Transcript

IN THE SUPREME COURT OF THE UNITED STATES

SHEILA RENDELL-BAKER ET AL., Petitioners, v. SANDRA KOHN ET AL.

No. 80-2102

April 19, 1982

The above-entitled matter came on for oral argument before the Supreme Court of the United States at 10:05 o'clock a.m.

APPEARANCES:

ZACHARY R. KAROL, ESQ., Boston, Massachusetts; on behalf of the Petitioners.

MATTHEW H. FEINBERG, ESQ., Boston, Massachusetts; on behalf of the Respondents.

PROCEEDINGS

CHIEF JUSTICE BURGER: We will hear arguments first this morning in Rendell-Baker and others against Sandra Kohn.

Mr. Karol, you may proceed whenever you are ready.

ORAL ARGUMENT OF ZACHARY R. KAROL, ESQ., ON BEHALF OF THE PETITIONERS

MR. KAROL: Mr. Chief Justice, and may it please the Court, the question in these two consolidated cases is whether an ostensibly private school which is retained by the state to discharge the state's obligation to provide special education acts under color of law when it dismisses several of its teachers for criticizing the manner in which that education is provided.

Petitioners are six former teachers and counselors at Respondent New Perspectives School in Brookline, Massachusetts. They allege they were dismissed for fulfilling their professional duty to speak out on school matters affecting the education of their students.

Although the school is ostensibly private, all 50 of its students were placed there by state agencies or local school committees under the Massachusetts special education statute. Each child's educational program was prescribed by public officials. State agencies or local school committees also paid each child's tuition, with the result that as much as 99 percent of the school's operating funds were derived from public sources.

Thus, the school had no students except those which had been placed there by public officials. It had virtually no operating funds except those which had been provided by public officials. It was contractually obligated to implement educational programs prescribed by public officials, and it had no function except to discharge the Commonwealth's own obligation to provide special education to students which public officials had placed at the school.

QUESTION: Who owns the building and properties?

MR. KAROL: The building and properties are privately owned by the school's trustees.

QUESTION: Who selects the teachers?

MR. KAROL: The teachers are selected by the school management, including the directors and the executive director of the school.

QUESTION: Are any of them public officials?

MR. KAROL: No.

Under the circumstances of this case, Petitioners submit that the school is subject to the same constitutional obligations as an ordinary public school in connection with the performance of its educational activities.

To place the issue into its proper context, it is important to understand more fully the statutory scheme under which special education is provided in Massachusetts. Chapter 766 of the Acts of 1972 confers upon every school aged child the statutory right to receive suitable, publicly funded education. If a child is suspected of having special learning needs, he is evaluated by a team of educators, physicians, and psychologists appointed by the state. If the team determines that the child does have special learning needs, then it formulates an individualized educational plan or IEP to meet those needs.

The IEP establishes educational objectives for the child, and sets out in detail an educational program designed to achieve those objectives. By law, the IEP must be implemented by the child's regular public school to the fullest extent possible. If the regular public school is unable to implement the IEP, then but only then may the school committee place the child in a specially accredited private school, such as the Respondent in this case.

The school must agree to implement the IEP and to submit to extensive state regulation and inspection. It must also report periodically on the child's progress, with a view toward returning him to the public school as soon as possible. For its part, the school committee must pay each child's tuition, and it also must monitor the child's progress and the school's performance.

The school committee also has an ongoing obligation to revise the child's IEP as the need arises. If the regular public school is unable to implement the IEP, and if the school committee is unable to locate a suitable private school which is willing and able to do so, then by law the school committee must establish a suitable program of its own.

So, in short, every school aged child has an unconditional right to suitable education, and the Commonwealth has an absolute duty to provide it. It is also significant that school attendance was made compulsory under Chapter 766 for children entitled to special educational benefits.

This, then, was the statutory scheme under which state agencies or local school committees provided the school with all of its students and virtually all of its operating funds.

QUESTION: Did the Court of Appeals for the First Circuit agree with all of your positions as to the statutory law of Massachusetts?

MR. KAROL: I don't know of any disagreement that they expressed with any of these positions.

The dismissals which gave rise to the litigation were all alleged to have been in retaliation for Petitioner's speech critical of school policies and administration. It was against this background and on these facts which, as I have noted, the First Circuit assumed to be true for purposes of its opinion, that Petitioners maintain that the school is subject to the sane constitutional obligations as an ordinary public school in connection with the performance of its educational activities.

QUESTION: Well, isn't that true of every private school? It must meet the state standards?

