United States Court of Appeals

Fifth Circuit



## FILED

August 15, 2005

Charles R. Fulbruge III

Clerk REVISED AUGUST 22, 2005

UNITED STATES COURT OF APPEALS

For the Fifth Circuit

No. 02-10190

LUCINDA G. MILLER; ELAINE KING-MILLER,

Plaintiffs-Appellees,

VERSUS

TEXAS TECH UNIVERSITY HEALTH SCIENCES CENTER, ET AL

Defendant-Appellant.

Appeal from the United States District Court

For the Northern District of Texas, Amarillo Division

____________________

Consolidated with

No. 02-30318

No. 02-30369

___________________

THEODORE JOHNSON,

Plaintiff-Appellee,

VERSUS

LOUISIANA DEPARTMENT OF EDUCATION, ET AL

Defendants,* Judge Owen was not a member of the court whe n this case was

su bmitted to the court en banc and did not participate in this

decision.

1 403 F.3d 272 (5th Cir. 2005) (en banc).

2 29 U.S.C. § 794.

2 LOUISIANA DEPARTMENT OF EDUCATION; STATE OF LOUISIANA;

PRESIDENT OF LOUISIANA STATE UNIVERSITY SYSTEM;

BOARD OF REGENTS

Defendants-Appellants,

and

LYNN AUGUST

Plaintiff-Appellee

VERSUS

SUZANNE MITCHELL; MAE NELSON; ED BARRAS; DEPARTMENT

OF SOCIAL SERVICES, for the State of Louisiana

Defendants-Appellants.

_________________________________________________

Appeals from the United States District Court

For the Eastern District of Louisiana

________________________________________________

ON PETITION FOR REHEARING EN BANC

Before KING, Chief Judge and JOLLY, HIGGINBOTHAM, DAVIS, JONES,

SMITH, WIENER, BARKSDALE, GARZA, DeMOSS, BENAVIDES, STEWART,

DENNIS, CLEMENT, and PRADO, Circuit Judges. *

DAVIS AND WIENER, Circuit Judges:

This consolidated appeal presents the same issue we recently

resolved en banc in Pace v. Bogalusa City S chool Board 1 : Does a

state waive its Eleve nth Amendment immunity from suit in federal

court under § 504 of the Rehabilitation Act of 1973 2 when it3 The factual and legal background of this cons olidated appeal is

accurately and succinctly presented in the panel opinions :

A. Johnson/August v. Louisiana Dep’t of Education

, 330 F.3d 362, 363-

364 (5th Cir. 2003).

Appellee Johnson was a full time student at the University

of New Orleans (“UNO”) on financial aid. He is disabled by

a partial paralysis of his left foot. In February 2000, a

medical emergency caused Johnson to withdraw from UNO. Four

months later, UNO revoked Johnson’s eligibility for financial

aid. Johnson successfully appealed the decision. The

appeals committee, however, did not inform Johnson of its

deci sion until after the fall 2000 semester had begun; the

committee also imposed academic requirements to maintain his

eligibility for financial aid. Johnson asserts that because

of his late start in fall semester classes, he was unable to

comply with the academic requirements. In January 2001, UNO

denied Johnson financial aid for the spring semester.

Johnson filed suit against the Louisiana Department of

Education, the State of Louisiana, the President of the

Louisiana State University System, the Louisiana Board of

Regents, and UNO under 42 U.S.C. § 1983, Title II of the

Ame ricans with Disabilities Act, and § 504 of the

Rehabilitation Act, alleging discrimination against disabled

students and failure to provide reasonable accommodations.

[Lynn] August, a blind man, worked as a computer

instructor for the Louisiana Department of Social Services

(“DSS”). In June 2000, DSS eliminated August’s teaching

duties, averring tha t August failed to submit “manual

materials” required for use in the computer course. August

contended...that he submitted the necessary material at the

sa me time as a sighted instructor whose materials were

approved. August brought various claims for damages against

the DSS and the three state employees in their official

capacities, including claims under the ADA and the

Rehabilitation Act ( § 504).

