Opinion ID: 705109
Heading Depth: 2
Heading Rank: 2

Heading: The City's Cross Appeal10

Text: 41 Title VI of the Civil Rights Act of 1964 provides that no person shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. 42 U.S.C. Sec. 2000d. Although Title VI itself directly reache[s] only instances of intentional discrimination, Alexander v. Choate, 469 U.S. 287, 293 & n. 8, 105 S.Ct. 712, 716 & n. 8, 83 L.Ed.2d 661 (1985) (citing Guardians Ass'n v. Civil Serv. Comm'n, 463 U.S. 582, 103 S.Ct. 3221, 77 L.Ed.2d 866 (1983)), actions having an unjustifiable disparate impact on minorities [may] be redressed through agency regulations designed to implement the purposes of Title VI. Id. at 293 & n. 9, 105 S.Ct. at 716 & n. 9; see also Craft v. Board of Trustees, 793 F.2d 140, 142 (7th Cir.) (per curiam), cert. denied, 479 U.S. 829, 107 S.Ct. 110, 93 L.Ed.2d 59 (1986). Among these regulations, 45 C.F.R. Sec. 80.3(b)(2), which applies to programs administered by the Department of Health and Human Services, provides, in relevant part, that recipients of federal funds may not, in the course of redistributing those funds: 42 directly or through contractual or other arrangements, utilize criteria or methods of administration which have the effect of subjecting individuals to discrimination because of their race, color, or national origin, or have the effect of defeating or substantially impairing accomplishment of the objectives of the program as respect individuals of a particular race, color, or national origin. 43 Based upon this regulation, the City submits that Lindley's use of the 75+ and rural factors in her funding formula, in place of disability and language barrier factors, has the effect of discriminating against minorities. The City notes that, although 13.7% of Illinois' older individuals are minorities, only 10.7% of the State's population over the age of seventy-five are minorities and that older individuals living in rural areas are 98% non-minority. Lindley responds that her formula explicitly distributes, via the minority factor, 10% of all federal OAA funds to PSAs based exclusively on the number of minority older individuals living there. The poverty factor, which accounts for 25% of fund distributions, also favors PSAs containing higher populations of older minority individuals, a great number of whom live in poverty. Lindley then emphasizes that her formula disburses 29.14% of the State's OAA funds to Chicago even though the City contains only 23% of the State's older individuals. Moreover, she notes, the 75+ and rural factors do not exclude minorities. Finally, Lindley submits that her use of the 75+ and rural factors comports with the goals of the OAA because these factors help ensure that OAA funds are provided to older individuals who are in greatest need. 11
44 Lindley's formula, without question, distributes more OAA funds to a PSA as the number of minority older individuals residing there increases. The formula's minority factor allocates 10% of all OAA funds solely on this basis. Indeed, this factor contributes substantially to the Chicago PSA's ability to garner over 29% of all OAA distributions even though only 23% of Illinois' older individuals actually reside in the Chicago PSA. The fact that the City's higher concentration of minority older individuals allows it to receive substantially more funds than it would were the funds distributed pro rata suggests that the City's claim that the formula has a disparate impact on minorities is without merit. 45 The City disagrees, citing Connecticut v. Teal, 457 U.S. 440, 450-51, 102 S.Ct. 2525, 2532-33, 73 L.Ed.2d 130 (1982), for the proposition that the favorable result generated by Lindley's formula is not a permissible defense if the formula includes factors with a racially disparate impact. Appellee's Br. at 43 n. 22. Teal was a Title VII case, not a case brought under regulations promulgated to effectuate Title VI. In Teal, a group of African-American employees challenged the promotion system of a state agency. The promotion process consisted of multiple steps, the first of which required applicants to achieve a passing score on a written examination. See 457 U.S. at 443, 102 S.Ct. at 2528. Far fewer African-Americans than whites passed this examination, and those who failed were excluded from the pool of candidates eligible for promotion. Id. at 443-44, 102 S.Ct. at 2528-29. However, the state agency ensured that sufficient numbers of African-Americans from among those who passed the test received promotions so that, ultimately, a much higher percentage of African-American than white test-takers actually earned a promotion. See id. at 444, 102 S.Ct. at 2529. The state claimed that this result eliminated any disparate impact generated by the examination, but the Court disagreed. Focusing upon the fact that the relevant provision of Title VII created a discriminatory bar to opportunities, id. at 450, 102 S.Ct. at 2532 (emphasis in original), the Court reasoned that measuring disparate impact only at the bottom line ignores the fact that Title VII guarantees these individual respondents the opportunity to compete equally with white workers on the basis of job-related criteria. Id. at 451, 102 S.Ct. at 2533 (emphasis in original). In sum, the disparate exclusion of minority candidates at the first stage of the selection process was not ameliorated by the favorable end result because excluded candidates were deprived individually of the opportunity for promotion. 