Consolidated Rail Corporation v. Lestrange Darrone Brief for Respondent

    No. 82-862
IN THE

SUPREME COURT OF THE UNITED STATES 
OCTOBER TERM, 1982

CONSOLIDATED RAIL CORPORATION,

Petitioner,
v.

LEE ANN LESTRANGE DARRONE,
Administratrix of the Estate of 
Thomas LeStrange,

Respondent.

On Writ Of Certiorari To The United 
States Court of Appeals 
For The Third Circuit

BRIEF FOR RESPONDENT

JOSEPH P. LENAHAN 
P.O. Box 234
Scranton Electric Building 
507 Linden Street 
Scranton, PA 18503 
(717) 346-2097

* Counsel of Record 
Attorney for Respondents



QUESTIONS PRESENTED
1. Does a private right of action exist under 

section 504 of the Rehabilitation Act of 1973?
2. In a private action under section 504, may an 

injured plaintff recover damages for
(a) an intentional violation of section 504, 

or
(b) an unintentional violation of section

#  504?
3. Does section 504 forbid a receipient of 

federal assistance to discriminate in employment on the 
basis of handicap where a primary objective of that 
assistance is not to provide employment?

4. Under what circumstances does discrimination 
constitute "exclu [sion] from participation in ... deni[al] 
[of] the benefits of, or ... discrimination under any 
program or activity receiving Federal financial assistance" 
within the meaning of section 504?

l



TABLE OF CONTENTS
• Page

Questions Presented .......................
Statutes and Regulations Involved .......
Statement of the Case ....................
Summary of Argument .......................
Argument

I. Section 504 Creates a Cause of 
Action on Behalf of Handicapped 
Individuals Discriminated 
Against By Federal Grantees ....

II. Damages May Be Awarded In 
Private Actions to Redress 
Violations of Section 504 .....
(1) Intentional Violations ....
(2) Unintentional Violations ..

III. Section 504 Prohibits Employment 
Discrimination Under All 
Federally Assisted Programs ....
(1) The Department of Transpor­

tation Regulations .......
(2) The Rehabilitation Act of 

1973 .......................
(3) The Rehabilitation Act 

Amendments of 1974 .......
(4) The Rehabilitation Act 

Amendments of 1978 .......
IV The Discrimination Alleged In 

This Case Constituted "Dis­
crimination Under [A] Program or 
Activity Receiving Federal 
Financial Assistance" Within the 
Meaning of Section 504 ........

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Page

Conclusion
APPENDIX

Statutes and Regulations
Section 504 of the Rehabilitation 
Act ..................................
Section 505 of the Rehabilitation 
Act ..................................
Section 601 of the 1964 Civil Rights 
Act ..................................
Section 604 of the 1964 Civil Rights 
Act ..................................
45 C.F.R. § 84.11(a)(1) .............
45 C.F.R. § 27.31(a)(1) .............

"Nondiscrimination Based on Handicap in
Federally Assisted Programs", 45 Fed. 
Reg. 37628 (1980) ...................

Agency Regulations Concerning Employment 
Discrimination on the Basis of 
Handicap .............................

- iii -



No. 82-862
IN THE

SUPREME COURT OF THE UNITED STATES 
OCTOBER TERM, 1982

CONSOLIDATED RAIL CORPORATION,

Petitioner,
v.

LEE ANN LESTRANGE DARRONE,
Administratrix of the Estate of 
Thomas LeStrange

Respondent.

On Writ Of Certiorari To The United 
States Court of Appeals 
For The Third Circuit

BRIEF FOR RESPONDENT

STATUTES AND REGULATIONS INVOLVED 
The statutes and regulations involved in this 

case are set out in an appendix to this brief. a
a



2

I. SECTION 504 CREATES A CAUSE OF ACTION ON BEHALF 
OF HANDICAPPED INDIVIDUALS DISCRIMINATED AGAINST 
BY FEDERAL GRANTEES
The question of whether section 504 can be enforced

through a private action is controlled by this Court's
decisions in Cannon v. University of Chicago, 441 U.S.
677 (1979), and Guardians' Association v. Civil Service
Commission of the City of New York (slip opinion, July
1, 1983). Section 504 was expressly patterned after the
similar language of Title VI of the Civil Rights Act of
1964 and Title IX of the Education Amendments of 1972.
In Cannon this Court held that Title IX creates a
private cause of action. In Guardians a majority

_/of the Court reached a similar conclusion regarding 
Title VI. This construction of Title VI was well 
established in the lower courts by 1973 when section 
504 was enacted. Cannon v. University of Chicago,
441 U.S. at 696-98.

This Court's exhaustive analysis of this issue 
in Cannon, and the application there of the standards

_/ Opinion of Justice White (joined by Justice 
Rhenquist), pp. 11-12, Justice Stevens (joined by 
Justices Brennan, Blackmun, and O'Connor), pp. 2-4, 
and Justice Marshall, pp. 10-20.



3

in Cort v. Ash, 422 U.S. 66 (1975), is largely applic­
able to the instant case. The basis for recognizing a 
private cause of action under section 504 is even 
stronger than under Title VI and Title IX. As enacted 
in 1973, section 504, unlike those titles, neither 
authorized the termination of funds for a violation of 
its provisions nor established any administrative 
procedure for implementing such a remedy. Thus this is 
not a case in which "a statutory scheme expressly 
provides for an alternative mechanism for enforcing the 
rights and duties created...." Guardians' Association v. 
Civil Service Commission, opinion of Mr. Justice Powell, 
p. 3 n.2. All eight circuits which have considered this
question have held that section 504 creates a private

_/cause of action.

_/ Miener v. State, 673 F.2d 969 (8th Cir. ) cert. 
denied 103 S.Ct. 215 (1982); Pushkin v. Regents of 
the University of Colorado, 659 F.2d 1372 (10th 
Cir. 1981); Kling v. County of Los Angeles, 633 
F .2d 876 (9th Cir. 1980); Camenisch v. University 
of Texas, 616 F.2d 127 (5th Cir. 1980), vacated on 
other grounds, 451 U.S. 390 (1981); NAACP v. Medical 
Center, Inc., 599 F.2d 1247 (3d Cir. 1979); Davis v. 
Southeastern Community College, 574 F.2d 1158 (4th 
Cir. 1978), rev'd on other grounds, 442 U.S. 397 
(1979); Kampmeier v. Nyquist, 553 F.2d 296 (2d Cir. 
1977); Lloyd v. Regional Transp. Auth., 548 F.2d 
1277 (7th Cir. 1977).



Petitioner urges this Court to conclude other­
wise on the ground that section 504 is merely hortatory, 
that it creates no private right of action because it 
does not create any right or duties at all on the
part of recipients of federal assistance, but is

_/"no more than a statement of policy." If this 
were correct it would also preclude action on the part 
of any federal agency to correct discrimination on the 
basis of handicap in the federal programs which it 
administers. Petitioner relies for this surpris­
ing conclusion on the following passage in the 1974 
Senate report:

[SJection [504] ... constitutes the establish­
ment of a broad government policy that programs 
receiving federal financial assistance shall be 
operated without discrimination on the basis of 
handicap. _/

We agree that the 1974 Senate report is entitled to 
considerable weight, since it was issued by the same 
committee of the same Congress which had drafted section 
504 only a year before, and since it accompanied an 
amendment that clarified the meaning of that section.

_/ Brief for Petitioner, p. 36; see also î d., at 
14-17.
_/ S. Rep. No. 1135, 92nd Cong., 2d Sess., p. 39.



See Red Lion Broadcasting Co., Inc. v. Federal Trade
Commission, 395 U.S. 367, 380-81 (1969). But the
language immediately following quoted portion of the
Senate report makes clear that Congress did intend
section 503 to create enforceable obligations.

It does not specifically require the issuance of 
regulations or expressly provide for enforcement 
procedures, but it is clearly mandatory in form, 
and such regulations and enforcement are intended.

The report further explained that Congress envisioned
that section 504 would be implemented in a manner
"similar to" Title VI and Title IX.

This approach to implementation of section 504 
... would ensure administrative due process 
(right to hearing, right to review), provide for 
administrative consistency within the federal 
government as well as relative ease of implemen­
tation and permit a judicial remedy through a 
private action.__/

The words "judicial remedy through a private action" 
must refer to a private right of action, since 
judicial review of contested agency action is men­
tioned earlier in the sentence. Petitioner suggests 
no reason, and none can readily be imagined, why 
Congress, having recognized that recipients of

/ Id. pp. 39-40.
/ Id. p. 40 (emphasis added).



federal assistance were frustrating the Vocational 
Rehabilitation Act by discriminating against the 
handicapped, would have announced a policy of nondis­
crimination which those recipients would be free to

_ /disregard at will. As Representative Dodd subse­
quently remarked in criticizing the lack of implemen­
tation of section 504, " [W]e would not have enacted 
it if we did not expect for it to be enforced."

Petitioner also urges that Congress cannot have 
intended to permit private enforcement of section 504 
because section 505(a)(2) expressly authorizes 
certain "remedies, procedures and rights"; petitioner

_/ The only reference to private litigation during 
the events leading to the enactment of section 504 is 
consistent with the 1974 report. See Hearings on S.7 
before the Subcommittee on the Handicapped of the Senate 
Committee on Labor and PPublic Welfare, 93rd Cong., 1st 
Sess., pp. 282-83 (statement of John Nagle) ("[T]he 
civil rights for the handicapped provision ... creates a 
legal remedy when a disabled man is denied his rightful 
citizenship rights because of his disability. It gives 
him a legal basis for recourse to the courts that he may 
seek ... full equality with all others.") (hereinafter 
cited as "1973 Senate Hearings").
_/ Hearings on Rehabilitation of the Handicapped 
Programs, 1976, before the Subcommittee on the 
Handicapped of the Senate Committee on Labor and 
Public Welfare, 94th Cong., 2d Sess., p. 323 (1978) 
(hereinafter cited as "1976 Senate Hearings").



-  j r  -

argues that these Title VI remedies do not include a 
private right of action, and that the counts "shall 
not expand the coverage of the statute to subsume 
other remedies." Brief for Petitioner, p. 34.
Since section 505(a)(2) was not adopted until 1978, 
it cannot of course control the meaning of section
503 as originally enacted in 1973. Thus here, as 
with the applicability of section 504 to 
employment, petitioner is urging that section 
505(a)(2) was adopted to partially repeal section
504 and to rescind the right of private action that
was widely recognized by the lower courts prior to 
1976. See nn. ___, ___ , supra.

Such a construction of section 505(a)(2) is 
precluded by the terms of secion 505(b), which 
provides:

In any action or proceeding to enforce or 
charge a violation of a provision of this 
subchapter, the court, in its discretion, may 
allow the prevailing party, other than the 
United States, a reasonable attorney's fee as 
part of the costs.

_ /Both the House and Senate reports make clear

_/ H. Rep. No. 95-1149, 95th Cong., 2d Sess., p. 
21 (1978) states:

"The proposed amendment is not in any way



- S ' -

that subsection (b) was adopted to provide counsel 
fees for handicapped individuals who enforced section 
504 through private litigation. The Senate report, 
which is of particular importance since it accom­
panied section 505(a)(2) as well as 505(b), explained

The committee believes that the rights extended 
under title V, that is ... nondiscrimination 
under Federal grants —  are, and will remain, 
in need of constant vigilance to assure 
compliance, and the availability of attorneys' 
fees should assist in vindicating private 
rights of action in ... cases .. arising 
under section ... 504. /

The importance of counsel fees to facilitate private
enforcement of section 504 was also stressed on the

_ /Senate floor. Congress would not have provided

/ (continued)
unique. At present there are at least 90 
separate atttorneys' fees provisions to 
promote enforcement of over 90 different 
Federal laws. In fact, disabled individuals 
are one of the very few miniority groups 
in this country who have not been authorized 
by the Congress to seek attorneys' fees. The 
amendment proposes to correct this omission 
and thereby assist handicapped individuals in 
securing the legal protection guaranteed them 
under Title V of the act."

_/ 124 Cong. Rec. 30346 (remarks of Sen. Cranston),
37507 (remarks of Sen. Stafford).



in subsection (b) for counsel fees in private enforce­
ment actions if such actions were to have been precluded 
by subsection (a)(2). Petitioner's argument that section 
505(a)(2) forbids any private cause of action also 
necessarily assumes that such lawsuits are not among 
the "remedies, procedures and rights set forth in Title 
VI." But Senator Cranston, the author of section
505(9) (2) and the floor manager of the 1978 amendment,
. . _ /indicated otherwise in a colloquy with Senator Bayh.

/ "MR. BAYH: Senator Cranston, is my under­
standing correct that section 505 
merely extends to the handicapped 
the same remedies, procedures and 
rights already extended through 
titl [e] VI...?

"MR. CRANSTON: My colleague from Indiana ...
is correct.

"MR. BAYH: When title VI was first enacted in
1964, Congress intended to create 
a private right of action for 
aggrieved individuals. The circuit 
courts of the United States have 
clearly acknowledged this congres­
sional intent....

"MR. CRANSTON: I agree with my colleage from Indi­
ana.... [A]n important reason for 
the inclusion of the attorneys' fees 
provision in S. 2600 is to encourage 
appropriate private litigants to bring 
actions under title V of the Rehabili­
tation Act ....



10

Had Congress in 1978 abolished the then well 
established private right of action, it would have left 
disabled individuals aggrieved by a vioaltion of section 
504 no relief other than recourse to the federal agency 
which had provided the grant involved. But the most 
consistent theme in the four years of congressional 
oversight of section 504 which led to the 1978 amendments 
had been the failure of those agencies to enforce it 
vigorously, if at all. The delays in HEW's final 
approval of its regulations, however justifiable in 
light of the complexity of the issues involved, had been 
the subject of repeated congressional criticism. See pp.
__________ , infra. A Government Accounting Office study
concluded that most federal agencies had taken no action

/ (continuted)
"MR. BAYH: I thank the distinguished

Senator from California for 
taking time to make clear the 
continuing intention of 
Congress that private actions 
be allowed under ... title V 
of the Rehabilitation Act of 
1973."

