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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 16, 2009 Decided November 6, 2009 

No. 08-5396 

CAMDEN COUNTY COUNCIL ON ECONOMIC OPPORTUNITY, 

APPELLANT

v. 

UNITED STATES DEPARTMENT OF HEALTH AND HUMAN 

SERVICES AND KATHLEEN SEBELIUS, SECRETARY, UNITED 

STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, 

APPELLEES

Appeal from the United States District Court 

for the District of Columbia 

(Civ. No. 07-1835) 

Robert A. Graham argued the cause for appellant. With 

him on the briefs was Edward T. Waters. 

Robin Meriweather, Assistant United States Attorney, 

argued the cause for appellees. With her on the brief were R. 

Craig Lawrence, Assistant United States Attorney, and 

Channing D. Phillips, Acting United States Attorney. 

Before: ROGERS and KAVANAUGH, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

USCA Case #08-5396 Document #1214543 Filed: 11/06/2009 Page 1 of 7
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Opinion for the Court filed by Circuit Judge

KAVANAUGH. 

KAVANAUGH, Circuit Judge: Under the Head Start 

program, the Federal Government grants money to certain 

local organizations that provide pre-school services to lowincome children. Camden County Council on Economic 

Opportunity was a Head Start grantee that provided preschool services to children in the Camden, New Jersey area. 

During a regularly scheduled review in 2005, the Department 

of Health and Human Services, which administers Head Start, 

found several safety-related deficiencies involving 

“undesirable and hazardous materials” on the playgrounds at 

Camden sites. After Camden failed to sufficiently correct the 

problems within the required 30-day period, HHS terminated 

Camden’s grant. Camden then filed suit, challenging HHS’s 

decision as arbitrary and capricious under the Administrative 

Procedure Act. In a thorough opinion, the District Court held 

that HHS acted lawfully when it ended Camden’s grant. We 

agree and therefore affirm.1

I 

 In 1981, Congress passed and President Reagan signed 

the Head Start Act, Pub. L. No. 97-35, 95 Stat. 499 (codified 

as amended at 42 U.S.C. §§ 9831-9852a). The Act authorizes 

 1

 HHS separately found that Camden had failed to correct 

several non-safety-related deficiencies within the 90-day period 

mandated by statute for those deficiencies. Because we find that 

HHS acted properly in terminating the grant based on the safetyrelated deficiencies, and because, as Camden acknowledges, 

termination of a Head Start grant may be based on a single 

uncorrected deficiency, see Tr. of Oral Arg. 13, we need not 

address the issues raised by Camden with respect to the non-safetyrelated deficiencies. 

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federal funding for local organizations that provide services to 

low-income pre-school children. 

Under the Act, Head Start grantees undergo HHS 

performance reviews every three years. 42 U.S.C. § 9836a(c). 

During those evaluations, HHS personnel determine whether 

a grantee’s Head Start program is meeting certain statutory 

and regulatory obligations pertaining to safety, quality, and 

the like. Id.; see also 45 C.F.R. Part 1304. If a grantee does 

not meet the requirements, HHS sends the grantee a notice 

detailing the deficiencies. The notice sets a date by which the 

grantee must either correct its deficiencies or face termination 

of its grant; the length of the corrections period depends on 

the danger posed by the deficiency and on the time the 

grantee reasonably needs to correct the deficiency. 42 U.S.C. 

§ 9836a(e)(1)(B). After the relevant period for corrective 

action has elapsed, HHS conducts a follow-up review. Id. § 

9836a(c)(1)(C). If the follow-up review determines that the 

grantee failed to remedy its deficiencies, HHS ends the grant. 

Id. § 9836a(e)(1)(C). 

Camden County Council on Economic Opportunity was a 

Head Start grantee serving some 1300 children in 22 facilities 

in Camden, New Jersey. According to Camden, it received 

about $13 million annually for its Head Start program. 

During a 2005 performance review, HHS found various 

deficiencies at Camden. Several of the deficiencies related to 

safety issues and thus were considered more serious under the 

Act. Most relevant for present purposes, the HHS team 

observed splinters and rusty nails at one Camden playground 

and trash cluttering another playground. Based on that 

evidence, HHS determined that Camden was not meeting its 

regulatory obligation to keep its sites “free of undesirable and 

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hazardous materials and conditions.” 45 C.F.R. § 

1304.53(a)(10)(viii). 

HHS required Camden to remedy this safety-related 

deficiency within 30 days. After the 30-day period elapsed, 

HHS conducted follow-up reviews, which determined, among 

other things, that Camden had not successfully remedied this 

deficiency. HHS therefore terminated Camden’s grant. 

 Camden appealed the termination of funding to HHS’s 

Departmental Appeals Board, but the Board ruled in favor of 

the agency. Camden subsequently brought suit in the District 

Court; the court likewise rejected Camden’s arguments. 

Camden appealed from the grant of summary judgment. Our 

review of the District Court’s decision is de novo. 

