different con text : What has been adopted can be repealed, and what has been repealed can be readopted. We conclude, therefore, that the plaintiffs are entitled to have their injunc tion ... based on the record at the time the case was [brought or] tried. Anderson v. City of Albany, 321 F.2d 649, 657 (5th Cir. 1963). In sum, the district court's finding that the Authority planned to replace and relocate the beds and services from Community Hospital to Huntersville Hospital by reclassifying 29 nursing beds and establish an 8 bed detoxification unit at Huntersville is supported by the vast weight of the evidence and is in no way clearly erroneous. It is also clear, as the court found, that these plans are still the plans of the Authority and were being implemented. c. The Injunction is Necessary to Comply with the Federal and State Certificate of Need Requirements The 1979 federal regulations promulgated under the nation al health planning act, which are in effect, require state agen cies to give consideration in the case of a reduction or elimination of a service, including the relocation of a facility or a service, the need that the population presently served has for the service, the extent to which that need will be met adequately by the proposed relocation or by alternative arrangements, and the effect of the reduction, elimina tion or relocation of the service on the ability of low income persons, racial and ethnic minorities, women, handicapped persons and other underserved groups to ob tain needed health care." 42 C.F.R. 123.409(a)(3)(ii). 20 Defendants made absolutely no study or assessment of the harm the low-income blacks who depended upon Community Hospital would suffer as a result of the hospital's closure and relocation of some of its beds and services to Huntersville Hospital. The Authority has made or begun to make two separate Certificate of Need applications for the transfer of the 8 bed detoxification unit to Huntersville and the conversion of the 29 beds at Huntersville to nursing home beds, but had adamantly opposed combining scrutiny of these proposals with the closing of Community Hospital. Yet the clear wording and intent of the federal and state statutes and regulations require just that. The regulations and statutes speak in terms of "redistribution" and "relocation." It is impossible to study, as the regulations require, the impact of such redistributions and relocations with out looking at the entire plan, that is, the initial location of services [Community] and the proposed new location [Hunters ville]. Indeed, as the district court held, "the most damaging feature of the whole arrangement [is] the closing down of Community Hospital." (M.O. 9). The laws do not allow defendants to isolate this aspect of their plan and avoid analysis of it by health planning agencies. The district courts findings of fact and conclusion of law are eminently correct and should be affirmed. 21 II. The Hospital Authority Will Suffer No Harm From Compliance with the Injunction; In Contrast, the Poor and Black Patients Who Depended Upon Community Will Be _____Substantially Harmed by a Stay________ As set forth in Point I, supra, a party seeking a stay of an injunction must stow, in addition to establishing that'it is likely to prevail on the merits: "...(2) that he will suffer irreparable injury if the stay is denied, (3) that other parties will not be substantially harmed by the stay, and (4) that the public interest will be served by granting the stay." Long v. Robinson, 432 F.2d 977, 979 (4th Cir. 1970). The Hospital Authority has made no such showing. Indeed, the evidence and findings of the district court all support the issuance and continuance of the injunction. A. The Hospital Authority Will Suffer No Harm Either from Proceedings With the Certificate of Need Application or from Maintaining Community Hospital in a Manner Which Will Allow Resumption of. Service The original injunction entered by the district court ordered: "2. That until the court has determined that defendants have complied with the statutes and regulations above described, by following the procedures established for the seeking and issuance of a certificate of need appropriate to this situation, they are enjoined and restrained to maintain in good order and repair the physical plant and equipment of the existing Community Hospital, and not to take any action which would or might materially interfere with possible rapid and orderly resumption of the services which they were providing before the decision to close the hospital was reached." (P.1.0. 4). The Hospital Authority's initial motion for suspension and expedited appeal included as Attachment 10 an affidavit by 22 H. C. Green, Executive Director of the Hospital Authority, which stated that it would cost the Authority over $100,000 to maintain Community Hospital for six months. Although the Authority in its memorandum (p.ll) "asserts that costs could be minimized if the injunction shall be [sic] suspended," it offers no evidence to support that assertion. The' sworn testimony of H. C. Green on June 15, 1981 unequivocally was that the costs listed in the affidavit in Attachment 10 would occur regardless of whether the injunction were in effect or not (Tr. 100). H. C. Green reaffirmed that the costs of maintaining the building would be no greater as a result of the injunction (Tr. 96-99, ex 36(a)). Thus, the district court was clearly correct in holding, "that the 'costs' now allegedly being incurred are not caused, by this litigation, nor the order of this court." (M.0. 8). Nor is the Authority precluded by having to maintain the hospital from implementing other plans for the building. First of all, the undisputed evidence established (Tr. 28-29, 34-, 39, 93) and the district court found (M.0. 8) that at the time the Authority decided to close Community, they had no concrete plans to use the hospital for any other function and, as of this date, still do not. Moreover, as the court found (M.0.8), the only possible use of Community which the Authority has in mind, an outpatient clinic, can be operated while still allow ing for prompt re-establishment of the services which until recently have been provided there (Tr. 106). In sum, the Authority has not done anything at Community Hospital that they would not have done if the injunction had not been 23 issued (Tr. 120, M.0.8, TT5-8) . And as an additional precaution, the court stated that "if there is any question whether any particular use violates the order, this court will immediately act to resolve such question." (M.O. 9, 1T10). Finally, the district court found, and the evidence estab lished, that the Certificate of Need procedures could be com pleted in approximately 90 days (M.O. 9, Ull, Tr. 15-16). Although the Authority argues that the process might require additional months, there is no evidence that such added time will be necessary in this case. In any event, the injunction is effective "during the period reasonably required to process a certificate of need" (M.O. 9). If the process takes much longer than 90 days, defendants are free to apply to the district court for dissolution of the order. The Authority's argument that the process is costly is without any support in the testimony or exhibits. Indeed, the Executive Director of the Authority testified it takes ten days or less to complete a Certificate of Need application (Tr. 109). In sum, no harm or even likelihood of harm has been demonstrated. This Court in Long v. Robinson held, "Mere injuries, however substantial, in terms of money, time and energy expended in the absence of a stay, are not enough," 4-32 F . 2d at 980, quoting, Virginia Petroleum Jobbers Assoc, v. Federal Power Comm'n, 259 F.2d 921, 925 (D.C. Cir. 1958). In this case, defendant has not even established that it will suffer monetary, let alone other, injury as a result of the injunction. Accordingly, the Authority's motion should be denied. 24 B. The Poor Black Residents of Mecklenburg County- Will Be Irreparably Harmed by the Issuance of the Stay or Dissolution of the Injunction and the Public Interest Will Be Served by ___________ Continuance of the Injunction___________ If the injunction is not continued, the Authority is free to sell the equipment at Community Hospital and to take any other action, $uch as selling the building, which would effec tively preclude plaintiff and the class she seeks to represent from obtaining the ultimate relief sought in the complaint. Such injury is by definition irreparable. Moreover, as set forth more fully in Point IV, infra., the district court found,(a finding defendants do not challenge as erroneous), that the closing of Community and the relocation of some of its services to Huntersville will have a substantial adverse impact on poor and black patients and would-be patients of Community (P.I.0.2) and that defendant's action will cause them irreparable harm (M.O. 8; P.1.0. 3). The Authority's statement that indigent patients cannot be penalized, since they will receive health care at other facili ties (Memorandum 12) ignores the evidence and the court's find ings that Memorial Hospital, as well as Huntersville, may not admit patients (who were formerly admitted to Community) when their condition is chronic and they soon would require nursing care (Tr. 69-72); and that Huntersville, although the only public hospital where persons formerly served by Community might go, is geographically inaccessible to the poor, black residents of Charlotte (M.O. 7). Indeed, Huntersville's Certificate of Need application for an 8 bed detoxification unit to replace that formerly in place at Community admits that detoxi- 25 fication patients now cannot obtain admission at any other facility (Ex. 28). The fact that all former patients at Community Hospital have been relocated and that there are presently no patients there does not detract from the harm which persons will suffer if the injunction is suspended or dissolved. The part of the injunction of which the Authority complains is the preservation of Community until the Certificate of Need application is pro cessed . Finally, the public interest can only be served by pre serving the possibility of reopening Community Hospital until responsible health planning agencies have had an opportunity to rule on the Authority's action, as required by federal and state law. 26 III. The District Court Has Jurisdiction Over the Subject Matter of This Action. The Causes of Action Predicated on Title VI, 42 U.S.C. §§ 1981 and 1983 and the Constitution Are Not the ___________ Subject of This Appeal__________ On pages 13-14- of its memorandum, the Hospital Authority- makes a cryptic argument that the district court lacks subject matter jurisdiction over this action. That argument appears to be based on two points, both of which are erroneous. First of all, the Hospital Authority argues that the Court predicated the issuance of the injunction "entirely upon alleged requirements of North Carolina law" (Memorandum 14). Even cur sory review of the district court's two opinions conclusively establishes otherwise. See P.1.0. 4 ("it is the opinion of the court that a certificate of need was required by federal and state statutes and regulations ...)(emphasis added). The district court's opinion of June 22, 1981 went into great detail about the requirements of the National Health Planning and Resources Development Act of 1974, 42 U.S.C. §§ 300k et seq. and their applicability to the present action (M.O. 1,2,3,8,9). If the Hospital Authority is implicitly suggesting that there is no private cause of action under the national health planning law, it is mistaken. See, e.g., Park East Corp. v. Califano, 435 4 /F.Supp. 46,50 (S.D.N.Y. 1977).- 4/ Plaintiffs' counsel has researched the issue and found no case which even suggests otherwise. 27 Secondly, although throughout the remainder of its motion and memorandum the Hospital Authority continually emphasizes that the only issue before this Court is whether a Certificate of Need is required, it argues that there is no jurisdiction under Title VI, 42 U.S.C. §§ 1981 or 1983 or the Constitution because claims under the Fourteenth Amendment and the statutes require proof of intentional discrimination (Memorandum 14). The Hospital Authority's argument is without foundation in logic or law. To begin with, as previously stated, the district court did not predicate the issuance of the injunction on either the Fourteenth Amendment, 42 U.S.C. § 1981 or 1983, or Title VI. Secondly, although it is true that the Constitution does require proof of intentional discrimination (Washington v . Davis, 426 U.S. 229 (1976)), plaintiff's complaint explicitly alleges such intentional discrimination. Complaint, § I Prelim inary Statement; 1T7; §V. This case is before the Court as a result of a motion for preliminary relief heard within a week of the filing of the complaint. Plaintiff has had no opportunity to conduct discovery and to present all her evidence which, she submits, will ultimately establish intentional discrimination. Under these circumstances, and in the absence of a motion to dis miss, plaintiff clearly has set forth sufficient allegations to establish subject matter jurisdiction under the Fourteenth Amend ment. E.g ., Conley v. Gibson, 355 U.S. 41, 45-46 (1957). The only appropriate treatment of this claim is to remand the case to the district court for further proceedings. 23 Thirdly, the Hospital Authority is mistaken as to the force and application of Title VI. Contrary to the Hospital Authority's statement (Memorandum 14), plaintiff has never argued that Title VI extends the coverage of the health planning laws to actions which those laws do not, at this time, encompass - solely termination of services. Rather, Title VI creates an independent obligation on the part of the Authority, as a recipient of federal financial assistance, to take no.actions which have the effect of discriminating against minority beneficiaries of the Hospital Authority's services. E. g. , Lau v. Nichols, 414- U.S. 563 (1974); Guadalupe Organization, Inc, v. Tempe Elementary School District No. 3, 587 F .2d 1022, 1029 n.6 (9th Cir. 1978); Serna v. Pprtales Municipal Schools, 499 F .2d 1147, 1154 (lOth Cir. 1974). Because the injunction at issue was not predicated on Title VI, this Court need not and, plaintiff suggests, should not on this appeal reach the issue of the proper standard for proving a claim under Title VI. Rather, as with the constitutional claim and statutory claim under 42 U.S.C. § 1981, this case should be remanded for discovery and the receipt of further evidence. In any event, the vast weight of authority holds that proof of intentional discrimination is not required under Title VI. In Lau v. Nichols, supra, the Supreme Court was faced with a claim of racial discrimination based upon a school system's decision not to provide remedial English courses to students of Chinese descent. The Court declined to reach the constitutional issue and instead based its decision on Title VI, interpreting the statute to mean: "Discrimination is barred which has that effect even though no purposeful design is present ..." Id. 414 U.S. at 568 (Emphasis in original). The Court in Lau 29 made clear that the statute and the regulations promulgated pursuant to the statute (4-5 C.F.R. Part 80) establish that dis criminating impact alone is enough to constitute a violation of Title VI. Even after the Supreme Court's decision in Washington v . Davis, supra, courts censtrned Title VI to require only proof of discriminatory impact, even without proof of invidious purpose. E.g., Guadalupe Organization, Inc, v. Tempe Elementary School District No. 3, supra, De La Cruz v . Tormey, 582 F.2d 45, 61 & n.16 (9th Cir. 1978). Nor do the opinions of the Supreme Court in Regents of the University of California v. Bakke, 438 U.S. 265 (1978) overrule the holding of Lau. In Bakke, the issue was whether a state school could properly adapt an admissions policy which explicitly set a quota for minorities. The question of whether or not Title VI covered practices with a discriminatory impact, rather than only those with discriminatory intent, was never before the Court. Moreover, in a later case, Fullilove v. Klutznick, 448 U.S. 448 (1980) which considered the constitutionality of a sta tutory preferential program, a plurality of the Court cited with approval Lau's validation of the Title VI regulation proscribing actions "which have the effect' of discriminating. 448 U.S. at 479 (Emphases in original). In the most recent decision on the issue, the Court of Appeals for the Third Circuit, sitting en banc, explicitly held that Lau is still controlling and that Title VI requires only proof of discriminatory impact. NAACP v. Wilmington Medical Center, ________F.2d__________ No. 80-1893 (June 29, 1981) Slip.op. at 12- 19. (a copy of the opinion is attached at the end of this brief). 30 The Third Circuit not only held Lau to be good law, but also found an effects test consistent with the congressional purpose behind Title VI of discouraging all forms of discrimination in federally-funded programs. Slip. op. at 17-18.— The Hospital Authority's reliance on Bryan v. Koch, 627 F .2d 612 (2d Cir. 1980) is misplaced. First of all, as just noted, the majority opinion in Bryan argued in dicta that Title VI em bodies an effects, not an intent, standard. Secondly, in dis cussing whether, upon establishment of a prima facie case, Title VI requires a federal fund recipient to consider alterna tives to a closing of a public facility, the court stated that, "we do not foreclose the possibility of a situation where some arrangement, other than the closing of another facility, has such obvious advantages that it must be considered as an alter native to a closing with a significant disproportionate racial impact." 627 F.2d at 619. In Bryan v. Koch, unlike this case, the municipal hospital system included 17 acute care facilities, all of which were assessed by numerous criteria. Contrary to the Hospital Authority's statement (Memorandum 17-18), the evi dence in this case does not demonstrate that the decision to close Community Hospital was made after considering of facts like that done in Bryan v. Koch. For example, it is undisputed that the Authority made absolutely no study or plans as to how patients who used Community would get to Huntersville (Tr.38). 5/ But see- Guardian' s Ass'n._of NYC, Police Dept, .Inc.— vl._Ci-vilService Commission, 633 F.2d 232, 254- (2d Cir. 1980), However,- art earlier -panbl of the Second Circuit held the effects test to be the standard,, relying on tau. Board of Education v.. Califano, 584 F.2d 576, 589 (2d Cir. 1978), aff'd on other grounds, Board of Education v. Harris, 444 U.S. 130. (1979)'. . (Contd) . 31 Although the injunction in this case is not based upon a finding that Title VI has been violated and although plaintiff did not have the opportunity to present all evidence as to the claim, the district court did receive evidence and made findings which establish a prima facie violation of Title VI. Speci fically, the district court found that the "action [of closing Community and relocating service at Huntersville] has a damaging impact among the people, almost all poor or black or both, formerly served by Charlotte Community Hospital, and will cause them irreparable damage." (M.O. 8); see also P.I.0.2. The court also found that although Huntersville is the only location in the local public hospital system where indigent patients can hope to go and be able to afford the care that they need, it is located fourteen miles north of Charlotte and no regular bus service goes to Huntersville Hospital from Charlotte. Nor is taxi service a feasible means of transportation because a one way trip from midtown Charlotte to Huntersville Hospital costs $21.00 (M.O. 7). These findings are not contested by the Hospital Authority. 5/ - contd. Moreover, the panel in Bryan v. Koch, 627 F .2d 612 (2d Cir. 1980), cited by defendant, stated in dicta that the effects test is probably still valid and limited the holding in Lora v. Board of Education, 623 F.2d 248 (2d Cir. 1980) to cases, unlike the present one, which involve a court-ordered school desegregation remedy. 627 F .2d at 616. In sum, the holdings of the Second Circuit disagree as to the proper standard under Title VI. 32 Accordingly, a remand is necessary to allow discovery and the presentation of proof as to the Authority's justification for its actions and the availability of alternatives which might have a lesser adverse impact on blacks while substan- ially accomplishing the Authority's purpose. See NAACP v . Wilmington Medical Center, Slip. op. at 21-25. CONCLUSION For the reasons set forth above, defendant's motion for a stay should be denied, the district court's injunction should he affirmed, and the case remanded for further proceedings under Title VI of the Civil Rights Act of 1964.; 42 U.S.C. §§ 1981 and 1983; and the Fourteenth Amendment. Respectfully submitted, /hf-kk 4- _________JULIUS CHAMBERS “ Chambers, Ferguson, Watt, Wallas, Adkins 8 Fuller, P.A. 951 South Independence Boulevard Charlotte, North Carolina 28202 (704) 375-8471 JACK GREENBERG BETH J . LIEF Suite 2030 10 Columbus Circle New York, New York 10019 (212) 586-8397 Attorneys for Plaintiff-Appellee 33 Certificate of Service I hereby certify that copies of the foregoing Brief for Plaintiff-Appellee was served on counsel for the parties by Federal Express mail, postage prepaid, on Monday, July 20, 1981. Beth J. Lief ; i 11 j UNITED STATES COURT OF APPEALS Fok tiii: TIIHU3 Cikcuit No. 80-1893 NATIONAL ASSOCIATION FOR THE ADVANCE MENT OF COLORED PEOPLE. 