3 accepts federal funds that are granted by Congress under authority

of the Constitution’s Spending Clause and expressly conditioned on

waiver of immunity from § 504? For reasons that follow, we find no

merit in appellants’ arguments and reaffirm our conclusions in Pace

that acceptance of such federal funds operates to waive a State’s

Eleventh Amendment immunity under the express conditions of 42

U.S.C. § 2000d-7. 3Separate district courts in the Eastern District of

Louisiana dismissed all claims against the defendants based

on state sovereign immunity except for those under § 504 of

the Rehabilitation Act. The defendants appeal, arguing that

state sovereign immunity bars the appellees’ § 504 claims.

B. Miller v. Texas Tech University Health Sciences Center

,

330 F.3d 691, 691 (5th Cir. 2003).

King Miller began working as an administrator and

professor at [Texas] Tech in 1997. She notified Tech that

she su ffered from a degenerative eye condition in August

1998; she was diagnosed as legally blind in 1999. In 2000,

she sued Tech for al legedly failing to accommodate her

disability in violation of § 504, which prohibits

discrimination against the disabled by programs receiving

federal funds.

...Tech moved to dismiss on the basis of state sovereign

immunity. The district court denied the motion, and Tech

took this interlocutory appeal.

4 The case before the panel in Johnson was a consolidated appeal by

LADOE and the Department of Social Services for the State of Louisiana

(“DSS”). LADOE and DSS consolidated their arguments into one brief for

this rehearing en banc, and therefore all arguments accredited to LADOE

are also made on behalf of DSS.

5 The Eleventh Amendment to the United States Constitution states:

The Judi cial power of the United States shall not be

construed to extend to any suit in law or equity, commenced

or prosecuted against one of the United States by Citizens

of another State, or by Citizens or Subjects of any Foreign

State.

4 I. BACKGROUND

Louisiana’s Department of Education (“LADOE”)and Department of

Social Services (“DSS”) 4 and Texas Tech University Health Sciences

Center (“TTUHSC”) (collectively “defendants”) appeal rulings by

district courts which held that, by accepting federal funds offered

on explicit conditions of waiver, defendants in fact waived their

right to Eleventh Amendment 5 immunity purs uant to 42 U.S.C. §6 Section 2000d-7 (a)(1) provides in pertinent part:

A State shall not be immune under the Eleventh Amendment of

the Constitution o f the United States from suit in Federal

court for a violation of section 504 of the Rehabilitation

Act of 1973...or the provisions of any other Federal statute

prohibiting discrimination by recipients of Federal financial

assistance.

7 325 F.3d 609 (5th Cir. 2003).

8 See Miller v. Te x. Tech Univ. Health Sciences Ctr. , 330 F.3d 691

(5th Cir. 2003) and Johnson v. La. Dept. of Educ.

, 330 F.3d 362 (5th Cir. 2003).

9 Pace v. Bogalus a City Sch. Bd. , 403 F.3d 272 (5th Cir. 2005) (en

banc) .

5 2000d-7, 6 and were therefore amenable to suit in federal court for

§ 504 violations. Later, a panel of this court in P ace v. Bogalusa

City School Board 7 (“ Pace I ”) held that, despite the express

provision in the grant that entitlement of the grantee to accept

the funds was conditioned on such a waiver, a State did not waive

Eleventh Amendment immunity from suit under § 504 by accepting

federal funds at a time when, based on t he then-current state of

the pertinent case law, the State had reason to believe that it had

no such immunity to waive. T wo panels of this court, relyin g on

Pace I, reversed the district courts’ denials of Eleventh Amendment

Immunity and dismissed the plaintiffs’ claims under § 504. 8

We later reheard Pace en banc and held that, then as now, a

State did waive Eleventh Amendment immunity from suit under § 504

by accepting federal funds under such circumstan ces ( “ Pace II ”). 9

Prio r to rehearing P ace en banc, we had agreed to rehear the

insta nt cases en banc, but postponed rehearing them pending our10 483 U.S. 203, 207 (1987).

11 ___ U.S. ___, 125 S. Ct. 1497 (2005).

6 decision in Pace II

.

After Pace II was announced, we asked the parties in these

cases to submit supplemental briefs explaining which of their

arguments regarding Eleventh Amendment immunity from suits under §

504 remained viable and which had been foreclosed

. In response,

the defendants conceded that Pace II forecloses all their arguments

except three.

