Opinion ID: 783836
Heading Depth: 3
Heading Rank: 4

Heading: Application of Musick Analysis

Text: 72 In holding that a right to contribution was consistent with the overall structure of the 1934 act, the Musick Court considered express liability provisions of the 1933 and 1934 acts and found that two of the eight express liability provisions in the 1934 act were analogous to Rule 10b-5 in structure, purpose, and intent. Because those provisions expressly created a right to contribution, the Court held that implying such a right in a Rule 10b-5 action was consistent with the 1934 act. Id. at 295-97, 113 S.Ct. at 2090-91. The Court also found relevant the fact that most courts of appeals had recognized a right to contribution in Rule 10b-5 actions for more than 20 years. Id. at 297-98, 113 S.Ct. at 2091. 73 UMass and Delaware State argue that, in considering analogous statutes, we need look no further than section 503 of the Rehabilitation Act and Title I of the ADA, which prohibit discrimination in employment and which, because their remedies are derived from Title VII of the Civil Rights Act of 1964, do not, after Northwest Airlines, create a right of contribution. Temple argues that the purpose of section 504 and Title II is not simply to prohibit discrimination but also, unlike other civil rights laws such as section 503 and Title I, to regulate recipients of federal funds and ensure that government money is not spent on programs that discriminate. Temple suggests that, because section 504 and Title II are examples of Spending Clause legislation, we should look to contract law, not to other civil rights statutes, in deciding whether to allow a right to contribution. 22 Temple Br. at 26-32. 74 In Barnes v. Gorman, 536 U.S. 181, 122 S.Ct. 2097, 153 L.Ed.2d 230 (2002), the Supreme Court held that punitive damages are not available under Title II and section 504. Relying on the contract analogy, the Court stated that [a] funding recipient is generally on notice that it is subject not only to those remedies explicitly provided in the relevant legislation, but also to those remedies traditionally available in suits for breach of contract. Id. at 187, 122 S.Ct. at 2101. The Court explained its holding in Franklin that compensatory damages are available under Title IX of the Educational Amendments of 1972, although not expressly provided, and its holding in Cannon that injunctive relief is similarly available on the grounds that those remedies are forms of relief traditionally available in suits for breach of contract. Id., 122 S.Ct. at 2101. Punitive damages, however, are not generally available for breach of contract, and the Court, therefore, held that they should not be available under Title II and section 504 either. Id. at 187-88, 122 S.Ct. at 2102. But Temple argues that contribution is different as it generally is available in suits for breach of contract. See 12 Samuel Williston, Law of Contracts § 36.14 (4th ed.1999). 75 The Court in Barnes stated that the contract law analogy may apply in Spending Clause cases defining the scope of damages remedies, deciding whether a damages remedy is available at all, and defining the scope of conduct for which funding recipients may be held liable for money damages. Id. at 186-87, 122 S.Ct. at 2101. The principle supporting the analogy in each of these types of cases is that in Spending Clause cases `in return for federal funds, the [recipients] agree to comply with federally imposed conditions.' Id. at 186, 122 S.Ct. at 2100-01 (quoting Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17, 101 S.Ct. 1531, 1540, 67 L.Ed.2d 694 (1981) (alteration in original)). In other words, the task for courts in such cases is to define the contractual terms, that is, to hold recipients to the terms of their bargain but not to impose conditions of which the recipient could not fairly have been aware. 76 Although we may assume that a defendant in a traditional common law breach of contract case would be entitled to contribution, we share the sentiment expressed by two Justices in the 5-4 Barnes majority, namely that the contract-law analogy may fail to give such helpfully clear answers to other questions that may be raised by actions for private recovery under Spending Clause legislation.... Id. at 191, 122 S.Ct. at 2103 (Souter, J., and O'Connor, J., concurring); see also id. at 186, 122 S.Ct. at 2101 (majority opinion) ([W]e have been careful not to imply that all contract-law rules apply to Spending Clause legislation.... (emphasis in original)). Unlike the Court in Barnes and the cases cited therein, such as Franklin and Pennhurst, we are being asked here to formulate a right that belongs not to a member of the class Congress sought to protect, but that instead benefits solely a violator of the duties Congress created for the protection of that class. 23 This case, therefore, does not fit easily within the line of cases relying on the `traditional presumption in favor of any appropriate relief for violation of a federal right' in finding implied remedies. Id. at 185, 122 S.Ct. 2097 (quoting Franklin, 503 U.S. at 73, 112 S.Ct. at 1036) (emphasis in Barnes ). Because Barnes used the contract-law analogy to determine the scope of appropriate relief under Franklin, that analogy can be of only limited use to us here, where the Franklin presumption does not apply. 