Both the Rehabilitation Act of 1973 and the Urban Mass Transportation Act declare that federally financed programs shall be available to handicapped persons. Persons handicapped to such a degree that they are confined to wheelchairs challenge the use of federal grants to the City of New Orleans for the purchase of 175 buses that they will be unable to board and use on two basically different grounds: the action of the federal agencies violates the duties imposed on them as governmental units under applicable departmental regulations, and the action of all of the parties involved violates the personal rights of the physically-disabled persons who join as a class in this suit. We conclude that the district court correctly determined that the agencies had complied with the regulations applicable to them, but that the disabled persons are entitled to court consideration of their personal claims and we, therefore, remand for further consideration of that issue.

This class action on behalf of mobility-disabled individuals1 seeks to bar the purchase of transit buses by the City of New Orleans2 and the public utility that operates the City's urban transportation services, New Orleans Public Service, Inc. (NOPSI), with funds provided in major part by a federal grant.3

The grant was made to finance 80% of the purchase price of 185 new standard size buses to replace older buses now in service on fixed transit routes. NOPSI is to provide the other 20% of the purchase price. Ten of these buses are to be equipped with wheelchair lift devices; the other 175 buses could not be boarded by wheelchair users or others who cannot negotiate steps. The grant is also to fund 80% of the acquisition cost of ten smaller coaches, all lift-equipped, which will be leased by the City to a non-profit corporation to provide transportation for the elderly and handicapped. The local contribution for these ten vehicles will be made by the City of New Orleans.

The plaintiffs charge that, by participating in this acquisition, the local government defendants discriminate against them, violating the duty imposed upon recipients of federal assistance4 because mobility-disabled persons will not be provided with service comparable to that afforded by the 175 buses that they will be unable to use, violating Section 5045 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, and the Department of Health, Education and Welfare (HEW) implementary guidelines promulgated on January 13, 1978, which prohibit discrimination against handicapped individuals under any program receiving federal financial assistance, as well as Section 16(a)6 of the Urban Mass Transportation Act (UMT Act) of 1964, as amended, 49 U.S.C. § 1612(a), which embodies the policy of nondiscrimination in transportation, and the 1976 Urban Mass Transit Administration (UMTA) regulations promulgated under that provision. Finally, the plaintiffs contend that the purchase would deprive the mobility-disabled class of effective use of public transportation and thus deny them equal protection of the laws, violating the fourteenth amendment and the Civil Rights Act of 1871, 42 U.S.C. § 1983.7

The plaintiffs contend that, by approving the grant to finance the discriminatory acquisition, the federal government officials, who are joined as defendants, violated Section 504 and the 1978 HEW guidelines as well as Section 16(a) of the UMT Act and the 1976 UMTA regulations.

Upon motions by all of the defendants for dismissal or alternatively for summary judgment, the district court concluded that the HEW guidelines promulgated under Section 504 were not yet effective when the grant was approved and, furthermore, were not applicable to the local government defendants. The court also determined that the UMT Act, as interpreted by the controlling UMTA regulations, was satisfied, relying upon the findings of the UMTA Administrator as set forth in the administrative record. The court noted "that all of the claims asserted in this action, with the exceptions of the constitutional and § 1983 claims (which we find to be without merit), may be decided within the framework of judicial review of the final action of the UMTA in approving Capital Grant Project No. LA-03-0015." Thus, the district court, relying solely upon the administrative record and applying the standard of review stated in Section 10(e)8 of the Administrative Procedure Act (APA), 5 U.S.C. § 706, concluded that UMTA's decision to approve the grant was not made "arbitrarily, capriciously, or in an abuse of discretion."

Having validated the grant approval by UMTA, the district court concluded that the local government defendants' actions and those of the federal defendants did not violate the controlling UMTA regulations. The agency action in approving the grant authorized NOPSI's anticipatory actions in leasing and operating the transit vehicles. However, the trial court did not consider separately the plaintiffs' claims for relief arising by implication from Section 504 of the Rehabilitation Act as distinguished from their claims that the actions of the federal agencies violated the regulations applicable to agency action promulgated under that statute.9

In reviewing the claims under the applicable Section 504 regulations, the district court did not conduct a de novo hearing but merely reviewed the administrative record. Because it considered the action solely upon the administrative record, the district court refused to permit discovery by the plaintiff class.

