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U.S. Supreme Court

DOT v. Paralyzed Veterans of America, 477 U.S. 597 (1986)

United States Department of Transportation

v. Paralyzed Veterans of America

No. 85-289

Argued March 26, 1986

Decided June 27, 1986

477 U.S. 597


Section 504 of the Rehabilitation Act of 1973 prohibits discrimination against handicapped persons in "any program or activity receiving Federal financial assistance." The United States provides financial assistance to airport operators through grants from a Trust Fund under the Airport and Airway Development Act of 1970 and its successor statute, the Airport and Airway Improvement Act of 1982 (Trust Fund Acts). The Government also operates a nationwide air traffic control system. Respondent organizations representing handicapped individuals brought an action in the Court of Appeals challenging, inter alia, the conclusion of the Civil Aeronautics Board (CAB) that its regulatory authority under § 504 was limited to those few airlines that receive subsidies under the Federal Aviation Act. The Court of Appeals held that § 504 gave CAB jurisdiction over all air carriers by virtue of the extensive program of federal financial assistance to airports under the Trust Fund Acts, and that the air traffic control system was an additional source of financial assistance to airlines. The court then vacated the regulations to the extent that their application was limited to carriers receiving funds under the Federal Aviation Act, and instructed the Department of Transportation, CAB's successor, to issue new regulations that would apply to all commercial airlines.

Held: Section 504 is not applicable to commercial airlines. Pp. 477 U. S. 603-612.

(a) Section 504's scope is limited to those who actually "receive" federal financial assistance. Congress sought to impose § 504 coverage as a condition or obligation tied to the recipient's agreement to accept the federal funds. By so limiting coverage to recipients, Congress imposed § 504's obligations upon those who are in a position to accept or reject those obligations as part of the decision whether or not to "receive" federal funds. In this case, the only parties in that position are the airport operators who are the recipients of federal funds under the Trust Fund Acts. Pp. 477 U. S. 603-606.

(b) To assert that the economic benefit to airlines from the aid to airports is a form of federal financial assistance ignores the distinction that chanroblesvirtualawlibrary

Page 477 U. S. 598

Congress made in § 504 that the statute covers only those who receive the aid, and does not extend to those who benefit from it. Pp. 477 U. S. 606-607.

(c) To tie § 504's scope to economic benefit derived from the Trust Fund expenditures in question here would give § 504 almost limitless coverage. Congress recognized a need to improve airports in order to benefit a wide variety of persons and entities, all of them classified together as beneficiaries, and did not set up a system whereby passengers are the primary or direct beneficiaries and all others, including airlines, benefited by the Trust Fund Acts are indirect recipients of the financial assistance to airports. Pp. 477 U. S. 608-610.

(d) The Court of Appeals' attempt to fuse airports and airlines into a single program or activity for purposes of § 504 is unavailing. Regulatory coverage tied to the scope of the intended beneficiaries of the Trust Fund Acts is inconsistent with congressional intent in passing § 504. Pp. 477 U. S. 610-611.

(e) Since the air traffic control system is "owned and operated" by the United States, it is not "Federal financial assistance" within the meaning of § 504. Rather, it is a federally conducted program that has many beneficiaries, but no recipients. Pp. 477 U. S. 611-612.

243 U.S.App.D.C. 237, 762 F.2d 694, reversed and remanded.

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J.,and WHITE, REHNQUIST, STEVENS, and O'CONNOR, JJ., joined. MARSHALL, J., filed a dissenting opinion, in which BRENNAN and BLACKMUN, JJ., joined, post, p. 477 U. S. 613. chanroblesvirtualawlibrary

Page 477 U. S. 599

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