124 Cong. Rec. 30349



_ /to implement section 504. The Department of Health,
Education, and Welfare, the agency primarily responsible
for administrative enforcement of section 504, conceded it
was unable to do so. In 1975 HEW's Office for Civil Rights
reported that it had become "increasingly difficult to
adhere to the assurance in substantive regulations of
prompt investigation of each [discrimination] complaint

_ /...." The next year HEW noted that there had been an
"astronomical growth" in the number of complaints it was

_ /required to process, and that "these increases have 
not permitted the office to keep pace with the rising 
volume of complaints received." OCR believed that even 
with increased staff it would be impossible "simultane­
ously to eliminate the complaints on a timely basis, and

_ /to fulfill other essential enforcement responsibilities."
In 1977 the OCR director, David Tatel, urged Congress to 
retain the private right of action under section 504 
precisely because the department was simply unable to 
handle effectively the increasing volume of administrative

_/ Hearings on Review of Programs for the Handicapped,
1977, before the Subcommittee on the Handicapped of the 
Senate Committee on Human Resources, 95th Cong., 1st 
Sess., 1130 (1977) (hereinafter cited as "1977 Senate 
Hearings" ; 1976 Senate Hearings 322.

/ 40 Fed. Reg. 24148. 
/ 41 Fed. Reg. 18394. 
/ 41 Fed. Reg. 18395.



/7-
- > r  -

_ /complaints. Tatel noted that while the
number of complaints filed under section 504 was
accelerating, his office was understaffed, and that
a backlog of several thousand unprocessed

_ /discrimination charges thus existed. Repre-

_/ Hearings on Implementation of Section 504,
Rehabilitation Act of 1973, before the Subcommittee 
on Select Education of the House Committee on Education 
and Labor, 95th Cong., 1st Sess., p. 358. ("I
believe it is important that the private right of 
action for individuals be preserved. HEW is not in 
a position and does not have the resources to do the 
whole job.") (hereinafter cited as "1977 House 
Hearings"); see also ĵ d. at 358 ("The Office for 
Civil Rights is small and we don't have the resources 
to discover and root out every instance of discrimina­
tion which occurs throughout the country....")
_/ "[W]e have received already 541 complaints under
section 504. About 46 percent of the complaints 
alone have come in since the implementating 
regulations were issued.... We are just beginning, 
during the past month or two, to process these 
complaints .... We have completed, I believe, 38 
.... There are several reasons why the Office for 
Civil Rights cannot, or has not, processed section 
504 complaints as quickly as we would like. The 
main reason is that we have responsibilities under 
title VI and title IX as well, and the complaint 
backlog in all areas is extraordinary. I don't 
have the exact figure with me, but I think its 
approximately 3,000 complaints, and the number of 
complaints in all areas, including section 504, is 
growing." 1977 House Hearings 341; see also _id. at 
302-05.



i3>- > r -

sentative Jeffords commented that no one "could 
conceive of" requiring exhaustion of administra­
tive remedies in light of that backlog and the

_ /understaffing at OCR. It is equally incon­
ceivable that Congress, which was all too aware 
of these problems, could have intended to re­
quire aggrieved individualls to resort to this
backlogged and ineffective admministrative

_ /process instead of, or prior to, seeking 
redress in the courts.

_/ (footnote continued)
In 1978 the OCR official resonsible for 

enforcing section 504 executed an affidavit stating 
that there is "a large backlog of [section 504] 
complaints and there is no guarantee that any 
newly filed complaint can be investigated and 
resolved in an expeditious manner." Whitaker v. 
Board of Higher Education of the City of New York, 
461 F.Supp. 99, 108 (E.D.N.Y. 1978). 1977 House
Hearings 276.

_/ The section 504 administrative procedures under 
are identical to those under Title IX, which 
this Court has already held are so limited that 
it would be inappropriate to insist they be used 
prior to filing suit. "Because the individual 
complainants cannot assure themselves that the 
administrative process will reach a decision on 
their complaints within a reasonable time, it 
makes little sense to require exhaustion." Cannon 
v. University of Chicago, 441 U.S. at 708-09 n.41. 
The United States itself opposed any exhaustion 
requirement in section 504 cases in its amicus 
brief in Southeastern Community Collegee v. Davis, 

U.S. (19 ).
[footnote continued on next page]



/ (continued)
In the instant case, of course, there were 

no administrative procedures to exhaust when 
respondent's claim arose. LeStrange filed this 
action on September 22, 1978. The Department 
of Transportation did not issue regulations im­
plementing section 504 until May 31, 1979.



/-*> '

II. DAMAGES MAY BE AWARDED IN PRIVATE ACTIONS TO REDRESS
VIOLATIONS OF SECTION 504
Since Marbury v. Madison, 1 Cranch. 137, 163 (1803), 

this Court has recognized that "Itjhe very essence ot civil 
liberty consists in the right of every individual to claim 
the protection of the laws, whenever he receives an injury." 
That protection would be meaningless if it consisted ot 
no more than a judicial pronouncement that the law had 
been violated. Thus "it is also well settled tnat where 
legal rights have been invaded, and a federal statute provides 
for a general right to sue for such invasion, federal 
courts may use any available remedy to make good tne wrong 
done." Bell v. Hood, 327 U.S. 678, 684 (1946). "The exis­
tence of a statutory right implies the existence ot all 
necessary and appropriate remedies." Sullivan v. Little 
Hunting Park, 396 U.S. 229, 239 (1969). This Court has 
never treated damages as some kind of exceptional relief 
to be awarded only under unusual circumstances, but has 
noted that, "[h]istorically, damages have been regarded 
as the ordinary remedy for an invasion of personal interests 
in liberty." Bivens v. Six Unknown Federal Narcotics Agents, 
403 U.S. 388, 395 (1971). "A disregard of the command 
of the statute is a wrongful act, and where it results 
in damage to one of the class for whose especial benefit 
the statute was enacted, the right to recover damages from 
the party in default is implied." Texas & Pacific R. Co. 
v. Rigby, 241 U.S. 33, 39 (1916).

On several occasions during recent years this Court 
has considered arguments that those whose federal rights 
have been violated should not be permitted to redress that



injury through damages. Davis v. Pressman, 442 U.S. 228
1979), But2 v. Economou, 438 U.S. 478 (1978); Bivens v. Six 
Unknown Federal Narcotics Agents, supra. These establish a 
criteria for weighing such claims in the absence of an express 
congressional authorization of damages: (1) whether the
type of injury sustained is one ordinarily compensable in 
damages, (2) whether there are "special concerns counseling 
hesitation," and (3) whether there is an "1 explicit congressiona 
declaration that persons' in [plaintiff'sJ position ...' may 
not recover money damages from those responsible for the 
injury,'" Davis v. Passman, 442 U.S. at 246-47.

The first and third criterion are clearly met in this 
case. The type of injury which respondent has sustained, 
primarily a loss of wages, is frequently redressed in damages 
by the federal and state courts; indeed, it is the very same 
type of harm which this Court held compensable in Davis v. 
Passman, 442 U.S. at 245. There is, moreover, no claim that 
Congress explicitly forbad the award of monetary damages in 
actions arising under section 504. The critical issue is 
whether section 504 presents special concerns which counsel 
against providing redress through "a particular remedial 
mechanism normally available in the federal courts." Bivens 
v. Six Unknown Federal Narcotics Agents, 403 U.S. at 397 
(emphasis added). The issue is one of congressional intent.

This Court considered, but did not resolve, the avail­
ability of damages for a violation of Title VI in Guardian's 
Association v. Civil Service Commission (slip opinion, July
1, 1983). Four members of the court concluded that damages



- n -

could be awarded in a private action under Title VI. Opinion 
of Justice Stevens, pp. 2-4; opinion of Justice Marshall, 
pp. 10-20. Two members of the Court would have held that 
such damages were not available for an unintentional violation 
of Title VI. Opinion of Justice White, pp. 12-24. Justice 
O'Connor concluded that compensatory equitable relief was 
authorized by Title VI, but neither she, Justice Powell nor 
the Chief Justice expressed an opinion as to the avail­
ability of damages. Many of the general questions discussed 
in the opinions of Justices White, Stevens and Marshall bear 
on the propriety of an award of damages under section 504; 
the language and legislative histories of the two measures, 
however, differ significantly.

Justice White's opinion in Guardians leaves open the 
question of whether damages could be awarded for an inten­
tional violation of Title VI. Because the considerations 
bearing on the propriety of damages got intentional and 
unintentional violations of section 504 are somewhat dif­
ferent, we discuss them separately.— ^

_/ Count one of the complaint alleges that Conrail refused
LeStrange employment "without a medical evaluation or a 
hearing," although he was "ready, willing and able to return 
to work." A-6 to 7. If LeStrange were to prove that Conrail 
refused, solely because of his handicap, to consider in good 
faith whether he was "otherwise qualified," that would con­
stitute a purposeful violation of section 504. Count two 
asserts that the test subsequently used by Conrail to determine 
LeStrange's fitness "was willfully and purposefully prepared 
in such a manner as to insure ... failure," A-7 and that 
Conrail "has maliciously, willfully and purposely discriminated 
against the plaintiff since 1973, solely because the plaintiff 
is handicapped." A-8. Such allegations, it proven, would of 
course constitute intentional discrimination.



- I S -

(1) Intentional Violations
Respondent urges that a federal grantee who violates 

section 504 cannot be held liable in damages under any cir­
cumstances. On respondent's view, even if employment discrim­
ination against the handicapped is illegal under federal 
law, Conrail is immune from monetary relief if it discriminates 
against a fully qualified disabled employee or job applicant 
because of a prejudice against the disabled, with an awareness 
that its conduct violates both section 504, or out of a 
cavalier indifference to the requirements of the law. Even 
if the federal courts were to hold that its treatment of 
LeStrange contravened section 504, Conrail maintains that it 
could with impunity treat another employee with the same 
disability in precisely the same way.

The degree of protection from damage awards asserted 
by Conrail for itself and ten of thousands of federal grantees 
is broader than that normally accorded to federal and state 
government officials in their personal capacities. Even a 
cabinet member can be held liable in damages for conduct 
which he or she knew or should reasonably have known was 
unlawful. Butz v. Economou, 438 U.S. 478 (1978). The immunity 
sought by respondent is particularly incongruous because of 
the unusual case with which a recipient of federal funds can 
ascertain its legal responsibilities. A grantee can, prior 
to accepting federal assistance, bring to the attention of 
the granting agency any practices about whose legality it 
may be in doubt, and "the appropriate federal official will 
determine whether the grantee's plan, proposal or program 
will satisfy the condition of the grant ... and the grantee 
will [thus] have in mind what its obligations will be."



—  19 -

Guardians Association v. Civil Service Commission, opinion 
of Justice White, pp. 13-14. If a question about such a 
practice arises after the grant has been accepted, the grantee 
can call it to the attention of the appropriate federal 
official and is entitled to a "prompt investigation" of 
whether that practice would constitute a violation of section 
503. 45 C.F.R. § 80.7(c); 4a C.F.R. § 27.123(c).— / Federal
regulations expressly direct recipients of federal assistance 
to review their policies and practices and to modify those 
which do not meet the requirements of section 504. 45 C.F.R.
§ 84.6(c); 49 C.F.R. § 27.12(c). Since federal grantees are 
thus required to scrutinize the legality of their conduct, 
and have a ready source of guidance as to the requirements 
of the law, the circumstances under which they should reasonably 
know whether their actions are unlawful are unusually broad.

The policy considerations articulated by Justice 
White in Guardians are largely inapplicable to grantees who 
knew or should reasonably have known that they were violating 
section 504. Such grantees cannot complain they were unaware 
of the conditions of the federal assistance (slip opinion, 
p. 13); by definition they either knew or disregarded a 
reasonable opportunity to learn that such conditions were 
being violated. (See id. at 15). The possibility of a 
compensatory remedy might dissuade from participating in 
federal programs potential recipients who intended to disregard

_/ While the determination of federal authorities regarding 
such practices would not be binding on the courts, we believe 
a grantee who relied in good faith on such a ruling should 
not be held liable in damages for any resulting injury.



-  -

the rules and regulations governing such programs, _id. at 
21 n.24, but Congress certainly intended to deter such 
entities from accepting federal funds for which they were 
not eligible.

Here, as in any other area of the law, retrospective 
relief is essential to bringing about obedience to the 
law. Section 503 forbids discrimination on the basis of 
handicap, not merely because Congress disapproved such 
discrimination, but because Congress believed that at least 
some federal grantees wanted to engage in discrimination 
and would continue to do so until it was forbidden by federal 
law. But unless some adverse consequence is imposed on 
grantees who have violated section 504, they are as free 
to engage in discrimination as if that section had never 
been enacted. If the only possible consequence of such 
a violation is that a court or agency may direct prospective 
obedience, there is no practical reason to obey until and 
unless such an order is issued. A grantee who finds compliance 
with section 504 expensive, and understands tnat disobedience 
is cost free, will have every financial incentive to discriminate. 
In the absence of retrospective relief, section 504 would 
be merely precatory; not until the imposition of an injunction 
or agency order backed by a threat of sanctions would grantees 
have any reason to comply with its commands. Thus, wholly 
aside from the normal assumption that Congress intended 
that federal courts have the authority to redress violations 
of any federal statute, the obvious congressional desire 
that federal grantees actually comply with tne provisions 
of section 504 compels the conclusion that Congress contemplated 
that there would be retrospective relief for such a violation.



That overriding congressional purpose is clearly advanced by 
the "deterrent ... inherent in the award of compensatory 
damages." Carey v. Piphus, 435 U.S. 247, 256-57 (1978).