The constitutional claim was dismissed by the district court, citing with approval the rationale in Vanko v. Finley, 440 F. Supp. 656 (N.D.Ohio 1977), i. e., the constitutional provision adds nothing to the plaintiffs' cause of action under the federal statutes, which impose a higher standard than the constitutional provision might require. Finally, having found no violation of any statutory or constitutional provision by the local government defendants, the court determined that the Section 1983 claim lacked merit. Accordingly, the trial court granted the defendants' motions for summary judgment.

Section 16(a)10 of the Urban Mass Transportation Act of 1964, as amended, 49 U.S.C. § 1612(a), and the regulations promulgated under that section, require governmental agencies to make special efforts to benefit handicapped persons and to include provisions implementing that policy in all programs receiving federal financial assistance. The claimed violation of Section 16(a) by the federal government defendants consists of UMTA's approval of the grant of financial aid to a noncomplying transit authority.

The district court correctly determined that the plaintiffs had standing to contest the validity of UMTA's action in approving the grant. The "three-part test (for standing to contest validity of agency actions) established in Barlow v. Collins, 397 U.S. 159, 90 S. Ct. 832, 25 L. Ed. 2d 192 (1970) and Association of Data Processing Serv. Organ., Inc. v. Camp, 397 U.S. 150, 90 S. Ct. 827, 25 L. Ed. 2d 184 (1970) ... is: (1) the challenged action must result in injury-in-fact to the plaintiffs; (2) the interest invaded must be arguably within the zone of interest to be protected by the statute; and (3) there must be no statutory prohibition of judicial review." Suntex Dairy v. Bergland, 591 F.2d 1063, 1066 (5th Cir. 1979).

The constitutionally-compelled injury-in-fact element of the standing test requires the plaintiffs to demonstrate a sufficiently direct and concrete injury, Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 73, 98 S. Ct. 2620, 2631, 57 L. Ed. 2d 595, 611 (1978), which is likely to be redressed if the plaintiffs prevail on the merits. Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 262, 97 S. Ct. 555, 561, 50 L. Ed. 2d 450, 462 (1977); Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 38, 96 S. Ct. 1917, 1924, 48 L. Ed. 2d 450, 460 (1976). The mobility-disabled plaintiffs in the present case have met the constitutional requisite for standing; their injury-in-fact consists of the direct and personal loss they suffer if they are unable to use public transportation.

The second element of the standing test is mandated by the Administrative Procedure Act (APA), 5 U.S.C. § 551 et seq. and § 701 et seq. A person who is "adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof" under Section 10(a) of the Administrative Procedure Act, 5 U.S.C. § 702. A plaintiff satisfies the APA standing requirement if his interests are arguably within the zone of interests that the statute in question was intended to protect or regulate. Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 153, 90 S. Ct. 827, 830, 25 L. Ed. 2d 184, 188 (1970). "The 'relevant statute' is the agency's enabling act or other legislation under which the zone of interests is purported to exist." 5 B. Mezines, J. Stein & J. Gruff, Administrative Law § 50.03, at 50-25 (1980).

"Section 16(a) of the Urban Mass Transportation Act of 1964, as amended (49 U.S.C. 1612), declares the national policy that elderly and handicapped persons have the same right as other persons to utilize mass transportation facilities and services...." 23 C.F.R. Part 450, Subpart A, Appendix B, as added by 41 Fed.Reg. 18,235 (1976). Because the interests that plaintiffs seek to advance are within the zone of interests intended to be protected by Section 16(a) of the UMT Act, the plaintiffs have satisfied the APA standing requirement.11

Moreover, there is no indication that judicial review of agency action under the UMT Act is prohibited. Therefore, the plaintiffs have standing to contest the validity of UMTA's approval of the grant application in the present case.

Judicial review of agency action is generally limited to an examination of the agency record. 5 B. Mezines, J. Stein & J. Gruff, Administrative Law § 51.04 (1980). Review de novo, with independent findings of fact, is appropriate only when the agency action "is adjudicatory in nature and the agency factfinding procedures are inadequate" and "when issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action." Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415, 91 S. Ct. 814, 823, 28 L. Ed. 2d 136, 152 (1971). Accord Camp v. Pitts, 411 U.S. 138, 142, 93 S. Ct. 1241, 1244, 36 L. Ed. 2d 106, 111 (1973). Neither situation exists here; thus, the district court properly limited its review of the plaintiffs' claims under the UMT Act to the administrative record.