107 East Ninth Street. Wilmington. Delaware. PUERTO RICAN CIVIL RIGHTS LEAGUE. INC.. 1030 West Third Street. Wilmington. Delaware. OLDER AMERI CANS COALITION. 1300 North Broom Street. Wil mington. Delaware. BRANDYWINE TRINIY UNITED METHODIST CHURCH. Twenty-Second and Market Streets. Wilmington. Delaware, on behalf of their members and others similarly situated. Appellants THE MEDICAL CENTER. INC.: DAVID MAT THEWS. U S. Secretary of Health. Education, and Welfare: AMOS BURKE. Director of the Bureau of Comprehensive Health Planning: WILLIAM L. GORDON. Director of the Health Planning Coun cil. Inc.: THE W ILMINGTON MEDICAL CEN TER. INC. and CRAWFORD II GIVEN WALL as Chairman of the Board ol l rustees. stud JOSEPII A. DALLAS, as Chairman of the Board of Directors (DC. Civil No. 78-02981 ( ) \ AIM'! At. EllOM till L'MII l>Sl All S DlS I Itll I COL It I poit m i Di s i i t i cr o r Di i.aw \itr. Argued November 3. 1980 Before: GlUliONS and WEIS. Circuit Judges and BECHTLE. District Judge* Reargued In Banc May 11. 1981 Before: ALDISEKT. ADAMS. GIBBONS, HUNTEIt, WEIS. Gahtil H igginbotham and S loviteb. Circuit Judges Opinion filed June 29, 1981 2 Marilyn G. Rose. Esq. (argued) Sanford Neuman, Esq. Center for Law and Social Policv 1751 N. Street. N.W. Washington, D.C. 20036 Douglas Shacluman. Esq. 1823 Lancaster Avenue Wilmington.. Delaware 19805 Jeffrey S. Goddess. City Solicitor City of Wilmington City/Countv Building 800 French Street Wilmington. Delaware 19801 Of Counsel: hvi Thomas I. Adkins. General Counsel James I. Meyerson. Esq. National Association for the Adv ancement of Colored People 1790 Broadway New York. New York 10019 Attorneys for Appellants * l I liiiim.ililc l.miis (' llt'i liilc I'nilrd Stales Disiiii l liuliu- lor diel .islem Disiiii l ollVmisvIv.inj.i, sillillii I*\ (li-simi.ilioii. } 3 William J. Wade. Esq. (argued) Rodney M. Layton, Esq. Richards. Layton & Finger One Rodney Square P.O. Box 551 Wilmington, Delaware 19899 Attorneys for Wilmington Medical Center, Inc. Drew S. Days, 111 Assistant Attorney General Jessica Dunsay Silver Irving Gornstein Attorneys Department of Justice Washington, D C. 20530 Attorneys for United States as Amicus Curiae OPINION OF THE COURT WEIS, Circuit Judge. The Wilmington Medical Center has been em broiled in litigation for the past five years because of its proposal to construct a new building in the suburbs and renovate one of its buildings in downtown Wilmington, Delaware. In this latest appeal, we hold that disparate impacts of a neutral policy may be adequate to establish discrimination under Title VI of the Civil Rights Act of 1961. Assuming, without deciding, that the plaintiffs presented a prima facie case, we conclude that the Medi cal Center produced adequate evidence to justify its relocation and reorganization plan. Accordingly, we will affirm the action of the district court in refusing to en join implementation of the proposal. 4 Alleging unlawful discrimination, the plaintiff or ganizations, representing minority, handicapped, and elderly persons, sought an injunction against the relocation and reorganization of the Medical Center. After we held that the plaintiffs had private rights of ac tion under Title VI of the Civil Rights Act of 1964, 42 U.S.C. §2000d (1976), and §504 of the Rehabilitation Act of 1975, 29 U.S.C. §794 (Supp. II 1978). see NAACP v. The Medical Center, Inc., 599 F.2d 1247 (3d Cir. 1979), the district court brought the matter to trial. The City of Wilmington was added as a party plaintill. and the complaint was amended to include allegations thajt the Age Discrimination Act, 42 U.S.C. §§6101-6107 (1976 & Supp. (I 1978) had been violated. In addition, plaintiffs charged the defendant with intentional dis crimination as well as conduct that had a disparate im pact on the classes represented by the plaintills. Following a bench trial lasting more than a month, the district court filed a comprehensive and detailed opinion, concluding that the plaintiffs had failed to prove discrimination under any of the three statutes. Judg ment was accordingly entered for the defendant. NAACP v. Wilmington Medical Center. Inc.. 491 F.Supp. 290 (D. Del. 1980).' The plaintiffs' appeal was heard initially by a panel and then, because of the nature of the issues, was reheard by the court in banc. The Wilmington Medical Center (WMC) was or ganized in 1965 by the merger of three non-profit hospi tals. General, Memorial, and Delaware, in different areas of Wilmington. WMC furnishes general medical and surgical services, as well as secondary and tertiary hospi tal care. It provides 1.104 of the 1.471 non-profit, acute general hospital beds in New Castle County. Other insti- I. Tlu* |)f|).iiinu'ii( ill IUmIiIi. I.diu aiii>ii ami Wcll.uv. tin* Itu- te.ui of Comprehensive Health I'laiiiiinic the Health IM.nmiim Connell, and the directors of the latter tiro oiuani/atinns were dis missed before trial. 5 tutions in the county include St. Francis Hospital, which has approximately 290 beds, and Riverside Osteopathic Hospital, with a capacity of 100. Th6 concentration of hospital beds in Wilmington proper is higher than is de sirable under national standards, while at the same time the southwestern part of the county surrounding New ark, Delaware, is quite underserved. WMC is the only hospital in the county with a teaching program approved by the American Medical Association. Medical students and residents are impor tant to VVMC’s delivery of health care to the community. Without their assistance, current levels of care could not be maintained. Because its physical structures are aging and are not in compliance with Delaware’s licensing law. WMC has encountered serious problems. Recruitment for its residency program has been hindered by the fragment ing of its plants, as well as by a lack of conference space and adequate research facilities. The surgical residency program has been placed on probation by its accrediting body and WMC itself is also in danger of losing its certifi cation by the Joint Commission on Accreditation of Hos pitals. On two recent occasions, only “probational" ac creditation was granted. Loss of accreditation could result in denial of Medicare and Medicaid reimburse ments. a situation which would be disastrous to WMC financially, since it relies on these funds for more than one third of its total budget. WMC has other monetary problems. It provides the largest amount of free care in the county — approxi mately $8,000,000 annually. Because Medicare and Medicaid do not reimburse it for any portion of fees at tributable to subsidization of free care, WMC must de pend upon its endowment and the Ices assessed upon paying patients and private insurers. The population shift to the southwestern suburbs and the possibility that another health care institution might be established in that area present another threat 6 to WMC. If it should lose the patronage of people there, most of whom pay for services or are privately insured, the subsidization of a higher percentage of unreim bursed care would become an even more serious drain on its financial resources. Recognizing the need for remedial action, the WMC Board canvassed the options open to it. After studying about 50 plans for relocation and consolidation, it decid ed upon Plan Omega. Essentially, this proposal would close the General and Memorial facilities, renovate the Delaware one. and reduce the number of downtown beds to 250. In addition, a new facility of 780 beds would be built in the suburban area 9.35 miles southwest of the Delaware plant. A division of services between the two locations was part of the arrangement." After the district court ordered a departmental re view, HEW found discriminatory effects in the plan. To ensure that Omega would comply with Title VI and the Rehabilitation Act. WMC contracted to make a number of modifications. Because no public transportation to the 2 2. Doth locations w ould provide the follow ini' services: allergy, cardiology, dermatology, endocrinology, internal medicine, rheuma tology. physical medicine, chest diseases, infectious disease, gener al surgerv. proctology, otology, and vascular. At the Southwest divi sion. the following services would he provided: gastroenterology, nephrologv. neurology, oncology, radiation therapy, neurosurgery, orihopcdk surgery, plastic surgery, thoracic surgerv. urology, obstetrics, gynecology, pediatrics, newborn, and premature. At Delaware, the following additional services would he provided: psvehiatry. family practice, rhinolaryngologv. dentistry, and ophthalmology. In addition, some clinic, outpatient, and support services will also he located exclusively at the Southwest division, including the high-risk prenatal and specialty pediatric and gynecological clinics, and the specially cardiac, radiation therapy and hemodialysis sup port services. The Delaware division will exclusiv ely house the psy chiatry. car. eye. and nose, and dentistry specialties. I he primarv care ciinics will he consolidated and located exclusively at the Dela ware division. 7 southwest site is available, WMC agreed to provide shut tle bus service between the Delaware and Southwest di visions for the convenience of patients, visitors, and em ployees. In addition. WMC committed itself to renovate the Delaware plant, devise inpatient service plans lor the two branches to prevent racial identiliability at either lo cation, and operate the two facilities on a unitary basis. Upon acceptance of these conditions. HEW with drew its objections to Omega. * Plaintiffs, however, con tinued their opposition, contending in the district court that the relocation would subject members ol the class to inferior health care and disproportionate travel bur dens. Moreover, it was alleged that there has been a misallocation of services between the two divisions. The district court analyzed the case under alternate theories of intentional discrimination and unintended discriminatory effects. The court first determined that there was no evidence of discriminatory purpose. It then applied a disparate effect standard, but concluded alter a lengthy review of the evidence that plaintiffs had failed to present a prima facie case. Rather than ending the inquiry at that point, the court assumed arguendo that a showing ol disparate im pact had been made. The record was then scrutinized to determine if the defendant had successfully rebutted the plaintiffs' contentions. The court concluded that even il disparate impact had been shown. WMC had demon strated it had bona fide needs that could not be satisfied by any less discriminatory plan. Finally, the court deter mined that plaintiffs did not prove that a feasible alterna tive to Omega was available. —----------- " f a T in- district court held that W A V 's decision was not arbi liarv or capricious. NAA CI* v. I lie Medical (.cuter. Inc.. -!•>• I Supp 2H0 ( I ) . Del. IM7H). and that the p la itilills had no privai. cause ol action under T itle V I or the llchahilitaliuu Act. Wo reveisey tin* latter action. 5f)t) I . 2d 12-11 Did C 'if. I (M U . 8 Consideration of the alleged disparate impact was divided into several general categories — access, quality of care, linguistic discrimination, and racial identifi- ability. Initially, the court found that Plan Omega would bring about vast improvements in the quality of care for all patients, including the classes represented by the plaintiffs. The detrimental effects to minorities and the elderly were determined to be minor and insignificant. With respect to the handicapped, plaintiffs failed to show any adverse impact. The first issue considered was the plaintiffs' conten tion that they will lack access to the Southwest facility and, consequently, will suffer a diminution in health care. The court found that WMC would meet its obliga tion under the HEW agreement to provide adequate shuttle bus and ambulance service. Furthermore, the court concluded that the increased travel time would generally not deter patients from seeking treatment for serious illness at the Southwest division. A possible exception was a group of women in need of services at the high risk obstetrical clinics at the Southwest division. It was acknowledged that minority women have a greater incidence of high risk pregnan cies and that patients seeking prenatal care are more likely to be deterred from seeking medical attention than others. However, the court found that the plaintiffs had overestimated minority usage of the high risk clinics in "’■ijfc.ty the Southwest facility and that utilization by whites . ! would be slightly less proportionately. The plaintiffs' expert erroneously included in her high risk category minority teenagers who are poor users of health care and statistically more likely to have preg nancies with complications. Omega, however, included special clinics at the Delaware division for teenagers and Hispanics. Thus, the group affected by the location of high risk clinics at Southwest division would be much smaller than plaintiffs projected. In addition, the WMC director of obstetrics testified that if a large number of t j high risk patients appeared at the Delaware division, a clinic would be created at that location, aithpugh some patient's might have to be referred to Southwest where the most sophisticated equipment would be placed. Plaintiffs also were concerned with the fact that be cause obstetrical services would be offered at the South west division, emergency room treatment of those cases at Delaware would be inferior. The court, however found that the vast majority of women about to delivei and those with obstetrical problems would go directly tc Southwest. In only exceptional instances would the ab sence of inhouse obstetricians affect emergency room treatment, because an obstetrical resident would be as signed to the clinics and obstetricians would be on call The court opined that the cases where treatment woulc be impaired would be extremely rare, assuming that an) at all woidd occur. In this context, therefore, the possi bility of detrimental effects was insignificant, particular ly when contrasted with the improvement in quality 01 care Omega would provide. The other adverse impact that plaintiffs attributec to travel difficulties is a possible decrease in the numbei of minority and elderly visitors to inpatients at the South west facility. Plaintiffs suggested that visitors would hi discouraged by the longer ride to unfamiliar surround ings. Evening visits would be further hindered becausi the proposed shuttle bus serv ice would stop at 7:00 p in The district judge found that elderly inpatient: might have fewer visitors at the Southwest division While this might result in some detriment to the healtl of elderly patients, the district court characterized tin level of harm as “very minor." ‘191 F.Supp. at 332. Tin court similarly concluded that the negative impact oi obstetrical patients would be “insubstantial." Id. Plaintiffs also argued that another group, minorit; pediatric inpatients, would be adversely affected by a de crease in the number of visitors caused by the location o services at Southwest. Hecogni/ing the importance q 9 10 family visits to the health of a child, the court deter mined that steps would be taken under Omega to pro vide those visits. Parents would be encouraged, and in some cases required, to spend the night with their chil dren. When parents of infants could not stay, the hospi tal would assign staff members to give special attention to those children."1 With respect to plaintiffs' second major contention — that treatment at the Delaware division would be infe rior— the court stated. "|T)he general medical and sur gical care that will be rendered at the Delaware Division under Omega will be entirely equal to that rendered at the Soutlnvest Division and superior to that which is now rendered by WMC." 491 F.Supp. at 325. Plaintiffs asserted that the Delaware division would be housed in an inferior building and even after the pro posed renovations, the two facilities would not be com parable. Moreover, it was questioned whether WMC would be financially able to meet its commitment to re habilitate the Delaware plant. The court described these contentions as “purely speculative and wholly unsup ported on the record." 491 F.Supp. at 325. In addition to assuming an obligation under the HEW agreement to refurbish. WMC had allocated more than SI2.000,000 for that purpose up to the time of trial. This amount, cou pled with projected commitments and funds to be set aside under the agreement, produced a total of $18,000,000 committed to renovation. The judge con cluded that the additional S4.000.000 needed to com plete the work could be raised from either the operating budget or unrestricted funds. Furthermore, the court was convinced that shuttle bus service would, in fact, be prov ided. The cost would be minimal in comparison with WMC’s annual budget and could be absorbed with no strain on the institution's financial resources. * -I. In addition, pediatric inpatient serv ices are ottered at the St. Francis and Itiversidc hospitals in Wilmington proper. After their expert suggested that operating deficits might occur in the years following completion of con struction, plaintiffs questioned whether lire high cost of Omega would cause WMC to discontinue the remodel ing and free care. The court found such evidence irrele vant and believed that financial feasibility of Plan Ome ga would be determined by bond market forces: “ |T|I le Court refuse|d| to construe the civil rights statutes as a license . . . to act as a financial overseer to those who provide services to minorities." 491 F.Supp. at 328. Finally, the district court rejected the claims that Omega would create linguistic discrimination or racial identifiability. Plaintiffs’ fear of a shortage of interpreters ; for Hispanics at the Southwest division was rejected. The trial judge found no present shortage of WMC per sonnel capable of acting as interpreters for Hispanics and expected that none would arise under Plan Omega. Additionally, the court held that Plan Omega as drafted would not create two racially identifiable facilities but if. i in practice, problems arose, remedial measures would be taken. All other arguments raised by the plaintiffs were found to be frivolous, and the court concluded that they had failed to present a prima facie case of disproportion ate impact. Recognizing that review in this lengthy and | hard-fought litigation was inevitable, however, the trial judge assumed arguendo that a prima facie case had been established and discussed the defendant's burden. Concluding that the defendant was required to go for ward with rebuttal evidence, the court found that WMC had met its burden of showing that it had bona fide needs, that Omega would satisfy them, and that other. ! less discriminatory plans would not. The court recognized that WMC’s immediate need to preserve its educational program and accreditation, as well as improve its quality of care, made it obvious that something had to be done. WMC was aware that to in sure its financial stability, and at (he same time care for II those dependent on its services, it had to provide facili ties both in the city and on the outskirts. Omega met these requirements, and the court found “Omega can be completed within YVMC's means and will allow VVMC to hold its costs down." 491 F.Supp. at 340. Although the VVMC Board had investigated many different plans, six alternatives were discussed. Assum ing that any plan which had all or substantially more beds in Wilmington would be less discriminatory, the court found that these plans would not meet WMC's needs. Some were financially infeasible, as in the exam ple of a single large hospital in the city. Rehabilitation of all existing structures within the city was objectionable because it would perpetuate excessive fragmentation. A more even division of services between the Delaware and Southwest facilities (450 beds at Delaware. 570 at Southwest) was rejected by the medical staff as failing to meet the goal of consolidation. Thus after reviewing the options, the court concluded. “WMC has met its burden upon rebuttal by showing that even if Omega may have some meager disparate impacts, those impacts are justi fied by bona J'ulc needs which could not be accomplished by any less discriminatory plan." 491 F.Supp. at 343. In turn, plaintiffs attempted to show that “Reverse Omega” (800 beds at Delaware and 200 at Southwest) was a feasible alternative. The court, however, found that cost estimates of reverse Omega given by plaintiffs' expert were unreliable, and concluded that this plan would be “prohibitively expensive." 