First, both LADOE and TTUHSC contend that no valid waiver of

Eleventh Amendment immunity occurred becau se, even though they

received federal funds, none of the st ate agencies was e xpressly

authorized by st ate law to waive its respective state’s immunity

f rom suit under § 504. Second, T TUHSC contends that Pace II did

not address the issue whether § 504 and § 2000d-7 place conditions

on federal funds that are not reasonably related to the purpose of

the expenditure, which is part of the test for valid Spending

Clause legislation set forth by the Supreme Court in South Dakota

v. Dole

. 10 Third, LADOE asserts that it did not “knowingly waive”

Eleventh Amendment immunity under § 2000d-7 by accepti ng federal

funds, contending that this argument, although rejected in Pace II

,

should be reexamined in light of the Supreme Court’ s subsequent

decision in Jackson v. Birmingham Board of Education

. 11

II. STATE IMMUNITY UNDER THE ELEVENTH AMENDMENT12 LADOE is authorized to accept federal funds pursuant to L A

. R EV

.

S TAT

. A NN . § 17:24 (C), which provides in pertinent part:

The board [LADOE] is hereby d esignated as the State Agency

with respect to federal funds for those programs under the

jurisdiction of the board. The State Department of Education

shall administer and distribute all federal funds received

for the benefit of those phases of education und er the

jurisdiction of the board. (Emphasis added).

Similarly, L A

. R EV

. S TAT

. A NN

. § 46:51(6 ) provides that the

Department of Social Services of Louisiana [DSS] may “ [a]ct as the

agent of the state to cooperate with the federal government...and

in the administration of federal funds granted in the state to aid

in the furtherance of an y functions of the department, a nd be

empowered to meet such federal standards as may be established for

the administration of such federal funds.” (Emphasis added).

Likewise, T EX

. E DUC

. C ODE

. A NN . § 110.08, which governs the funding of

TTUHSC, provides in pertinent part , “The board [of TTUHSC], in its

discretion, may accept and administer grants and gifts from the federal

government...for the use and benefit of the Health Sciences Center.”

7 A. Express Authority to Waive Immunity

We consider first defendants’ argument that they did not waive

their states’ Eleventh Amendment immunity from suit under § 504

because they lacked express authorization to do so under state law.

Defendants do not challenge that they were authorized under state

law to accept federal funds or that each received federal funds. 12

Defendants insist, however, that as state agencies, their authority

to accept federal funds is insufficient to waive Eleventh Amendment

immunity, which, they argue, cannot be validly waived without

express statutory authority.

Defendants’ argument fails to recogn ize that grant programs

based on the Spending Clause are to be interpreted under ordinary13 Barnes v. Gorman , 536 U.S. 181, 186 (2002).

8 contractual principles. 13 In these cases, the defendants were

authorized by the State to accept the benefits of substantial sums

of federal Spending Clause money burdened with the clearly stated

condition under § 2000d-7 that acceptance waives immunity from suit

in federal court. The statutory powers of attorney provided to

defendants by their respective state legislatures to accept,

administer, and expend such federal funds necessarily includes the

authorization to accept the conditions that come along with those

funds. Clothed with this authority, the defendants held themselves

out to have authority from their states to comply with the

conditions imposed by Congress in the statute. These conditions

are inseparable from the offer of the funds: The States (or their

authorized agencies) may reject the condition of waiver of Eleventh

Amendment immunity by rejecting the funds, or they may accept the

funds and the conditions; they cannot, however, accept the benefits

of the funds and reject the inextricably intertwined condition of

waiver by claiming post hoc that the delegation of authority to

accept the funds did not carry with it the authority to waive

immunity. This is hornbook contract and agency law.

Therefore, we reject defendants’ arg ument that they retain

Eleventh Amendment immunity because they lacked express statutory14 This disposition makes it unnecessary for us to consider what effect

the Supreme Court’s decision in Lapides v. Board of Regents of the

University System of Georgia , 535 U.S. 613 (2002) has on this issue.

15 Under Dole

, conditions attached to Spending Clause legislation are

only valid if they are (a) attached to expenditures that benefit the

general welfare; (b) unambiguous; (c) reasonably related to the purpose

of the expenditure to which they are attached; and (d) not in violation

of an independent constitutional provision. 483 U.S. at 207-208.