II 

 According to Camden, HHS acted arbitrarily and 

capriciously and thus violated the Administrative Procedure 

Act when it terminated Camden’s funding. Camden contends 

that it corrected the deficiency at the sites specifically 

identified in the initial HHS notice – the Hayes and 

Charleston sites – and was improperly denied funding based 

on a later-discovered problem at a different site, Lois I. 

In its initial review, HHS found that some of Camden’s 

sites “had outdoor areas that were not secured or cleaned to 

prevent the children from being injured.” Head Start Review 

Report 5 (Sept. 12, 2005) (J.A. 145). HHS cited Camden’s 

Charleston playground for the presence of “splinters, rusty 

nails, and leaves” and Camden’s Hayes site for being 

“cluttered with trash.” Id. Both of those problems, HHS 

stated, violated Camden’s obligation to keep indoor and 

outdoor premises “cleaned daily and kept free of undesirable 

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and hazardous materials and conditions.” Id. (quoting 45 

C.F.R. § 1304.53(a)(10)(viii)). Classifying this as a 

deficiency that threatened the “health or safety of staff or 

program participants,” 42 U.S.C. § 9836a(e)(1)(B)(i), HHS 

afforded Camden 30 days to remedy the problem. 

 After the corrective period had expired, HHS performed a 

follow-up review. It found Camden’s deficient playground 

sites “Not Corrected.” Follow-Up Head Start Review Report 

16 (Apr. 9, 2006) (J.A. 110). Although acknowledging that 

the Charleston and Hayes sites were “now free of splinters 

and rusty nails,” HHS nonetheless deemed Camden’s 

deficiency uncorrected in light of similar problems at another 

Camden site – specifically, the presence of “trash” and a “pile 

of old wood planks with rusty nails sticking out” of them at 

the Lois I facility. Id. at 16-17 (J.A. 110-11). Based on this 

unremedied safety-related deficiency, HHS terminated 

Camden’s grant. 

Camden says it’s unfair – and arbitrary and capricious – 

to terminate its funding based on later-discovered problems at 

the Lois I site. Although Camden’s argument is not without 

some force, it ultimately misconstrues the nature of a 

“deficiency” for purposes of the Head Start Act. 

At the time of Camden’s performance review, the Head 

Start Act did not define the term “deficiency.” 42 U.S.C. § 

9832 (2000).2

 But HHS had promulgated a regulation 

 2

 Congress has since amended the Head Start Act to define a 

deficiency as “a systemic or substantial material failure of an 

agency in an area of performance” involving any of several 

enumerated program characteristics, including “health, safety, or 

civil rights of children or staff.” Improving Head Start for School 

Readiness Act of 2007, Pub. L. No. 110-134, § 3(a)(5), 121 Stat. 

1363, 1364 (to be codified at 42 U.S.C. § 9832(18)). 

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interpreting the Act. And that regulation defines a 

“deficiency” broadly as an “area or areas of performance” in 

which a Head Start grantee “is not in compliance with State or 

Federal requirements.” 45 C.F.R. § 1304.3(a)(6)(i). HHS’s 

regulation is permissible and binding under the principles set 

forth in Chevron v. Natural Res. Def. Council, 467 U.S. 837 

(1984). Consistent with the HHS regulation, moreover,

HHS’s Departmental Appeals Board has interpreted 

“deficiency” to denote a structural or systemic problem, rather 

than simply a manifestation of a deficiency at a particular site. 

See First State Cmty. Action Agency, Inc., Docket No. A-02-

122, Decision No. 1877, at 78-79 (May 1, 2003); Norwalk 

Econ. Opportunity Now, Inc., Docket No. A-05-92, Decision 

No. 2002, at 17 (Nov. 28, 2005). 

In short, the plain terms of the HHS regulation required 

Camden, after it received the initial notice, to ensure that it 

did not have “undesirable and hazardous materials and 

conditions” at any of its playgrounds, not merely at the Hayes 

and Charleston playgrounds. Camden failed to comply with 

that obligation. 

 We also reject Camden’s related argument that it lacked 

proper notice of the corrections required at the Lois I site. To 

be sure, the Act generally requires notice and an opportunity 

for corrective action before a grantee may lose its funding. 

Here, however, Camden received such notice: HHS’s initial 

deficiency letter informed Camden that it was not meeting its 

obligation to maintain sites “free of undesirable and 

hazardous materials.” Head Start Review Report 5 (Sept. 12, 

2005) (J.A. 145) (quoting 45 C.F.R. § 1304.53(a)(10)(viii)). 

That letter, combined with HHS’s regulations and its 

Departmental Appeals Board rulings, afforded Camden 

sufficient notice that all of its playgrounds had to be free of 

“undesirable and hazardous materials” by the time of the 

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follow-up review. As HHS’s Departmental Appeals Board 

explained, the review process does not allow a grantee “to 

play cat and mouse” by correcting problems at one location 

“while allowing other premises to be or become noncompliant 

or by correcting one set of hazards while allowing similar 

hazards to exist.” Docket No. A-07-90, Decision No. 2116, at 

16 (Sept. 25, 2007) (J.A. 45). 

* * * 

 We affirm the judgment of the District Court. 

So ordered. 

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