491 F.Supp. at 342. The court determined, therefore, that “plaintiffs have failed to meet their burden of persuasion of showing a feasible, less discriminatory alternative." 491 F.Supp. at 345. 12 The lengthy recitation of the background makes it clear that this case turns largely on factual matters. There are. however, several discrete legal issues essen tial to a resolution of the dispute. 1 he first that we shall discuss implicates the nature of the evidence necessary to show a violation of Title VI. If the plaintiff must show intent to discriminate, then our task is a simple one be cause the trial court found no such evidence and that holding is not contested. We are persuaded, however that intent is not required under Title V| and proof ol dis parate impact or effects is sufficient. Our conclusion ap plies to the other two statutes that have been invoked as well. Title VI of the Civil Rights Act of 1964. 42 U.S.C §2000d (1976). bans discrimination based on race, color or national origin in any program receiving federal linan cial assistance.5 VVMC concedes that Medicare am Medicaid payments made to it call Title VI into play. In Lait v. Nichols, 414 U.S. 563 (1974). the Su preme Court was confronted with a racial discriminatioi charge growing out of a school system’s decision not ti provide English language instruction to students of Chi nese ancestry. The Court declined to reach an equal pro tection argument but chose instead to rely on Title VI interpreting it as follows: “Discrimination is barred which has that ejjcc even though no purposeful design is present: a rc cipient ‘may not . . . utilize criteria or methods c administration which have the effect of subjcctin individuals to discrimination’ or have ‘the effect c defeating or substantially impairing accomplish 13 5. The antidiscrimination prov ision of Title VI states: "No person in the United States shall, on the ground t race, color, or national origin, he excluded from participation it lie denied the benefits of. or he subjected to discrimination in dor any program or 'activity receiving Federal financial assii . lance." -12D S C. §2000d (1070). f !* 14 ment of the objectives of the program as respect in dividuals of a particular race, color, or national origin.' ” Id. at 568 (emphasis the Court's), quoting HEW regula tion. 45 C.F.R. §80.3(b)(2). Lau makes it clear that discriminatory impact is enough to constitute a violation of Title VI. WMC, how ever. argues that Lau was overruled by Board of Educa tion v. Harris, 444 U S. 130 (1979), and Regents of the University of California v. Bahlie, 438 U.S. 265 (1978).u We are not convinced, however, that either case did so. In Bahhe, the question was whether a state school could properly adopt an admissions policy clearly intend ed to prefer minorities. It is true, as WMC notes, that five justices expressed reservations in Bahhe about the hold ing in Lau. In the opinion written by Justice Brennan, in which Justices White. Marshall, and Blackmun joined, it was said. “|W|e have serious doubts concerning the correctness of what appears to be the premise of |L<nt|." 438 U.S. at 352. The issue did not have to be resolved, however, be cause “even accepting Lau’s implication that impact alone is in some contexts sufficient to establish a prima facie violation of Title VI. contrary to our view that Title Vi's definition of racial discrimination is absolutely coex tensive with the Constitution’s, this would not assist the respondent in the least.” 438 U.S. at 352-53. It did not (i. Whether intent or impact is siitiiclciu to state a claim under Title VI and the issues surrounding hospital closings and relocations have been the subject of scholarly commentary. See. c.o . Note. The Prima I'acie Case and Remedies in Title VI llosjdtal Relocation Cases. t»5 CORNELL L. REV. <>8‘) t |})8t)i; Note. Main taining Health Care in the Inner City: Tide VI and Hospital Relocations. 5;> N.Y.U.L. REV. 271 tH>80>; Note. Title VI: the Impacl/lntent Debate Killers the Municipal Services Arena, a.i ST. JOHN'S L IMA 12 I ( I (ISO); Note. N A.UT v. Medical Center. Inc : The Cvidcntiary Hearing Under Title VI 2 1 ST. LOUIS I'.L.J. ATM (1080). ) 15 matter, the group wrote, whether Title VI proscribed some acts, such as those at issue in Lau, that would sur vive constitutional scrutiny. As the group read the legis lative history of the Civil Rights Act, Congress did not in tend to proscribe the particular type of practice challenged by Bahhe —- preferences designed to remedy past discrimination. As stated in another portion of the opinion. “lAjpplied to the case before us, Title VI goes no further in prohibiting the use of race than the Equal Pro tection Clause ol the Fourteenth Amendment itself." 438 U.S. at 325 (emphasis supplied). In a separate opinion. Justice Powell used language that may be inconsistent with Lau. but he stopped short ol advocating that the case be overruled. I le wrote. “Title VI must be held to proscribe only those racial classifica tions that would violate the Equal Protection Clause or the Fifth Amendment." 438 U.S. at 287. lie then went on to distinguish Lau, saying significantly. “|T|he pref erence’ approved {in Lau) did not result in the denial of the relevant benefit — ‘meaningful opportunity to par ticipate in the educational program’ — to anvone else." 138 U.S. at 304. In determining what weight is to be given to these separate statements, it is important to recognize that the issue presented to the Court in Bahhe differs substantial ly from that in the case at bar. It was clear in Bahhe that whatever the reach of Title VI. the plaintiff had estab lished a prima facie case by showing intentional discrim ination. The question facing the Court, then, was whether some forms of intentional discrimination were nevertheless permissible. A majority of the Court con cluded that those forms of intentional discrimination that would survive constitutional analysis also were exempt Irom Title VI. Congress, in enacting the Civil Rights Act of 1964. did not intend to prohibit those racial preferences that are permitted under the Constitution. It does not inexorably follow, however, that Con gress also intended the constitutional standard to control 16 every allegation of discrimination. It would be consistent with Congress’s expansive, remedial intent to interpret Title VI as prohibiting acts that have the effect of dis crimination yet permitting patent preferences designed to remedy past discrimination. The Powell-Brennan opinions, therefore, may be read as expressing the theory that at least when the charge is intentional discrimination in the nature of a governmental preference. Title VI incorporates the con stitutional standard. The case sub judice. however, is not one of a discriminatory governmental preference but one of a neutral program with disparate impact. As we see it, it is still permissible to hold that when the charge is disparate impact, a prima facie case can be established without proof of intent. The other case on which defendant relies. Board of Education v. Harris, supra, held that §702(b) of the Emergency School Aid Act (ESAA) prohibits school,dis tricts from maintaining racially identifiable faculties even when the segregation is unintentional. The Court upheld the power of Congress in the exercise of its au thority under the spending clause to require the recipi ents of federal funds to go further in eliminating dis crimination than mandated by the Constitution. Lau v. Nichols was not cited. In dissent. Justice Stewart argued that since five justices in Bakhe had slated Title VI prohibited only in tentional discrimination, the same premise should gov ern claims under the ESAA. 444 U.S. at 160. In this ar gument, however, he was joined only by Justice Powell. The majority expressly disclaimed any necessity to pass on the standard applicable to Title VI. Id. at 149. Full Hove v. Klutznich, 448 U.S. 448 (1980). is an other case that considered the constitutionality ol a stat utory preferential program. A plurality ol the Court cited with approval Fan’s validation ol the HEW regulation proscribing actions u which have the effect ol discrimi nating. 448 U.S. at 479 (emphasis supplied by Court). 17 Joining in the opinion were Justices White and Powell, who in Bahhe had taken the position that intent was nec essary to establish a Title VI violation. Although there is ample ground for argument that the Supreme Court has doubts about Lau’s continued viabilitv a requiem may be premature and, in any event should not be sung by this choir. The prerogative o overruling its cases rests with the Supreme Court, and not with us. Americans United for Separation oj Chinch and State, Inc. v. HEW. 619 F.2d 252, 271 (1980) (Weis. J., dissenting), cert, granted, Valley Forge Christian Colleae v Americans United for Separation oj Cliuich and State, Inc.,------U .S .-------, 49 U.S.L.W. 3617 (U.S Feb 23 1981) (No. 80-327); United States ex rel. Gocliley v. Myers. 450 F.2d 232 (3d Cir. 1971), cert, de nied. 404 U.S. 1063 (1972).' The question is not one of congressional power but rather of intent. Providing federal funding conditioned on an even-handed application is a positive measure to discourage all forms of discrimination, intentional or not. The use of an effects lest, therefore, is consistent with the legislative aim of eliminating discrimination and is in harmony with Title VII of the same Act, and litle VIII. 7 7 Hiil see Cannon v. University ol Chicago. |-.2cl No 80-1763 (7th Cir. May 6. 1981). where it was held that disp.o- portionate impact alone does not establish a violation o llid eN I. In. Guardians Ass n ol New York City Police IXpt. Inc. v. Civil i>c''tcc Commission. 633 I'.2d 232. 251 (2d Cir. I960), a pane ol the Com ol Appeals lor the Second Circuit concluded that only Intentional, discrimination Is actionable under title VI An eaiiiei panel ol t u- same court disagreed, however, citing Urn s impact test as autho.Uy, alter Unlike. Board ol Education v. Calilano. 581 I 2d d /6. 58J u d Cir. 1978). alfd on otliei (/rounds. Board ol Education v. Hauls • H U S 130 (1979). Still oilier panels have either acknowledged ilia Unlike did not expressly overrule Urn. see Ass’ii ol Andrew; lacks.... High School v Amlwch. 598 l\2d 705 7 6 (2d Cir. I Jj.dk o, have argued in dicta why an cllccts test probably retains validity See Bryan v. Koch. 627 I 2d 612 (2d Cir 1980) 18 Resident Advisory Board v. Rizzo, 564 F.2d 126 (3d Cir. 1977), cert, denied, 435 U.S. 908 (1978), as well as our previous reference to Title VI in Shannon v. United States Department of Housing & Urban Development, 436 F.2d 809, 816, 820 (3d Cir. 1970) (Title VI provides redress for discriminatory effects of local housing plans). Moreover this approach parallels regulations adopted by HEW and other departments charged under §602 of the Civil Rights Act, 42 U.S.C. §2000d-l, with enforcing the statute.8 With due deference to Lau v. Nichols and congres sional intent as we perceive it. therefore, we conclude that plaintiffs in a Title VI case alleging discrimination in the application of federal funds in a facially neutral program need only establish disparate impact. The Re habilitation Act and the Age Discrimination Act of 1975 provide equally strong cases for application of an impact test since both are patterned after Title VI.“ We there fore use the same standard. * 9 | 8. See, e.fi„ i C.F.It. §15.3 (1980) (Agriculture Dept); 1-1 C F.lt. §1250.103-1 (1981) (NASA); 18 C.F.It. §1302.3 (1980) (Tennessee Valley Authority); -15 C.F.R. § 1010.10-2 (1980) (Com munity Services Administration): 49 C.F.It. §21.5 (1980) (Trans portation Dept). 9. Section 504 ol the Rehabilitation Act provides: "No otherwise qualified handicapped individual in the United States, as defined in section 700(7) of this title, shall, solely by reason ol' his handicap, be excluded from the partici pation in. be denied the benelits of. or be subjected to discrimi nation under any program or activ ity receiving Federal finan cial assistance. . . . " 29 U.S C. §794 (Supp. II 1978). Section 303 ol the Age Discrimination Act provides: “Pursuant to regulations prescribed under section 0103 of this title, and except as prov ided by section 0103(b) and section 6 103(c) of this title, no person in the United States shall, on the basis of age. be excluded from participation in. be denied the benefits of. or be subjected to discrimination under, am pro gram or activ ity receiving Federal financial assistance." 42 U.S.C. §0102 (1970). 19 11 The next inquiry is whether, applying an effects test, the plaintiffs have established a prima facie case. Before addressing this issue, it is helpful to review the provisions of the agreement between WMC and HEW. Included in the early paragraphs is a statement that the Secretary of HEW desires assurances that operation of the hospital facilities under Plan Omega will be in com pliance with Title VI and the Rehabilitation Act. The agreement obligates WMC to provide free transportation between the Delaware and Southwest di visions, to designate an ombudsman to receive and act upon complaints of discrimination, to adopt a system of inpatient utilization control, and to prevent either divi sion from becoming racially identifiable. It is additionally required that both divisions be operated on a unitary ba sis. with a single Board of Directors, Executive Commit tee, medical staff, teaching program and accounting procedure. Any proposed expansion of services at Southwest or reduction at Delaware must be first sub mitted to HEW for approval. WMC agreed to set aside $2,800,000 for use exclusively in renovating the Dela ware facility. WMC also agreed to recognize the need for employment by minority groups, “including in particular urban minority groups." As noted earlier, the court found that WMC would carry out its categorical obligations under this agreement. A. THE HANDICAPPED There is no evidence that either facility will not comply with the structural requirements of the Rehabili tation Act. Indeed, the provisions for handicapped with respect to barriers, entry, and lice movement within the buildings will be an improvement over existing condi tions. I he alleged disparate impact upon the handi capped. therefore, rests upon the location of major por- 20 lions of hospital services and jobs in the Southwest Division. The plaintiffs produced no credible evidence, however, establishing the residential distribution of handicapped persons within the county. In the absence of such information, we cannot tell what effect, if any, Plan Omega will have upon disabled persons in the area, and thus agree with the district court that plaintiffs did not establish a prima facie case under §504. B. THE AGED AND MINORITIES Unlike the evidence with respect to the handi capped. there was testimony that most of the elderly and minorities who would be served by the Wilmington Medical Center live closer to the Delaware than the Southwest division some nine miles away.,u Since many of the medical services would be located at the suburban building, transportation to the new facility would be re quired, and hence treatment would not be as convenient as if provided at Delaware. Although the trial court did lind that there would be some effect upon the elderly and minorities because of the travel aspects, those im pacts upon patients were described as "de minimis." "in significant." and "minor."11 We agree with these charac terizations and have serious doubts that such effects are enough to establish a prima facie case of discrimination. 10 11 10. OverBT'V nfihc minority residents and Tli.Vi of tin* elder- |v residents of New Castle County live in the northeast area. I lderly and minority families near the Delaware lacilitv are more likelv than oilier lamiles in the area to he without a ear. ID I I .Supp. at ;U)2-lU. 11. The district court, relvinu on 12 L'.S.C. §2lMHUl-d. did not consider the impact of Omega on minoritv service employees. I'lie plaint ills had contended that these employees would he assigned in a discriminatory fashion anil that this would exacerbate the racial idcnliliahiliiy ol the Delaware division caused hv tlisi rimiiiatorv pa tient assignments. I lie argument was never made however, that assignment of employees would itself result in racial idenliliahility v iolalive of Title VI. C liven our aflirmance of the district court's li tid ing that patient assignment would not result in t.u ial idcniiliahililv. it is not necessary to consider plaintiffs' other argument 21 The nine mile trip in an area like Wilmington does not impose a significant hardship. Changes to alleviate some problems, even though resulting in improvement, often impose other burdens or confer unequal benefits. Whatever was done here could not possibly distribute the inconveniences and benefits with precise equality, but inaction would have a profound adverse impact upon all who depend upon the medical center. All concede that something must be done or all will suffer. To establish a prima facie case under Title VI in these circumstances, some definite, measurable disparate impact is required, otherwise needed and worthwhile efforts at improvement will be paralyzed. Reasonable accommodations must be made, but when they have been reached, new programs must be allowed to proceed. Although all of us are not completely per suaded that plaintiffs met their burden here, we will as sume arguendo, as did the district court, that a prima facie case was presented. *“ III The next step, therefore, is to determine what bur den is placed upon the defendant and whether it was met in this case. The district court concluded that once the plaintiffs had met their initial burden, the defendant had to go forward with evidence to “rebut |that| prima facie case." 491 F.Supp. at 315. The plaintiffs argue that the defendant's burden is a heavier one. that of persuasion. The parlies agree that the decisional law allocating the burdens of production and persuasion under Title VII is instructive in this case, but disagree as to the prop er interpretation of the opinions. It is not disputed that when a prima facie Title VII case of discriminatory in- 12. Judge Higginbotham w ould hold that plait itil Is did estab lish a prima lacic case. 22 tent is established, the defendant must go forward with evidence of a legitimate, nondiscriminatory reason for its action. The plaintiff may rebut by showing that the stat ed reason is mere pretext. The ultimate burden of persuasion on the issue of illegal discrimination always remains with the plaintiff. Whatever doubt may have existed on that score has been resolved in recent years by a series of cases in the Su preme Court and this court. Texas Department of Com munity Affairs v. Burdine,----- U S .-------. 49 U.S.L.W. 4211 (U.S. March 4. 1981); Board of Trustees of Keene State College v. Sweeney. 439 U.S. 21 (1978); Furuco Construction Corp. v. Waters. 138 U.S. 567 (1978); McNeil v. McDonough.----- F.2d-------. No. 80-1640 (3d Cir. April 24, 1981): Smithers v. Bailor. 629 F.2d 892 (3d Cir. 1980); Kunda v. Muhlenberg College. 621 F.2d 532, 543 n.3 (3d Cir. 1980): and Whack v. Peabody & Wind Engineering Co.. 595 F.2d 190 (3d Cir. 1979). See also Resident Advisory Board v. Rizzo, supra at 149 n.37 (Title VIII); Rodriguez v. Taylor. 569 F.2d 1231. 1239 (3d Cir. 1977). cert, denied. 136 U.S. 913 (1978) (Age Discrimination in Fmploymcnt Act). The plaintiffs contend that there should be a differ ence in the defendant's burden when the charge is dis criminatory impact rather than discriminatory intent. Their theory is that in countering a prima facie case of discriminatory impact, the defendant is presenting something in the nature of an aflirmative defense that requires shouldering the burden of persuasion. See Kirby r. Colony Furniture Co.. 613 I'.2d 696. 703 n.5 (8th Cir. 1980) (opinion of one judge, others not joining). That reasoning is not conv incing. One could just as readily say in an intent case that the neccssilv to prove a nondiscriminatory reason is an aflirmative defense car rying a burden of persuasion. Holdings of the Supreme Court and this court, however, are to the contrarv. lt In Furnco Construction Corp. v. Waters, supra, the Supreme Court explained its allocation of the burden of proof in intentional discrimination cases. If the plaintiff produces evidence sufficient to meet the standards of a prima facie case under McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973), an inference of discrimina tion is raised “because we presume |the complained ofj acts, if otherwise unexplained, arc more likely than not based on the consideration of impermissible factors.” Furnco Construction Corp. v. Waters, supra at 577. The effect of such a prima facie case is only to put in issue whether the employer’s conduct “was based upon legiti mate, nondiscriminatory reasons and therefore permissi ble." Id. at 576 n. 8. A prima facie case does not necessar ily constitute proof of the ultimate fact of discrimination under Title VII. Id. at 576. . To meet a McDonnell Douglas prima facie case, a j defendant must produce evidence of an acceptable rea son but is not required to show an absence of discrimina tory motiv e. Board of Trustees of Keene State College v. Sweeney, supra at 24. The burden of persuasion on the ultimate fact of discrimination remains with the plaintiff who may show that the proffered legitimate reason was a pretext. Furnco Construction Corp. v. Waters, supra at , 578; McDonnell Douglas Corp. v. Green, supra at 801. Disproportionate impact or effect is simply an addi tional method of demonstrating impermissible discrimi nation under Title VII. Teamsters v. United States. 