9 authority to waive their states’ Eleventh Amendment immunity. 14

B. Relatedness

We next address TTUHSC’s argument that § 504 and § 2000d-7 are

unconstitutional Spending Clause legislation because they place

conditions on federal grants that are not reasonably related to the

purpose of the expenditure. This is often referred to as the

“relatedness” prong of the Dole test for valid Spending Clause

legislation. 15 According to TTUHSC, they are not governed by § 504

because none of the federal funds they received were earmarked for

§ 504 goals of preventing disability discrimination or

accommodating disability. TTUHSC urges that, if we determine that

the immunity waiver condition imposed by § 504 is not limited to

Rehabilitation Act funding b ut that they accompany all federal

funding, we should hold that § 504 fails the “relatedness” prong of

the Dole test.

TTUHSC failed to raise this argument in its briefs before

either the district court or the original panel of this court.

Neither did it argue the point in its original en banc brief. In16 403 F.3d at 281 n.32.

17 See Communication Workers of America v. Ector County

, 392 F.3d 733,

748 (5th Cir. 2004) (failure to brief an issue con stitutes waiver on

appeal); Proctor & Gamble Co. v . Amway Corp. , 376 F.3d 496, 499 ( 5 th

Cir. 2004)(party waive d argument not included in original brief to

panel); Cooper Ind. v. Tarmac Roofing, Inc.

, 276 F.3d 704, 711 (argument

not raised before original panel waived); and Lowry v. Bankers Life and

Cas. Retirement Plan

, 8 71 F.2d 522, 525 ( 5 th Cir. 1989) (refusing to

consider an argument raised for the firs t time in a petition for

rehearing). See also F ED

. R. A PP

. P. 28 (a)(9)(A) which states that an

appellant’s brief must contain “appellant’s contentions and the reasons

for them, with citations to the authorities and parts of the record on

which the appellant relies.”

18 See Edelman v. Jordan, 415 U.S. 651, 677-678 (1974) (because defense

of Eleventh Amendment imm unity is a jurisdictional bar to the

plaintiff’s suit, court of appeal did not err in consider ing defense

when it was not argued before the district court).

10 Pace II

, we concluded that the state defendant had waived this

“relatedness” argument because it failed to argue the point before

the original panel and did not argue it in its en banc brief beyond

a bare assertion. 16 The maxim is well established in this circuit

that a party who fails t o make an argument before either the

district court or the original panel waives it for purposes of en

banc consideration. 17

If we are required to address this argument because it relates

to Eleventh Amendment immunity, and as such may be a

“jurisdictional” defense that cannot be waived, 18 we reject it. We

agree with the four circuit courts that have addressed this issue

and concluded that, if the involved state agency or department

accepts federal financial assist ance, it waives its Eleventh

Amendment immunity even though the federal funds are not earmarked

for programs that further the anti-discrimination and19 See Barbour v. Washington Metropolitan Area Transit Authority

, 374

F.3d 1161 (D.C. Cir. 2004); Lovell v. Chandler

, 303 F.3d 1039 (9 th Cir.

2002); Koslow v. Commonwealth of Pennsylvania

, 302 F.3d 161 (3d Cir.

2002); Jim C. V. United States, Atkins School District

, 235 F.3d 1079

(8 th Cir. 2000) (en banc).

20 Koslow

, id. at 166-167.

21 Id. at 167.

22 Id. at 165.

11 rehabilitation goals of § 504. 1 9 Chief Judge Scirica’s persuasive

opinion for the Third Circuit in Koslow is particularly helpful in

explaining this point.

In that case, the State of Pennsylvania received federal

financial assistance for the State Criminal Alien Assistance

Program, established to alleviate costs states incur in imprisoning

illegal aliens who commit state offenses. 20 The state furnished

these funds to the Pennsylvania Department of Corrections. 2 1 The

plaintiff, M r. Koslow, was employed by the Department of

Corrections as a supervisor at the prison’s water treatment plant

and brought a § 504 suit against his employer for failing to

accommodate his disability following a work related injury. 22

The state d efendants argued that the federal government’s

interest in th e federally funded program was too attenuated from

the general waiver of immunity set forth in § 2000d-7 respecting

claims under § 504. The K oslow court disagreed and concluded that

receipt of federal funding by an agency operated as a waiver of

that agency’s Eleventh Amendment immunity even though the funds are

not earmarked for § 504 purposes. The court gave three reasons for23 Id. at 175-176. (internal citation omitted).