Transamerica Mortgage Advisors, Inc, v. Lewis, 444 
U.S. 11 (1979), holds that "where a statute expressly provides 
a particular remedy or remedies, a court must be chary of 
reading others into it." 444 U.S. at 19. But section 504 
as originally enacted contained no express remedies at all; 
thus no inference can be drawn that Congress in 1973 chose 
certain forms of redress over others. The 1978 amendments 
do provide for enforcement of section 504 through the rights, 
remedies and procedures of Title VI, but section 505(a)(2) 
is expressly non-exclusive, declaring those forms of relief 
"available." Since, as petitioner concedes,— ^ the avail­
ability of damages under Title VI cases was unresolved in 
the lower courts in 1978, as it is in this Court today, no 
conclusion regarding Congress' attitude toward damages can 
be drawn from the invocation of Title VI remedies. Moreover, 
in light of the numerous statements during the legislative 
history of the 1978 amendments that that measure would expand
the rights and remedies of the disabled, pp. ____ infra, and
the repeatedly expressed approval of the private right of
action under section 504, p. ____ supra, Congress cannot
have intended that Section 505(a)(2) eliminate any type of 
relief that was otherwise permissible under section 504.

This conclusion regarding the significance of 
section 505(a)(2) is confirmed by the provision of the 
Senate bill concerning procedural safeguards for disabled

/ Brief for Petitioner, p. 42.



individuals who might be aggrieved by the rehabilitation 
plan prepared for them by state agencies. Section 104 of 
that bill accorded to such individuals the right to an 
administrative hearing to review that plan, and if it were 
upheld to challenge it in federal court. Subsection (f), 
however, expressly provided "No civil action may be brought 
under this section for monetary damages." 124 Cong. Rec.
30293 (1978); see also id. at 30315 (remarks of Sen. Javits).
The failure of Congress to include any such language in the 
portion of the bill containing section 505(a)(2) can only be 
understood as indicating the absence of any intention to 
oppose such a limitation on relief in section 504 cases.— ^ 

Justice White's opinion in Guardians Association, 
however, asserts that under Pennhurst State School v. Halderman, 
451 U.S. 1 (1981) there is a "presumption" that in an action 
to enforce spending Clause legislation private litigants are 
entitled to no relief other than a prospective injunction 
compelling grantees to comply with the conditions of federal 
assistance if they chose to continue receiving it. Slip 
opinion p. 17. This is not an accurate description of the 
majority opinion, of Justice White's dissent, or even of the 
issue presented in Pennhurst. The plaintiff in that case 
did not ask for damages or retrospective or compensatory 
relief of any other kind, but sought only to "compel compliance

_/ The conference committee replaced the civil action
authorized by section 104 with a right of review by the 
Secretary of HEW, and subsection (f) was thus eliminated 
as irrelevant. H. Conf. Rep. No. 95-1780, pp. 68-69, (1978).



with" certain conditions imposed by statute on grants under 
the Developmentally Disabled Assistance Act. 397 U.S. at
____. The remedial question was whether such compulsion
should take the form of an order enjoining federal authorities 
from providing funds to the grantee if the conditions were 
not met, or an order directed at the grantee itself requiring 
compliance. The majority in Pennhurst noted that the former 
approach was taken in Rosado v. Wyman, 397 U.S., 420 (1970), 
but that "[ijn other cases ... we have implicitly departed 
from that rule," 451 U.S. at 29, and remanded the question 
to the court of appeals. Id. at 30. Justice White would 
have held that prospective relief to enforce the conditions 
of federal grants should be limited to the type of injunction 
approved in Rosado, since "the State may terminate such 
statutory obligations, except those already accrued, by 
withdrawing from the program and terminating its receipt of 
federal funds." 451 U.S. at 53 (emphasis added). But as 
theunderscored language makes clear, Justice White recognized 
that a state could not merely by withdrawing from a federal 
program, in any way escape from or alter the obligations 
that were created by its earlier acceptance of federal funds.



(2) Unintentional Violations
Although there is thus no basis for inferring that 

Congress intended to deny absolutely the traditional remedy 
of damages for injuries sustained by reason of a violation 
of section 504, delineating the circumstances under which 
damages will be available raises somewhat different issues. 
Damages are normally available for any injury occasioned by 
the violation of a legal right regardless of the mental 
state of the defendant; the added element of an intent to 
violate or a willful disregard of the law may be the basis 
for the additional remedy of punitive damages. Congress 
must be assumed to have intended to aply this traditional 
rule unless the language or legislative history of a statute 
demonstrates otherwise. See Carey v. Piphus, 435 U.S. 247, 
250-57 (1978).

The paramount desire of Congress in enacting section
504 was to end the practice of discrimination on the basis
of handicap in all cases, not just in those in which a grantee
happened to know that its conduct violated the law. The
prospect of damage awards serves to induce compliance with
the law among those who may not at first realize what section
504 requires, just as it does among those who are well aware
of those requirements. In the case of discrimination in
employment, as in other areas, the primary legislative

objective was a prophylactic one.
"It was to achieve equality of employment 
opportunities and remove barriers that have 
operated in the past to favor an identi­
fiable group of white employees over other 
employees. ..."

Backpay has an obvious connection with this purpose. 
If employers faced only the prospect of an injunc­
tive order, they would have little incentive to 
shun practices of dubious legality. It is the



reasonably certain prospect of a backpay award 
that "provide[s] the spur or catalyst which causes 
employers and unions to self-examine and to self- 
evaluate their employment practices, and to endeavor 
to eliminate, so far as possible, the last vestiges 
of an unfortunate and ignominious page of this 
country's history."

Albemarle Paper Co. v. Moody, 422 U.S. 405, 417-418 (1975).
It may be, as Justice White noted in Guardians, that a fed­
eral grantee will not necessarily know prior to such self- 
examination whether its employment criteria, program entrance 
qualifications, or architecture have the effect of excluding 
the disabled, but without the prospect of retrospective 
relief such a grantee has no incentive to make that inquiry 
or correct the arguable violations it may unearth.

The congressional direction that handicapped individ­
uals receive the same treatment as others benefitting from a 
federally assisted program can often be complied with, par­
tially if not fully, on a retrospective basis. As Justice 
O'Connor recognized in Guardians, compensatory injunctive 
relief represents merely a delayed method of providing the 
victims of discrimination with the same benefits or status 
that Congress intended that they be afforded at an earlier 
time. Where non-handicapped students at a school are given 
a particular form of training, section 504 ordinarily requires 
that it be given to the disabled as well. That statutory 
command is equally applicable to and implemented by the 
voluntary act of a school admitting the handicapped student, 
or a subsequent court order directing that they be given the 
instruction that was earlier denied them. An award of dam­
ages serves precisely the same "make equal" function. If a 
disabled employee does the same work for which able-bodied 
colleagues are paid $100, section 504 ordinarily directs



—  —

that the handicapped worker also receive $100. That statu­
tory command is equally implemented whether the disabled 
worker receives the $100 as a result of the voluntary act of 
the employer or due to a court ordered award of back pay.

The Department of Transportation section 504 regula­
tions, following the similar requirement established by the 
earlier HEW regulations under both section 504 and Title VI, 
directs a recipient of federal funds which has engaged in 
discrimination on the basis of handicap to "take such reme­
dial action as the responsible official deems necessary to 
overcome the effects of the violation." 49 C.F.R. § 27.11 
(a)(1); 45 C.F.R. §§ 80.3(b )(6)(i) (Title VI), 84.6(a)(1) 
(section 504). Such remedial action must be extended to 
individuals who are no longer in the recipient's program, or 
who, because of the discrimination, never participated in 
the program at all. 49 C.F.R. § 27.12(a)(3). This require­
ment is on its face as applicable to intentional violations 
as it is to unintentional violations, and mandate corrective 
or compensatory measures regardless of whether the effect of 
the discrimination was the denial of an education or a denial 
of wages.

A majority ^ of this Court held in Guardians that a 
victim of discrimination under Title VI is entitled to com­
pensatory injunctive relief. ^ A remedial rule which none­
theless excluded compensatory monetary relief would make 
little practical sense under Tiel VI or section 504. If only

_/ Justices O'Connor, Brennan, Marshall, Blackmun and
Stevens.

/



compensatory injunctive relief were permitted, the victims 
who could and could not obtain effective redress for a Title 
VI or section 504 would be determined in an entirely capri­
cious manner. A student illegally excluded from a public 
school could get relief if he or she sought no other educa­
tion and waited for an injunction ordering remedial training, 
but not if he or she went to a private school after that 
rejection and subsequently sought reimbursement for the 
tuition. An unlawfully dismissed employee who ordinarily 
received non-monetary compensation, such as discounts on 
company goods or services, could receive partial compensa­
tory relief, but not a fired employee who received only 
wages. The deterrent effect would be equally uneven and 
unpredictable. In the case of section 504 this distinction 
seems particularly peculiar, for often compliance with a 
corrective injunction will be far more costly than ordinary 
damage claims. Thus a federal grantee who constructed a 
building inaccessible by wheelchair might have to spend 
millions of dollars to build ramps and elevators, but would 
be protected from the financially trivial liability that 
would accrue if it spurned the services of the local newsboy 
because he walked with a limp.

Justice White in Guardians noted with regard to Title 
VI

The possibi1ity that Congress may have felt that 
the salutary deterrent effect of a compensatory 
remedy was outweighed by the possibility that such 
a remedy would dissuade potential recipients from 
participating in important federal programs. Slip 
opinion, pp. 20-21, n. 24 (emphasis added).



- 3.?-
But the legislative history of section 504 contains not a 
single reference to any such concern. No witness or member 
of Congress ever mentioned any federal grantee ever having 
rejected or even considered rejecting federal aid because of 
the danger of a compensatory award. And nowhere in the 
thousands of pages of hearings, reports and debates on the 
vocational rehabilitation legislation of 1973, 1974 and 1978 
is there the slightest suggestion that Congress should have 
or had restricted the traditional remedies available for 
violations of federal law in order to reassure squeemish 
applicants for federal aid.

The only discussion of the costs imposed by section 504 
concerned expense of complying with injunctive relief. Senator 
McClure in 1978 offered an amendment that would have forbidden 
inactions alleging employment discrimination by the federal 
government "equitable relief ... disproportionately exceed­
ing actual damages in the case." ^ McClure emphasized that 
his proposal "would not in any way limit the actual damages 
which could be recovered," ^ but expressed concern about 
situations in which the cost of altering a workplace to 
accommodate a disabled employee might be 200 times greater 
than the damages which would be suffered without such changes. 
McClure's amendment was successfully opposed by the managers

/ 124 Cong. Rec. 30576 (1978).
/ Ibid.



__ -N QI

of the bill. Senator Cranston, who had drafted section 505 
and chaired the hearings which led to the original version 
of section 503, argued that federal employees were entitled 
to the same rights of employees of federal grantees, and 
added

An individual denied a job, an advancement, or 
promotion on the basis of handicap is a person 
entitled to the same remedies as a person dis­
criminated against unlawfully on the grounds of 
any other factor.__/

The remedies available to victims of discrimination on the 
basis of other factors— specifically race, national origin, 
sex and religion— include back pay under Title VII. It is 
inconceivable that Cranston could have made this argument 
had he believed that such monetary relief was not available 
to victims of discrimination on the basis of handicap just 
as it was for victims of other forms of employment discrimi­
nation. No limitation similar to the McClure amendment was 
even proposed to restrict the injunctive relief available to 
victims of employment discrimination by federal grantees. In 
1979, a report of the Senate Committee which had drafted 
section 505 emphasized that

It is and always has been the Committee's intent 
that any handicapped individual aggrieved by a 
violation of title V has the right under existing 
law ... to receive back pay.__/

_/ Section 505(b)(1) allows a court in framing an injunc­
tion to consider the cost of any workplace accommodation. 
Senator Cranston correctly described this as merely stating 
what any "reasonable court" could do even in the absence of 
an express authorization. 124 Cong. Rec. _______ .
__/ 124 Cong. Rec. 30578.
_/ S. Rep. No. 96-316, 96th Cong., 1st Sess., 12-13 (1979).



-3><9

There is no reason to question the accuracy of the Committee's 
description of its views only the year before.

Back pay and other damages are among the forms of relief 
normally available to the victim of a violation of federal 
law, regardless of the motivation of the lawbreaker. Nothing 
in the language or legislative history of section 504 even 
hints at a congressional desire to depart from that tradi­
tional rule, or to shift the cost of such violations from 
grantees receiving millions or even billions of dollars in 
federal aid to physically and mentally handicapped indi­
viduals often uniquely unable to protect their interests. To 
deny monetary relief under section 504 would often be to 
postpone until the entry of a final court injunction the 
implementation of legal rights adopted a decade ago for men 
and women who had already endured "hundreds of years of be­
ing alienated, degraded, insulted and otherwise ignored by 
society. ..." ^ Such a scheme would, as Senator Cranston
said of the rejected McClure amendment, provide "half-reme­
dies for whole wrongs." ^

/ 124 Cong. Rec. 30578 (1978) (remarks of Sen. Stafford).
/ Ibid.



- 3 I -
pt'-Q

■— 1---

III. SECTION 504 PROHIBITS EMPLOYMENT DISCRIMINATION 
UNDER ALL FEDERALLY ASSISTED PROGRAMS
The contention advanced by Conrail in this case

is far more radical than that already rejected by
this Court in North Haven Board of Education v.
Bell, 456 U.S. 512 (1982). In North Haven the
petitioners conceded that employment discrimination
on the basis of sex was illegal; they asserted no
right to fire, demote, or harass female employees
because of they were women, but merely argued that
such mistreatment, admittedly forbidden by Title VII
of the 1964 Civil Rights Act and other laws, was not
also covered by Title IX of the Education Amendments

_ /of 1972. In the instant case Conrail contends
that neither an aggrieved individual nor any federal

_ /agency is authorized to take any action to prevent or

___/ "A holding that § 901 does not prohibit employment
discrimination will not sanction such discrimination. 
Rather, employment discrimination will be remedied 
by resort to Title VII, the Equal Pay Act [and] the 
post-Civil War civil rights statutes, 42 U.S.C.
§ 1983...." Brief for Petitioners, No. 80-986, 
p. 109.
_/ Brief for Petitioner, pp. 22, 23. Petitioner's
argument against any private action to remedy such dis­
crimination is premised in part on the assumption that 
federal agencies are powerless to take such action, 
and that Congress cannot have intended to "invest 
individuals with substantive rights broader than ... 
those subject to agency definition, administration, 
and enforcement." Brief for Petitioner, p. 10.