431 j U.S. 321. 336 n.15 (1977). In Albemarle Paper Co. v. Moody. 422 U.S. 405 (1975). the Court held that a prima facie case could be established under the impact theory i! the plaintiff demonstrated that a facially neutral policy disproportionatclv affected persons protected bv Title VII If tl le plaintiff meets his initial burden, the defen dant must show " ‘that any given requirement |has| . . a manifest relationship to the employment in question.' " Id. at 125. gaoling Griggs v. Duke Power Co., supra at 23 24 432. In formulating this approach, the Court referred to the related test it had devised in McDonnell Douglas Corp. v. Green, supra at 425, and went on to include a similar third step: “it remains open to the complaining party to show that other. . . selection devices, without a similarly undesirable . . . effect, would also serve the . . . legitimate interest.” 422 U.S. at 425. In characterizing the defendant’s obligation to show a manifest relationship as an affirmative defense, the plaintiffs here apparently assume that making out a prima facie case of disproportionate impact is the equiv alent of establishing a Title VII violation by a preponder ance of the evidence. This assumption cannot stand be cause the Furnco analysis should control impact, as well as intent, cases.11 When the Supreme Court first held that Title VII prohibited some facially neutral practices, it described the congressional purpose as “the removal ol artificial, arbitrary, and unnecessary barriers . . . when the bar riers operate invidiously to discriminate on the basis of racial or other impermissible classification." Griggs v. Duke Four) Co., supra at 431. A showing of dispropor tionate effect or impact alone may not establish a \iola- tion. “The touchstone is business necessity. II an em ployment practice which operates to exclude . . . 13 * 13. The distinction between establishing a prima facie case and prevailing on the ultimate issue is discussed in l \ .1 Wigmore. Evidence §2187 (3d ed. 10-10). There Professor Wigmorc quotes ex tensively from Speas v. Merchants Dank & Trust Co.. 188 N.C . 52-1. 125 S E 308 (192-1): "A prima facie' case . . . does not change the burden of proof. It only stands until its weight is met by evidence to the contrary . . . |A| prima facie’ case . . . need not be overcome by a pre ponderance ol the evidence, or by evidence ol gieatei weight, but the evidence needs only to be balanced, put In equipoise .; and if this be done, the burden of the evidence has been met and the duty qf producing further ev idence shifts back to the party hav ing the burden of proof." 25 cannot be shown Co be related lo job performance, the practice is prohibited.” Id. To be proscribed, then, the challenged practice must not only affect disproportion-! ately, it must do so unnecessarily. To establish a prima facie case the plaintiff need not show that the practice was unnecessary but may rely on inferences. If the defendant presents no evidence ol business relatedness in his case, the court may assume that there was no permissible reason for the impact.11 In the event that the defendant does come forward with evidence to meet the inference of discrimination raised by the prima facie case, the plaintiff may still carry his burden of persuasion by demonstrating that a feasible, yet less onerous alternative exists. Albemarle Paper Co. v, Moodg, supra at 425. The contention plaintiffs make here, that business relatedness constitutes an affirmative defense, is incom patible with the third step ol Albemarle. Plaint ills would have WMC bear the burden of persuasion on this issue by showing a dearth ol' less objectionable alternatives. But in Albemarle, this burden was imposed on the com plaining party. As the Court explained in an analogous context, if the plaintiffs were correct in their assessment ol the various burdens of production and persuasion, the third step in the analysis would be rendered "entirely su perfluous . . .. since it would place on the |defcndant| at the second stage the burden of showing that the reason . . . was not a pretext, rather than requiring such prooi hum the jplainlillsj as a part of the third step." board oj l-l. As the- Supreme Court noted In Teamsters v. Uniter Stales, sigmi at 358: " The importance oTMcDonnell Ifont/ln* lies, not in its spcctlica lion ol the discrete elements ol proof there required, but in it: recognition of the general principle that any Title VII plait it il must cany the initial burden of offering evidence adequate li , create an inference'that an emplovment decision was based 01 a discriminatory criterion illegal under the Act." 26 Trustees of Keene State College v. Sweeney, supra at 24-25 n.l. The Supreme Court has not given any indication that it requires a shifting of the burden of persuasion in effects cases. To the contrary, the Court stated in New York Transit Authority v. Beazer, 440 U.S. 568, 587 n.31 (1979), that the ultimate burden of proving dis criminatory impact is the plaintiffs. Albemarle Paper Co. v. Moody, supra, was an impact case, yet in referring to the employer's burden to meet the plaintiffs prima facie showing, the Court cited McDonnell Douglas Corp. v. Green, supra, an intent case. As other examples of cross-references to McDonnell Douglas in effects cases, see Dothard v. Rawlinson, 433 U.S. 321, 329, 339 (1977), and Nashville Gas Co. v. Salty, 431 U.S. 136. 144 (1977). See also Teamsters v. United States, 431 U.S. 324. 336. 358. 360 (1977).15 The plaintiffs have cited no current authority for their position. Precedents antedating Board of Trustees of Keene State College v. Sweeney, supra, have little per suasive effect since that case settled the, confusion that surrounded this issue. Although the facts and inferences required to prove a case vary between intent and effect situations, that factor does not call for the shifting of the burdens of production and persuasion depending on the theory advanced. Moreover, it is illogical to impose a heavier burden on a defendant in a case where a neutral policy results in disparate impact than in one where the charge is unlaw 15. In Texas Dep t ol Community Adairs v. timeline, supra. the Court commented that the factual issues and therefore the “character of the evidence presented" differ in effects cases hut did not give am indication that a different liurdon would he imposed on the defendant. U.S. at , 19 U.S.L.H. at 1215 n.5. Iti. See fienenilli/. Hillman. Teamsters. California Breners. and Beyond: Seniority Systems and Allocation of the Ihirden of Proving Dona I ides. 51 ST JOHN'S L HKV. 70(i. 711 Iti (1980). 27 ful animus. Indeed, if there is to be a difference, quit the opposite result should follow. The defendant who it tentionally discriminates should not fare better than th one whose conduct may be subjectively blameless. In because of its effects may require remedial action. As a practical matter, a procedural distinction bt tween the impact and intent cases would cause unnet essary confusion in the trial courts, particularly so i cases like the one at hand in which both theories are at vanced. See, e g., Whack v. Peabody & Wind Engineerin Co., supra. It is difficult to understand what imperial interests would be served by imposing two different bu dens on the defendant in a case of this nature. Certain) the multiplication of procedural dev ices is not a desirabl development in trial practice. All things considered, uniformity in the procedure aspects of impact and intent cases is highly desirabl and should not be sacrificed on the dubious theory tin plaintiffs advance here. Although we need not vvorshi at its shrine, symmetry is not always sinful. Just as v\ permit plaintiffs to establish discrimination through e fects under both Title VI and VII. so should there be consistent burden on defendants. The district court determined that WMC should g forward “with evidence that Omega will in theory an practice’ serve 'a legitimate bona lide interest of | WMC . . . and . . . show that no alternative course of actio could be adopted that would enable that interest to b served with less discriminatory impact.' ” 491 F.Supp.; 315-16, quoting Resident Advisory Board v. Rizz> supra at 149. Following this, plaintiff was allowed to produce lu tlicr ev idence consistent with the third step of dcmoi strating pretext that the Supreme Court has mentione in both intent and impact cases brought under .Till VI!.1' McDonnell Douglas Corp. v. Green, supra-, Alin 17. In intent cases, il the reasons put lortli by the defeudai are not l»is real ones and In fact mask Ids plan to discriminate, ill 28 marie Paper Co. v. Moody, supra; Tehmsters v. United States, supra. In Resident Advisory Council v. Rizzo, supra, we held that under Title VIII of the Civil Rights Act of 1964. a plaintiff retains the burden of persuasion on the exist ence of less discriminatory alternatives. Requiring plain tiffs to meet that obligation by demonstrating that feasi ble, less discriminatory alternatives exist is neither unjust nor impractical in view of the extensiv e discovery material that was available in this case. The district court’s test is actually more stringent than that suggested in Jefferson v. Hackney. 406 U.S. 535 (1972). There, the Supreme Court found that appli cation of a percentage reduction factor to determine re duced needs of welfare recipients was rationally related to the purpose of the separate welfare programs and. consequently, did not violate the equal protection clause. For similar reasons, the Court also concluded that the challenged system would not contravene Title VI. The relationship of the reduction factor to the purposes of the Stale’s welfare programs distinguished JeJferson from Griyys: “In Griyys. the employment tests having racially discriminatory effects were found not to be job-related, and for that reason were impermissible under the specific language of Title Yll of the Civ il NOT I-'. IT — (Conlimicrf) plaint il l may slum tin* pretext, lit impact cases, where no intent Is aliened, the pretext may sometimes eonsist tit a tldeiulanl's assertion ot a Itona fide interest in order lo conceal another nondiscriminatory reason lor not adoption a less discriminaloix plan. In other situations, business justification may he the onh rea son lor the decision. It nevertheless remains open to the plait it ill to show that other devices exist which also serve the delendant's le gitimate interest hut w hich do not manilest a similarh prejudicial elici t. Indeed. '‘|s|iich a showing would he evidence that the |de- lend.mil was using its |device| merely . as a pretext' lor discrim ination." Albemarle Paper Co. v . Moodv. sn/mi at Ido. It mav also be ( substantive evidence lo support plaint ill's case. 29 Rights Act. Since the Texas procedure challenged here is related to the purposes of the welfare pro grams, it is not proscribed by Title VI simply be cause of variances in the racial composition of the different categorical programs.” JeJferson v. Hackney, supra at 550 n. 19. I a JeJferson, the state was not required to produce evidence that alter nate formulae for computing need would not have served the purposes of the program with less of a dispa rate impact. In Bryan v. Koch, 627 F.2d 612 (2d Cir. 1980). the Court of Appeals for the Second Circuit was confronted with a Title VI challenge to the closing of a city hospital. The court said that Title VI did not require consideration of alternatives beyond “an assessment of all the munici pal hospitals in order to select one or more for closing." Id at 619. Since the appropriateness of the city’s choice had been sufficiently demonstrated, the court's role end ed. Expressing doubt about the feasibility of a more open ended judicial evaluation of alternativ e means of econo mizing. the opinion stated. “Once a court is drawn into such a complex inquiry, it will inev itably be assessing the wisdom of compet ing political and economic alternatives. Moreover, such policy choices would be made without broad public participation and without sufficient assur ance that the alternative selected will ultimately prov ide more of a benefit to the minority popula tion.” Id. The court added that its skepticism extended even lo requiring courts to consider “alternative locations I'oi placement . . . of facilities.” Id., citiny NAACP v. The Wilminyton Medical Center, Inc., 491 F.Supp 290 (D.Del. 1980). By contrast, the district court in the case at hand did evaluate the alternatives. It required WMC to go "for- 1 ward with evidence showing that it has chosen the least discriminatory alternative." 491 F.Supp. at 340. That is a stringent standard which more than adequately serves Title VI aims.10 The court discussed six possible, less discriminatory alternatives to the Omega Plan, including the plaintiffs' “Reverse Omega” proposal and found that none of the plans would serve WMC's needs. The court also said that WMC had “investigated approximately 50 different plans, all of which it rejected for bona fide rea sons.” Id. at 340 n.314. Indeed, the court found that “Omega is the only plan which can adequately meet WMC's needs." Id. at 340. On this record, we conclude that the district court did not err in concluding that the defendant had carried its burden of meeting the plaintiffs' prima facie case.1" IV The plaintiffs also argue that the district court erred in refusing to assess the financial feasibility of Plan Omega and in deferring.instead to the judgment of the bond market. But as noted earlier, the court did make specific findings with respect to WMC's financial ability to complete the renovation at Delaware and pay for whatever shuttle bus service is required. When the court referred to the sanction of the bond market for the finan cial consequences of Plan Omega, it apparently was re ferring • the question whether WMC was wise in un dertaking; such an extensive project. As we read the district judge's opinion, whether funds could be obtained was not a matter which he 30 IH. .Indues 11iiCLciiitkiiIi.iin and Sloyilei' would adopt die stand ard used liy the district court that the disciiniinatorv impacts must lie "instilled hy Ixnm title needs which could not he accomplished h\ tiny less discriminatory plan." 101 I' Supp. at d Id III The record contains ample evidence supportinn justifica tion lor such disparate eH'eets as may exist as well as demouslraliim that other impacts asserted hy plainlills will not take place. 31 i could confidently predict, but was a circumstance sub ject to market forces. If the bonds were not sold. Onicgt could not proceed. Obviously an undertaking of tint magnitude involves some element of financial risk anc predicting the ultimate outcome is not a field in whict the courts have a special competence. The distric judge's hesitancy to wander into this area of uncertainty is understandable. On the record we do not find it to In reversible error. In fact, it would have been pure speculation for ih< court to accept the plaintiffs’ argument Even if it coulc be demonstrated that WMC was overly optimistic, then is no way of knowing with any certainty what remedia measures would be taken. It is far from clear that WMC would take the path suggested by plaintiffs and reduci free care and renovations of the Delaware division. No only would this breach the HEW contractual obligation: but it would also place WMC in jeopardy of losing it: Medicare-Medicaid reimbursements. A facility ahead; in financial difficulty is not likely to risk forfeiting federal f unding that makes up 30 percent of its budget. It must be remembered that the Omega Plan was submitted for administrative review to hospital planniiq organizations and to HEW. Alter some changes luu been made, the proposal was approved by HEW as beinj in compliance with Title VI. We are not called upon t> appraise the wisdom of Omega but are limited to review ing the decision of the district court by appropriate ap pellate guidelines. From that perspective, we do not lint legal error in the standards the district court utilized no can we say that the factual findings are clearly errone ous. Accordingly, the judgment of the district court wi| be affirmed. The mandate will issue forthwith. 32 ADAMS, Circuit Judge, concurring. 1 arrive at the result reached by the majority but, be cause I do so by a somewhat dill'erent route, I find it nec essary to write separately. The record here reveals a problem confronting American hospitals with increasing frequency: an aging physical plant, escalation of health care costs and maldistribution of services combine to create a health care crisis.1 Deteriorating physical facilities threatened the Wilmington Medical Center with a loss of accredita tion. Such a loss would further erode the quality of the hospital s medical care and its financial foundation by triggering a loss of qualification for the Center’s teach ing program and a termination of Medicare and Medic aid funds. In addition, without the construction of new facilities, the community would suffer a shortage of acute care beds. See NAACP v. Wilmington Medical Cen ter, Inc., 491 F. Supp. at 290. 297-98 (D. Del. 1980). Faced with these demographic and fiscal pressures, the Center concluded that rehabilitation of some of its facilities in downtown Wilmington and construction of new facilities in the suburban area, which would pre vent paying patients from gravitating to a potential com petitor. would most appropriately fulfill the hospital's needs. See -191 F. Supp. at 310. The Center considered approximately 50 proposals before arriving at a final plan that was denominated “Omega." Plan Omega was ap proved first by a state designated planning agency, which ensured that the project conformed to local needs for adequate health care, and then by the federal Depart ment of Health. Education and Welfare (now Health and Human Services). See Wilmington United Neigh borhoods v. United States Dept, of Health. Education and Weljare. 615 F.2d I 12. 12 1-25 (3d Cir. 1980). i. i. I'or a history and critique ol health care planning. see Hosetihlall. Health Carr Hc/oriii amt Atliiiinislralire Lair: .1 Struc tural Approach. 88 Vale 2 13 (1978). 33 Under Plan Omega, the Center proposed to inves appioximately $18-24 million in the rehabilitation of cer tain of the inner city facilities, to make a substantial in vestment in facilities in the suburbs, and to providt transportation for center city residents in need of speci lied services located at the suburban installation Set 491 F Supp. at 325-27. 343. 319. The plaintiffs main tain that the proposed program violates Title VI of tht Civil Rights Act of 1964. 42 U.S.C. §2000d the Age Dis crimination Act of 1975, 42 U.S.C. §6102. and Sectio. 504 of the Rehabilitation Act of 1973. 29 U.S.C,§794 because it adversely affects the quality of care and ac4 cess to that care for the handicapped, the elderly and ceitain minority groups." The Center, however con tends that, as a whole, the physical rehabilitation, new construction and consolidation of services will result in improved care for all patients, and that the availability ol a shuttle service will minimize any transportation bar riers for the handicapped, elderly and minoritv groups. Because I would affirm the district court on differ ent giounds than the majority. I find it unnecessary to decide whether Latt v. Nichols. 411 U S. 563 (1971). in! w Inch the Supreme Court construed Title VI to prohibit! dispaiate impacts, is still the relevant governing law. Al though the Supreme Court has recently suggested in Regents oj the Universiti/ oj'California v. Uahhe. 438 U S. 130 (1979). and Board of Education of Neu-'York Citi, v. Harris. 4 11 U S. 130. 