Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


1-10-2000

Freed v Consol. Rail Corp.
Precedential or Non-Precedential:

Docket 99-3191




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Recommended Citation
"Freed v Consol. Rail Corp." (2000). 2000 Decisions. Paper 3.
http://digitalcommons.law.villanova.edu/thirdcircuit_2000/3


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Filed January 10, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-3191

JANICE FREED,
       Appellant

v.

CONSOLIDATED RAIL CORPORATION

On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 98-cv-01670)
District Judge: Hon. Donetta W. Ambrose

Argued October 19, 1999

Before: SLOVITER, MANSMANN, and ROTH,
Circuit Judges,

(Filed January 10, 2000)

       Mark T. Wade
       Peirce, Raimond, Osterhout,
        Wade, Carlson & Coulter
       Pittsburgh, PA 15219

       Joseph M. Sellers (Argued)
       Suzette M. Malveaux
       Cohen, Milstein, Hausfeld & Toll
       Washington, DC 20005

        Attorneys for Appellant




       Thomas H. May (Argued)
       Dickie, McCamey & Chilcote
       Pittsburgh, PA 15222

        Attorney for Appellee

       Corbett Anderson
       McGuiness, Norris & Williams
       Washington, DC 20005

        Attorney for Amicus-Appellee
        Equal Employment Advisory
        Council

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Plaintiff Janice Freed appeals from the order dismissing
her claim against the Consolidated Rail Corporation
("Conrail") under the Rehabilitation Act for failure to
exhaust her administrative remedies. Her appeal requires
that we decide whether a plaintiff must exhaust
administrative remedies prior to bringing suit under section
504 of the Rehabilitation Act against a private recipient of
federal funds.

I.

Freed's complaint sets out the following facts, which in
the context of a motion to dismiss we must accept as true,
although we have some question about the chronology of
events. Freed began working for Conrail in 1978 in a
clerical capacity. She suffered from herniated discs, which
limited her ability to perform tasks that required bending,
lifting, and climbing. She alleges that in April of 1992 she
was "bumped" from her position at Conrail.

In late 1992 or early 1993, Freed's condition began to
stabilize to the point where she could return to work full
time albeit with limitations on standing, bending, and
lifting. Conrail recalled her to work in early 1993 but she
"was specifically told that if she had any restrictions she

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would not be permitted to return to work." App. at 8.
Apparently because she did have restrictions, Freed has
since been carried by Conrail as "disabled - prolonged
sickness." App. at 8. According to Freed, she could have
performed the job for which she was recalled with only
minimal accommodation. Conrail has never performed a
functional assessment of Freed's ability to perform her
former job or any other job, although she alleges she was
eligible for numerous vacant positions.

Before commencing this litigation, Freed was a member
of a class action certified in the Western District of
Pennsylvania. The class was certified to pursue claims for
injunctive relief under the Americans with Disabilities Act,
42 U.S.C. S 12101 et seq. (ADA), and section 504 of the
Rehabilitation Act, 29 U.S.C. S 794 (the "Act"), and included
current and former Conrail employees and applicants who
"ha[d] been denied employment . . . because of their
disabilities." App. at 22. The case was tried before the court
which found for Conrail on the merits, a decision affirmed
on appeal. See Mandichak v. Consolidated Rail Corp., 

(3d Cir. 1999) (table). The District Court vacated
its class certification order and entered judgment for
Conrail on August 20, 1998 "without prejudice to the right
of any plaintiff, or any other employee, to assert individual
claims against Conrail under the ADA [or] the
Rehabilitation Act." App. at 45.

Freed then brought this individual suit against Conrail
alleging the company had violated Title I of the ADA and
section 504 of the Rehabilitation Act. Conrail filed a motion
to dismiss asserting that both claims were barred by
Freed's failure to exhaust her administrative remedies, as
she had not filed an administrative charge with the Equal
Employment Opportunity Commission or with the
appropriate state agency before, during, or after the
maintenance of the class action. The Magistrate Judge
issued a report recommending dismissal for failure to
exhaust, and the District Court entered an order adopting
that report. This appeal followed.