— 3>̂ - '

-02---

redress employment discrimination on the basis of 
handicap in a federally assisted program except where 
providing employment was one of the primary objec­
tives of that program.

On Conrail's view a public or private entity
which is supported partially or even wholly by
federal funds and which has an avowed policy of not
hiring, promoting or retaining handicapped individuals
is, save in certain exceptional circumstances,
innocent of contravening federal law. If that
argument is sustained, Conrail would be free to
refuse to hire an attorney because he or she had a
bad back, to pay a ticket clerk loss because he or
she used a cane, or to fire a baggage handler because
he or she once suffered from epilepsy. One decision
relied on by petitioner actually holds that a school
can even discriminate against handicapped instructors

_  /in hiring teachers for handicapped children. The 
issue raised by petitioner is thus not how Congress 
intended to enforce a prohibition against employment

_/ Sabol v. Board of Education of Willingboro, 510
F. Supp. 892 (D.N.J. 1981) cited at Brief for Petitioner, 
p. 7, n.4.



— 33 — 

— 3—

discrimination on the basis of handicap by federal grantees, 
but whether Congress intended, save in one small category 
of cases, to permit the disabled to be barred from jobs in 
federally funded programs, regardless of their actual 
qualifications, because of nothing more than prejudices, 
fears, or unfounded preconceptions about physical or mental 
disabilities.

If the coverage of section 504 is limited to
employees in fedral programs whose primary objective
is to create jobs, the reduction in the number of
workers protected by that law would, as petitioner

_ /acknowledges, be "dramatic." An analysis
prepared in 1976 for the Department of Health,
Education and Welfare estimated that section 504, if
applied to all federal grantees, wuld affect more

_ /than a million disabled workers. That Department
alone provided funds for more than 36,000 programs

_ /and activities. Only a handful of these 
employees and programs would be covered if the 
application of section 504 were restricted to programs

/ Petition, p. 13.
/ 41 Fed. Reg. 20312, 20323 (1976).
/ 1977 House Hearings, pp. 299, 358.



whose primary purpose was to provide employment. The 
practical effect of such a restriction would be 
particularly great because of the frequency and 
importance of employment discrimination against the 
disabled. Employment discrimination has consistently 
been the most common subject of administrative 
complaints filed with federal officials under section 
504; in 1977, for example, 70% of all the section 504 
complaints received by HEW concerned employment 
problems. Thus any construction of section 504 
that sharply limited its application to employment 
discrimination would reduce dramatically its overall 
impact on the plight of handicapped individuals.

-— 4—

_/ 1977 House Hearings, pp. 303, 317, 318, 341 ; see
also 1976 Senate Hearings, p. 1500.



_  3>A'

(1) The Department of Transportation Regulations
This action was commenced on September 22, 1978.

_ /Eight months later the Department of Transpor­
tation adopted regulations under section 504 
applicable to Conrail and other recipients of funds 
administered by DOT. Section 27.31(a)(1) of those 
regulations provides:

No qualified handicapped applicant for 
employment, or an employee shall, on the 
basis of handicap, be subjected to discrim­
ination under any program or activity that 
receives or benefits from Federal financial 
assistance.

This regulation is not limited to discrimination 
under a federal program whose primary objective is 
employment, but deliberately and without ex­
ception applies to all federally assisted programs.

Section 27.31, if valid, is dispositive of this 
aspect of this litigation. As the Court has repeat-

_/ 44 Fed. Reg. 31442 ( 1979). The regulations are
now contained in 49 C.F.R. part 27.
_/ As we note, infra, pp. ______ , Executive Order
11914 required that the DOT regulations comport with 
guidelines established by HEW, which in turn require 
non-discrimination in employment regardless of the purpose 
of the federally assisted activity. See 44 Fed. Reg.
31442.



3 6 -

edly held, "a court is to apply the law in effect
at the time it renders its decisions, unless doing
so would result in manifest injustice...." Bradley
v. Richmond School Board, 416 U.S. 696, 711 (1974).
Section 27.31, although not discussed by the courts
below, has been in effect throughout most of the

_ /five years that this action has been pending.
In addition to DOT, twenty-four other federal

_ /agencies have promulgated virtually identical reg­
ulations forbidding employment discrimination on the 
basis of handicap in all federally assisted programs. 
This widespread and uniform construction of section 
504, derives from the interpretation long given to the 
statute by HEW. Executive Order 11914, 41 Fed. Reg. 
17871, promulgated in 1976, directed the Secretary of 
Health Education and Welfare to "coordinate the imple­
mentation of section 504 of the Rehabilitation Act of 
1973", and to establish "guidelines for determining 
what are discriminatory practices, within the meaning

- 2-

_/ Since section 27.31 merely reiterated for DOT
grantees the long established HEW construction of 
section 504, its application to events occurring 
prior to its issuance in May, 1979, is clearly not 
unjust.
_/ See Appendix _____ , infra p. _______



- 3 7 '

of section 504." Section 2 of the Executive Order
required that regulations issued by DOT and all
other federal agencies be "consistent with" the

_ /standards formulated by HEW. Thus HEW was the 
agency particularly responsible for the administration 
of the statute. Cf. NLRB v. Bell Aerospace Co., 416 
U.S. 267, 274-75 (1974).

HEW's construction of section 504, insofar as 
that provision applies to employment discrimination, 
has been consistent and longstanding. The first HEW 
regulation was promulgated in June, 1974, nine months 
after enactment of section 504. The rules issued on 
that date revised pre-existing provisions concerning voca­
tional rehabilitation in order "to implement the pro-

_ /visions of the Rehabilitation Act of 1973." Section
402.24, entitled "Nondiscrimination for reason of 
handicapping condition," provided:

_/ This authority was transferred to the Department
of Justice by Executive Order 1250, 45 Fed. Reg. 72995 
(1982). That Department, however, also construes 
section 504 to apply to employment discrimination in 
all federally assisted programs. SEe p. ___, infra.

3

/ 39 Fed. Reg. 18562 ( 1974) .



- 4~

5 ^  -

No otherwise qualified handicapped individual 
shall, solely by reason of his handicap, be 
excluded from participation in, be denied the 
benefits of, or be subjected to discrimination 
in any program, project or activity supported 
under this part. No qualified individual 
shall be denied employment in any program, 
project, or activity supported under this part 
solely because of a physical or mental 
disability.__/

Thus the regulations forbad employment discrimination
in all such programs despite the fact that providing
employment was not a primary objective of the Vocational

_ /Rehabilitation Act.
The language of section

503 as originally enacted in 1973 contained no express
authorization or requirement of agency regulations. In
November, 1974, however, a Senate report accompanying

_ /certain amendments related to section 504 explained
that section 504 had envisioned the "promulgation of
regulations" and the development of uniform federal
"standards and policies." The report called on the
Secretary of HEW to issue such regulations and to coordinate
section 504 enforcement in light of "that Department's
experience in dealing with handicapped persons and with the

_ /eliminiation of discrimination in other areas."

__/ 39 Fed. Reg. 18582 ( 1974) (emphasis added).
_/ The 1974 amendments are discussed infra, pp. ________ .
_/ Not until 1978 did the act include a program to include
funds for the express purpose of providing jobs to the disabled. 
See n. __ , infra. [?]

/ S.Rep. No. 93-1297, 93rd Cong., 2d Sess., p. 40 (1974).



-  -

following this report HEW decided, "[rjather than promulga­
ting a general regulation which would provide only minimal 
direction to the recipients, ... to confront and attempt to
resolve various major policy issues which would necessarily

_ /arise in the administration of the statute. Although
_ /there appears to have been no question within HEW

regarding the applicability of section 504 to all employees
of federal grantees, delineating the substance of section

_ /504's requirements raised novel and complex issues.
After consulting with committees of both the House and

_/ 1976 Senate Hearings, p. 1491 (testimony of Martin
Gerry, director of HEW's Office of Civil Rights).
_/ An internal HEW memorandum dated December 3, 1975,
stated:

/ HEW explained:
"The premise of both Title VI and Title IX is that 
there are not inherent differences or inequalities 
between the general public and the persons pro­
tected by these statutes .... The concept of 
section 504, on the other hand, is far more complex. 
Handicapped persons may require different treatment 
in order to be afforded equal access to federally 
assisted programs and activities, and identical 
treatment may, in fact, constitute discrimination.
The problem of establishing general rules as to 
when different treatment is prohibited or required 
is compounded by the diversity of existing handi­
caps and the differing degree to which particular 
persons may be affected." 41 Fed. Reg. 20296 (1976).



Senate as well as some 60 federal, state and local
agencies, and organizations familiar with the problem
of the disabled. HEW issued proposed draft
regulations in May of 1976.

The May 1976 announcement, in addition to seeking
public comment on the proposed draft, solicited comments
on 15 issues about which HEW was particularly uncertain.
But HEW indicated no doubt as to the scope of section
504's application to employment discrimination. The
Department emphasized that "section 504 ... differs from
__ title VI in the extent to which it applies to employ-

_ /ment practices." Section 84.11(9) (1) of the 
regulations provided:

No qualified handicapped person shall, on the 
basis of handicap, be subjected to discrimination 
in employment, or in the recruitment, consideration 
or selection therefor, under any programs or 
activity to which this part applies.__/

_ / 1976 Senate Hearings, pp. 1491, 1503-04.

_ / 41 Fed. Reg. 20296-97.

_ / 41 Fed. Reg. 20296-97.

_ /tion
from

41 Fed. Reg. 
was applicable 
HEW. Section

20307 (emphasis added). The 
to all recipients of federal 

84.2, 41 Fed. Reg. 20305.
regula
funds



-g -1  -

HEW expressly noted that the section 504 subpart
concerning employment "generally follows the
employment provisions of the Department's regulation
implementing Title IX of the Education Amendments

_ /of 1972..." ; the Title IX regulations covered
all employment discrimination in federal education 
programs, most of which virtually by definition 
were not primarily concerned with providing employ­
ment. See 45 C.F.R. § 86.51(a)(1). In July, 1976,
HEW formally proposed a somewhat modified set of section 
504 regulations. The accompanying announcement reiterated 
in identical language the distinction noted in May
between the scope of section 504 and Title VI regarding

_ /employment practices, as well as the reliance
_ /on Title IX regulations. Section 84.11 remained

_ /  'unchanged. Although the July announcement contained 
an extensive discussion of public comments on the May

/ 41 Fed. Reg. 20300
/ 41 Fed. Reg. 29548
/ Id. at 29552.
/ Id. at 29563.



_ /draft, there was no indication that any commen­
tator had raised any question regarding the applicability 
of the employment provisions to all federally assisted 
programs. The final regulations ultimately promulgated 
by HEW in May of 1977 were, like the draft released a 
year earlier, applicable to employment discrimination in 
all federally assisted programs. 45 C.F.R. § 84.11 
(a)(1).

The correctness of HEW's construction of the law 
was not questioned until the decision of the fourth 
circuit in Trageser v. Libbie Rehabilitation Center,
590 F.2d 87 (1978), held that the Comprehensive 
Rehabilitation Services Amendments of 1978 restricted 
section 504 to employment discrimination in federal 
activities whose primary purpose was to provide 
employment. Trageser was decided ony 42 days after 
the adoption of the 1978 Amendments, and the court 
conceded it did not know how HEW would construe the 
new legislation. 590 F.2d at 89, n.11. The courts

=— 8—

/ Id. at 29552-54.



- I f  3  -

-— 9 —

of appeals following Trageser have either ignored
_ /or refused to consider HEW's construction of

section 504. The appellate opinions rejecting the
Trageser limitation, on the other hand, have expressly
relied on the broad administrative interpretation of

_ /section 504.
The administrative agencies responsible for 

applying section 504 have consistently disapproved 
Trageser1s construction of the 1978 amendments. In 
March, 1979, HEW considered and rejected suggestions 
that it alter its standards in light of Trageser,

__/ Scanlon v. Atascadero State Hospital, 677 F.2d
1271, 272 (9th Cir. 1982); United States v. Cabrini 
Medical Center, 639 F.2d 908, 910-911 (2d Cir. 1981)? 
Simpson v. Reynolds Metals Co. Inc., 629 F.2d 1226, 
1236-37 (7th Cir. 1980).
_/ Carmi v. Metropolitan St. Louis Sewer District,
620 F.2d 672, 675 n.7 (8th Cir. 1980).

__/ LeStrange v. Consolidated Rail Corporation, 687
F.2d 767, ___ (3d Cir. 1982), A-52-53; Jones v .
Metropolitan Atlanta Rapid Transit Authority, 681 
F.2d 1376, 1382 (5th Cir. 1982); Scanlon v. Atascadero 
State Hospital, 677 F.2d 1271, 1273 and nn.3 and 4 (9th 
Cir. 1982)(Ferguson, J., dissenting); Carmi v. Metro­
politan St, Louis Sewer Dist., 620 F.2d 672, 677 n.3, 
678 n.6 (8th Cir. 1980)(McMillan, J., concurring).



insisting that its guidelines "reflect the Department's
_ /current interpretation of its authority". In 

1980, following the transfer to it of responsibility
_ /for coordinating federal enforcement of section 504, 

the Department of Justice published a detailed 
analysis reaffirming the government's view that "the 
employment practices of recipients of federal finan­
cial assistance are covered by section 504 regardless 
of the purpose of the assistance". 45 Fed. Reg.
37628. The Department expressly declined to follow 
Trageser, criticizing in particular that decision's 
failure to consider the legislative history of the
1978 amendment, and emphasized that its own regula-

_ /tions reflected its broader view of the law. Id.
The United States has aggressively advanced this
construction of section 504 in the courts, both in
litigation to which it was a party and through amicus

_ /curiae briefs in several cases.