1 17 n 10(1979). that Title VI might incorporate the constitutional standard ol spe cific intent lo discriminate, it should be noted that, be cause ol the wide range ol activities and conduct that Ti tle VI covers, the concerns raised in those two cases do not parallel the issues here. As the majority explains. Bahhe focused on the intentional use of racial criteria in ! - I Ik- majority and I agree w ith the distric t court that the did not establish a pinna lade case with respect to the handicapped under sec tion .701 See inaj op. sup,;, at I!) 34 the context of voluntary remedial actions. The Supreme Court did not deal with the type question present in this case, namely whether Title VI may impose requirements on recipients of federal funds that are broader than the Constitution demands when faced with disparate im pacts resulting from facially neutral actions. Moreover, the concern voiced in Harris — that because a violation of Title VI may result in a cutoff of funds, it is likely that Congress desired this drastic sanction only when dis crimination is intentional — would also appear to be in applicable here. The plaintiffs private cause of action against the Center, seeking an injunction to prevent fu ture discrimination, involves no immediate prospect of a fund cutoff. In fact, it is attempting to ensure against such a possibility. * * Nonetheless, whether hospital relocations and ren ovations such as the present one should be subjected to judicial scrutiny aimed not only at preventing intention al discrimination but also at forestalling any relocation which may occasion unintentional, adverse effects on protected groups is. from my perspective, a troublesome question. Courts may not be the most competent forums for determining the effects of hospital relocations on ra cial minorities. Admittedly, we earlier acknowledged the 3. The broad spectrum ol federally funded programs in which Title VI challenges occur may account for the divergent resolutions of the intent vs. Impact question among and within the circuits. Sir Cannon v. University ol Chicago. No. 80-1 ili3 (till (_ir. May 0. 1081) (based on belief that a violation of Title VI requires an inten tional discriminatory act. the court adopted the intent standard for Title IX): Guardians Association of the New York City Police Dept.. Inc., etc v. Civil Service Commission of the City of New York. G33 *V2d 232 (2d Cir. 1080) (intent required for Title VI); llryan v. Koch. <>27 K.2d G12 (2d Cir. 1080) (unnecessary to decide whether intent or effects standard applies to Title VI); board of I'.ducation v Calilano. 581 12d 570. 580 ( 2d Cir. 1978) t effects test for Title VI). oil'll on other iiroiiiuls. d l l U S. 130 (1070); Guadalupe Organiza tion. Inc v. Tempo Klementary School Disc No 3. 58, I .2d 1022. 1020 n (i (0th Cir 1078) (impact is proper standard for Title VII 35 desirability ol judicial review by finding a private cause of action under Title VI. See NAACP i . \Vihniiujton Medical Center, Inc., 599 F.2d 1247. 12o4 (3d Cir. 1979). And courts are often well-situated to address the concerns of relatively unorganized, politically weak con sumer groups whose interests may be insufficiently rec ognized in administrative proceedings. But I would defer deciding until a later day. the level of scrutiny, and the extent to which courts might intrude upon a perhaps better-informed regulatory process. As the district court held, and the majority here agrees, the record is devoid of proof ol intentional dis crimination. But, even assuming that a disparate impact test is an appropriate one under Title VI. I believ e that a fair reading of the ev idence in this case, and especially ol the extensive findings made by the trial court, indicates that the plaintiffs failed to make out a prima facie case under anv of the statutes inv olv ed. A plethora of findings underlies the trial judge's ultimate conclusion that the plaintiffs have shown only a slight disparate increase in travel time, a modest decrease in the ability ol inner city residents to visit patients at the suburban site, and con sequently a minimal negative effect which the decrease in visitors may have upon the quality ol care for the el derly. -191 F. Supp. at 333 The district court also deter mined that the possibility of a lew minority high risk pa tients missing an appointment at the specially clinics, and the extremely rare chance ol an obstetrical emer gency patient receiving inadequate treatment in the in ner city division constituted such unlikely effects that thev failed to establish a prima facie case under l itle \ I 491 F. Supp. at 337. I cannot find that the trial court dearly erred in holding that plaintiffs "failed to meet their initial burden of proving disparate impact under the civil rights statutes invoked. See 491 1 Supp at 339. Moreover, these specific findings are part ol a larger mosaic: the trial court's overarching finding that the lev - 1. . . 36 el ol care for all population groups will improve on ac count of the benefits that greater consolidation, better-trained residents and upgraded facilities will con fer. Measured against HEW regulations which define Title VI violations as actions which have “the effect of defeating or substantially impairing accomplishment of the objective of the program as respect [sic] individuals oi a particular race, color, or national origin,” 45 C.F.R §80.3(b)(2) (emphasis added), these de minimis im pacts simply do not pass muster. Unless a threshold is created for prima facie cases under Title VI, questions legaiding hospital relocations and similar, complex so cioeconomic decisions will be open to protracted court challenge, for each significant community undertaking affects slightly differently the various protected popula tion subgroups in our country’s localities. Because I am unable to find that the plaintiffs estab lished a prima facie case, it is unnecessary for me to re solve whether the defendants carried a burden of pro duction or burden of proof in rebutting an initial showing ol disparate impact with evidence of legitimate medical needs. Gibbons. Circuit Judge, concurring and dissenting. I join in Part 1 of the opinion of the court, which holds, contrary to the position advanced bv the Wilming ton Medical Center (WMC). that Title VI of the Civil Rights Act of 1964. 42 U.S.C. §2000d et set,. (1976). Section 504 of the Rehabilitation Act of 1975 29 U S C §791(Supp. II 1978) and the Age Discrimination Act. 42 U.S.C. §§6101 et seq. (1976 & Supp. II >. prohibit not in tentional discrimination alone, but also disparate impact upon the classes those acts protect. Only an effects standard will encourage decision makers to consider 37 possible discriminatory consequences of a proposal be fore its implementation. I also join in Part II A of the opinion of the court, holding that the plaintiffs did not establish a prima facie case of violation of Section 504 of the Rehabilitation Act. I do not join in Part II B of the opinion, which assumes arguendo that the plaintiffs es tablished a prima facie case of disparate impact against the aged and minorities. My view is that the plaintiffs quite clearly proved a prima facie case of disparate im pact against both classes in significant respects. I dis sent from Part III of the opinion of the court, which is entirely inconsistent with the intention which the court correctly attributes to Congress in its discussion of the federal funding statutes in Part I. I. In describing the requirements for a prima facie case the majority opinion states: To establish a prima facie case under Title VI in these circumstances, some definite, measurable im pact is required, otherwise needed and worthwhile efforts at improvement will be paralyzed. Reason able accommodations must be made, but when they have been reached, new programs must be allowed to proceed. Typescript p. 20 (emphasis supplied). If the court ended its discussion with the italicized language. I would agree with its test. But the addition of the following sentences shows that the court is confusing the requirements of a prima facie case—definite, measurable impact on the protected class—with justification for the imposition of such an impact. Medical and financial necessities may justify the adverse effects, but do not make them any less substantial. The distinction is critical. It is illogical to proceed, as the majority does, to the issue of justifica tion. without first identifying the specific impacts which I 38 will occur, since what amount of accommodation is rea sonable depends on the size of the impact. On this record there is no question but that, con trary to the district court’s alternative holding, a definite, measurable impact on the protected classes has been shown. It need not be assumed arguendo. It is plain. The district court’s contrary conclusion is the result of sever al fundamental legal errors, which the majority opinion ignores. A. Factual Background Before reviewing the lower court’s ultimate find ings, I summarize the background facts about Plan Omega which are common ground. The plan was the culmination of a long period of planning bv WMC for the improvement of its ability to offer quality medical care. WMC is a private nonsectarian hospital which evolved from the merger in 1965 of three acute care general hos pitals in the City of Wilmington, which alter the merger maintained three separate physical facilities containing approximately 5d percent of the available acute care beds in the State of Delaware. Although the three sepa rate facilities are located in different areas of the city, they are all well served by bus routes which run throughout heavily populated areas of New Castle Coun ty. as would be true of any new consolidated facility if it was located in Wilmington. The primary reasons lor the meigei vveic ieduction of duplicate facilities and im provement of clinical experience for a resident program in order to attract residents who would serve the Dela ware community. Thwarting this purpose is the fact that WMCs physical facilities are aging and in v arious states of disrepair; their inadequacies have resulted in onlv probalional accreditation by the Joint Commission on Accicditaiion ol Hospitals.- Loss ol accreditation would mean ineligibility for participation in residency pro grams approved by the American Medical Association. Thus plant improvement is essential. 39 It has always been the judgment of the WMC medi cal staff that achievement of the hospital’s objectives could best be served by placing all medical and surgical services under one roof. However by the time planning for a new facility commenced, Delaware, like other states, was experiencing a substantial shift in population growth from older urban to newer suburban locations. In New Castle County that shift in the growth pattern produced a rapid increase in its southwestern portion, around Newark. Delaware. That area is now serv ed only by an emergency room, and the need for some hospital beds in the vicinity of Newark is widely recognized. The Delaware Health Planning Council, a state agency, has recommended that such beds be provided. If an institu tion other than WMC were to do so. the latter would be adversely affected. WMC is the largest prov ider of free care in the County to those unable to pay for care them selves and unable to qualify for government assistance. Partly as a result of subsidization of this lice care, j WMC's hospital rates are the highest in the State of Delaware. Since the population in the southwestern j suburbs is generally more affluent than that in the ur- 1 ban northern part of the County, diversion of patients from WMC to a new suburban institution would have the effect of increasing the percentage of free care pa tients in WMC's patient mix. and thus of adversely af fecting its financial stability. The combination of undisputed facts outlined in the proceeding paragraph limited the choices available to WMC. It could build a new hospital under a single roof in the suburbs, closing the Wilmington units, or it could build a new hospital in Wilmington, running the risk that another institution would build in the suburbs, or it could attempt, with separate facilities, to serve both areas. When the third course was decided upon it be- [ came necessary to determine the mix of facilities in the two locations. In Plan Omega WMC opted for the crec- 40 tion of a new 780-bed hospital, the Southwest Division, in a rural location at Stanton, the closing of two of the three Wilmington divisions, and the reduction in bed ca pacity of the third, Delaware Division, from 480 to 250 beds. The Stanton location is not now and will not be in the foreseeable future served by public transportation, although it is on an interstate highway. The Plan in volves more than allocating beds, however, for some ma jor hospital services will be located exclusively at thp larger Southwest Division, others exclusively in the smaller Delaware Division, and some in both places.1 1. Placement of inpatient services under Plan Omega would be as follows: Department Section Location Medical: Allergy Roth Cardiology Both Dermatology > Both Endocrinology Both Gastroenterology Southwest Internal Medicine Both Nephrology Southwest Rheumatology Both Physical Medicine Both Chest Diseases Both Infectious Disease Both Neurology Southwest Oncology Southwest Psychiatry Delaware Radiation Therapy Southwest Family Practice Delaware Surgical: General Both Neurosurgery Southwest Orthopedic Surgery Southwest Plastic Southwest Proctology Both Thoracic Southwest Otology Both Rhinolaryngology Delaware Vascular Both Dentistry Delaware Ophthalmology Delaw are | 1 As a result of the order of the district court that the Department of Health. Education and Welfare perform an investigation of Plan Omega’s compliance with Title VI,2 proceedings took place before that agency which re sulted in a finding that, as originally conceived. Plan Omega would violate Title VI. A Supplemental Agree ment between the agency and WMG was then made lot the purpose of assuring that the plan would not violate the statute. ‘ The fact, though not the legal significance, of the Supplemental Agreement is undisputed. The plaintiffs contend that the effect of Plan Omega is to impose on protected classes in New Castle County a disproportionate burden of decreased availability of medical services and of employment opportunities when compared to the rest of the population. That dispaiate impact, they contend, will result because the housing patterns in New Castle County concentrate greater numbers ol the protected classes in those paits of the County nearer to the present WMC divisions, which un- 41 U eulogy Obstetrics' Gynecology: „ Pediatrics: Obstetrics Gynecology Pediatrics Newborn Premature Southwest Southwest Southwest Southwest Southwest Southwest In addition, some clinic, outpatient, and support services will also be located exclusively at the Southwest Division, including the high risk prenatal and specialty pediatric and gynecological clinics and the specialty cardiac, radiation therapy, and hemodialysis sup port services. The Delaw are Div ision will exclusively house the psy chiatry. ear. eye. and nose, and dentistry specialties. I he primary care clinics will be consolidated and located exclusively at the Dela ware Division. -i See NAACP v. Wilmington Medical Center. Inc.. TV! I Supp. 280 tl) Del IfCKV The Supplemental Agreement is in the record as P.Y2. 34 the context of voluntary remedial actions. The Supreme Court did not deal with the type question present in this case, namely whether Title VI may impose requirements on recipients of federal lunds that are broader than the Constitution demands when faced with disparate im pacts resulting from facially neutral actions. Moreover, the concern voiced in Harris — that because a violation of Title VI may result in a cutoff of funds, it is likely that Congress desired this drastic sanction only when dis crimination is intentional — would also appear to be in applicable here. The plaintiff's private cause ot action against the Center, seeking an injunction to prevent fu ture discrimination, involves no immediate prospect ol a fund cutoff. In fact, it is attempting to ensure against such a possibility.•* Nonetheless, whether hospital relocations and ren ovations such as the present one should be subjected to judicial scrutiny aimed not only at preventing intention al discrimination but also at forestalling any relocation which may occasion unintentional, adverse ellects on protected groups is. from my perspective, a troublesome question. Courts may not be the most competent forums for determining the effects of hospital ielocutions on ra cial minorities. Admittedly, we earlier acknowledged the 3. The broad spectrum ol federally funded programs in which Title VI challenges occur may account for the divergent resolutions of the intent vs. impact question among and within the circuits. See Cannon v. Universitv ol Chicago. No. 80-1i03 l jth Lit. May ii. 1981) (based on belief that a violation of Title VI requires an inten tional discriminatory act. the court adopted the intent standard for Title IX); Guardians Association of the New York City Police Dept.. Inc., etc. v. Civil Service Commission of die City of New York. 933 I'.2d 232 (2d Cir. 1980) (intent required for Title VI); Bryan v. Koch. 027 I'.2d 012 (2d Cir. 1980) (unnecessary to decide whether intent or effects standard applies to Title VI); Board of education Calilano. 581 I .2d 570. 589 (2d Cir. 1978) (effects lest for fide VI). „H,l on other (iron nils. -I Id US. 130 (1979); Guadalupe Organiza- tion. Inc. v. Tempt* Klementary School Dist. No 3. 587 I 2d 1022. 1029 n.0 (9th Cir. 1978) (impact is proper standard for l itle VI). 35 desirabilitv of judicial review by finding n private cause of action under Title VI. See NAACP v. Wilmiiuitun Medical Center, Inc., 599 F.2d 124/, 12d4 (3d Cit 1979). And courts are often well-situated to address the concerns ol relatively unorganized, politically weak con sumer groups whose interests may be insulliciently tec- ognized in administrative proceedings. But I would defer deciding until a later day. the level ol scrutiny, anti the extent to which courts might intrude upon a perhaps better-informed regulatory process. As the district court held, and the majority here agrees, the record is devoid ol prool of intentional dis crimination. But. even assuming that a dispaiate impact test is an appropriate one under Title VI. I believe that a fair reading of the evidence in this case, and especially ol the extensive findings made by the trial court, indicates that the plaintiffs failed to make out a prima facie case under any of the statutes involved. A plethora of findings underlies the trial judge s ultimate conclusion that the plaintiffs have shown only a slight disparate inciease in travel time, a modest decrease in the ability ol inner city residents to visit patients at the suburban site, and con sequently a minimal negative effect which the decrease in visitors mav have upon the quality ol cute loi the el derly. 491 F. Supp. at 333. The district court also deter mined that the possibility of a few minority high risk pa tients missing an appointment at the specialty clinics, and the extremely rare chance ol an obstetrical emer gency patient receiving inadequate treatment in the in ner city division constituted such unlikely ellects that thev failed to establish a prima facie case under Title \ I 491 F. Supp. at 337. I cannot find that the trial court clearly erred in holding that plaintiffs "failed to meet their initial burden ol proving disparate impact undo the civil lights statutes invoked." See 491 F. Supp. at 339. Moreover, these specific findings are part ol a largci mosaic: the trial court's overarching finding that the lev - 36 el of care for all population groups will improve on ac count of the benefits that greater consolidation, better-trained residents and upgraded facilities will con fer. Measured against HEW regulations which define Title VI violations as actions which have “the effect of defeating or substantially impairing accomplishment of the objective of the program as respect |sicj individuals of a particular race, color, or national origin," 45 C.F.R. §80.3(b)(2) (emphasis added), these de minimis im pacts simply do not pass muster. Unless a threshold is created for prima facie cases under Title VI. questions regarding hospital relocations and similar, complex so cioeconomic decisions will be open to protracted court challenge, for each significant community undertaking affects slightly differently the various protected popula tion subgroups in our country's localities. Because I am unable to find that the plaintiffs estab lished a prima facie case, it is unnecessary for me to re solve whether the defendants carried a burden of pro duction or burden of proof in rebutting an initial showing of disparate impact with evidence of legitimate medical needs. CmiiONS, Circuit Judge. concurring and dissenting. I join in Part 1 of the opinion of the court, which holds, contrary to the position advanced by the Wilming ton Medical Center (WMC), that Title VI of the Civil Rights Act of 1961. 