Shortly before the oral argument, Freed filed a motion
under Federal Rule of Appellate Procedure 42(b) for

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voluntary dismissal of her ADA claim on appeal. 1 We
advised the parties at oral argument that we would grant
that motion, subject to our later decision on costs. We have
now entered an order granting the Rule 42(b) motion. It
follows that the sole issue remaining for disposition on
appeal is whether Freed was required to exhaust
administrative remedies prior to bringing suit under section
504 of the Rehabilitation Act.2

We have jurisdiction pursuant to 28 U.S.C. S 1291. Our
review of the District Court's order dismissing Freed's claim
under Rule 12(b)(6) is plenary. See Moore v. Tartler, 

, 685 (3d Cir. 1993).

II.

We begin by briefly discussing the pertinent sections of
the Rehabilitation Act.

Section 501 of the Act is directed specifically at
employment discrimination and requires each federal
department, agency, and instrumentality, including the
Postal Service ("federal employer"), to adopt an affirmative
action program plan for the hiring, placement and
advancement of persons with disabilities. 29 U.S.C.
S 791(b). Originally, Congress provided no private right of
action for persons aggrieved by a violation of section 501,
but in 1978 Congress added such a right. This was effected
by providing in section 505(a)(1) that "[t]he remedies,
_________________________________________________________________

1. When it first learned through the reply brief of Freed's suggestion
that
she would seek to withdraw her appeal of the judgment on the ADA
claim, Conrail objected. It argued that Freed had not filed a Rule 42(b)
motion, which she later did. It also argued that withdrawal of the ADA
claim should not be permitted because the same issue was pending in
other cases against it. We do not deem that a sufficient ground for
requiring the parties to litigate the issue in this case if plaintiff is
satisfied to proceed only on her claim under section 504 of the
Rehabilitation Act.

2. We wish to comment on the civility shown by counsel for both parties
during the oral argument to the court and to each other. It is, of course,
consistent with the standard of conduct we expect and have often
observed; we make note of it here to encourage all attorneys to do the
same.

                                4



procedures, and rights . . . [of Title VII] of the Civil Rights
Act of 1964 . . . shall be available, with respect to any
complaint" under section 501. 29 U.S.C. S 794a(a)(1). Title
VII requires plaintiffs to exhaust the administrative process
prior to bringing suit. See Trevino-Barton v. Pittsburgh Nat'l.
Bank, 

, 878 (3d Cir. 1990). Thus, persons can
sue a federal employer for injunctive relief and/or damages
for violating section 501 but are required to exhaust
administrative remedies.

Section 504 has a broader reach. It bars both federal
agencies and private entities that receive federal funding
from discriminating on the basis of disability and is not
limited to the employment context. It provides:

       No otherwise qualified individual with a disability . . .
       shall, solely by reason of his or her disability, 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 or under any program or activity conducted
       by any Executive agency or by the United States Postal
       Service.

29 U.S.C. S 794(a).
This section originally applied only to programs receiving
federal funding, but the 1978 amendments to the Act made
section 504 applicable to federal agencies and the Postal
Service. However, in contrast to the incorporation of Title
VII rights and remedies into section 501, the 1978
amendments provided in section 505(a)(2), 29 U.S.C.
S 794a(a)(2), that "the remedies, procedures, and rights set
forth in title VI of the Civil Rights Act of 1964" were
applicable to persons aggrieved by a violation of section
504. Title VI includes an administrative procedure that can
lead to the withdrawal of federal funding from programs or
activities that discriminate on the basis of race, color, or
national origin, but it does not require that plaintiffs
exhaust the administrative process before bringing suit. See
Jeremy H. v. Mount Lebanon School Dist., 

, 281
(3d Cir. 1996); Chowdhury v. Reading Hosp. & Med. Ctr.,

, 321-22 (3d Cir. 1982). We have explained
that this reflects a recognition that the Title VI

                                 5



administrative process "cannot provide the relief[plaintiffs]
seek." 

n.16.

In Spence v. Straw, 

(3d Cir. 1995), we were
faced with a suit under section 504 filed by a federal
employee against his federal employer. We noted that if the
plaintiff had brought suit under section 501, he would have
been required to exhaust his administrative remedies. We
shared the concern expressed in McGuinness v. United
States Postal Serv., 

, 1322 (7th Cir. 1984),
that this would permit a federal employee to circumvent the
section 501 exhaustion requirement by the simple
expedient of suing under section 504. The McGuinness
court had believed it improbable that Congress,"having
specifically addressed employment of the handicapped by
federal agencies . . . in section 501, would have done so
again a few sections later in section 504." 

We
too believed it was unlikely that Congress wanted to provide
"different sets of remedies, having different exhaustion
requirements, for the same wrong committed by the same
employer." 