24 Id. at 176.

25 Id.

26 Id.

12 its conclusion. First, the panel found that:

[t]hrough th e Rehabilitation Act [§ 504], Congress has

expressed a clear interest in eliminating disabilitybased discrimination in state departments or agencies.

That interest, which is undeniably significant and

clearly reflected in the legislative history, flows with

every d ollar spent by a department or agency receiving

federal funds. The waiver of the Commonwealth’s immunity

from Rehabilitation Act claims by Department of

Corrections employees furthers that interest directly. 23

Second, § 2000d-7 limits the waiver to the agency or

department that receives federal funds and does not require waiver

by other agencies or the state as a whole. 24 The court concluded

that “[t]his limitation hel ps ensure the waiver accords with the

‘relatedness’ requirement articulated in Dole .” 25

Finally, the court observed that, as a practical matter, § 504

funds received by specifi c state departments or agencies are

frequently not tracked, making it virtually impossible to determine

how the agency spent the federal dollars and whether the federal

funds paid for the affected employee’s salary or benefits. 26

For the same reasons articulated in Koslow

, we reject the

TTUHSC’s argument that the substantial federal financial assistance

for education it rece ived is unrelated to the goals of § 504 and

therefore fails Dole ’s “relatedness” requirement.27 403 F.3d at 282–285.

28 ___ U.S. ___, 125 S. Ct. 1497 (2005).

29 325 F.3d at 617.

30 451 U.S. 1 (1981).

31 Pace II

, 403 F.3d at 279 (emphasis in original); see also Dole

, 483

U.S. at 207 (quoting Pennhurst ).

13 C. Jackson v. Birmingham Board of Education

Finally, LADOE argues that it did not “knowingl y” waive

Eleventh Amendment immunity from suit in federal court under § 504

in accordance with § 2000d-7 by accepting federal funds. As LADOE

acknowledges, this argument was considered and rejected by our en

banc majority in P ace II

. 27 LADOE nevertheless argues that the

Supreme Court’s dec ision in J ackson v. Birmingham Board of

Education

, 28 require s us to re-examine the issue, repudiate the

reasoning of Pace II

, and adopt the analysis of Pace I

. In P ace I

,

the panel held that the state defendant did not “knowingly” waive

its Eleventh Amendment immunity by accepting federal funds because,

at the time it received those funds, the prevailing legal

authorities sugge sted that it had no Eleventh Amendment immunity

from suits under § 504. 29

In rejecting the Pace I panel’s syllogism, the en banc court

in Pace II held that, in accordance with Pennhurst State School &

Hospital v. Halderman

, 30 “the only ‘knowledge’ that the Court is

concerned about is a sta te’s knowledge that a Spending Clause

condition requires waiver of immunity, not a state’s knowledge that

it has immunity that it could assert.” 31 We also stated in P ace II32 Pace II

, id.

33 Id. at 282–285.

34 Jackson , 125 S. Ct. at 1508–09.

35 Id. (internal citation omitted).

14 that, “[a]t bottom. ..if Congress satisfies the clear statement

rule, the knowledge prong of the Spending Clause waiver analysis is

fulfilled.” 32 Finding th at § 504 and § 2000d-7 clearly and

unambiguously conditioned the receipt of § 504 funds on waiver of

a State’s Eleventh Amendment immunity from suits grounded in § 504,

we held that the State had “knowingly waived” immunity from suits

under § 504. 33

LADOE does not argue that § 504 and § 2000d-7 fail the “clear

statement rule” of Pace II ; rather LADOE contends that in Jackson

(decided after Pace II ) the Supreme Court repudiated this “clear

statement rule” and replaced it with a “notice” rule. In J ackson

,

the male coach of a high school’s girls basketball team asserted a

retaliation claim aga inst the local school board, grounding his

claim in Title IX. The school board argued that, because

retaliation claims are not expressly authorized by the language of

Title IX, it was not put on notice of the potential for retaliation

claims under the statute. 34

The S upreme Court agreed that, because Title IX was passed

pursuant to the Spending Cl ause, “private damage actions are

availab le only where recipients of federal funding had adequate

notice that th ey could be liable for the conduct at issue.” 3 536 Id. at 1509 (quoting Pennhurst , 451 U.S. at 17).