In reviewing UMTA's approval of the grant, the task of the district court, as specified in the APA, was to determine whether the agency's findings and conclusions were "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law...." 5 U.S.C. § 706(2)(A). "Under the 'arbitrary and capricious' standard the scope of review is a narrow one. A reviewing court must 'consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.... Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.' Citizens to Preserve Overton Park v. Volpe, supra, 401 U.S. at 416, 91 S. Ct. at 824." Bowman Transportation, Inc. v. Arkansas-Best Freight System Inc., 419 U.S. 281, 285, 95 S. Ct. 438, 442, 42 L. Ed. 2d 447, 455 (1974). See Refrigerated Transport Co. v. ICC, 616 F.2d 748, 751 (5th Cir. 1980).

In order to determine whether UMTA's decision was based on a consideration of the relevant factors, the district court was required to decide which of several regulations promulgated under Section 16(a) of the UMT Act of 1964, as amended, 49 U.S.C. § 1612(a), and Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, was applicable to this grant. The regulations promulgated under Section 16(a) of the UMT Act12 mandated "special efforts" to plan public mass transportation services that can effectively be utilized by the handicapped.13

In 1976, a presidential executive order,14 issued to enforce Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, directed HEW to coordinate the implementation of Section 504 among all federal agencies. Each federal department and agency empowered to provide federal assistance was ordered to issue regulations to implement Section 504 consistent with standards to be established by HEW. On January 13, 1978, HEW published guidelines to be followed by each federal agency in issuing its regulations necessary to implement Section 504. 43 Fed.Reg. 2,132-39 (1978) (to be codified in 45 C.F.R. Part 85).

It was evident that existing structures could not instantly be modified to accommodate disabled persons and that mass-produced vehicles must be designed a considerable time before they are actually put into use. Therefore, the HEW guidelines distinguish between existing and new facilities. As to new facilities to be acquired, Section 85.58 of the HEW guidelines provides:

New Construction.

(a) Except as provided in paragraph (b) of this section, new facilities shall be designed and constructed to be readily accessible to and useable by handicapped persons.

However, because redesigned buses could not be purchased immediately, the guideline continues:

(b) The Department of Transportation may defer the effective date for requiring all new buses to be accessible if it concludes on the basis of its section 504 rulemaking process that it is not feasible to require compliance on the effective date of its regulation: Provided, That comparable, accessible services are available to handicapped persons in the interim and that the date is not deferred later than October 1, 1979.

43 Fed.Reg. 2,139 (1978) (emphasis added).

The plaintiffs contend that the requirement of comparable services in the interim entitles them to such service immediately. They contend that this HEW standard requiring that "comparable, accessible services" for handicapped persons be provided by federal aid recipients supersedes the "special efforts" standard of the 1976 UMTA regulations. Moreover, they assert that the "interim" period during which such comparable services must be available began on the day the HEW guidelines became effective, January 13, 1978, and hence comparable services were required when the grant to New Orleans was approved.

Although the HEW guidelines are not completely clear on this point, we concur in the trial court's determination that the "interim" (during which Section 85.58(b) requires that comparable, accessible service be provided) refers to that period beginning with the effective date of the Section 504 regulations to be issued by the Department of Transportation (DOT) and ending on October 1, 1979, the date when the full-accessibility standard is mandated for all agencies.15

We also agree with the trial court's assessment that these HEW regulations are directed towards guiding the various federal agencies, including DOT and UMTA, in the promulgation of their regulations as required by the presidential executive order, and are not applicable to the recipients of the federal aid. As the supplementary information published with the HEW guidelines explains, "the (HEW) regulation applies to Federal agencies, not to recipients...." 43 Fed.Reg. 2,133 (1978). Thus, if the still unissued DOT and UMTA regulations implementing Section 504 in compliance with the presidential directive satisfied the HEW full-accessibility standard and became effective before the October 1, 1979, HEW deadline, the HEW regulations would not override those issued by DOT.