__/ 44 Fed. Reg. 17162, 17174.
_/ The Department of Justice commentary on Trageser,
which accompanied its final regulations implementing 
section 504 and the 1978 amendments, are set out
in full in the appendix to this brief. ___a -

a.
_/ United States v. Cabrini Medical Center, supra.
_/ Scanlon v. Atascadero State Hospital, supra;
Trageser v. Libbie Rehabilitation Center, supra;
Sabol v. Board of Education of Township of Willingboro, 
510 S. Fupp. 892 (D.N.J. 1981).



1-t
In sum, the construction of section 504 contained 

in section 27.31 of the DOT regulation embodies a widespread, 
longstanding and consistent administrative interpreta­
tion of the law, an interpretation first announced 
only months after the adoption of the 1973 act, 
emphasized by HEW shortly after that agency was given 
primary authority for implementing section 504, 
strongly reiterated following the 1978 amendments, 
and now followed by a total of 25 federal agencies.
This reading of section 504, concurred in by the 
Department of Transportation, Justice, and Health,
Education and Welfare, is entitled to the "great 
deference to the interpretatin given [a] statute by 
the officers or agency charged with its administration."
Udall v. Tallman, 380 U.S. 1, 16 (1965).



- U . I -

---1---

(2) The Rehabilitation Act of 1973
Although both Trageser and petitioner focus 

their arguments on the 1978 amendments to the Rehab­
ilitation Act, an analysis of the meaning of section 
504 must begin with the original enactment of that 
provision in 1973. This is particularly true in the 
instant case because LeStrange's claim arose in 1973,
App. A-6, five years prior to the 1978 amendments.
Thus even if this Court were to hold tht the 1978 
legislation did restrict section 504 to employment 
discrimination in federal employment programs, it 
would still be necessary to ascertain the original 
scope of section 504 prior to 1978 and to consider 
whether that the pre-1978 law should be applied to 
respondent's pre-1978 claims. See Cort v.Ash,
422 U.S. 66, 76-77 (1975).

No court prior to the adoption of the 1978
amendments questioned the applicability of section
504 to employment discrimination in all federally

_ /assisted programs. This judicial acceptance

[ I \ l

_/ See Whitaker v. Board of Higher Education, 461
F. Supp. 99 (E.D.N.Y. 1978); Davis v. Bucher, 451 
F. Supp. 791 (E.D Pa. 1978); Duran v. City of Tampa, 
451 F. Supp. 954 (M.D. Fla. 1978), 430 F. Supp. 75 
(M.D. Fla. 1977); Drennon v. Philadelphia General 
Hospital, 428 F. Supp. 809 (E.D. Pa. 1977); Gurmankin 
v. Costanzo, 411 F. Supp. 982 (E.D. Pa. 1976) aff1 d 
on other grounds, 556 F.2d 184 (3d Cir. 1977); cf. 
Cook, Nondiscrimination in Employment Under the 
Rehabilitation Act of 1973, 27 Am. U. L. Rev. 31, 43 
n.71 (1977).



of HEW's construction of the law is understandable in
light of the actual wording of section 504:

No otherwise qualified handicapped individual in 
the United States, as defined in section 7(b), 
shall, solely by reason of his handicap, be excluded 
from the participation in, be denied the benefits 
of, or be subject to discrimination under any 
program or activity receiving federal assistance.

Nothing in the broad language of this statute affords 
any basis for limiting its application to only some 
employees, programs, or types of discrimination. "No 
individual", not "very few individuals", may be dis­
criminated against. "Any program", not "most programs

_ /or activities", are forbidden to discriminate.
The prohibition is not limited to denials of benefits or 
exclusion from participation, but extends broadly to any 
"discrimination under" a federally assisted programs. 
Here, as in North Haven, a handicapped "employee who 
works in a federally funded program is 'subject to 
discrimination under' that program if ... paid a lower 
salary for like work, given less opportunity for promo­
tion, or forced to work under more adverse conditions 
than are" his or her non-handicapped colleagues. 72 
L.Ed.2d at 307, U.S. at

_/ United States v. Cabrini Medical Center, 639
F.2d 908, 910 (2d Cir. 1981), one of the lower court 
cases relied on by petitioner, concedes that this 
reference to "any program" "at first blush seems broad 
enough" to cover all employment claims.



The fact that section 504 does not expressly
mention employment is clearly of no significance, for
the statute contains no references to specific types of
discrimination, but is deliberately cast in all-inclusive
general terms. Congress's "failure" to single out
employment for particular emphasis no more militates
against respondent's claims than Congress's "failure" to
mention specifically railroads, or grantees receiving
over $1 billion, or discrimination against employees who

_/had lost their left, rather than right hands. Had
Congress intended to exclude from the scope of section
504 employment discrimination not involving federal
employment programs, it certainly knew how to do so. In
May of 1972, only four months before the section 504 was

_ /drafted by the Senate Subcommittee on the Handicapped, 
a House-Senate conference committee considered and 
deleted from Title IX of the Education Amendments a 
limitation identical to that which Conrail now seeks to 
read into section 503. North Haven Board of Education, 
___U.S.at , 72 L.Ed.2d at 310.

_/ See Guertin v. Hackerman, 496 F. Supp. 593, 595-96
(S.D. Tex. 1980)(rejecting defendants' contention that 
section 504 applies only to public agencies receiving 
federal assistance.)
_/ See 118 Cong. Rec. 30680 (remarks of Senator Randolph).



— -  
-— 4---

Section 904 of those Amendments, forbad discrimination against
the blind by recipients of federal aid to education, but
was specifically limited to discriminatory exclusion from
"any course of study" and thus was expressly inapplicable
to employment discrimination. No such express limitations
were placed in section 504.

A broad literal reading of section 504 is strongly
supported by section 7(6) of the act, whose definition of
"handicapped individual" delineates the persons protected
by section 504. Section 7(6) provides:

The term "handicapped individual" means any indi­
vidual who (A) has a physical or mental disability 
which for such individual constitutes or results in 
a substantial handicap to employment and 
(B) can reasonably be expercted to benefit in 
terms of employability from vocational rehabilita­
tion services provided pursuant to Title I and III 
of this Act. __/

Only individuals whose handicap may inhibit but does not 
preclude them from working are protected from discrimina­
tion by section 504. This restriction would make no 
sense if section 504 were generally inapplicable to 
employment discrimination. The employability of a

_/ "No person in the United States shall, on the
ground of blindness or severely impaired vision, be 
denied admission in any course of study by a recipient 
of federal financial assistance for any education 
program or activity...." This provision is now codified 
in 20 U.S.C. § 1689[?]
/ 87 Stat. 361 (1973).



— SJ> —

--5-- *

disabled individual is clearly of little if any relevance 
to whether he or she should or needs to be protected 
from discrimination in housing, education or medical 
treatment, but bears directly on the propriety of 
excluding the individual from employment. Just as 
Congress might have defined "handicap" in terms of 
educability had its paramount interest been discrimina­
tion in education, so here the criterion of employability 
demonstrates that employment discrimination was the 
problem with which section 504 was primarily concerned.

This construction of section 504 is consistent with 
the overall goals and other provisions of the Rehabilita­
tion Act. That statute is not concerned with housing, 
food assistance, transportation, communication or the 
public schools —  its primary focus is on enabling the 
disabled to obtain work. Section 2(8) in a clear refer­
ence to sections 501, 503, and 504, states that a 
purpose of the Act is to

promote and expand employment opportunities in the 
public and private sectors for handicapped indi­
viduals and to place such individuals in employment.

None of the stated purposes of the statute refer to
promoting and expanding opportunities for the disabled
in any other specific area. Title I authorized $1.3



— 1 l —

— 6—

billion in grants to assist handicapped individuals to 
"prepare for and engage in gainful employment to the 
extent of their capabilities". 87 Stat. 363. Title II 
provides funds for research and training regarding the 
rehabilitation of the disabled. Having authorized more 
than a billion dollars to assist the disabled to return 
to the work force, it would have been "odd indeed" if 
Congress had condoned in section 504 the very type of 
employment discrimination in federally assisted programs 
which would have frustrated that vital and costly 
program. Scanlon v. Atascadero State Hospital, 677 F.2d 
1271, 1274 (9th Cir. 1982)(Ferguson, J., dissenting).
To hold section 503 largely inapplicable to employment 
discrimination would be like holding Title IX inapplic­
able to the exclusion to female students from federally 
funded programs of study.

The legislative history of the 1973 Act fully 
supports HEW's construction of section 504. The bill 
passed by the House and the measures intially proposed in 
the Senate contained no anti-discrimination provision? 
section 504 was drafted by the Senate Subcommittee on

/ 87 Stat. 357 (1973)



the Handicapped after extensive hearings in May and June 
1972. Virtually the only form of intentional discrimina­
tion against the disabled which was disclosed at the 
Senate hearings was discrimination in employment. One 
study, based on the experience of the President's Committee 
on Employment of the Handicapped, concluded:

[T]he disabled face all the obstacles to the able 
bodied and a myriad of special ones caused by their 
handicap.... The stigma associated with disability 
... hurts the job seeking individual. An employer 
who does not feel comfortable around a disabled 
person will not be inclined to hire the handicapped. 
[C]ertain disabilities, among them epilepsy, and 
mental illness, carry more stigma than others, but 
employers react negatively in many cases to 
any type of disability.... Initially sympathetic 
employers may also be scared away by the fear 
that their insurance rates will rise if they hire 
the handicapped ... [although] the safety record of 
the disabled worker on the job is 8% better than 
that of the average worker.... Another barrier to 
employment of the handicapped is the stereotype that 
exists about their job capabilities. Too often 
they are seen as workers who can only perform menial 
tasks. They are regarded as suitable sign painters 
... but not as competent white-collar workers.__/

Employment discrimination was a frequent focus of Senate

_/ Hearings on the Rehabilitation Act of 1972 before
the Subcommittee on the Handicapped of the Senate 
Committee on Labor and Public Welfare, 92nd Cong., 2d 
Sess., pp. 534-536 (1972 (hereinafter cited as "1972 
Senate Hearings"); see also jld. at 1361-62 (employment 
discrimination against the deaf).



—  4 " 3 -

discussion during the year when section 504 was drafted. 
In February of that year Senator Williams, who later 
cosponsored the bill containing section 504 and who 
chaired the Committee on Labor and Public Welfare which 
reported it to the Senate, placed in the Congressional 
Record a series of letters descriving in graphic detail 
the employment discrimination suffered by the disabled.

/ 118 Cong. Rec. 525 (remarks of Sen. Humphrey)
T"Millions of young persons and adults who want to 
learn a trade, work like other people, and establish 
their self-worth through a paycheck, are barred ... from 
countless jobs they could do well."), 3321 (remarks of 
Sen. Williams)("Too many of our handicapped population 
are misdiagnosed, mislabled, and hustled out ... jobs 
...."), 9495 (remarks of Senator Humphrey)(victims of 
discrimination against the handicapped include individuals 
"who can and want to learn a trade and experience the 
dignity of work and a paycheck."), 19435 (remarks of Sen. 
Williams)(placing in record student essay on the employ­
ment problems of the disabled); 33319 (remarks of Sen.
Dole)("Too many employers are still reluctant to hire 
the handicapped and look first to disabilities rather 
than the skills and talents the handicapped possess.");
36761 (remarks of Sen. Mondale)(placing in the record 
article entitled "Handicapped Tell of Discrimination in 
Finding Jobs and Getting Insurance")(1972).
_/ 118 Cong. Rec. 3324 (letter of Robert L. Bennett)
("Quite possibly the greatest handicap a handicapped 
person has is being disqualified for work solely because 
he is somethat different.... I am an epileptic who was 
refused employment by the Post Office"), 3325 (letter of 
Charles Bright)("In 1921 I had Polio which paralyzed me
from the waist down__ To day, with the use of a brace
on my right leg and a cane, I do quite well.... I found 
myself with an almost insurmountable problem —  that
of finding a job___  I have had more doors closed in my
face, because I was ... handicapped than I care to 
remember"), 3327 (letter of Mrs. JoAnn Marshall) ("Generally

[ / continued on next page]



- 4 V -

Williams noted that the unemployment rate was 52%
among paraplegics, 66% among the blind, and 75% among
epileptics. The Senate report accompanying the
Rehabilitation Act explained, in a passage reiterated

_ /during the Senate debate, that the hearings had 
revealed "a lack of action in areas related to rehabili­
tation which limit a handicapped individual's ability to 
function in society, e.g., employment discrimination...."
S. Rep. No. 93-318, 93rd Cong., 1st Sess., p. 3 (1973)(?).

_/During the 1973 debates both Senator Cranston, the

_/ continued
... handicapped people are the last hired and the first 
fired.... My husband, a paraplegic has ... been told 
'you can't do it' for so long that if it weren't for his 
tremendous belief in himself and his ability he would 
have been beaten long ago"), (letter of David Zeise)("I 
had a 3.5 average, a good record, and excellent recommen­
dations from my teachers. Nevertheless, I've been 
having a difficult time finding employment because of my 
poor vision"); (letter of Max Feintuch)("How does a man 
gain recognition when he isn't given a chance to show 
what he can do?... [My son's] physical condition 
always stands in the way of an appointment despite his 
superior skill and qualifications").
_/ 118 Cong. Rec. 3321.
_/ 119 Cong. Rec. 24566 (1973) (remarks of Sen. Cranston).
_/ 119 Cong. Rec. 5882.