46 Although Teal is a Title VII case, we shall assume that the principle for which it stands is applicable in a Title VI case as well. 12 Nevertheless, the applicability of that principle to the case under advisement is not at all clear. First, this case, unlike Teal, does not present a situation in which one factor used in an evaluative process harms some individuals of a particular racial group even though the process as a whole benefits that racial group; rather, Lindley's formula benefits all minority older individuals from the start because of the heavily-weighted minority factor in Lindley's formula. Second, unlike the situation in Teal, which involved a step-by-step selection process in which one step disparately excluded minority individuals from moving on to the next step and, in turn, deprived them of any opportunity for benefits, see Teal, 457 U.S. at 451, 102 S.Ct. at 2533, Lindley's formula applies a variety of factors simultaneously to determine the appropriate distribution of benefits. 13 Finally, and most significantly, the City's argument would require that Lindley also eliminate the minority factor altogether--the very factor that most favors the City. Unlike the 75+ and rural factors, which do not on their face limit distribution of OAA funds on racial grounds, the minority factor wholly eliminates white older individuals from consideration with respect to 10% of all funds. As such, the factor, viewed in isolation as the City argues all factors must be, constitutes a criteri[on] ... of administration which [has] the effect of subjecting individuals to discrimination because of their race, see 45 C.F.R. Sec. 80.3(b)(2), in direct violation of the regulation upon which the City bases its claim. 47 However, even assuming the applicability of the Teal methodology, the City's claim still fails. With respect to the 75+ factor, the City offers a raw comparison of population percentages, noting that 13.7% of the State's older individuals are minorities while only 10.7% of those over the age of seventy-five are minorities. The City does not claim in its brief, however, that the difference in these percentages is statistically significant. See Hazelwood Sch. Dist. v. United States, 433 U.S. 299, 308-11 & nn. 14, 17, 97 S.Ct. 2736, 2742-44 nn. 14, 17, 53 L.Ed.2d 768 (1977). Consequently, the City has not established that use of the 75+ factor, considered in isolation, produces a disparate impact for purposes of Title VI's regulations. 48 With respect to the rural factor, the City notes that only 2% of the State's older minority individuals live in areas designated rural. Viewed in isolation, the rural factor appears to favor substantially non-minorities. However, it does not appear that Lindley's use of the factor substantially impair[s] accomplishment of the objectives of the [OAA] program as it relates to minority older individuals. See 45 C.F.R. Sec. 80.3(b)(2). The factor does not exclude minorities on its face. In addition, as the district court determined, the amount of funds at issue, when the rural factor is viewed in isolation, is small as compared to the overall OAA distribution to Illinois, and the actual benefit to minorities from eliminating the factor is unclear because the City is not required to expend the funds it receives on the basis of its minority older population dollar for dollar on those individuals. 14 Moreover, the regulations specifically recognize that rural Americans in the older age categories have needs that must be addressed and requires that each state provide assurances that the State agency will spend in each fiscal year, for services to older individuals residing in rural areas in the State [,] an amount not less than 105% of the amount spent for such services in 1978. 42 U.S.C. Sec. 3027(a)(3)(B) (emphasis added). In light of this statutory provision, elimination of the rural factor, rather than its use, would substantially impair the objectives of the OAA. 49 In sum, the factors the City challenges do not have a disparate impact on the State's minority older individuals, do not substantially impair the OAA program as it relates to such individuals, or are substantially justified in light of the purposes of the OAA.