DOT's regulation promulgated to comply with the presidential directive became effective on July 2, 1979, and superseded most of the existing UMTA regulations.16 44 Fed.Reg. 31,442 et seq. (1979) (to be codified in 49 C.F.R. Part 27). The new rule implements both Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, and Section 16(a) of the UMT Act of 1964, as amended, 49 U.S.C. § 1612(a). It mandates a full accessibility standard17 instead of the "special efforts" standard provided by the 1976 UMTA regulations. 44 Fed.Reg. 31,477-481 (1979) (to be codified in 49 C.F.R. Part 27, Subpart E).

The full accessibility standard was not applicable until the effective date of the DOT's regulation, July 2, 1979. This complied with HEW's requirement that all new buses, acquired after September 30, 1979, be accessible to handicapped persons. Therefore, for purposes of judicial review of UMTA's grant approval on September 12, 1978, the district court appropriately looked to the 1976 UMTA regulation "special efforts" standard.

Applying the scope of review mandated by the APA, 5 U.S.C. § 706(2)(A), the district court properly reviewed the administrative record and concluded that, in light of the 1976 UMTA regulations "special efforts" standard,18 UMTA's decision to approve the grant to the City of New Orleans was not "arbitrary and capricious." Thus, the district court's award of summary judgment to the defendants as to plaintiffs' claims under Section 16(a) of the Urban Mass Transportation Act was not error.III. Section 504, Rehabilitation Act of 1973

Section 504 of the Rehabilitation Act of 1973, 29 U.S.C. § 794, provides:19

No otherwise qualified handicapped individual in the United States, as defined in Section 7(6) (29 U.S.C. § 706(6)), shall, solely by reason of his handicap, 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.

The legislative history indicates that this policy is intended to prevent discrimination against handicapped individuals in federally supported transportation services.20

We recognized in Camenisch v. University of Texas, 616 F.2d 127 (5th Cir. 1980), that Section 504 implies a private cause of action and, therefore, entitles handicapped persons to obtain injunctive relief to enforce its antidiscrimination policy.21 See Tatro v. State of Texas, No. 80-1069 (5th Cir. Sept. 2, 1980).22

Although the complaint, construed liberally in accordance with the lenient pleading standards of the Federal Rules of Civil Procedure, gave sufficient notice that a claim under Section 504 was being asserted, the implication of a private cause of action and the judicial standard applicable thereto were neither brought to the attention of the trial court nor addressed by its decision.23 Generally this court will not reach the merits of an issue not considered by the district court. Pierre v. United States, 525 F.2d 933 (5th Cir. 1976); Stanley Educational Methods, Inc. v. Becker C.P.A. Review Course, Inc., 539 F.2d 393 (5th Cir. 1976); EEOC v. Standard Forge and Axle Co., 496 F.2d 1392 (5th Cir. 1974). However, "when a pure question of law is involved and a refusal to consider it would result in a miscarriage of justice," Martinez v. Mathews, 544 F.2d 1233, 1237 (5th Cir. 1976), we condone counsel's failure to bring issues raised on appeal to the attention of the trial court. As the Supreme Court has said, the determination "of what questions may be taken up and resolved for the first time on appeal is one left primarily to the discretion of the courts of appeals.... (T)here are circumstances in which a federal appellate court is justified in resolving an issue not passed on below, as where the proper resolution is beyond any doubt ... or where 'injustice might otherwise result.' Hormel v. Helvering, (312 U.S. 552, 557, 61 S. Ct. 719, 721, 85 L. Ed. 1037, 1041 (1941)). ..." Singleton v. Wulff, 428 U.S. 106, 121, 96 S. Ct. 2868, 2877, 49 L. Ed. 2d 826, 837 (1976).

Considering the gravity of the legal issue and the profound effect failure to resolve it would have on all the litigants, the fact that it appears to be largely a legal question and the injustice that might result if the question were pretermitted, we have decided that the case should be remanded to the trial court for initial determination of the Section 504 claims. However, because the issue has been briefed, we provide guidance to the district court on a few questions that are likely to arise on remand.