42 U.S.C. §2000d ct scg. (1976). Section 501 oflhe Rehabilitation Act of 1975, 29 U.S.C. §791 (Supp. II 1978) and the Age Discrimination Act, 12 U.S.C. §§6101 ct seg. (1976 & Supp. II). prohibit not in tentional discrimination alone, but also disparate impact upon the classes those acts protect. Only an effects standard will encourage decision makers to consider 37 possible discriminatory consequences of a proposal be fore its implementation. I also join in Part II A ol the opinion of the court, holding that the plaintiffs did not establish a prima facie case of violation of Section oO-l ol the Rehabilitation Act. I do not join in Part 11 B ol the opinion, which assumes arguendo that the plaintills es tablished a prima facie case ol disparate impact against the aged and minorities. My view is that the plaintills quite clearly proved a prima facie case ol disparate im pact against both classes in significant respects. I dis sent from Part III of the opinion of the court, which is entirely inconsistent with the intention which the court correctly attributes to Congress in its discussion ol the federal funding statutes in Part I. I. In describing the requirements for a prima lacie case the majority opinion states: To establish a prima facie case under Title \ I in these circumstances, some definite, measurable im pact is required, otherwise needed and worthwhile efforts at improvement will be paralyzed. Reason able accommodations must be made, but when they have been reached, new programs must be allowed to proceed. Typescript p. 20 (emphasis supplied). II the court ended its discussion with the italicized language. I would agree with its test. But the addition oflhe following sentences shows that the court is confusing the requirements ol a prima facie case—definite, measurable impact on the protected class—with justification for the imposition ol such an impact. Medical and financial necessities may juslilv the adverse effects, but do not make them any less substantial. The distinction is critical. It is illogical to proceed, as the majority does, to the issue ol justifica tion, without first identifying the specific impacts which 38 will occur, since what amount of accommodation is rea sonable depends on the size of the impact. On this record there is no question but that, con trary to the district court’s alternative holding, a definite, measurable impact on the protected classes has been shown. It need not be assumed arguendo. It is plain. The district court’s contrary conclusion is the result of sever al fundamental legal errors, which the majority opinion ignores. A. Factual Background Before reviewing the lower court’s ultimate find ings, I summarize the background facts about Plan Omega which are common ground. The plan was the culmination of a long period of planning by WMC for the improvement of its ability to offer quality medical care. WMC is a private nonsectarian hospital which evolved from the merger in 1965 of three acute care general hos pitals in the City of Wilmington, which alter the merger maintained three separate physical facilities containing approximately 55 percent of the available acute care beds in the State of Delaware. Although the three sepa rate facilities are located in different areas of the city, they are all well served by bus routes which run throughout heavily populated areas of New Castle Coun tv, as would be true of any new consolidated facility if it was located in Wilmington. The primary reasons for the merger were reduction of duplicate facilities and im provement of clinical experience for a resident program in order to attract residents who would serve the Dela ware community. Thwarting this purpose is the fact that WMC’s physical facilities are aging and in various states of disrepair: their inadequacies have resulted in only probational accreditation by the Joint Commission on Accreditation of Hospitals. Loss of accreditation would mean ineligibility for participation in resiliency pro grams approved by the American Medical Association. Thus plant improvement is essential. I It has always been the judgment of the WMC medi cal staff that achievement of the hospital's objectives could best be served by placing all medical and surgical services under one roof. However by the time planning for a new facility commenced, Delaware, like other states, was experiencing a substantial shift in population growth from older urban to newer suburban locations. In New Castle County that shift in the growth pattern produced a rapid increase in its southwestern portion, around Newark. Delaware. That area is now served only by an emergency room, and the need for some hospital beds in the vicinity of Newark is widely recognized. The Delaware Health Planning Council, a state agency, has recommended that such beds be provided. If an institu tion other than WMC were to do so. the latter would be adversely affected. WMC is the largest provider of free care in the County to those unable to pay lot caie them selves and unable to qualify for government assistance. Partly as a result of subsidization of this free care, WMC’s hospital rates are the highest in the State of Delaware. Since the population in the southwestern suburbs is generally more affluent than that in the ui- ban northern part of the County, diversion of patients from WMC to a new suburban institution would have the effect of increasing the percentage of free care pa tients in WMC’s patient mix. and thus of adversely af fecting its financial stability. The combination of undisputed facts outlined in the proceeding paragraph limited the choices available to WMC. It could build a new hospital under a single tool in the suburbs, closing the Wilmington units, or it could build a new hospital in Wilmington, running the risk that another institution would build in the suburbs, or it could attempt, with separate facilities, to serve both areas. When the third course was decided upon it be came necessarv to determine the mix ol facilities in the two locations. In Plan Omega WMC opted for the erec- 39 40 lion of a new 780-bed hospital, the Southwest Division, in a rural location at Stanton, the closing of two of the three Wilmington divisions, and the reduction in bed ca pacity of the third. Delaware Division, from 480 to 250 beds. The Stanton location is not now and will not be in the foreseeable future served bv public transportation, although it is on an interstate highway. The Plan in volves more than allocating beds, however, lor some ma jor hospital services will be located exclusively at the larger Southwest Division, others exclusively in the smaller Delaware Division, and some in both places.* 1 Placement of inpatient services under Plan Omega would be as follows: Department Section Location Medical. Allergy Roth Cardiology Both Dermatology Both Endocrinology Both Gastroenterology Southwest Internal Medicine Both Nephrology Southwest Rheumatology Both Physical Medicine Both Chest Diseases Both infectious Disease Both Neurology Southwest Oncology Southwest Psychiatry Delaware Itadialion Therapy Southwest family Practice Delaware Surgical: General Both Neurosurgery Southwest Orthopedic Surgery Southwest Plastic Southwest Proctology Both Thoracic Southwest Otology Both Rhinolaryngology Delaw are Vascular Both Dentistry Delaware Ophthalmology Delaware 41 As a result of the order of the distiict court that the Department of Health. Education and Welfare perform an investigation of Plan Omega’s compliance with Title VI.- proceedings took place before that agency which re sulted in a finding that, as originally conceived. Plan Omega would violate Title VI. A Supplemental Agree ment between the agency and WMC was then made loi the purpose of assuring that the plan would not violate the statute.3 The fact, though not the legal significance, of the Supplemental Agreement is undisputed. The plaintiffs contend that the effect of Plan Omega is to impose on protected classes in New Castle Count) a disproportionate burden of decreased availability of medical services and of employment opportunities when compared to the rest of the population. That disparate impact, they contend, will result because the housing patterns in New Castle County concentrate greater numbers of the protected classes in those parts oi the County nearer to the present WMC divisions, which un- Urology Obstetrics/ ('.yi tocology: Pediatrics: Obstetrics Gynecology Pediatrics Newborn Premature Southwest Southwest Southwest Southwest Southwest Southwest In addition, some clinic, outpatient, and support services will also be located exclusively at the Southwest Division, including the high risk prenatal and specialty pediatric and gynecological clinics, and the specialty cardiac, radiation therapy, and hemodialysis sup port services. The Delaware Division will exclusively house the psv- chiatrv. ear. eye. and nose, and dentistry specialties 1 he primary care clinics will be consolidated and located exclusively at the Dela ware Division. . a see NAACP v. Wilmington Medical Center. Inc.. Tvt I Supp. -HOtD. Del. IhiSV A .The Supplemental Agreement is in the record as I \ ~ 42 der Plan Omega would be scaled down considerably. The travel burden imposed by the proposed Southwest Division would allegedly be exacerbated by the lact that the new facilitv would not be served by public transpor tation. The burden would, therelore, tali disproportion ately on minorities, the handicapped, and the elderly, who. plaintiffs urge, have far less access to private trans portation than does the rest of the population. Moreover, they predict that because the more significant in-patient medical services will be at the Southwest Division, the quality of care at the Delaware Division will in many re spects be inferior, and that division will ultimately be come raciallv identified. These impacts would violate Ti tle V! Before addressing the evidence supporting these contentions, it is worthwhile noting certain provisions of the Supplemental Agreement reached by WMC and the Department of Health. Education and Welfare. The agreement recites the Secretary's desire to receiv e assur ance that the operation of WMC under Plan Omega as implemented will be in compliance with Title VI and the Rehabilitation Act. The agreement covers main areas of future WMC operation. First, it obliges WMC to operate its own transportation system between the Delaware and Southwest Divisions. Second, it requires the adoption of a system of inpatient utilization control aimed at pre venting one or the other division from becoming racially identifiable. Third, it requires that both divisions be op erated on a unitary basis, with a single Board ol Direc tors and Executive Committee, a single medical staff, consolidated leaching programs, and consolidated ac counting. Fourth, it requires improvements in the plant of the Delaware Div ision and approval by the Regional Civil Rights Director of (he Department of Health. Edu cation and Welfare before aqv reductions in serv ices at that div ision or material expansion of the Southwest Di vision occur. The agreement is. however, “subject to 43 amendment from lime to time by written instrument ex ecuted by the parties, to reflect such changes in systems for delivery of hospital care and of changing community needs."1 In determining that the plaintif fs had failed to prove a case of disparate impact, the trial court canv assed the . ev idence on each of the ways Plan Omega could be ex pected to impact upon the three protected classes. Since ! I agree with the majority's disposition ol the claim ol dis parate impact on the handicapped. 1 address the remain ing claims of the aged and minorities. B. llie Disparate Impacts Identified The plaintiffs' evidence suggests that minorities and the elderly are concentrated in or near the City of Wilmington, that of households lacking access to auto mobiles 73.8rr were in that part of the County, and that such public transportation as is av ailable in the County other than taxicabs is concentrated in that pail ol the County as well. Moreover, a round trip taxicab fare from the Delaware Div ision to the Stanton site costs approxi mately SI5.00. 491 F. Supp. at 304-05. That evidence t also suggested that minorities and the elderly have a dis proportionately high incidence of need for those inpa- j tient services which will be located exclusively at the Southwest Division. ’ 491 F. Supp. at 30G. The plaintiffs evidence identified three classes ol services falling in this category. First, services relating to childbearing and j infant health are more likely to be needed by minorities. 191 F. Supp. at 300-07. Second, minorities are more | likely than whites to need serv ices for cerebral v ascular diseases and for cancer. 491 F. Supp. at 30/. Third, the t -t. Supplemental Agreement. Paragraph i l-f >• 5. Services to be exclusively at Southwest include gasirocnier- ! ologv. nephrology, neurology, oncology, radiation ihcrapv. i neurosurgerv. orthopedic surgery, plastic surgery, thoracic sumeiv. urology, obstetrics, gynecology, pediatrics, newborn, and pi etna - ture. j 5 i f I f 44 elderly are more likely than the general population to need services relating to cerebral vascular and cardio vascular diseases, gastroenterology, thoracic surgery, and radiation therapy. 491 F. Supp. at 308.1 he evidence is clear, and virtually undisputed, therefore, that certain services will, under Plan Omega, be moved over nine miles further from the population that needs them most; a population that has least access to private trans portation. The evidence also discloses important differences between the Southwest and Delaware Divisions, differences which plaintiffs predict will result in unequal quality of care. Almost all clinic (outpatient) care will be concentrated at the Delaware Division, and that a majority of clinic patients are members of minority groups. Moreover, of 33 inpatiept departments, only 5. psychiatry, family practice, rhinolaryngological surgery, dentistry and ophthalmology, will be exclusively at Dela ware Division, while 15 will be exclusively at Southwest and only 13 at both facilities. There is ev idence that the Delaware Division will be housed in a renovated lacility. presently dilapidated, while the Southwest Div ision will be brand new. Plaintiffs also offered ev idence lending to show that estimates of revenue on which Plan Omega was based, and upon which the proposed renovation of Delaware Div ision was dependent, were questionable, and thus that even a renovated Delaware Div ision may not materialize. 191 F. Supp. at 327. Plaintiffs contend that Delaware Division is destined to become a second-rate lacilitv. racially identifiable, anti lendeiing to the minorities and the elderly in its service aiea sei- vices inferior to those rendered at the Southwest Divi sion. The inferior serv ice will result, they contend, from unavailability of board-certified specialists for consulta tion at the Delaware Div ision in those important speciali ties exclusively at Southwest. For various reasons the trial court rejected the sig nificance of most of the evidence referred to. and con- 45 eluded that no violation of either Title VI or the Age Dis crimination Act was shown. 1 lie court analyzed the evidence under three categories: effects on accessibility, effects on quality of care, and racial identifiabilitv. I w ill do likewise. 1. Accessibility Patently the removal of a number of medical spe cialties from Wilmington to the suburbs will impose a disproportionate travel burden on minorities and the el derly who are concentrated in the inner city and have less access to private transportation. But as amended by the Supplemental Agreement. Plan Omega includes a shuttle bus component intended to satisfy transportation demand. Plaintiffs produced the testimony■ of Dr. Marvin Manheim. a transportation expert, to the effect that the level of shuttle bus serv ice specified in the Supplemental Agreement will be far less than the demand and will cre ate for passengers prohibitively long waiting periods. The court discounted the relevance of Dr. Manheim s testimony, however, construing the Supplemental Agreement as a categorical undertaking by WMC to pro vide adequate free transportation for patients, visitors and employees. 1 he court concluded, moreover, that even in the worst case hypothesized by the transporta tion expert, the additional cost of providing needed free transportation would be minimal in comparison with WMC's annual budget. -191 F. Supp. at 319. Since the court did not discredit Dr. Manheim s tes timony on the likely inadequacy of the minimum trans portation requirements set forth in the Supplemental Agreement, they must for purposes of rev iew be accept ed in determining whether plaintiffs proved a prima facie case. Rebuttal of this case hinged on the testimony of James Tvler. a defense witness, assuring that \\ Mk would have the financial ability to meet this projected need. However, it was plaintiffs' contention throughout trial that, regardless of WMC's good intentions, its In- 46 ture revenue projections were seriously flawed and that as a consequence, it would be unable to satisfy the an ticipated need lor shuttle service. Elsewhere in its opin ion the court conceded that plaintiffs had presented strong evidence" that revenues were overestimated. .I91 f SuPP 4at 328 "-230. But it deemed such evidence irrelevant lor purposes of weighing the prima facie case. As will be discussed in more detail later '* this at tack on the credibility of WMC's revenue projections was, to the contrary, highly relevant, and the court's ac ceptance of Tyler s assurances, with no consideration E ” t0 1 \e!r ‘eiiahilliy. tainted its conclusion that . ,n"°uld be able to upgrade its planned shuttle ser vice. For purposes of plaintiffs' prima facie case, we are e t "*«•» undisputed evidence of a lack of public trans portation horn minority and residential areas to the Southwest Division, and of a planned private shuttle bus system which, as presently projected, will be I inadequate. Plaintiffs also produced evidence, and the trial court found, that even assuming adequate free shuttle serv ice connecting the Delaware and Southwest Divisions mi nority inpatients and v isitors will still suffer a dispropor- "V he anWH,,U ol lime sP<m‘ leveling lo leach NM Cs facilities. -191 F. Supp. at 320. The same would appear, from the ev idence, to be true of the elder ly. 1 his time the burden would fall particularly heavily on the poor lor w hom it might mean lost wages and on minority mothers of small children. There is also ev i dence that because of the nature of the populations affected—the elderly and minorities—an increase in lavel time may translate into some decrease in the use ol healtl. care. -191 F. Supp. at 322. The court discount ed the significance of this evidence. ti SVr I '.m lill m2 Hi) in I'm. 47 Relying on section 603 of Title VI.7 it declined to consider any transportation impact on employees. This omission was improper, for while it is true that medicaid and medicare funds are not appropriated to provide em ployment, and thus may fall within section 603, the irn pact on employees still was relevant to the claim, ad vanced on behalf of hospital patients, that the Southwest and Delaware Divisions will become racially identifiable. In measuring the plaintiffs' prima facie case, therefore, evidence about access to the Southwest Division bv mi nority employees was highly relevant. The failure to con sider it was error. As to ev idence of possible decrease in use of health care facilities, the court rejected it. noting that jojbv iously, they will not be deterred from seeking care at any of the serv ices located at the Delaware Division. Any deterrent . . . will only occur with services located exclusively at the Southwest Divi sion. Moreover, increases in time and distance w ill j usually only deter those seeking primary care and will have no effect upon those who will be inpa- 1 items, those who arc terminally ill. or those w ho are ! referred by their doctor to a facility to receive spe- cializcd care. Since only doctor referred specialty clinics, inpatient facilities, and doctor referred spe- cialiv outpatient treatment facilities will be located at the Southwest Division, this deterrent factor should, for the most part, not apply. 491 F. Supp. at 322. While there was evidence from which another inference might have been drawn about * 12 < Noiliim; conta ined in this sulicliapici d u l l In- coiiMiucd u> 1 au ilio ri/c aclion u n d e r this su Ih l iapicr l>\ a m dcparimciil or auen- f i \ wiili respect m a m c-ni|>lo\mem |iraeiiee ol a m employer e \aop t w here a primary ol>|eeii\e ol d ie le d e ra l Iiii.iik ial a ss is tan te i* to pro\ ide cuiplox m em 12 l ' S t ' $20l)0d-.1. 48 the deterrent effect of distance upon minorities and the elderly seeking inpatient care at the Southwest Division, the above finding cannot be described as clearly erroneous. The court went on to find, however, that in two re spects which were treated as de minimus the added dis tance and trav el time would have a deterrent el feet on the statutorily protected classes. F|rst. the location of all specialty obstetrical care at the Southwest Division, in cluding specialty clinics and high-risk prenatal care, may deter a few minority women to skip appointments. Second, there will be a disproportionate decrease in the number of minority and elderly visitors to the Southwest Div ision. 