_/floor manager of the bill, and Senator Stafford, a 
cosponsor and the ranking minority member of the sub­
committee which drafted it, referred to evidence 
of "unfounded discrimiantion in employment" which had 
been presented at the subcommittee hearings.

Senator Randolph, introducing the committee bill, 
noted that its overall goal was to "provide a bright, 
new beginning on the road to meeting the goal of self-

_/sufficiency ... for millions of handicapped Americans." 
Senator Taft explained:

The basic purpose of vocational rehabilitation 
continues to be to help physically and mentally 
handicapped individuals achieve the ability to 
work, earn, and live independently in their com­
munity..... Too many handicapped Americans ...
lack jobs and too many are underemployed —  utilized 
in capacities well below the levels of their training, 
education and ability. __/

Senator Cranston noted that the federal vocational
rehabilitation efforts were being frustrated by employment
discrimination against the disabled:

Despite efforts on the part of ... personnel of the 
vocational rehabilitation programs, discrimination 
in placement, hiring and advancement continue 
to limit the vocational rehabilitation program's

_/ 119 Cong. Rec. 5893.
_/ 118 Cong. Rec. 30680; see also _id. at 30681 (remarks
of Sen. Cranston)("The program which is authorized by 
the legislation will provide ... a true opportunity for 
[handicapped] individuals to enter or reenter society on 
a competitive basis....")
/ 119 Cong. Rec. 24587.



ability to effect successful rehabilitations....
The expenditure of money on vocational rehabilita­
tion programs is not well spent if we do not at the 
same time take meaningful steps to ... provide 
substantial accomplishments in employment for 
handicapped individuals. _/

_/ _/Senators Javits and Taft expressed similar concerns.
In light of the importance of eliminating employment 

discrimination against the disabled, it is hardly 
surprising that several sponsors of the 1973 Act explained 
that that was the precise purpose of section 504.
Senator Williams noted that the act contained "prohibi­
tions againt discrimination in employment in programs

_/assisted with federal funds...." Senator Javits

_/ 119 Cong. Rec. ______ .
_/ 119 Cong. Rec. 5898 ("During hearings on H.R. 8395,
it became patently obvious that revision of the existing 
Federal-State programs for rehabilitation of handicapped 
indiviudals would not solve all of the problem of 
handicapped individuals particularly in terms of employ­
ment. Several additional provisions within H.R.
8395 ... dealt directly with these problems.... [T]he 
bill ... prohibits discrimination against handicapped 
individuals in any program or activity receiving federal 
assistance.")
_/ 119 Cong. Rec. 24587 ("[I]f we are to assure that
all handicapped persons may participate fully in the 
rewards made possible by the vocational rehabilitation 
program, we must devote more of our energy toward the 
elimination of the most disgraceful barrier of all —  
discrimination.")
/ 119 Cong. Rec. 24588.



- i 7 -

• 9explained that among the portions of the bill addressing 
"special federal responsibilities" were "provisions for
encouraging hiring of the handicapped under federal

_/contracts and under federal grants." Senator 
Cranston repeatedly asserted that the Act "deal[t] 
comprehensively with problems such as discrimination in 
... federal grants ... problems which ... have a profound 
effect on the provision of relevant and effective

J[rehabilitation] services."
Between September, 1972, when it was first drated,

and September, 1973, when it was signed into law,
section 504 was referred to seven times in three com-

_/mittee reports and in fifteen instances during
_/House and Senate debates. On not a single occasion

_/ 118 Cong. Rec. 32305.
_/ 119 Cong. Rec. 5862 (emphasis added); see also id.
at 24569.
_/ S. Rep. Nov. 1135, 92d Cong. 2d Sess., 3, 9, 49, 77 
(1972): S. Rep. No. 93-318, 93rd Cong., 1st Sess., pp.
(2123), (2143) (1973) H. Conf. Rep. 92-1581, 92nd Cong.,
2d Sess., ______  reprinted in 118 Cong. Rec. 35163.
_/ 118 Cong. Rec. 30681, 30682 (two references), 30683
(remarks of Sen. Williams), 32280 (remarks of Sen.
Cranston), 32281 (remarks of Sen. Cranston), 32305 
(remarks of Sen. Javits), 32310 (remarks of Sen. Humphrey), 
32613 (remarks of Sen. Cranston); 119 Cong. Rec. 5862 
(remarks of Sen. Cranston), 5898 (remarks of Sen. Williams), 
24569 (remarks of Sen. Cranston), 24587 (remarks of Sen. 
Randolph), 24588 (remarks of Sen. Williams), 24589 
(remarks of Sen. Dole).



is there the slightest indication that any member of 
Congress understood or intended section 504 to have a 
scope narrower than its broad literal meaning. On not a 
single occasion is there any reference to section 605 of 
Title VI or to federal programs whose "primary objective 
... is to provide employment." The draftsmen of section 
504 could hardly have been more emphatic in explaining 
their preoccupation with employment discrimination, and 
a member of Congress who read section 503, reviewed 
the relevant reports, and listened to the debates, 
could only have concluded that it was to employment 
discrimination above all that section 504 was to apply.

(3) The Rehabilitation Act Amendments of 1974
In 1974 Congress acted to resolve a problem created 

by the definition of "handicapped individual" in section 
7(b) of the 1973 Act. That definition had been placed in 
the 1973 Act to delineate the individuals entitled to 
rehabilitation services, and was utilized unchanged to
define those protected by section 504. See p. ____,
supra. Read literally section 7(b) would have 
restricted the protection of section 504 to employable



— M —

handicapped individuals in need of rehabilitation; the
unemployable disabled would not have been protected from
discrimination in education or housing, and employable
handicapped persons who did not need rehabilitation or
who had already received such assistance could have
been denied jobs solely because of their disabilities.
Section 111(a) of the 1974 amendments broadened the
language of section 7(b) so as to preclude either form

_ /of discrimination.
The legislative history of this amendment makes 

clear that Congress intended the amended law to include 
and broaden protection against any employment discrim­
ination by federal grantees. The Senate report explained

It was clearly the intent of the Congress 
in adopting section 503 (affirmative action) 
and section 504 (nondiscrimination) that the

__/ 88 Stat. 1619. The Amendment added to section
7(6) the following language;

"For the purposes of titles IV and V of this Act 
such term means any persons who (A) has a physical 
or mental impairment which substantially limits 
one or more of such person's major life activities, 
(B) has a record of such an impairment, or (C) is 
regarded as having such an impairment."



term "handicapped individuals" in those sections 
was not to be narrowly limited to employment ...
[A] test of discrimination against a handicapped 
individual under section 504 should not be 
couched ... in terms of whether . .. such individ­
ual can reasonably be expected to benefit, in 
terms of employment, from vocational services 
.... Section 504 was enacted to prevent discrim­
ination against all handicapped individuals, re­
gardless of their need for, or ability to benefit 
from, vocational rehabilitation services, in 
relation to Federal assistance .... ../

Restricting the protection of employable handicapped
individuals to those who could benefit from vocational
rehabilitation, the report noted, "makes little sense
when applied to ... section ... 504 nondiscrimination

_ /programs and provisions. Senator Stafford reiterated
the argument made in 1973 regarding the relationship 
between rehabilitation programs and nondiscrimination 
in employment:

[I]t will do this country little good to 
invest money in the training of handicapped 
individuals so that they may be employable 
if we cannot provide sufficient job oppor­
tunities to those job applicants.__/

Senator Cranston, the floor manager of the bill, 
explained that the new definition was "meant to in­
clude a broader group of handicapped persons who suffer

__/ S.Rep. Nov. 93-1297, 93rd Cong. 2d Sess., 37-38 (1974)
(emphasis added).
__/ Id. at 64.
_/ 120 Cong. Rec. 30532 (1974).



— +6—

from discrimination practices, and participation in
certain services and programs even though their

_ /handicap may not effect job performance."
The recently promulgated HEW regulations, which 

forbad employment discrimination without regard to the 
"primary objective" of the federal assistance, were also
the subject of coment. See p._____ , supra. The Senate
report noted that HEW, in drafting its regulations, had 
worked closely with the relevant House and Senate 
Committees in a "generally useful and satisfactory" 
manner, "to ensure that implemenation of the provisions 
of the Act would be accomplished in accordance wtih the 
intent of Congress." The resulting regulations were "in 
most respects reflective of underlying congressional 
intent," except where, as in the case of section 7(b),
"clarifying and perfecting changes in the Act" were

_ /needed. Senator Cranston expressed identical
_ /views on the floor of the Senate. This approval

of HEW's regulations was expressed within a year of

_/ 120 Cong. Rec. 30532.
_/ S.Rep. No. 93-1297, 93rd Cong. 2d Sess., 25 (1974).
_/ 120 Cong. Rec. 30530.



- 6 S l -

4̂ ?— a-

the adoption of section 504 by the same committee 
which had drafted and the same Congerss which had 
enacted that provision.

Petitioner asserts that the Senate report "noted
that Section 504 was to be interpreted ... in pari
materia with Title VI." Brief for Petitioner, p. 17.
But the passage relied on by petitioner refers, not to
Title VI as a whole, but only to section 601 of the 1964
Civil Rights Act, and mentions to Title IX as well

Section 504 of was patterned after, and is 
almost identical to, the antidiscrimination 
language of section 601 of the Civil Rights 
Act of 1964, 42 U.S.C. 2000d-1 (relating to 
race, color, or national origin), and section 
901 of the Education Amendments of 1972, 20 
U.S.C. 1681 (relating to sex).__/

To the extent that any conclusion can be drawn from this
statement, it supports a broad literal reading of section
504. Section 901 has already held by this Court to be
fully applicable to employment discrimination, North Haven
Board of Education v. Bell, ___ U.S. ___ (1982), while
the scope of section 601 is at best unclear. ___ U.S.
___, 72 L.Ed.2d at 313 n.20. More importantly, North Haven

/ S .Rep. No. 93-1297, 39.



-  ^ 3  -

—

expressly disapproves construing one statute by resort to
the legislative history of another provision after which it
may have been patterned. "It is Congress' intention in"
1973, "not in 1964, that is of significance in interpreting"
section 504. ___ U.S. ___, 72 L.Ed.2d at 313. Half of the
spokesmen quoted by petitioner from the 1964 debates were
not in congress nine years later, a majority of the
subcommittee which drafted section 504, including Senator

_ /Cranston, were not in Congress nine years earlier,
and it seems unlikely that any member of the 93rd Congress
would have recalled details of the lengthy debates which had
occurred in 1964. Speculation about the content of any such
dim and unspoken memories cannot outweight the explicit and
repeated references to employment discrimination during

_ /the debates on section 504.

__/ Brief for Petitioner, pp. 11-13 (Representative Celler,
Attorney General Kennedy).
__/ Cranston, Mondale, Hathaway, Taft, Schweiker, Beall, Jr.
__/ Inn 1975 the Senate adopted, as part of the Education
for All Handicapped Children Act, PL 94-142, a provision 
requiring the recipients of assistance under that statute 
to take affirmative action to employ and promote qualified 
handicapped individuals. A House-Senate conference committee 
deleted this provision with the following explanation:

"The conferees deleted the language in the Senate 
bill making financial assistance conditional upon 
... asssurances [of affirmative action] because



/ (continued)
section 504 of the Rehabilitation Act of 1973 
already establishes, as a matter of federal law, 
that no qualified handicapped individual in 
the United States shall be excluded from partici­
pation in, be denied the benefits of, or be sub­
jected to discrimination under any program or 
activity receiving Federal Financial assistance.
It is clear that qualified handicapped individuals 
who, because of their handicap, are refused em­
ployment by recipients of assistance under the 
Act are fully covered by the prohibition in 
section 504 of the Rehabilitation Act of 1973."

S. Conf. Rep. 94-455, 94th Cong., 
(emphasis added)

1st Sess., 54 (1975).



_ _  u ~ -

(4) Rehabilitation Amendments Of 1978
Petitioner's central contention, and the theme of Trageser

and its progeny, is that Congress, by enacting in 1978 section
505(a)(2) of the Rehabilitation Act, limited the application of
section 504 to employment discrimination in federal programs
whose primary objective is to provide employment.

The Congress which enacted section 505(a)(2) was familiar
to an unusual degree with HEW's construction of Section 504 and
had been instrumental in prompting HEW to formulate and issue
the regulations embodying those views. In 1974 the Senate

_ /Subcommittee on the Handicapped urged HEW to promulgate 
such regulations. In February, 1976, that subcommittee labled
as "unconscionable" the delay in the issuance of detailed

_ /  _ /AfegsOibbommstted hekedn^EW whfehafeuehmeegakfchiMembwosldfbe proposed.
_/Congress and other witnesses pressed HEW to move forward 

with the regulations. In May, 1976, HEW made public its proposed 
regulations, explicitly emphasizing in its introduction that 
section 504's coverage of employment discrimination was broader 
than that of Title VI. See pp , supra. In January, 1977,

__/ S. Rep. No. 93-1297, pp 39-40.
__/ 1976 Senate Hearings, pp 347-48.
_/ 1976 Senate Hearings 323 (testimony of Rep. Dodd),
1502 (statement of Sen. Williams), 1511 (statement of 
Sen. Williams).
_/ 1976 Senate Hearings 23, 69, 278, 491, 501, 555,
604-06, 1006.

Cs z-i]
— 1—



HEW Secretary Matthews forwarded those proposed regulations to
Congress with a letter expressing the Department's desire "to
lay its interpretation before the Congress so that it can provide

_/whatever clarification is appropriate". In April of 1977
Joseph Califano, the new Secretary of HEW, wrote individually to
every member of House and Senate, again enclosing a copy of the
draft regulations, and urging that "Congress evaluate the
regulation, and the implementation process, the ensure that they

_/conform to the will of Congress." At Senate hearings in
February, 1977, Senator Culver and other witnesses urged that

_ /  'the proposed regulations be formally promulgated. The
next month the subcommittee chairman wrote Secretary Califano

_ /  ‘asking when the regulations would be finalized throughout
the spring of 1977 members of the House and Senate took the

_ /floor to call on HEW to issue the regulations . Following 
the promulgation of the HEW regulations, a House subcommittee 
conducted further hearings on the implementation of section 504, 
at which the Director of HEW's Office of Civil Rights provided a

_/detailed description of the employment discrimination provisions.