Inherent in the concept of a private cause of action is the right to seek judicial relief. The plaintiffs are entitled to adduce evidence in support of their claims just as the defendants are entitled to offer evidence that would defeat them. All or part of the administrative record might be introduced after appropriate consideration of the Federal Rules of Evidence, Fed.R.Evid. 803(8). Then the parties are entitled to the court's assessment of the facts, its evaluation of the credibility of witnesses and its application of a judicial standard of nondiscrimination, to be determined by it.24 The judicial appraisal of the plaintiffs' claim cannot properly be limited to review of the administrative record and the application of a restricted standard of review, relying on regulations which, though they were effective as of the date of the agency action, no longer reflect the agency's own view of the standard of nondiscrimination required under the statute.25 Because review is not limited to the administrative record, such discovery as would normally be allowed should be permitted.

We note in regard to the standard of nondiscrimination under Section 504 that on appeal "a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary." Bradley v. School Board of Richmond, 416 U.S. 696, 711, 94 S. Ct. 2006, 2016, 40 L. Ed. 2d 476, 488 (1974), quoted in Cort v. Ash, 422 U.S. 66, 77, 95 S. Ct. 2080, 2087, 45 L. Ed. 2d 26, 35 (1975). Logically, if an appellate court must apply the administrative regulations in effect at the time it renders its decision, Thorpe v. Housing Authority of Durham, 393 U.S. 268, 282, 89 S. Ct. 518, 526, 21 L. Ed. 2d 474, 484 (1969), the district court on remand after appeal should consider the new DOT regulations absent statutory direction or legislative history to the contrary. Supplemental information accompanying the DOT's new Section 504 regulation indicates that the 1979 regulation might properly be considered by the district court in its review of the Section 504 claims in this case.26 Therefore, the regulatory provisions promulgated by the DOT in compliance with the presidential directive to implement section 504, 44 Fed.Reg. 31,442 et seq. (1979) (to be codified in 49 C.F.R. Part 27), may be considered by the district court in its determination of the appropriate standard of nondiscrimination mandated by Section 504. Upon remand, the district court should not limit its analysis to the 1976 UMTA regulations, but should also consider the 1979 DOT regulations promulgated under Section 504.

If the court limits its consideration of the implied cause of action in Section 504 to a review of the administrative record under the strictures of the "arbitrary and capricious" standard of review of agency action specified by the APA, the effectuation of the policies behind the implication of the private cause of action will be diminished, if not defeated completely. The less rigorous standard of judicial review under the APA adds little to the enforcement potential of the administrative agency itself. It does not afford the plaintiff the same degree of direct relief as would a de novo review upon a record compiled by the district court. Moreover, the plaintiff has less control over the court's review under the APA if he is not allowed to present his own evidence to the court.

Such limited review of the evidence in an action under Section 504 was rejected as unduly restrictive in Leary v. Crapsey, 566 F.2d 863 (2d Cir. 1977). Similarly, in United Handicapped Federation v. Andre, 558 F.2d 413 (8th Cir. 1977), the Eighth Circuit remanded for a consideration of the affirmative duties created by Section 504 and enforceable by a private cause of action in light of newly promulgated regulations with no indication that the district court's reappraisal of the Section 504 claim was to be confined by the strictures of the APA standard of review. See also Snowden v. Birmingham-Jefferson County Transit Authority, 407 F. Supp. 394 (N.D.Ala.1975), aff'd summarily, 551 F.2d 862 (5th Cir. 1977), which was resolved by summary judgment but only after a full review of evidence submitted and testimony taken from the parties.27

We, therefore, affirm the summary judgment as to the UMT Act claims and remand for further proceedings the plaintiffs' implied cause of action under Section 504. We express no opinion concerning whether, upon the completion of discovery, there will be genuine issues of material fact requiring a trial on the merits of the cause of action implied in Section 504 or whether the material facts will be so pellucid as to permit summary judgment.

Our disposition of the claims under the Rehabilitation Act makes it unnecessary for us to examine fully the plaintiffs' claims against the local government defendants under the fourteenth amendment and 42 U.S.C. § 1983. These are of course to be evaluated on the basis that they are independent judicial claims. Our decision also does not address the plaintiffs' claim for attorney's fees under 42 U.S.C. § 1988. That claim should properly await the district court's determination of the merits upon remand. See Falcon v. General Telephone Co. of the Southwest, 626 F.2d 369 (5th Cir. 1980); Iron Workers Local No. 272 v. Bowen, 624 F.2d 1255 (5th Cir. 1980).

For these reasons, the judgment is AFFIRMED as to the UMT Act claims and, as to the Section 504 claims, the case is REMANDED for further proceedings consistent with this opinion.