MR. KAROL: We think that there is a critical difference in this case. An ordinary private school is not discharging an obligation of the Commonwealth or of the state when it provides education, because the children who attend that school have chosen to reject the education which the state is required to offer. The school in this case was clearly discharging an obligation of the Commonwealth, not only in the sense that the Commonwealth was paying for the education and had prescribed the educational program for the child, but that the Commonwealth would have had to provide this education itself. These were children who had come forward to claim the special educational benefits which the state was statutorily obligated to provide.

We contend that the school is subject to constitutional obligations on two principal grounds.

QUESTION: You say there is a great difference between this situation and the situation that the Chief Justice posed to you, but isn't this state by statute required to furnish an education for everybody?

MR. KAROL: Yes, it is required to furnish an education for everyone.

QUESTION: If somebody wants to go to public school, he has a right to go to public school.

MR. KAROL: Yes.

QUESTION: By statute.

MR. KAROL: Yes.

QUESTION: And if they choose to go to private school instead, why, that is at least a replacement for a state obligation, isn't it? It is a substitute for a state obligation, as long as the state approves it as an adequate substitute.

MR. KAROL: It is a substitute for the obligation of the --

QUESTION: Well, how is that different from this situation, other than the financing?

MR. KAROL: Because the private school in that case is providing education to children who have -- either they or their parents have chosen to reject the public education which the state provides.

QUESTION: Well, I know that. That may be one way of talking about it, but it nevertheless is discharging the state obligation in both cases.

MR. KAROL: Well --

QUESTION: At least it is a substitute for a state obligation.

MR. KAROL: It is a substitute, but --

QUESTION: And furthermore, the child is discharging his obligation in the same way in both cases.

MR. KAROL: That is correct. The child is discharging his obligation to attend a school.

QUESTION: Yes, and the state is relieved of an obligation in both cases.

MR. KAROL: Well, the state would still have an obligation --

QUESTION: Or it is relieved of an obligation to do it itself.

MR. KAROL: It is -- That is correct. The important point that we wish to emphasize is that when the school provides education in this case to these children, it is discharging an obligation of the state and performing a sovereign function as an agent or instrumentality of the Commonwealth. When state agencies or state employees provide services in discharge of the Commonwealth's obligation, they, of course, must observe constitutional standards when they do so.

The question then in this case is whether a different standard should apply when the state elects to deliver those same services through a closely controlled agent like the school, rather than through its own full-time employees.

We maintain that the same standard must apply in either case, because states should not have it within their discretion to avoid constitutional obligations by the simple expediency of farming out their statutory obligations. The existence or non-existence of constitutional rights must not be permitted to turn upon formal distinctions between agents who are on the state payroll and those who aren't. If states are permitted to retain alter egos like the school to deliver essential services, and if those alter egos are as free to disregard constitutional rights as they -- as the state chooses to permit them to be, then citizens will ultimately be dependent upon nothing more than the will of the state for protection --

QUESTION: Well, what -- suppose a city has an obligation to provide roads and streets and bridges and things like that, which it does, and it contracts with a construction firm to build a bridge, and it has -- it certainly has standards that they have to live up to. They put out for bids, and they have the specifications, and they agree to pay a certain amount of money. They finance the entire deal. Do you think that that makes that independent contractor a state instrumentality for purposes of the Fourteenth Amendment?

MR. KAROL: Not necessarily. We would distinguish cases in which the private entity is performing a function on behalf of the state from situations in which it is not, and we would distinguish it on the basis of whether or not the private entity's conduct substantially and materially affects the delivery of the particular service, so that under this functional analysis --

QUESTION: Well, suppose the fellow who is in charge -- the superintendent of the job is fired. He has been in charge, and midway through the building of the bridge he gets discharged for a reason that he says violates his due process rights. Wouldn't that have as much of an impact on the delivery of the state services as the discharge in this case?

MR. KAROL: I don't believe so. I think the distinction is that when a school fires teachers for failing a professional duty to speak out on professional matters, on educational matters affecting students, that there is not only the immediate impact of losing those particular teachers, but that all teachers at that school then and in the future know that they risk dismissal for expressing those types of professional opinions and --

QUESTION: What if Justice White's hypothetical employee working on this bridge spoke out and said that the company was not building the bridge correctly, and that it might endanger the public.

MR. KAROL: In most cases --

QUESTION: Would that be any different?

MR. KAROL: In most cases, I would say, yes, it would be different, unless --

QUESTION: Well, he is speaking out to protect the public.