(quoting 

). Therefore, we held, as had the court in
McGuinness, that federal employees must exhaust Title VII
administrative remedies before filing suit against a federal
employer under section 504.

The situation in Spence   was far different than that
presented here. Conrail   is not a federal employer, but
rather is the recipient   of federal funding, and thus it can be
sued for a violation of   section 504 but not for a violation of
section 501. Therefore,   our concerns in Spence are not
implicated here.

Instead, Freed's case more closely resembles that of the
plaintiff in Jeremy H., 

, decided a year after
Spence. Jeremy H., a visually handicapped minor, sued his
school district, school board, and various individual
defendants under a number of statutes, including section
504 of the Rehabilitation Act. The District Court dismissed
the complaint for failure to exhaust. In discussing whether
Jeremy H. needed to exhaust his administrative remedies to
maintain the section 504 claim, we noted that section 504
"is not ordinarily subject to an exhaustion requirement." 

n.17. We distinguished Spence as "involving very

                                6



unusual circumstances" that required us to construe the
apparently incongruous enforcement scheme created by
sections 501 and 504 as applied to employment
discrimination suits against federal agencies. 

Because Jeremy H., unlike Spence, was not suing a federal
agency for employment discrimination, and his claims did
not "have the effect of circumventing some other
Congressionally mandated exhaustion requirement," 

we held that he was not required to exhaust his
administrative remedies before suing on his section 504
claims.

Conrail acknowledges that employees of private recipients
of federal funding, unlike their counterparts working for a
federal employer, are typically not required to exhaust
administrative remedies before filing suit under section 504
of the Rehabilitation Act. Nonetheless, Conrail argues that
the District Court did not err in dismissing Freed's
complaint for failure to exhaust in light of our decisions in
Spence and Jeremy H. Those decisions do not counsel
dismissal here. Freed, unlike the plaintiffs in Spence and
McGuinness, does not have the option of suing under
section 501. Because Freed has withdrawn her ADA claim,
we are presented with the narrow issue whether a plaintiff
suing solely under section 504 must exhaust the Title VI
administrative process before bringing suit against a private
recipient of federal funds. We know of no precedent, in this
court or elsewhere, that imposes such a requirement.

Every court of appeals to have addressed this question
has already held that plaintiffs suing private recipients of
federal funds under section 504 do not need to exhaust
Title VI administrative remedies. See, e.g., Brennan v. King,

, 268 n.12 (1st Cir. 1998); Tuck v. HCA Health
Serv. of Tennessee, Inc., 

, 470-71 (6th Cir. 1993);
Smith v. Barton, 

, 1338 (9th Cir. 1990);
Miener v. State of Missouri, 

, 978 (8th Cir.
1982); Pushkin v. Regents of the Univ. of Colo., 

, 1382 (10th Cir. 1981); Lloyd v. Regional Transp.
Auth., 

, 1287 (7th Cir. 1977). These holdings
reflect the fact that "the applicable remedies[under Title VI]
provide no individual relief, including no damage orders
against an employer." 

. The Title VI

                               7



administrative remedy, which provides for the termination
of federal financial assistance to programs that violate Title
VI, 42 U.S.C. S 2000d-1, does not "include or encompass
equitable relief for the affected individual." 

.

Our earlier holding in NAACP v. Medical Center, Inc., 

(3d Cir. 1979), although arising in a different
context, is consistent with this line of cases. In Medical
Center, individual and organizational plaintiffs sued the
Wilmington Medical Center, a hospital that received
substantial federal support, alleging that the hospital had
chosen a relocation site in a discriminatory manner. The
plaintiffs also sued various participants in the review
process established by the Social Security Act to screen
capital expenditure programs. We rejected defendants'
arguments that Title VI and section 504 of the
Rehabilitation Act did not create private rights of action
and, in making that determination, we held that"there
exists a private cause of action under section 601 of Title VI
which may be asserted without preliminary recourse to
agency remedial procedures." 

n.10. We based
this holding on the fact that "private parties are normally
precluded from advancing their [Title VI] rights before the
administrative agency." 

Because "the regulations that enforce section 504[of the
Rehabilitation Act] are the same procedures adopted to
enforce Title IX," 

, most of the cases
holding that there need be no exhaustion for section 504
claims have relied on the Supreme Court's decision in
Cannon v. University of Chicago, 

(1979).
There, the Court held that Title IX (which is enforced by the
same procedures that enforce section 504) created a private
right of action that plaintiffs could pursue without
exhausting administrative remedies. See 

n.41.