191 F. Supp. at 322. The significance of these disparate impacts upon the protected classes is dis cussed in connection with quality ol care. 2. Quality of Cure (i) Physical Facilities Plaintiffs presented expert testimony that the cost of the features of Plan Omega which called for the renova tion of the Delaware Division to make it physically and aestheticallv equal to the Southwest Division was seri- ouslv underestimated by the defendants. Under the Supplemental Agreement WMC agrees to use its best ef forts to take S2.800.000 from the financing of Plan Ome ga and place it in escrow, to be expended on renov ating the Delaware Div ision. However, plaintiffs’ expert pre dicted the cost of renovations would be S2-I.T00.000. Plaintiffs also offered what the court described as "strong ev idence" tending to show that the revenue pro jections upon which Plan Omega is predicated were overestimated, and thus that the improvements in the Delaware Division would not be carried out. 491 F. Supp. at 328. The court did not discredit this testimony, rather it disregarded the evidence as irrelevant, thus pre senting us with a legal issue. The evidence of underestimation of the cost of ren ovating the Delaware Division was held to be irrelevant 49 because of the categorical requirements of the Supple mental Agreement. 491 F. Supp. at 325. Even leaving the Agreement aside, the court found that the needed renov ations were of the type that could be met by use ol money from the operating budget and unrestricted funds. 491 F. Supp. at 327. If. however, the rev enue pro jections are underestimated as plaintiiis alleged, the op erating budget will not be achieved and unrestricted funds will be invaded to meet opening deficits. Although it noted the "seriousness of the consequences." the court refused to “take a hard second look at the plan." holding instead that plaintiffs' evidence of overestimaiion of revenues—indeed the whole question ol Plan Omega s financial feasibility—-was irrelevant. because this question is better left for determination bv the commercial market. The |bond| market will be able to apply sanctions as swiftly, surely and with greater accuracy than this court could apply. 491 F. Supp. at 328. Such reliance on the Supplemental Agreement or the bond market as a basis for declining to consider plaintiffs' evidence on cost underestimation and rev enue ovcrcstiminalion cannot withstand analysis If Delaware Division were not to be renovated substantially, after erection of Southwest Division went forward, the case for disparate impact upon the protected classes would be overwhelming. It is no answer to say that substantial evi dence of financial infeasibility is irrelevant because WMC has made a promise to HEW. In the first place the Supplemental Agreement does not appear to me as cate gorical as the trial court believed it to b e* * Moreover, the S Paragraph Igul> provides: • WMC agrees to complete renovation of the Delaware Divi sion regardless of cost, within i.D years of the date on which construction of the Southwest Division is completed, failure to 50 agreement is subject to amendment at any time.0 But more fundamentally, the court’s deference to HEW en forcement of an agreement, in place of a decision on the merits of the plaintiffs’ claims, is inconsistent with the mandate of this court in the prior appeal. When the case was last before us we considered both the ruling that the federal statutes relied on did not permit a private cause of action, and the ruling that HEW did not have to afford a trial-type hearing. We did not pass upon the merits of the appeal from the latter ruling, because we held that it was to the court that plaintiffs could look for relief. Reli ance upon the Supplemental Agreement worked out be tween WMC and HEW. an agreement which antedated both of the orders we reviewed in our earlier decision, is inconsistent with the clear purpose of our remand for a trial in the district court.* 9 10 * * NOTE 8 — (Continued) complete said renovation within said period shall he deemed to he a violation of Title VI of the Civil Rights Act of 196-1. The Supplemental Agreement does not. however, describe the na ture or scope of the renov ations, as the court itself conceded. -101 F. Supp at AO I a.89. 9. Paragraph i Id) provides: This agreement shall he subject to amendment from time to time by written instrument executed by the parties, to reflect such changes in systems lor delivery of hospital care and of changing community needs. 10. See NAACP v Wilmington Medical Center. Inc.. -15A F. Supp. 280 -I5A F. Supp. AAO i D Del. 1978). ra il. 599 F.2d I2J7 (Ad Cir 1979). The plaintiffs' contentions, which the panel remand ed for consideration, included inter itlm that the modified plan was based on erroneous and inadequate findings. . . ." 599 F.2d at 1250 in their brief on this appeal, plaintiffs point to inadequacies in the IIF.W investigation which, (hey claim, undermine the credihil- iiv of its acceptance ol the Supplemental Ameemenl. lil'AVs chief investigator admitted, lor instance, that the agency had not consid ered total patient days in accepting the patient assignment plan and thus did not consider the over-occupancv consequence prior lo its 51 Even less defensible from a legal standpoint is a re jection of the relevancy of plaintiffs’ financial feasibility evidence on the ground that they could rely upon the certain wisdom of the bond market. That market may. for all we know, be perfectly confident that the balance between the interest rate it seeks and the security of fered by WMC, even if a default occurs, is an acceptable risk. The one thing that is fairly predictable is that if three years after Southwest Division is completed WMC cannot afford lo complete the renovations of Delaware Division, the bondholders will be far more interested in keeping the former rather than the latter in operation. Thus it was error to reject the relevancy of plaintiffs' ev i dence on financial feasibility as a part of their prima facie case. That evidence, if credited, casts serious doubt upon the likelihood of Delaware Div ision being a hospi tal plant equivalent to Southwest Div ision, since the ren ovation depends on the availability of an operating sur plus. The district court did not discredit it. and we mav not. If one projects the possibility that Delaware Div ision may not be renovated, the case for disparate impact upon the minorities and the elderly who are likely to be its patients is strong.11 (ii) Qiuilit a of Mt'ilteal Scn icc Aside from their general prediction that lor financial reasons Delaware Division would be an inferior facility. acceptance of I’lan Omega. It was also conceded tli.it no health ex perts were consulted or involved in the dialling or revision ol the letter of findings or the negotiations leading to the Supplemental Agreement (Joint Appendix (JA> I2-IA-0. 1230). 11. In a related context, the Court of Appeals in Hryan v. Kor h 627 F.2d 612 (2d Cir. 1980). implied that plaintiffs challenging the shutdown of a municipal hospital had established a prima facie case of disparate impact where the City's estimates for alternative care "rest on projections made without sufficient assurance. . . ." (>27 F.2d at 617. Accordingly.'the panel found it "appropriate" to com plete an assessment ol' the plaintiffs' Title VI claim by examining the justification advanced by the City for closing tin1 hospital 52 the plaintiffs also offered evidence attempting to prove that the quality of care received by minorities and the el derly under Plan Omega will be poorer than that re ceived by the general population. Plaintiffs’ first contention is that although both Divi sions will offer some services in medicine and in sur gery,12 the services delivered at Delaware Division will be inferior, (1) because of the unavailability of board-certified specialists in some specialties for consul tation at that division, and (2) because of the likelihood that, even when a specialty service is offered at both, a shortage of board-certified physicians at the Delaware Division will result from their abandonment of it out of preference for Southwest. The impact in either event upon minorities and the elderly would be considerably greater than upon the general population. The court dis credited the evidence suggesting that this scenario will occur; it reasoned that under Plan Omega specialists at Southwest would be required to be on call for consulta tion at Delaware, that Delaware would be a fully equipped hospital in which such subspecialists could practice,13 and that under the Plan doctors w ould be pro hibited from limiting their practices to one division. In this instance, more than any other, the court w as called upon to exercise intuition and judgment about human behavior in the future. While the district court's descrip tion of plaintiffs' evidence on this point as having “abso lutely no merit" is hyperbolic. -191 F. Supp. at 330. one cannot say that the court erred in discrediting it. Its re jection is reinforced by the conclusion that in most cases patients in need of subspecially services will be admitted directly to Southwest, and others can be transferred there. 191 F. Supp. at 329-30. But still, all depends on the assumption of financial lcasibility. 12. See note t siiprn. 13 rite court assumed, of course, that this would lie liuancial ty feasible See Part l.(liH2KD s«/mi. 53 I Plaintiffs also attempted to prove that the quality of the resident staff at Delaw are would be inferior in num bers and quality. The court concluded otherwise, be cause Plan Omega contemplates operating the resident program on a unified basis, with residents being rotated among floors in both facilities. They also challenged the quality of Emergency Room services, although the Plan calls for duplicate Class 1 emergency rooms with similar backup specialists, in both of these instances, as well one is unable to say that the court erred in finding no disparate impact on the protected class, assuming finan cial feasibility of the entire program. However, all of these findings favorable to W'MC are tainted bv the court's treatment of evidence of financial feasibility as irrelevant. All would probably have been de termined otherw ise if it were found that W'MC could not afford to upgrade Delaw are Division after the completion of Southwest Division. In that event, plaintiffs' case ol disparate impact would be overw helming. In two respects the court found that plaintills had proved disparate impact in quality of care: access to a high risk prenatal clinic, and impact on visitors to inpatients. As to prenatal care the evidence is clear that the in cidence of high risk pregnancy is greater among minor ity women than in the female population at large. Ob stetrical service will be concentrated at Southwest. Because of the distance to that div ision, the court found that persons in need of prenatal outpatient care, espe ciallv teenagers, will be more likely than others to miss appointments and be deterred Irom seeking care. -191 l Supp. at 335. In considering plaintiffs' pritna facie case, this finding was discounted because, the court conclud ed. (t|he fact is. however, that the special clinics which W'MC maintains for teenagers and ilispanics are not called high risk clinics” and will be located at the Delaware Division under Omega. 54 491 F. Supp. at 335. 11 the quoted language was intend ed as a finding that there would be equivalent obstetrical clinic care at Southwest and Delaware, there is no sup port lor it in the record. The evidence is that the only clinic at which an attending physician is present is the “obstetrical high risk clinic" (JA 525-6, 529), and that clinic will be at Southwest (JA 1002). Thus the finding of disparate impact on minority women with high risk pregnancies is unrebutted. As to visitors, the court acknowledged that in creased travel time will have a deterrent effect on minor ities and the elderly. 491 F. Supp. at 332. Specialty ser vices for which the elderly are particularly in need are concentrated at Southwest, for example, and the court acknowledged that a lack of visitors can have both psv- chic and physical deleterious effects on them. 491 F. Supp. at 332. All pediatrics inpatient services will like wise be at Southwest and the court conceded that visits from family members are extremely important for sick children. 491 F. Supp. at 338. Obstetrical inpatient ser vices will be at Southwest, and OB inpatients were also lound to have a great need for visitors. 491 F. Supp. at 331. But while conceding that elderly inpatients and mi nority users oi WiMC s pediatric and obstetrical services w ill be disproportionately impacted by the inhibiting ef fect ol time and distance on visitors, the court disregarded those disparate impacts as insufficiently substantial to be taken into account in determining whether a prima facie case had been made out. The question of substantiality for purposes of Title VI and the Age Discrimination Act is a question of law. At least in the area of hospital care, w here the marketplace typical ly affords few alternative facilities and impaired access may gravely all'ect health. I am reluctant to impose a very strict a standard of substantiality. Therefore. I can not agree with the court's conclusion that these dispa rate impacts are insubstantial. 55 3. Racial Identifiability Finally, plaintiffs attack the Supplemental Agree ment provision for inpatient utilization control, whereby patients needing services offered by both the Southwest and Delaware Divisions would be assigned to one or the other according to zip code. Expert testimony was pre sented suggesting that this method of allocation will fail to prevent the Delaware Division from becoming racially identifiableM and will, in fact, cause overcrowding that can be alleviated only in such a way as to make the mi nority presence at the Delaware Division even more dominant. Noting that the assignment plan merely re quired the hospitals to offer beds to certain assigned pa tients. but did not compel the patients to take them, plaintiffs’ experts testified that a multitude of factors would influence the choice of the more affluent, more mobile white population to go to the Southwest Division, w hile the poorer, less mobile minority population would await a bed at the Delaw are Division. Further exacerbat ing the racial identifiability of the inner-city hospital, i plaintiffs urge, would be the tendency for WMC's minor ity sen ice employees to prefer w orking there because of ! the greater travel time required for them to reach the Southwest Division. In tlte face of such evidence and an admission by | HEW that it had not considered the overcrowding con sequence. the court again chose to disregard it as “sim ply irrelev ant" because of the Supplemental Agreement which requires WMC to remedy any ensuing racial identifiability "by whatever means ncccssarv." 491 F. Supp. at 300. In response to plaintiffs' concerns that WMC might somehow avoid this contractual obligation, the court noted that "MEW can monitor WMC’s activi ties. thus assuring that, if WMC does not meet its i I I I Lmli'i Paiamaph iti' ol (In- Amooment. a division will he divined r.u'Killy idcniiliahlc il it shows "in excess ol J.V< niinoriiv in|)aiiem uiili/aiinn" based upon patient davs. 56 obligations, sanctions will be applied." 491 F. Supp. at 300.15 1 have already indicated that such reliance on the terms of the Supplemental Agreement cannot substitute for a decision on the merits of plaintilis’ concerns. Since no weight was given to their evidence, the court’s find ing that the threatened overcrowding or racial identifiability can be remedied by simply transferring four inpatients per dav from the Delaware to the South west Division. 491 F. Supp. at 339. cannot be upheld, es pecially when the transfer of minority and elderly inpa tients risks reducing the quality of their care because ol the impact it would have on their access to visitors. In summarv. after looking at the entire record, in cluding the evidence which the court erroneously disregarded, and considering the disparate impacts which were actually found. I conclude that the judg ment appealed from cannot be affirmed on the basis oi a failure bv the plaintiffs to prove a prima facie case ol dis parate impact of Plan Omega on minorities and the elderly. II. As the opinion ol the court correctly indicates, when plaintiffs in a Title VI or Age Discrimination Act case hav e produced ev idence of disparate impact, the de fendants must at least come forward with ev idence in re buttal or justification to "meet" the plaintiffs' prima facie case. Unfortunately, however, the court never gets more specific and. hence, there is a large gap in its analysis. Bv assuming that the plaintiffs unrebulted evidence es tablished a prima facie case ol disparate impact, without discussing that evidence in detail, the opinion fails to I'o- * 17 1 5 However, relianee on ilie numiioriiiu and enlorcement ea- paluliiv oi IIKW. now III IS. max lie unrealistic See \\ ini>. I Mr M anil Ihallh Imilil irx. 10 Hast. I I i t. > !».«• 10. Sir Pari lilt m2 Mill 17. Typescript p|> 22. 20. 57 cus upon the nature and extent of the several different impacts on which evidence was offered. It then passes on to the quite separate issue of burden of persuasion, without first pausing to inform just what it is the factfinder must be persuaded of. The content of the re buttal or justification evidence cannot be determined in the abstract. It must be related to the precise impacts J suggested bv the plaintiff s evidence. If we were dealing with an effort to prove intention al race or age discrimination by inference from the cir cumstantial ev idence of disparate impact upon minor ities or elderly persons, the content of the rebuttal ev idence would be sufficiently self-evident that an opin ion writer might safely assume it need not be referred to explicitly; evidence of a nondiscriminatorv business put- pose for the challenged actions supports an inference j that accomplishing that purpose was the true motive. Notwithstanding the inference of improper motive , which arguably arises from disparate impact, the exist ence of a proper business purpose places the evidence on motive at best in equipoise, such that the party with j the burden of persuasion on that issue loses. 1 he plain tiff can still cam- this burden by demonstrating that the business purpose was a pretext, feigned in order to hide the actual discriminatory animus. If such a pretext is es- ' tablished. the defendant loses, for he cannot ever justify action taken, regardless of pretext, lor the purpose ol j discriminating. [ In a case such as this one. however, where the plaintiffs do not relv upon an intent to discriminate, the legal standards for rebuttal or justification are much more complex. Part I of the opinion of the court is a wel-i come clarification of the analytical distinction between intent cases and disparate impact cases, and a proper recognition that spending power statutes such as Title Vi and the Age Discrimination Act address both prob lems. Unfortunately, however, by ignoring the critica differences between the legal standards lor rebuttal and 58 justification in the two types of cases, the court leaves the law almost as confused as it was found. When a member of a class protected by a funding statute’s nondiscriminatory clause has produced evi dence that a defendant’s actions will impose a disparate impact on that class, there are two analytically separate kinds of evidence which may be offered. First, the defen dant can rebut the evidence offered by plaintiffs, by evi dence that the impacts complained of will not occur. For example, a defendant can show that steps will be or have been taken to effectively prevent their occurrence. Alter natively. a defendant can justify those impacts by show ing that they must necessarily occur, if certain impor tant objectives are to be accomplished, even though a defendant has chosen what it believes to be the feasible alternative having the least discriminatory impact. This distinction between rebuttal and justification is critical. Rebuttal is in essence a factual matter. Justification, on the other hand, while it involves factual matters which may be in dispute, also involves a legal standard, which the opinion of the court never supplies. It never decides the legal question presented by this case: what must de fendants do before they may justify a redistribution of federal benefits away from a protected class. In my view, that a plan imposing such an impact can only be justi fied by a showing that defendant has v alid needs essen tial to its business or service, that the proposed plan will feasibly meet those needs, and that other plans with lesser impact on the protected classes will not.,H * ol 18 The distric t court assumed that this was the legal standard lor justification ol disparate impact. J9I T. Supp. at .110 A plurality ol this court, relying on Jefferson v. Hackney. I0(> U S. 535 (1972), hint that any inquiry into alternatives at all may he inappropriate in Title VI cases. I lowevet. at the lime that case was decided, the eon- tours of Title M s obligations had not been Initialed. -Il)l> U.S at 577 (Marshall. J.. concurriin; in (tail and dissenting in part), and the C ourt treated analysis under that statute and the fourteenth amend ment as being equivalent. -IOC* U.S. at 5 19-50 n 19. Subsequently, it 59 In the trial court WMC offered evidence both in re buttal and in justification. The trial court considered both, and decided in WMC’s favor. If the court had weighed all the relevant evidence regarding potential impacts and the steps taken to remove or mitigate them, and concluded that the alleged impacts would not occur, it might be proper to affirm on the basis that such a find ing was not clearly erroneous. Alternatively, if the court had identified specific impacts which will occur, but concluded after weighing all the relevant evidence that these impacts are inevitable. because Plan Omega is the only feasible method of meeting WMC’s compelling needs, that finding might likewise be affirmed as not clearly erroneous. But neither of these courses is proper ly open to this court on the present record because of the errors referred to in Pai l I above. The district court's en tire analysis is flawed by its interrelated holdings that ev idence of financial infeasibility was irrelev ant and that the Supplemental Agreement would overcome all de fects in Plan Omega bearing upon the vital issues of transportation, racial identifiability. and quality of ser vice. By assuming favorable revenue projections and complete compliance with the Agreement, the court re lieved WMC of the need to rebut those major impacts suggested by plaintiffs' experts.1" It also thereby nat- 19 * Itanded down its landmark opinion in Lau v Nichols. -IN I S 3t>3 tl9(-|). deciding that litlc \ I. Iw itscll. hatred disparate ellects Since the announcement in Uni that Title M can require allnma liv e action, the question olT/ott iinuh has remained open and is not controlled h\ JeJj'crson v. I/</< /.’