— 2—

__/ 1977 House Hearings 73.
__/ Id. at 76.
_/ Hearings on S.2600 before the Subcommittee on the Handicapped
of the Senate Committee on Human Resources, 95th Cong., 2d Sess., 
5, 1130-31, 1244, 1247, 1269-7-, 1281 (1978)(hereinafter cited as 
"1978 Senate Hearings").
__/ Id. at 1571.
_/ See pp , infra.
/ 1977 House Hearings, pp 294-95.



—  6~? -

By 1978 Congress was thus fully aware of the scope of the HEW
regulations. The central issue presented by the 1978 amendments
is whether Congress intended to drastically narrow the scope of
section 504 and to overturn one of the critical provisions of
the HEW regulations whose issuance had been sought by Congress
only a year before.

Section 505(a)(2) provides:
The remedies, procedures, and rights set forth in 
Title VI of the Civil Rights Act shall be available 
to any person aggrieved by any act or failure to act 
by any recipient of Federal assistance or Federal 
provider of such assistance under Section [504] 
of this title.

Petitioner contends that this language incorporates into section 504 
the substance of section 604 of Title VI, which precludes any "action... 
except where a primary objective of the Federal financial assistance is 
to provide employment". Petitioner further contends that by thus 
incorporating section 604 Congress precluded private as well as agency 
action to prevent or redress employment discrimination other than in 
a federal employment programs.

Petitioner's proposed construction flies in the face of the literal 
language of section 505. First, section 505 does not refer to all of 
Title VI, but only to the "remedies, procedures and rights" contained 
in that Title. Section 604 is neither a "remedy", a "right" nor a 
"procedure"; it does not provide persons aggrieved by a violation of
Title VI with any substantive entitlements, with any form of redress,

_/or with any method for obtaining that relief. Petitioner itself

_/ Black's Law Dictionary defines a "remedy" as the means employed 
to enforce a right or redress an injury. (Rev. 5th ed. 1979, p. 
1103). The term "right" generally connotes "a power, privilege 
faculty, or demand, inherent in one person and incident upon another" 
Id. at 1189. "Procedures" prescribe methods of "enforcing rights or 
obtaining redress for their invasion". Id. at 1083. The provisions 
of section 604 obviously fit none of thse definitions.



_  ^  -

never describes section 604 as a right, remedy, or procedure, but
consistently and accurately refers to it instead as a "limitation"
_ /  _ /or "restriction" . Had Congress intended to incorporate
into sections 504 and 505 all of Title VII, the restrictions as well
as the rights, it could and would have said so. Second, the Title VI
machinery referred to by section 505(a)(2) is not made the exclusive
method of redress open to an aggrieved individual. Section 505(a)(2)
is merely permissive, it provides that the Title VI rights, remedies
and procedures "shall be available", but does not forbid resort to
other rights, remedies or procedures. Far from "evincing an intent

_ /to require identical enforcement" of Title VI and section 504,
the words "shall be available" demonstrate an intent merely to add
Title VI enforcement methods to whatever other devices might already
be available to enforce section 504. Third, the restriction contained

_/in section 604, as petitioner itself concedes, is literally 
applicable only to action by "any department or agency", not to 
litigation brought by a private individual. Thus even if section 505 
had expressly made section 604 generally applicable to the enforcement 
of section 504, such a provision still would not affect the ability 
of the Federal Courts to afford relief in a civil action such as 
this. Petitioner suggests that such a literal reading of section 604 
would give private individuals greater enforcement authority than is

_/ Brief for Petitioner, pp 2,6,8; Petition for Writ of Certiorari,
pp 8, 10, 12.
_/ Brief for Petitioner, pp. 13, 19; Petition for Writ of Certiorari, 

pp 10, 14 n. 7.
_/ Brief for Petitioner, p. 19.
/ Brief for Petitioner, p. 9.

-  -4 -



_ /enjoyed by Federal agencies. But section 505 does not limit 
agency enforcement either, not merely because section 604 is not a 
right, remedy and procedure and because section 505 makes Title VI 
enforcement methods "available" but not mandatory, but also because 
section 505(a)(2), which incorporates the relevant Title VI provisions 
itself applies only to actions by aggrieved "persons". Thus, the 
limitation contained in section 604 is inapplicable to private parties 
because of the literal language of section 604, and inapplicable to 
federal agencies because of the literal language of section 505(a)(2) 

If section 505(a)(2) had the meaning urged by petitioner, it 
would have legalized employment discrimination against the handicapped 
in literally millions of jobs where it had been forbidden from 1973 
through 1978. Such an implied partial repeal of section 504 is not 
to be inferred in the absence of unequivocal statutory language.
Morton v. Mancari, 417 U.S. 535, 549-51 (1974). Other aspects of the 
1978 amendments militate strongly against such a construction of 
section 505(a)(2). Section 505 itself is entitled "Remedies and 
Attorneys' Fees," 92 Stat. 2982, a title which clearly indicates the 
author's belief that they were assisting the implementation, not 
narrowing the substantive scope, of section 504. The provision for 
counsel fees contained in Section 505(b) signals a general congression 
al intent to facilitate rather than impede private enforcement of 
section 504. The programs authorized by the 1978 amendments confirmed 
the priority Congress continued to attach to the employment of 
handicapped individuals. Section 101 authorized over $3.7 billion 
over four years for vocational rehabiliation programs, programs which 
would be directly frustrated by employment discrimination against the

/ Id. at p. 10.



-  7 4 -

£-

disabled. Title VI, the Employment Opportunities for Handicapped 
Individuals Act, authorized $260 million in funds for state and local 
governments to provide "useful opportunities in community service 
activities for handicapped individuals." 92 Stat. 2989-95. It is 
inconceivable that Congress would in the same statute have committed 
billions of dollars in aid to rehabilitate and provide jobs for the 
disabled and yet simultaneously have legalized discrimination against 
that very disadvantaged group by the recipients of other Federal 
grants.

The report of the Senate Committee which drafted section 505(a)(2)
explained that, far from restricting the scope of 504, it was "designed
to enhance the ability of handicapped individuals to assure compliance

_/with the Civil Rights Provisions of Title V ..." The report made
clear that the phrase "procedures, remedies and rights set forth on
Title VI" referred to the administrative rules which had been issued
by HEW for implementing Title VI.

It is the committee's understanding that the regulations 
promulgated by the Department of Health, Education and 
Welfare with respect to procedures, remedies, and rights 
under Section 504 conform with those promulgated under 
Title VI. Thus, this amendment codifies existing practice 
as a specific statutory requirement.__/

/ S. Rep. Nov. 95-890, 95th Cong, 2d Sess., 18 (1978).
/ Id. 19.



- 7 '  -

That understanding was entirely accurate. HEW’s section 504 regulations
themselves contained no procedural provisions; section 84.61 provided:

The procedural provisions applicable to Title VI of the 
Civil Rights Act of 1964 apply to this part. These 
procedures are found in § 80.6-80.10 and Part 81 of this 
Title.__/

The cited Title VI regulations, which the commentary accompanying
_ /section 504 described as "complaint and enforcement procedures" , 

concerned compliance reports, the conduct of investigations, methods 
for bringing about compliance, and the conduct of administrative hearings. 
See 42 Fed. Reg. 22695-701. The procedural regulations incorporated by 
reference into the section 504 regulations, and reprinted with them in 
the Federal Register, did not, however, include section 80.3 of the Title VI 
regulations, which define the "Discrimination Prohibited" by Title VI 
and limited its application to employment discrimination in federal 
employment programs. 45 C.F.R. § 80.3 (c). Thus when the Senate report 
asserted that the "procedures, rights and remedies "under the section 504 
regulations "conform with those...under Title VI", it was referring to 
the incorporation by reference into section 84.61 of the procedural 
provisions of the Title VI regulations. The Senate committee did not, 
as petitioner suggests, "overlook the differences between the HEW 
regulations... under Title IV and Section 504... with respect to em-

-  7 - -

__/ 42 Fed. Reg. 22685 (1977). HEW had earlier declared its intent
to incorporate by reference into Section 504 the Title VI procedural 
regulations. 41 Fed. Reg. 29548 (1976).

/ 42 Fed. Reg. 22694 (1977).



-7o3 -

ployment practices." Brief for Petitioner, p. 21. Rather, 
it was the identical Title VI and Section 504 procedural regula­
tions, not then differing substantive provisions, to which the 
words "procedures, rights and remedies" in both the Senate rpeort 
and Section 505(a)(2) refer.

Petitioner's suggestion that Congress intended Section 
505(a)(2) to radically reduce the protection afforded handicapped
workers is inconsistent with the continued concern about employment

_/discrimination activated during the Senate debates.
Proponents of the bill repeatedly described Section 504 as
protecting against employment discrimination by any federal

_/ .  .grantee. In opposing an amendment that would have limited
the extent to which alcoholics and drug abusers were protected by
Section 504, Senators Williams and Hathaway quoted a 1977 opinion
of the Attorney General that:

[SJection 504 does not mean that such a person must
be hired...in a Federally assisted program if the

manifestations of his condition prevent him from
effectively performing the job in question...but... Section 504
does in general prohibit discrimination against alcoholics and
drug addicts in Federally assisted programs solely because of

_/their status as such.

— 8—

124 Cong. Rec. 30304 (remarks of Sen. Randolph) (One 
of the areas where handicapped Americans have been subjected to 
unconscionable discrimination...has been in the area of 
employment), 30325 (remarks of Sen. Hathaway) ("There is ample 
evidence that addicts and alcoholics are subject to discrimina­
tion in access to...employment")
_/ 124 Cong. Rec. 30323 (remarks of Sen. Williams),
30324-5 (remarks of Sen. Hathaway). Williams also quoted an 
opinion by the Secretary of HEW that "an alcoholic or drug addict 
may not be...disqualified from employment solely because of his 
condition..." Id. at 30323.



—  7-5 -

s-

In arguing against a proposal that would have narrowed the 
circumstances under which courts could grant injunctive relief 
to redress employment discrimination by the Federal government, 
Senator Cranston asserted:

I believe that the requirement with respect to Federal 
contractors and grantees should be no less stringent that 
the requirements attached to the Federal Government. The 
amendment would create an unwise and unrealistic distinc­
tion with respect of employment between the obl-igations 
of the Federal Government and the obligations of Federal 
contractors and grantees...[T]he... amendment would 
limit... the Federal Government's obligation of being an 
equal opportunity employer. Federal contractors and 
grantees would appropriately continue to be required to 
be equal opportunity employers. Rather than a leader in 
this field, the Federal Government would become a distant 
also-ran requiring more of its grantees and contractors 
than it would be willing to require of itself. __/

This argument would simply have made no sense if, as petitioner
suggests, section 504 did not apply to the employment practices
of most federal grantees.

The sponsors and proponents of the Senate bill repeatedly 
assured their colleagues that the purpose and effect of the 
legislation were to expand the opportunities for the disabled. 
Senator Randolph, the floor manager, opened the debate by 
asserting that " [a]11 of the provisions of this bill... not 
only provide opportunities to handicapped Americans to aspire 
to certain goals but also provide the means by which they can

/ 124 Cong. Rec. 30577-7 
/ 124 Cong. Rec. 30303.



- 7 < f

--fO—
_ /reach those goals." Senator Javits announced that the

bill would "properly expand structurs currently in place to
_ /protect the rights of [disabled citizens]." And Senator
2/Cranston, the author of section 505(a)(2) explained in

a direct reference to that section that " [p]rovisions in the
... bill such as...certain application of appropriate Civil
Rights remedies...should be important steps in our continuing
efforts toward full participation in society by handicapped 

3 /Americans."
The discussion of the HEW regulations by the Congress 

which enacted the 1978 Amendments are entitely inconsistent 
with any intent to overturn section 84.11. In the spring of 
1977, when the draft section 504 regulations containing 
section 84.11 were awaiting final action, members of both the 
House and Senate repeatedly took the floor to urge HEW to 
approve them as written. Representative Koch deplored Secre­
tary Califano's lack of commitment to signing the regulations

_ / 124 Cong. Rec. 30303.
L S 124 Cong. Rec. 30313.
_2 / 124 Cong. Rec. 30346-47.

_3/Sen.
124 Cong. 
Randolph)

Rec.
(bill

37509; see also _id. at 
"affirms not only the

30303 (remarks of 
rights of these

severely and profoundly handicapped individuals but also 
strengths the rights and protections of all citizens"), 30337 
(remarks of Sen. Dole)(bill "provides a host of opportunities 
for the handicapped"), 30349 (remarks of Sen. Cranston)(bill 
"promises a major step forward in our continuing efforts to 
assist handicapped individuals") 37506 (remarks of Sen. 
Stafford)(bill "will significantly enhance the opportunities 
for handicapped individuals") 37508 (remarks of Sen. Hathaway) 
(bill will "renew our national commitment to help these 
individuals help themselves").



—  7^s'—

44

_!/in their current form". Congressman Dodd expressed
concern about possible changes in the draft, insisting "these

2/regulations must not be weakened". Senator Cranston
called for the "prompt and effective implementation" of the
regulations and wrote to Secretary Califano urging that the
draft "be considered presumptively valid" and expressing

3/opposition to any changes tht might weaken them. Those 
pressing for issuance of the final regulations repeatedly 
stressed the need for protection against employment discrimina­
tion. Congressman Koch insisted tht thos ehandicapped indi­
viduals who, like himself, favored promoulgation of the 
regulations

are simply remanding the right to participate as 
equals for opportunities for jobs they are capable 
of doing. They want no special consideration in 
employment, but simply the right to apply and not 
be rejected on the basis of their handicapp. 
when the handicap is not job related. _4/

The final promoulgation of those regulations by HEW was
greeted with virtually unanimous praise by the Congress, with
many speakers again referring to the problem of employment

1/ 123 Cong. Rec. •

2/ 123 Cong. Rec. 10455.
J7 123 Cong. Rec. 10823.
4/ 123 Cong. Rec. 12410.