37 Id.

15 Consonant with its holding in Pennhurst , the Court reiterated its

position that a State must be aware of th e conditions imposed on

receipt of federal funds for there to be “knowing acceptance” of

those conditions. 36 Acknowledging that Title IX is silent on the

question of the fund recipient’s amenability to retaliation suits,

the Court looked to its prior decisions dealing with the scope of

remedies available under Title IX and concluded (in the absence of

a “clear statement”) tha t the school board nevertheless had

sufficient “notice” because:

[T]he Board should have been put on notice by the fact

that our cases since C annon [v. University of Chicago

, 441 U.S. 677 (1979)], such as G ebser [v. Lago Vista

Independent School Dist.

, 524 U.S. 274 (1998)] and Davis

[v. Monroe County Bd. of Ed.

, 526 U.S. 629 (1999)], have

consistently interpreted Title IX’s private cause of

action broadly to encompass diverse forms of intentional

sex discrimination. 37

LADOE would have us read Jackson as the Court’s abandoning of

College Savings Bank ’ s “clear statement rule” that we applied in

Pa ce II and replacing it with a “notice” test of what the

recipients of the funds should have known at the time the funds

were accepted. We cannot read such a sweeping change into the

court’s opinion in Jackson

. Title IX, the statute at issue in

Jackson , is silent (or at least ambiguous) regarding retaliation;

in contrast, the Spending Clause statutes we addressed in Pace II

were clear and unambiguous regarding waiver: Section 2000d-738 Pennhurst , 451 U.S. at 17; see also Dole , 483 U.S. at 207.

16 expressly and unambiguously states that parties w aive their

Eleventh Amendment immunity to actions under § 504 b y accepting

federal funds. Moreover, there is no language in J ackson that can

be pointed to in support of a conclusion that the Court desired to

modify, much less repudiate, the well-established rule with such a

long and distinguished history laid out in P ennhurst

, Dole

, and

College Savings Bank that “if Congress intends to impose a

condition on the grant of federal moneys,” “it must do so

unambiguously” and “speak with a clear voice.” 3 8 Stated

differently, nothing in Jackson undermines Pace II ’s holding that

a clear statement like the one found in § 2000d-7 is sufficient to

satisfy the “knowing” requirement for a waiver to be valid.” Even

if Jackson can be interpreted as standing for the proposition that

a clear and unambiguous statement from Congre ss is not the

exclusive road to a “knowing waiver,” it can not be read to call

into question the holding in Pace II that the presence of a clear

statement is sufficient to satisfy the ne ed for a waiver to be

“knowing. ” Accordingly, LADOE’s J ackson argument in this regard

fails.

III. CONCLUSION

We hold that LADOE, DSS, and TTUHSC are not entitled to

Eleventh Amendment immunity in these consolidated c ases. We

therefore affirm the district courts’ denials of defendants’

motions to dismiss plaintiffs’ claims under § 504 on the basis of17

such immunity, and we remand the cases to the district courts from

whence they came for further proceedings.

AFFIRMED AND REMANDED.39 Of course, the court’s conclusion here that state law properly

authorized the state officials to execut e contracts in no way

undercuts the arguments in dissent from Pace that the federal law

during the relevant time period (1996 through 1998) did not

communicate to the states that they possessed Eleventh Amendment

sovereign immunity to waive. S ee Pace

, 403 F.3d at 301 (Jones, J.,

dissenting).

18 EDITH H. JONES, Circuit Judge , joined by JOLLY, SMITH, GARZA,

DEMOSS and CLEMENT, Circuit Judges, concurring in part and

dissenting in part:

The en banc decision in Pace v. Bogalusa City School

Board

, 403 F.3d 272 (5th Cir. 2005), held that a state voluntarily

and knowingly waived its Eleventh Amendment immunity, as a matter

of federal law, from suits for damages in federal court by accepting federal Rehabilitation Act funds made subject to 42 U.S.C.

§ 2000d-7. We adhere to the arguments in the dissent from that

decision. We concur, however, in the court’s disposition of the

states’ fallback arguments in these cases. 39