/in/ 19. 1'heelTect ol this was to short-circuit the process oT reason able accommodation w hich Title VI is designed to luster Kccogiu- tion hy the trial court ol such specific, discrete impacts as the ab sence ol a high risk prenatal clinic .it the Delaware Division anil consideration ol plaimtlls' evidence ol litianri.il inleasibiliiv nttdii well have elicited Iroin \\ Ml' more reassuring revenue projection-, or prompted it to line-tune Man Omega in ways which would rc move or sulliciemlv mitigate the jtrohlems jdculilicd. without tie 60 rowed the number and severity of the impacts which had to be justified. Problems which would be major if WMC lacked the financial resources to make adjust ments were made de minimis by the simple stroke of ex cluding plaintiffs’ financial evidence. Thus although the district court sought to apply the correct legal standards, both with respect to rebuttal and with respect to justifi cation, it did so against a background of “meager’’ dispa rate impacts created by its own assumed factual matrix which cannot be relied upon. And because the majority opinion of this court addresses neither plaintiffs' impact evidence nor the appropriate legal standard for justifica tion, the errors below go uncorrected. The majority does attempt to put the trial court's ruling on financial feasibility in a favorable light, but in vain.20 Evidence that Plan Omega is fiscally unsound goes to the heart of the case, for it not only raises the threat of a racially identifiable facility and other adverse impacts, but also indicates that this burden placed on minorities and the elderly is unjustified. It is one thing to demonstrate, as defendants have done, that Plan Omega is designed to serve compelling objectives: whether it will accomplish them, however, is another, equallv im portant question left open on this record. In light of the trial court's refusal to consider “strong evidence" that NO I t. 19 — (Continued) ccssitatlng (lie inquiry into justification and the merits ol Itevcrsc Omega or some alternative site. Indeed. WMC might have decided to rebut the prima facie case by ad justing the mix ol services at their preferred site, for example, or by replacing generalized promises of adequate shuttle transportation with specific allocations of funds for expanded service or a concrete contingency plan satisfying plain- tills' concerns. 2U. The opinion of the court contends that the district court did make findings with respect to the financial feasibility of the Dela ware Division renovations. That contention misses the point. It is clear that the district court refused to decide the broader question on which renovation depends: i.e.. whether Plan Omega taken as a whole is financially sound. 61 Plan Omega seriously overestimates future revenues and may therefore pose a drain on W'MC's resources. I cannot find the consolation others have in the district court's “overarching" finding that the lev el of care for all population groups will improve. As suggested above. I concede that a substantial burden on the access of mi norities and the elderly to federal benefits is nonetheless justified if the relocation is the only feasible alternative capable of meeting defendant's needs. Conv ersely, how ever, an infeasible plan is insufficient justification as a matter of law. Thus, to dismiss the issue of financial fea sibility as completely irrelevant subverts the Congres sional policy in favor of nondiscriminatory funding.-’1 The discussion so far has concerned the legal stand ards by which a defendant's actions should be meas ured. and not who bears the burden of persuasion. The point is that, regardless of where that burden is placed, the errors discussed in Part 1 above completely tainted the trial court's substantiv e analysis. That alone requires a rev ersal and remand. Ill Equallv troubling from a precedential standpoint, however, is the majority's decision equating the defen dant's burden in a case of disparate impact with that borne in a case of intentional discrimination. Today's 21 21 The ma jority suggest that any financial inquiry is too spec ulative: yet they are willing to speculate, without any supporting evidence presented at trial, that the bond market will attest a Hawed project or that bondholders w ill abide by the terms ol the Supple mental Agreement in the event a shortage ol revenue Im.-I.iIIs the project and threatens their security interest. On the other hand ii such optimism should prove unlouuded. and a raciallv identifiable hospital ol'inlerior qualm ensues, the only sanction available to led- eral authorities at that point will be a cutoHol further holding I bis does not help matters when the hospital is already linanciallv strapjicd. Nor is there any assurance that the ellecis ol a cut-oil would be felt equally by the Stanton and Delaware Divisions 62 holding achieves an artificial symmetry, but at consider able cost to the prospects of eliminating all forms of dis crimination which, as the opinion of the court confirms, was the impetus behind Title VI and the Age Discrimi nation Act. I have no serious difficulty with leaving the burden of persuasion on the plaintiffs when what is brought forward by defendants is rebuttal—evidence that there will be no impact—rather than justification. However, since in many cases the means of proof of jus tification will not be within the reach of the protected class and allocation of the burden of persuasion will be dispositive, the only allocation consistent with the Con gressional intention to protect the disadvantaged class from actions having discriminatory effects is to assign the burden of justifying the impact to the defendant who receives federal funds. The policy decision was made by Congress, and in filling in the gaps in the statute we should allocate the burden consistent with that policy. The majority reaches its result without considering the interest in evenhanded access to the federal benefits Congress provides and without acknowledging the prob lems of proof. Instead, it looks to the one line of discrimi nation cases where burdens hate been clearly spelled out. involving intentional employment discrimination, and argues that such rules must be uniformlv applied in all cases brought under nondiscrimination statutes. The plea for symmetry has only the attraction of relieving courts from analyzing the substantive differences be tween two quite distinct statutory prohibitions. The de fendant accused of discriminating intentionally stands in a very different position than one accused of actions which have unintended adverse effects. As noted before, the plaintiffs in this case are not asking that the factfinder draw from circumstantial evidence of dispa rate impact, an inference of discriminatory intent. Rath er, the gravamen of the complaint is that the benefits of a federal program are being redistributed away from pro tected classes unnecessarily, and that racially identifi able facilities are being spawned with the help of federal funds. The object of the litigation is not so much to pun- \ ish a wrongdoer, as to prevent indifference and correct f for inadvertance. The presumption in a case which has \ proceeded to the point in litigation where definite impact is established is that defendant is subjectively willing to | mitigate the impacts, but is constrained from further ac- [ commodation by other pressing needs and the lack of \ reasonable alternatives. Something akin to an affirma tive defense makes sense logically in such a context; on the other hand. 1 reject the majority’s proposition that \ “|o|ne could just as readily say in an intent case that the *' necessity to prove a nondiscriminatory reason is an af- I firmative defense. . . Typescript p. 22. To the con- f trary. such reasons are offered to disprove the existence of discriminatory intent. They can never justify it. The logic of requiring recipients of federal aid to : justify the disparate impact caused by their actions was recognized by the Supreme Court in Board of Education v. Harris, -l-l-l U.S. 130 (19791. Statistical proof of dis criminatory effects in that case had established a prima facie violation of the Emergency School Aid Act. That in ference could be rebutted, said the Court, adding »» L LUMLIIIUL, party against whom the statistical case has been made. See Castaneda v. Partida. -130 U.S. -182. -197-98. and n. 19 (1977); Griggs r. Duke Power Co.. -101 U.S. -12-1. -13-1 (1971). That burden perhaps could be carried by proof of “educational necessitv." analogous to the “business necessity" justification applied under Title VII of the Civil Rights Act of 196 1. 78 Stat. 253. -12 U.S.C. §2000e el seq.: see. eg.. Dot hard v. Rawlinson. -133 U.S. 321 329 (L977); Fnrnco Construction Corp. v. Wafers. 138 U.S. 567. 581-583 (1978) (dissenting opinion). 64 444 U S. at 151; cf, Southeastern Community College v. Davis, 442 U.S. 397. 407 (1979) (§504). However much ambiguity surrounds the nature ol the burden on a nonfederallv-t'unded employer in Title VII cases. Harris represents a clear signal that burden-shilting on justifi cation is called for where principles of nondiscrimination in funding are to be enforced. Even within the context of Title VII. on which the majority focuses, appellate courts faced with having to clarify the nature of the employer's burden on the issue of business necessity have described it as “heavy" or labeled it as one of persuasion. See. e g.. Donnell v. Gen eral Motors Corp.. 576 F.2d 1292. 1298 (8th Cir. 1978); Smith v. Olin Chemical Corp.. 555 F.2d 1283. 1286 (5th Cir. 1977); Vulcan Society of N.Y. v. Civil Service Comm'n. 490 F.2d 387. 393 (2d Cir. 1973). The major ity's suggestion that the Supreme Court has since set- ded the issue of burden in such impact cases is belied by the Court's most recent pronouncement in Texas De partment of Community Affairs v. Burdine. 49 U.S.LAV. 4214 (1981). That opinion implies that the al location of burdens in a disparate treatment case does not necessarily govern disparate impact cases. 49 U.S. LAV. at 4215 n.5.-“ ■22 In Burdine the question I'or decision was die nature of an employer's louden in an intent ease. The Court began its analvsis liv saying: In MiDomiell Doniilii' Ctu/i. t. Cirnt. -Ill U.S. 9r2 (1973). we set forth the basic allocations of loudens and order of presentation of prool in a I itle \ II ease alleging discrimina- tory treatment. ‘ 5. We have recognized that die factual issues, and thcre- lore the character of the evidence presentetl. differ when the plaintiff claims that a fat iallv neutral emplovment poli cy lias a discriminaiorv imp.it i oil protected classes. |cita- lions omiiletl|. 65 Citing intent and impact cases indiscriminately and recommending they be approached in the same way threatens to confuse the litigation process and lead to unfortunate misunderstandings such as may have oc curred in the decision of the district court. It held that WMC had met its burden of producing some evidence, and that the plaintiffs failed to prove that the hospital’s justification for Plan Omega was pretextual. 491 F. Supp. at 345. This misconceives what it was the court had to decide. The contention was not that the reasons advanced were not genuine, but that there were feasible alternatives with less disparate impact. That was the 49 U.S.L.W. ai 4215. The footnote would seem superfluous were it not construed as a signal that the evidence and the issues in an im pact case may warrant a different burden of proof analysis. Nor is a unitary burden for all Title VII cases established by the other Supreme Court precedents. The footnote in New York Transit Authority v. Heazer. 440 U.S. 508. 587 n.3l 1 1979). did no more than reaffirm the decision in Alhcrmarlc Paper Co. v. Moody. 422 U.S. 405 t 1975). which in turn does not speak with the clarity at tributed to it by the majority. .UIhiiiuiiIc Paper Co. assigns plain tiffs. at most, the burden of proof on the existence of less discrimi natory alternatives, an inquiry which is relevant only to the extent that the defendant has lirst persuasively shown that it has compel ling needs and that its proposed plan will feasible meet those needs. Hut even that construction of .1 Ihcniuulc Pu/kt Co. would be loo broad. The opinion can be read as simply acknowledging that plain tiffs who failed to prove a Crifiys-type violation, could nonetheless still attempt to succeed on an intent theory if they were prepared to prove that less discriminatory alternatives existed and that, there fore. defendant's justification was merely pretextual. 422 U.S. at 425. I bis use of alternativ es as circumstantial evidence of discrimi naiorv animus is standard in intentional discrimination cases. Turnco Construction Corp. v. Waters. 438 U.S. 5(i7. 378 t 1978* In contrast, the existence of alternatives to Plan Omega revealed in this litigation was not urged as ev idencc of pretext, but went direct ly to the question of whether the disparate impact of W.MC's pro posed relocation could be mitigated anil, therefore, federal benefit-' heller distributed. That is purelv an impact issue and. as such, should remain part of the defendant's burden of justification 66 heart of the issue: whether Plan Omega with its dispro portionately adverse effects was unnecessary.23 The majority's observation that a completed Title VI violation involves not disparate impacts per se, but only those that are unnecessary, may arguably make termi nology such as “alfirmative defense” unsuitable; but it does not answer the question of where the risk of non-persuasion on the issue of justification should be placed as a matter of public policy and from the viewpoint of who has the evidence. Indeed, the problems of developing ev idence and assembling it in admissible , form cannot be separated from the fulfillment of statu tory policy flowing from Congressional intent.2"1 Bringing such considerations to bear in this matter. I am concerned that allocating the risk of non-per suasion on justification in an impact case bv reference to precedent established in cases of intentional discrimina tion ignores important distinction's between access to proof in the two types of cases. In intent cases, the plaintiff-victim is often in a better position than the de fendant to develop and uncover the particular acts upon which the charge of discrimination is based. In some in stances. such evidence is probably more accessible to the victim, particularly when the discriminatory acts are committed by subordinates, but must be defended by their superiors. Evidence of the presence or absence of impact may also be equally available. But assuming some impact, the prool ol justification is (ilu tu/s going to be in the possession of the defendant and rarely also in * 21 i.J Elsewhere, the court seemed to appreciate the distinction, lull the net el loci ol its ambiguous locus on pretext is to cast doubt on the court's treatment of the evidence. Hopefully. the opinion ol this court lias at least relegated the concept ol "pretext" to its proper place. See Typescript p. '27 n.17. 21. CJ Slnilt/ v W heaton Class Co.. 121 I .2d 259. 2(>7 (3d C ii. 19 1 0) ( Equal Pay Act) i In cases such as this, where the just ili- caiion lor the diUcrential rests on economic benefit, the company has peculiarly within its knowledge the means of proof. and the bur den therefore is one which cannot lie satisfied bv general or conclusory assertions.") the possession of plaintiff members of the protected class, since the latter are unlikely to be privy to the decision-making process or the competing consider- j ations which ultimately form (he defense of justification. One need look no further than the instant appeal to appreciate the crucial importance which the risk oi l non-persuasion .assumes in a case like this. All parlies j seem reconciled to the need for placing some facility in the Stanton area to foreclose competition from another institution, and all parties agree that WMC needs a new large hospital. The dispute has to a large extent been whether some variety of “Reverse Omega" could miti gate the disparate impacts of a relocation and still feasi bly accomplish the hospital's pressing needs. By relying on intent cases and placing the burden of demonstrating feasible alternatives on the plaintiffs, the court saddled them and their expert with the task of filling in the gaps in VVMC's own consideration of alternatives,2i> and re- 25. The difficulty of this task was at one point acknowledged by the district court. Although WMC submitted projections for He- ; verse Omega which showed it to be more costly than Omega, plain tiffs argued that the cost differential was due to the fact that the two ; plans did not contemplate equivalent facilities and services. In sup port of their contention, plaintiffs' key expert witness attempted to construct an estimate of what the Plan Omega hospitals would cost j if they were to match the hospitals Reverse Omega wotdd create. Indeed, the court found that WMC never had attempted to develop a plan for Reverse Omega using the same parameters that were used lor Omega. 491 f . Supp. at 343. Therefore, in order to propcrlv compare the two plans, plaintiffs' witness had to create an "(magi- f nary Omega." The court found the expert's projections unreliable, but acknowledged that this was because "in devising his estimates. ; |the expert| relied upon documents that were never designed for the purpose of making the comparison he was attempting. " 491 I'. Supp. at 344. A comparison among alternate plans using equivalent param- I elers would seem critical to proper determination of whether delen- ! tlahts' chosen alternative was unavoidable despite its disproportion ate adverse effects. Assigning the burden of justilicalion to the f recipient ol federal lunds will help ensure that documents permitting such comparison are placed before the court. 67 lieved VVMC. which had far more ready access lo die in- lormation, of the need to persuade that the alternatives were not financially or medically feasible. Moreover, the risk of non-persuasion was made critical by the abun dance of conflicting evidence as to the pro jected cost dif ferential betweeh Omega and Reverse Omega, and it is noteworthy that the court did not accept at face value WMC's cost estimates, but made its own. 491 F. Supp. at 345. In short, the burden placed on plaintiffs was im practical and the error sev ere, hot harmless. Thus, ev en if the errors discussed in Parts I and II did not require reversal, the erroneous allocation of burden of persua sion does. 68 IV. I do not minimize the complexity of the trial judge's task in this case, requiring as it does consideration of fu ture consequences. However, since the effective deliv ery of federally-supported health care is at stake, the led- eral interest in preventing creation of a racially identifiable facility and the possible curtailment of hospi tal serv ices is clear. The dockets olThis court and others bear testimony to the difficulties of desegregating insti tutions after they have become segregated. Regulations affecting site selection, designed to forestall segregation in health care delivery, intentional or otherwise, from oc curring in the first place, simply reflect the wisdom —acknowledged, ironically enough, in the medical profession—that an ounce of prevention is word: a pound of cure. A True Copy: Teste: C l i ' iL (iI l lw 1 'n ih il S lu l i 's I n u l l i if \i>i>mls Ju r I In l l i i n l l in m l ( VO IT S. C 'omlv Tin' l.rii.il liiH'llimiui'i. I’lul.i I’.i '