Opinion ID: 587688
Heading Depth: 3
Heading Rank: 2

Heading: Availability of Relief Under Section 504

Text: 35 The APA does not afford complete relief in this case, however, because it does not provide for the award of money damages sought by plaintiff SOS. 8 This component of relief must come from a suit under the Rehabilitation Act. 36 The district court dismissed the present case in part on the ground that the Rehabilitation Act did not waive sovereign immunity so as to authorize a private right of action against the federal government. The district court did not have the benefit of Doe v. Attorney General, decided subsequent to its decision. Doe held that Congress, in enacting section 504, waived sovereign immunity and created a private cause of action against the government. 941 F.2d at 789. 37 The plaintiff in Doe was a physician with AIDS. Upon suspicion that Doe was afflicted, the FBI, which had been sending its agents to him for routine physical exams, essentially stopped the flow of referrals. Doe sued, alleging discrimination on the basis of handicap. After careful analysis of the statute's language, 941 F.2d at 789-91, and review of legislative history, id. at 791-93, the Doe court held that the Rehabilitation Act provided a private cause of action against the federal government. The court opined: 38 First, Congress intended to put the federal government on equal footing with everyone else in making it subject to section 504's prohibition of discrimination against the handicapped. Second, Congress intended to encourage private parties to pursue enforcement of Title V, including section 504, through private rights of action. The debates consider a purpose of both section 504 and 505(b) to be the development of uniformity under Title V's provisions, giving all handicapped persons an equal chance at justice. The goal of uniform private enforcement cannot be accomplished by giving a right only to injunctive relief under the APA ... when the culprit is a federal agency. 39 Id. at 792 (emphasis added). 40 SSA correctly points out that in Doe, the government was acting in its proprietary capacity; that is, it was taking action (contracting for medical services) that any private party might take. In this case the government acts in its regulatory capacity when it adopts and implements procedures for claimants to apply for SSI benefits. 9 SSA relies on this distinction to argue that Doe does not apply to regulatory activities and that the only remedy for regulatory agency action that discriminates against the handicapped is injunctive relief under the APA. Doe is not so limited. 41 Doe's conclusion that Congress intended to permit private suits against the government did not turn on the proprietary/regulatory distinction. Instead, it was based on exhaustive review of statutory language and legislative history. Nowhere in either of those sources was there any indication that a handicapped person's right to sue the government depended on whether the defendant agency was discriminating as proprietor rather than discriminating as regulator. 42 The issue arose in Doe only when we commented upon certain language from Cousins. 10 In doing so, we briefly acknowledged that the First Circuit perceived [its] case as one involving a claim against a federal agency as regulator, 941 F.2d at 793 (emphasis omitted), but we pointedly avoided adopting the proprietary/regulatory dichotomy as the law of this circuit.We accept on its face the First Circuit's characterization of the government's role as regulator in Cousins's case. We note, however, that we allowed a section 504 plaintiff seeking an injunction that would require a government defendant to issue regulations under section 504 to proceed in federal court, without government challenge. Williams v. United States, 704 F.2d 1162 (9th Cir.1983). 43 Id. at 793 n. 17. 44 Neither the language of Doe nor the structure of the Rehabilitation Act limits a private cause of action to those instances where the government discriminates in its proprietary capacity. Any such limitation would require courts to make unfamiliar and potentially unworkable threshold characterizations of agency actions as either proprietary or regulatory. Not all actions may be so easily classified. Therefore, we conclude that a plaintiff states a claim under the Rehabilitation Act by alleging that the government's action, regardless of whether it is labelled proprietary or regulatory, discriminates on the basis of handicap. 45 Once past that point, however, the proprietary/regulatory dichotomy does serve a limited function as a nonbinding indicator of whether the APA should provide the dominant paradigm for decision. Because regulatory actions are presumably the result of an administrative rulemaking process, administrative law principles may pertain. For example, plaintiffs are likely to seek change in government practice or policy as their desired remedy; in other words, they are more likely to seek relief other than money damages. Such changes in policy can be more expeditiously obtained by taking the complaint directly to the agency. If the case eventually requires judicial intervention, formulation of an appropriate injunction will require that the court have access to the same information that the agency has. An administrative record of the type created by an exhaustion proceeding will be indispensable. On the other hand, proprietary actions are less likely to fit the administrative law paradigm, because they are by definition capable of being performed by non-governmental actors. If proprietary actions are alleged to cause harm, tort principles may be more applicable. See Doe, 941 F.2d at 793 (APA's purpose is not to provide a forum for adjudicating government tort liability). The victim of discriminatory proprietary action may be more likely to seek money damages rather than a change in policy, since the discrimination may not have been the result of formally adopted policy to begin with. For that same reason, the administrative record may be less illuminating, and so less necessary to a reviewing court. 