77 Thus, in looking for analogous provisions under Musick, we look, as did the Musick Court, to other sections of the legislation creating the cause of action sued on for guidance, not to contract law. To do otherwise, we would have to read Musick as conferring a broad common law power on the federal courts to create a right of contribution in cases involving an implied right of action as long as the court could find support for such a right in any other analogous area of the law. Musick, however, does not give the federal courts such broad power. A court must look not to any analogous area of the law, but rather to the intent of Congress insofar as the court can distill that intent from the structure and language of the legislation as a whole. In this case we, therefore, look to the rest of the ADA and the Rehabilitation Act for guidance. 24 78 In particular, we look to other provisions of these statutes that are close in structure, purpose, and intent to the private right of action under Title II and section 504. Id. at 295, 113 S.Ct. at 2090. In Musick, the Court found that two sections of the 1934 act are close in structure, purpose, and intent to the Rule 10b-5 action for two reasons: (1) they target the precise dangers that are the focus of section 10(b) and are motivated by the same intent to deter fraud in the securities market and to ensure full disclosure of material information; and (2) they impose liability on defendants who stand in a position most similar to 10b-5 defendants for the sake of assessing whether they should be entitled to contribution. 508 U.S. at 295-96, 113 S.Ct. at 2090-91. Looking to the other liability provisions of the Rehabilitation Act and the ADA, it is clear that none are as close in structure, purpose, and intent to the private section 504 and Title II actions as the two 1934 act provisions used by the Court in Musick are to Rule 10b-5. Yet, because those provisions closest in structure, purpose, and intent to section 504 and Title II and the legislative history and structure of the statutes do not suggest that Congress would have created a right to contribution had it created an explicit private right of action for violations of either section 504 or Title II, we hold that there is no right to contribution under either of those provisions. 79 Among the declared purposes of the Rehabilitation Act of 1973 was authorization of programs to develop and implement comprehensive and continuing state plans for meeting the need for providing vocational rehabilitation services to disabled persons and to provide such services for the benefit of such individuals,  Rehabilitation Act of 1973, Pub.L. No. 93-112, § 2(1) (1973) (emphasis added); to initiate and expand services to groups of handicapped individuals ... who have been underserved in the past, id. § 2(6); and to promote and expand employment opportunities in the public and private sectors for handicapped individuals and to place such individuals in employment, id. § 2(8). The statement of purpose was amended in 1978, simultaneously with the amendments creating private rights of action by cross-reference to read: The purpose of this Act is to develop and implement, through research, training, services, and the guarantee of equal opportunity, comprehensive and coordinated programs of vocational rehabilitation and independent living. Pub.L. No. 95-602, § 122(a)(1) (1978). 80 To further this purpose, Title V of the Rehabilitation Act prohibits certain entities from discriminating against persons with disabilities. Section 501 requires all executive branch agencies and departments to submit affirmative action plans for the hiring and advancement of disabled persons and prohibits discrimination on the basis of disability in federal employment. 29 U.S.C. § 791. Section 503 requires all federal contractors to take affirmative action to employ and advance in employment qualified persons with disabilities. Id. § 793. Finally, section 504 prohibits any program or activity receiving federal funds from discriminating against persons with disabilities. Id. § 794. From 1973 to 1978, the federal courts generally began to recognize a private right of action under section 504, but not under section 501, while the courts were split on the question whether a private right of action existed under section 503. See Smith v. United States Postal Serv., 742 F.2d 257, 259 (6th Cir.1984). In 1978, Congress amended the act to create private remedies for violations of sections 501 and 504 in order to clarify the confusion in the lower courts. Id. Congress, however, did not create a right of action under section 503 with the 1978 amendments, and every court of appeals facing the question since has held that an implied right of action does not exist under that provision. See 2 Americans With Disabilities: Practice and Compliance Manual § 8:272 (2003) (compiling cases from every court of appeals). 81 Section 501 is, therefore, the only other liability provision in the Rehabilitation Act that is even arguably similar to section 504. While the analogy is not perfect, the two sections share the basic goal of protecting persons with disabilities from discrimination, much in the same way as the statutes at issue in Musick shared the common goal of deterring fraud and ensuring full disclosure of material information. Furthermore, defendants in a section 501 action stand in a position similar to defendants in a section 504 action in that the two sections impose direct liability on defendants for their own acts as opposed to derivative liability. See Musick, 508 U.S. at 296, 113 S.Ct. at 2090. But section 501 does not provide for a right to contribution, nor does any court appear to have recognized a right to contribution in a section 501 action. 