Conrail argues that the Supreme Court's more recent
decision in Franklin v. Gwinnett County Public Schools, 

(1992), which held that monetary damages were
available to plaintiffs in Title IX actions, severely eroded the
rationale for the decisions of the courts of appeals that held
that non-federal employees suing under section 504 are not
required to exhaust administrative remedies. Conrail views

                               8



the earlier cases as dependent on the absence of
administrative remedies providing any individual relief,
including damages. Conrail interprets Franklin to imply "the
existence of both a private right of action and monetary
damages for violations of section 504" of the Rehabilitation
Act. Appellee's brief at 12. Indeed, we relied on Franklin in
our holding that monetary damages are available in section
504 actions. See W.B. v. Matula, 

, 494 (3d Cir.
1995). But we do not agree that this calls into question the
validity of the earlier holdings that exhaustion was not
required by section 504 plaintiffs.

In the first place, we have explained that section 504
(and Title VI) plaintiffs need not undertake administrative
exhaustion because that process fails to provide them with
meaningful relief. See 

; see
also Jeremy 

n.17 (decided after Matula
and reiterating that section 504 "is not ordinarily subject to
an exhaustion requirement"). For example, although the
Department of Transportation regulations that implement
section 504 of the Rehabilitation Act, see 49 C.F.R. pt. 27,
permit an aggrieved person to file a "written complaint with
the responsible Departmental official," 49 C.F.R.
S 27.123(b), they do not provide for individual relief. The
Department may attempt informal dispute resolution with
the recipient of federal funds, see 49 C.F.R. S 27.123(d),
and, if these efforts are unsuccessful, may determine, after
a hearing, whether to suspend or terminate funding, see 49
C.F.R. S 27.125. Although the complainant is notified of the
time and place of the hearing, see 49 C.F.R. S 27.127(a)(2),
the regulations make no provision for the complainant to
participate in the hearing or to recover damages, see 49
C.F.R. S 27.127; see also 

(finding
Department of Health and Human Services administrative
process inadequate because section 504 plaintiff may not
furnish evidence or participate in investigation, appeal an
adverse decision, or recover damages). Even though
plaintiffs may recover damages in a court proceeding, the
applicable administrative process under Title VI does not
provide them with meaningful relief.

In the second place, nothing in the language of section
504 or Title VI requires administrative exhaustion. Conrail

                               9
argues that even where a private plaintiff has not included
a claim under Title I of the ADA (which requires exhaustion
of Title VII rather than Title VI remedies), 42 U.S.C.
S 12117(a), with his or her claim under section 504 of the
Rehabilitation Act, the fact that a plaintiff has the option of
doing so gives plaintiffs the ability to circumvent the ADA
exhaustion process by limiting their claim to one under
section 504. However, we are dealing with an issue of
Congress's intent. In Spence, we were construing two
potentially conflicting sections of the Rehabilitation Act and
held Congress intended to require exhaustion. We have no
basis to assume that Congress had a similar intent with
respect to two independent statutes.

Conrail argues that Congress has already expressed a
desire to coordinate the ADA with the Rehabilitation Act
and it points to various provisions of these two statutes.
The aim of these provisions is to achieve substantive
conformity and to avoid duplication of effort. See 42 U.S.C.
S 12117(b); see also 29 U.S.C. S 791(g) (standards to
determine whether S 501 of the Rehabilitation Act has been
violated are the same as those applied under ADA sections);
29 U.S.C. S 794(d) (same). Nothing in these provisions
addresses an exhaustion requirement. Where Congress has
wanted to coordinate statutes in that way it has done so
expressly. See, e.g., 20 U.S.C.S 1415(f) (requiring plaintiffs
suing under other federal statutes, including the
Rehabilitation Act, to exhaust administrative remedies
under the Individuals with Disabilities Education Act "to
the same extent as would be required had the action been
brought under this subchapter").

Accordingly, we reaffirm our long-standing position that
section 504 plaintiffs may proceed directly to court without
pursuing administrative remedies.

III.

For the reasons set forth, we will reverse the decision of
the District Court dismissing Freed's claim under section
504 of the Rehabilitation Act and remand to that court for
further proceedings. Because Freed's failure to dismiss her
appeal of the dismissal of the ADA claim earlier put Conrail

                               10



to the effort and expense of briefing that issue, we will
require that each party bear its own costs.

A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit

                        11