46 Applied to the present case, these observations lead us to conclude that exhaustion is an appropriate prerequisite to this section 504 claim. The primary relief sought by all plaintiffs is a change in agency practices; the claim for damages derives from the same factual predicate. 11 While we recognize that the Rehabilitation Act does not require exhaustion of remedies in all cases, prudential concerns dictate exhaustion before resort to the courts in this case. We are particularly concerned with the need to create an adequate record for decision. The question is whether it will best be made by traditional means of developing a court record--discovery and trial--or whether an initial administrative proceeding is the better vehicle. We think the necessary insight into the operations of the agency is more likely to be generated in useful form through an administrative proceeding than through the adversarial clash of interrogatories, depositions and document productions. The agency should be a participant in the process, not an adversary to it. 47 In appropriate cases, the Ninth Circuit has applied a prudential exhaustion requirement in the absence of a statutory mandate for exhaustion of remedies. El Rescate Legal Services, Inc. v. Executive Office of Immigration Review, 959 F.2d 742, 747 (9th Cir.1992). Exhaustion is appropriate where 48 (1) agency expertise makes agency consideration necessary to generate a proper record and reach a proper decision; (2) relaxation of the requirement would encourage the deliberate bypass of the administrative scheme; and (3) administrative review is likely to allow the agency to correct its own mistakes and to preclude the need for judicial review. 49 Montes v. Thornburgh, 919 F.2d 531, 537 (9th Cir.1990) (quoting United States v. California Care Corp., 709 F.2d 1241, 1248 (9th Cir.1983)). All of these considerations suggest the need to exhaust administrative remedies in this case. (1) The agency's expertise in the administration of the SSI program is essential to a court's understanding of the case. The agency is in the best position to determine what information it needs to make eligibility decisions and to evaluate what burdens would be imposed upon whom by different methods of gathering information. (2) The administrative scheme established in 45 C.F.R. § 85 was constructed to assure that the Department of Health and Human Services (of which SSA is a part) conforms to the demands of the Rehabilitation Act in its administration of federal programs. If this suit, which directly implicates the manner in which the Department administers a federal program, is allowed to proceed without reference to 45 C.F.R. § 85, it might inappropriately encourage deliberate bypass of the administrative scheme in other cases. (3) The remedy that plaintiffs seek is the adoption and implementation by SSA of new application procedures. SSA's involvement and input will be indispensable toward that end. Plaintiffs have made no showing that their needs could not be satisfied through an administrative procedure. On the contrary, SSA's counsel explained at oral argument that claimed needs of deaf SSI applicants had been accommodated through the administrative process. On the record before us, we have no reason to believe that SSA, given the impetus of a complaint filed pursuant to HHS regulations, would not develop appropriate application procedures for these plaintiffs without the intervention of the court. 50 Exhaustion is not required where resort to the agency would be futile. El Rescate, 959 F.2d at 747. Exhaustion is futile where the agency's position on an issue appears already set, and it is very likely what its result would have been. Id.; SAIF Corp./Oregon Ship v. Johnson, 908 F.2d 1434, 1441 (9th Cir.1990). There is no indication on the record that such is the case here. The complaint alleges no facts suggesting that it would be futile for the plaintiffs to approach SSA first. In its brief and at oral argument, SSA has consistently taken the position that it is willing to consider plaintiffs' grievances, but prefers to do so in an administrative, as opposed to a litigation, context. Should this not occur within a reasonable time after proper application, plaintiffs will have recourse to the courts. 51 We have previously found claims under the Rehabilitation Act to be appropriate candidates for exhaustion of remedies. In Greater Los Angeles Council on Deafness, Inc. v. Baldridge, 827 F.2d 1353 (9th Cir.1987), plaintiffs claimed that the failure of public television stations to caption their programs for the hearing-impaired violated section 504. We held that 52 the judicially created doctrine of exhaustion of administrative remedies is appropriate here. The court should wait until the Department has ruled on the administrative complaint before it reviews the Department's action vis-a-vis the [Rehabilitation] Act. The creation of an administrative record will best serve the competing interests of the court, the agency, and the aggrieved individual[s]. 53 Id. at 1362 (citation omitted). 54 Plaintiffs' grievances will, we hope, be resolved by the agency acting in concert with those parties affected by its procedures. In the event that the grievances are not resolved or that monetary relief is still sought, the plaintiffs may return to federal court. At that time, they may frame their claims for grievances in a multi-count complaint for declaratory and injunctive relief under the APA and for declaratory, injunctive, and monetary relief under the Rehabilitation Act. The complaint would be supported, if the administrative process has worked as it should, by a comprehensive administrative record that would afford the court a proper basis for decision.