25 Indeed, there is no provision of the Rehabilitation Act that appears to contemplate the existence of a right to contribution. 82 More importantly, section 501 rights and remedies are derived from Title VII, which, under Northwest Airlines, does not create a right of contribution. Thus, inasmuch as Congress took no action in 1978, when it created private rights of action by cross-reference under sections 501 and 504, to create a right to contribution, and because no such right explicitly or implicitly exists in section 501 or any other section of the Rehabilitation Act, we are unable to infer that Congress in 1978 would have created such a right had it crafted a more explicit private remedial scheme for violations of section 504. Thus, we reach our conclusion that there is no right to contribution under section 504 of the Rehabilitation Act. 83 Similarly, nothing in the ADA counsels in favor of recognizing a right to contribution for violations of Title II. The ADA's goals are familiar: (1) to provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities; (2) to provide clear, strong, consistent, enforceable standards addressing discrimination against individuals with disabilities; (3) to ensure that the federal government plays a central role in enforcing the standards established on behalf of individuals with disabilities; and (4) to invoke the sweep of congressional authority, including the power to enforce the Fourteenth Amendment and to regulate commerce, in order to address the major areas of discrimination faced day-to-day by people with disabilities. 42 U.S.C. § 12101(b). Title I of the ADA prohibits discrimination in employment and provides that rights and remedies available under Title VII of the Civil Rights Act of 1964 are available under Title I. Id. § 12117. Title II prohibits discrimination by a public entity. Id. § 12132. Rights and remedies available under section 504 of the Rehabilitation Act are available under Title II. Id. § 12133. Finally, Title III prohibits discrimination in public accommodations. Id. § 12182. Rights and remedies available under Title II of the Civil Rights Act of 1964 are available under Title III. Id. § 12188. 84 Although all three titles have similar purposes, that is, to eliminate discrimination in the sphere each one covers, Title I is more analogous to Title II than is Title III because Title I defendants stand in a position similar to Title II defendants for reasons comparable to those we discussed above with respect to defendants under sections 501 and 504 of the Rehabilitation Act. On the other hand, Title III defendants cannot be liable for money damages. Id. § 12188(a); Wander v. Kaus, 304 F.3d 856, 858 (9th Cir.2002). Title I does not provide for a right to contribution nor does any court appear to have implied such a right. Furthermore, under Northwest Airlines, contribution is not available under Title VII. Even were we to consider Title III as another possibly analogous provision, neither Title III nor Title II of the Civil Rights Act of 1964 appears ever to have been held to create a right to contribution. Thus, we reach our conclusion that there is no right to contribution under Title II of the ADA. We, therefore, will reverse the district court's orders of November 7, 2001, and March 6, 2002, appealed at No. 02-3236, with respect to UMass and Delaware and remand the matter to the district court to dismiss the contribution claims against them under both section 504 and Title II. 85 We close with a final observation. In this case, we hold that Temple cannot have a right of contribution from UMass or Delaware State and, as Bowers has not sued them directly and there are no other claims pending against them, they will be dismissed from this action. But at this time we cannot be certain as to how the proceedings will go forward (beyond the case being dismissed as to all three third-party defendants) and we, therefore, cannot know whether Bowers will recover judgments against the defendants and, if so, whether the damages recovered will be duplicative and, indeed, how the district court will submit the case to the jury or, in the absence of a jury trial, itself calculate damages if Bowers establishes that the defendants are liable. Thus, we want to make clear that we do not intend to bar a party satisfying a judgment from seeking reimbursement in part from other judgment debtors. It may be that the district court will avoid the possibility that recovery against defendants will overlap by separating Bowers's case against the various defendants so that damages against a liable defendant are ascertained individually. But we cannot be sure that this can or will be done, though surely it would be desirable to do so. In any event, we do not intend by this opinion to preclude the district court from entertaining arguments and granting relief to a party satisfying a judgment for which more than one defendant is responsible by allowing it to make a recovery from other defendants on some principle provided it is consistent with this opinion.