- 7 6  -

discrimination. The only concerns expressed about
the regulations focused on whether the federal government

_ /should bear a share of the financial cost of compliance.
If, as petitioner urges, Congress intended section 505(a)(2) 

to incorporate section 604 of the 1964 Civil Rights Act, to 
override the well-know HEW regulations regarding employment 
discrimination, that intent was carried out through a conspiracy 
of silence. Nowhere in over 3000 pages of hearings, 4 committee 
reports, or two years of debate is there a reference to section 
604. Not a single witness, Congressman or Senator ever voiced 
the slightest objection to the HEW regulations, or suggested that

_/ 123 Cong. Rec. 10455; see also i^. at 10292 (remarks of
Rep. Koch) ("Delays in implementing Section 504 have been 
cited as contributing to the consistently high rate of, 
employment among disabled persons..."), 10822 (remarks of Rep.
Dodd)(this disabled "most not be forced to wait any longer 
before they are allowed to enjoy the same rights to a job...that 
the rest of our citizens have."), 12216 (remarks of Sen.
Humphrey)(disabled regard Section 504 as "other charter for 
fair employment in jobs for which they qualify").
_/ 123 Cong. Rec. 12760 (remarks of Sen Randolph), 13342 (remarks
of Sen. Cranston), 13515 (remarks of Sen. Humphrey), 13635 
(remarks of Rep. Brodhead), 14133 (remarks of Rep. Koch), 14552 
(remarks of Sen. Haskell).
_/ 123 Cong. Rec. 17546-8 (remarks of Rep. Jeffords), 19051-52
(remarks of Rep. Jeffords), 32618 (remarks of Rep. O'Brien).
Neither Jeffords nor O'Brien voiced any objection to the substance 
of the regulations. Jeffords condemned discrimination against 
the handicapped "based upon centuries of false stereotypes and 
distorted images", 123 Cong. Rec. 17548, but explained "If we in 
the Congress believe that discrimination against the handicapped 
is wrong, and I do, and he Federal Government is going to direct 
hoe to end the problem, then the Federal Government has an obliga­
tion to put its money where its mouth— and regulations—  is 
and pay at leat part if not all the costs to carry it out." 123 
Cong. Rec. 9051.



fewer federal grantess would be forbidden to discriminate on the
basis of handicap. Nothing in the reports or debates could have
alerted the House or Senate to the possibility that the 1978
amendments would reduce the protections and remedies which for
vfive years had been available to the disabled. If the authors of
section 505(a)(2) intended to overturn the HEW regulations and
partially repeal section 504, theirs was a plan that was never
articulated to solve a problem that had never been mentioned
through a change that was never revealed to any of their colleagues.
n[I[n light of the great emphasis which the Act places upon
securing employment opportrunities for handicapped invidiuals, it
is remarkable to attribute to Congress a desire to gut this
protection by such a deft, unheralded maneuver." Hart v. County

_ /of Alamade, 405 F. Supp. 66, 72 (N.D. Cal. 1979)

_/ Because of its view of section 504, the Court of Appeals did
not have occasion to decide whether providing employment was "a 
primary objective" of any of the programs under which petitioner 
has received federal assistance. Should this Court hold that 
section 504 only applies to employment discrimination in programs 
iwth that objective, it should remand this case to the Court of 
Appeals for consideration of whether such programs were involved 
in this case.



IV. THE DISCRIMINATION ALLEGED IN THIS CASE CONSTITUTED
"DISCRIMINATION UNDER [A] PROGRAM OR ACTIVITY RECEIVING
FEDERAL ASSISTANCE" WITHIN THE MEANING OF SECTION
504
Section 504, in language identical to that in Title VI 

and Title IX, provides that no person may on an impermissible 
basis "be excluded from the participation in, be denied the 
benefits of, or be subjected to discrimination under any 
program or activity receiving federal financial assistance

Although the terms of these prohibitions are similar, 
Titles VI and IX contain restrictions on its enforcement 
which are not found in section 504. Under Titles VI and IX 
the termination of funds is limited "in its effect to the 
particular program, or part thereof, in which noncompliance
has been found," 42 U.S.C. §§ ____, ____ , and agencies are
only authorized to promulgate regulations regarding discrim­
ination in the particular programs or activities for which
they provide assistance. 42 U.S.C. §§ ____, ____ . These
restrictions, however, do not apply to other remedies under 
titles VI and IX, and do not limit agency enforcement of 
section 504.

In North Haven Board of Education v. Bell, this Court, 
while noting the program-specific nature of Title IX, did
not attempt to define "program." ____ U.S. at ____, 72 L.Ed.
2d at 319. We do not here attempt to offer a comprehensive 
explication of the "program or activity" language of section 
504. The experience of the lower courts in applying section 
504, Title VI and Title IX demonstrates that federal funds 
benefit individuals, and discrimination may injure them, in 
a wide variety of ways and circumstances. We believe the 
Court should not attempt to define in a single opinion the



legal status of each of these situations, and urge instead 
that the explication of the "program or activity" language 
proceed on a case by case basis.

Petitioner Conrail was established pursuant Regional 
Rail Reorganization Act of 1973, 45 U.S.C. § 701 et seq. In 
light of the bankruptcy of eight major railroads, and the 
possibility of termination of the rail service which they 
provided, Congress directed the reorganization of the rail­
roads into a single system operated by a federally chartered 
corporation. Regional Rail Reorganization Cases, 419 U.S. 
102, 108-117 (1974). Because of the financial condition of 
the railroads to be merged into this system, Congress 
recognized that a substantial infusion of federal funds 
would be required. Under section 216 of the act, 45 U.S.C.
§ 726, Conrail has received $3.28 billion, which may be used 
for the modernization of rail properties, for the acquisition 
of equipment, for the refinancing of indebtedness, or as 
working capital. 45 U.S.C. § 726(b)(1). Under Title V of 
the act, 45 U.S.C. § 797 et seq., Conrail has received $317.8 
million in federal aid to assist workers adversely affected 
by the consolidation of the rail lines. Title V funds can 
be utilized by Conrail to retrain or move workers, and to 
pay allowances to unemployed or terminated employees. The 
total amount received by Conrail under the Rail Act, over 
three and one half billion dollars exceeds the sum of ail 
federal aid received by many states and most cities in recent 
years.

We maintain that Conrail's refusal to employ LeStrange 
meets section 504's "program or activity" requirement for



several distinct reasons. First, we urge that the term
"program" includes the particular activities which the
recipient actually seeks and obtains federal funds to engage
in. It is not, however, necessary that these activities be
wholly funded by the federal government; section 504 speaks
of federal "assistance", not of exclusively federal support.
Section 27.9(a) of the DOT regulations requires:

Each application for Federal financial assistance 
to carry out a program ... shall, as a condition 
to approval... be accompanied by, written assurance 
that the program will be conducted ... incompliance 
with all the requirements imposed by ... this part.
49 C.F.R. § 27.9(a) (emphasis added).

The earlier HEW section 504 and Title VI regulations are 
similar. 45 C.F.R. §§ 80.4(a)(1), 85.5(a). The protection 
afforded by this assurance extends to the entire program of 
activities for which federal funds are to be provided.

Employment of engineers such as LeStrange was clearly 
among the functions for which federal assistance was sought 
and given by Conrail. Any or all of the $3.28 billion in 
section 216 funds could be used as working capital to meet 
ordinary Conrail business expenses; $631 million were ac­
tually applied for such purposes. A-17. Petitioner, however 
suggests that section 504 requires proof that "the position 
for which LeStrange applied was funded with federal money.... 
But neither the applicable regulations nor the statutory 
language support such a narrow construction of section 504; 
that provision is "program-specific" not "job-specific." It 
petitioner is correct section 504 would apply only to those 
employees whom the recipient chose to pay with federal funds. 
Were that the case Conrail's accountants, not federal law,

/ Brief for Petitioner, p. 25; see also id. at 26.



would determine who was protected by section 504 and Conrail 
could evade completely the commands of section 504 merely by 
using non-federal funds for any job slot from which it intended 
to exclude a handicapped worker. Such a construction of the 
law

would allow major institutions receiving substantial 
amounts of federal aid to dissect themselves, at 
whim, into discrete entities, to allocate federal 
dollars into programs which cannot discriminate against 
handicapped persons, and to free privately obtained 
funds from those programs and instead to channel 
such money into programs purportedly immune from Section 
504 strictures. Wright v. Columbia University, 520 

F. Supp. 789, 792 (E.D. Pa. 1981.J
Only by reading section 504, as do the DOT and earlier HEW 
regulations, to cover all activities for which the federal 
assistance could be used can such evasion be prevented.

Second, under both section 504 and the applicable 
regulations that protections against discrimination extend 
as far as the benefits that flow from the federal assistance. 
Section 504 applies, not only to exclusion from direct 
"participation" in the federally assisted programs, but also 
to denials of any of the "benefits" of that program. The DOT 
regulations, like the HEW regulations before it, thus construe 
section 504 to apply to any program that "receives or benefits 
from federal financial assistance."— ^ The tracing of such 
benefits will often raise complex factual issues. In this 
case, however, two distinct DOT regulations compel the con­
clusion that LeStrange was covered by section 504. First 
where federal funds are employed to acquire or improve

_/ See also United States v. City of Chicago, 549 F .2d
415, 442 (7th Cir. 1977); Haffer v. Temple University 524 
F.Supp. 531 (E.D. Pa. 1981).
_/ 49 C.F.R. § 27.7(a) (emphasis added); see also 45
C.F.R. §§ 84.4(a).



real or personal property, the nondiscrimination require­
ment applies to that property indefinitely so long as it 
continues to be "used tor the purpose for which the Federal 
financial assistance was provided or for a similar purpose." 
49 C.F.R. §§ 27.9(b)(1) and (b)(2). In the instant case 
Conrail spent over $800 million in federal funds to purchase 
railroad cars, or other equipment. A-17. It is inconceiv­
able that none of this vast acquisition was at any time used 
on the jobs where LeStrange would have worked, and Conrail 
does not claim that this occurred. Section 27.7(b)(6) of 
the DOT regulations also provides:

[T]he aid, benefit, or service provided under a 
program or activity receiving or benefitting from 
federal financial assistance includes any aid, benefit, 
or service provided in or through a facility that 
has been constructed, expanded, altered, leased or 
rented ... in whole or in part, with federal assistance.

This regulation has its roots in Simkins v. Moses H. Cone 
Memorial Hospital,— ^ which served as a model for Title 
VI, and which held all the activities of a nominally private 
hospital were "state action" because part of the hospital 
had been built with federal funds.— ^ In this case Conrail 
used $1.4 billion in federal funds for the construction 
and replacement of track. A-17. Conrail's system of con­
tiguous track and road bed constitutes a single facility 
within the meaning of the regulations. See 49 C.F.R. §
27.5. Thus even if the tracks and buildings which LeStrange 
would have used were not built or renovated by federal

/ 323 F.2d 959 (4th Cir. 1963) (en banc), cert, denied
376 U.S. 938 (1964) .
_/ See 323 F.2d at 971 (Haynsworth, J., dissenting).



- < ? 3 ,  —

funds, the use of federal aid for that purpose elsewhere in 
the system renders section 504 applicable throughout.

The benefit of federal assistance may also extend beyond 
the immediate activity for which it is expended if it in 
fact replaces funds which the recipient is thus free to 
spend on other activities. Often, of course, the federal 
aid will be used tor a program which would not have been 
operated but for that assistance, or be applied to increase 
the size or scope of some pre-existing function. In such 
cases there would be no non-federal funds released for other 
purposes. But where a plaintiff can show that one of the 
benefits of federal assistance was to displace other funds 
which the recipient was able to use elsewhere, and that the 
amount of the funds thus released for general purposes was 
not de minimis, the benefit of the federal assistance includes 
the equivalent of unrestricted grant in the amount of the 
released funds, and extends to any activities for which they 
could have been spent.— ^ Ordinarily ascertaining whether 
such funds had thus been released for general use would 
involve factual issues to be resolved in the first instance 
by the trial court. In this case, however, such an eviden­
tiary inquiry is not necessary. The $317 million in Title V 
funds were specifically intended to relieve Conrail of its 
contractual obligations under collective bargaining agreements 
in existence in 1973 to provide severance pay or other

_/ See Haffer v. Temple University 524 F.Supp. 531, 537 
(E .D . Pa. 1981); Poole v. South Plainfield Board of Education, 
490 F.Supp. 948, 951 (D.N.J. 1980); Bob Jones University v. 
Johnson, 396 F.Supp. 597, 602-03 (D.S.C. 1974), aff'd sub 
nom. Bob Jones University v. Rhodebush, 529 F .2d 514 (4th 
Cir. 1975).



benefits to employees who lost their jobs. Section 504(a) 
expressly superseded all job stabilization provisions in 
those agreements, 87 Stat. 1014, and the severance pay 
formula contained in section 505(f) was based on the formula 
that would have applied under those agreements. S. Rep. No.
93-601, 93rd Cong., 1st Sess., ____ (§ 605) (1973). Thus the
very purpose of Title V was to help meet Conrail's pre­
existing financial obligations to its employees, and thus to 
release for other uses the funds which would otherwise have 
been expended to meet those obligations.



CONCLUSION

For the above reasons the decision of the Court of
Appeals should be affirmed.

Respectfully submitted,

JOSEPH P. LENAHAN*
P.0. Box 234
Scranton Electric Building 
507 Linden Street 
Scranton, PA. 18503 
(717) 346-2097

Attorney for Respondent

*Counsel of Record