MR. KAROL: Unless --

QUESTION: He thinks he is speaking out to protect the public.

MR. KAROL: Unless that particular individual has a position of responsibility which -- under which it is his job in discharging the obligation of the state in this case to say what he is saying. If --

QUESTION: You mean, he is hired to build a bridge, not to talk.

MR. KAROL: That's -- if he is the superintendent of the job, that is correct, but if you take, for example, a truck driver, or somebody who is laying the concrete, and he is criticizing the design of the bridge, and is speaking in public forums, I would say that the private contracting company would have a right to discharge that individual, because the --

QUESTION: But not the superintendent, you think?

MR. KAROL: If it is the superintendent's position to express opinions concerning the safety of the project, then in that case I would say that he would have a right to speak out, to the same extent that the state engineer in charge of the project would have a right to do so.

QUESTION: Mr. Karol, this is not a state institution, is it?

MR. KAROL: It is a private institution. Yes, Your Honor.

QUESTION: And the employees are not state employees.

MR. KAROL: They are not employees of the state. They are not on the state payroll.

QUESTION: Where do they get under -- How do they get under the Fourteenth Amendment?

MR. KAROL: They are acting under the color of law in the sense that they are agents or instrumentalities of the state.

QUESTION: How are they agents? They are not paid by the state, are they?

MR. KAROL: They are not on the state payroll. Their funds --

QUESTION: They weren't hired by the state, were they?

MR. KAROL: They were not hired by the state.

QUESTION: Well, how do they become state officials?

MR. KAROL: They are paid by funds provided by the state, and they are subject to the control of the state.

QUESTION: That is true as to Harvard's, too, isn't it?

MR. KAROL: Excuse me?

QUESTION: There are some people at Harvard that are paid with federal funds, too, aren't they?

MR. KAROL: But they are not discharging --

QUESTION: And it is still private, isn't it?

MR. KAROL: That is still private. They are not discharging any obligation of the Commonwealth to deliver the educational services which they are delivering.

QUESTION: I just don't understand how they become state employees.

MR. KAROL: They don't become state employees.

QUESTION: And my "state" is in quotes.

MR. KAROL: They become instrumentalities of the state --

QUESTION: And I think you need those quotes to get under the Fourteenth Amendment.

MR. KAROL: Well, as the Court --

QUESTION: Unless you can persuade me I am wrong.

MR. KAROL: As the Court said in Evans versus Newton, and this is the quote from the opinion, "When private individuals or groups are endowed by the state with powers or functions governmental in nature, they become agencies or instrumentalities of the state and subject to its constitutional limitations." There have been several opinions by this Court in which private entities have been held subject to constitutional obligations. For example, in Burton versus Wilmington Parking Authority, the Eagle Coffee Shop was, of course, private.

QUESTION: Did that case say that the employees were state employees? They weren't even involved. The employees weren't involved in the case.

MR. KAROL: No, that case said that the --

QUESTION: Well, I am still waiting for one that will help you.

MR. KAROL: They become --

QUESTION: I think that's your problem.

MR. KAROL: They are not state employees, but I don't believe the Fourteenth Amendment requires or applies only to employees. I believe that it applies to persons who are acting under color of law, and that when the private employee is discharging an obligation of the Commonwealth --

QUESTION: Well, suppose the private employee makes his speech to a private student. Would that be protected by the Fourteenth Amendment?

MR. KAROL: Under the circumstances in which it was -- if under the circumstances --

QUESTION: I gave you the circumstances. In the school, he got a group of private students who were paying their tuition, and told them -- made a speech to them. Is that a protected speech?

MR. KAROL: If these were private students who had not been sent there by the Commonwealth, the answer is no. It would be a private speech.

QUESTION: Well, what was this speech made to, only public students?

MR. KAROL: There were no students at this school except students who had been sent by state agencies or local school committees. All 50 of the students had been placed there by the state.

QUESTION: Was that done after -- Was that school open before the statute or after?

MR. KAROL: There isn't anything in the record about the history of the school. I believe it was opened shortly before the statute, and I don't know if there is anything -- I believe there is nothing in the record as to whether it ever had any students except those placed by the state.

QUESTION: Well, go down all of the indicia of a state employee, and they don't have any. Do they take an oath to the state?

MR. KAROL: They did not take an oath, but they signed a contract which provided that they would discharge the obligation of the Commonwealth to implement the IEP.

QUESTION: And so do bootleggers sign contracts, too, don't they?

MR. KAROL: Excuse me?

QUESTION: The fact they sign a contract doesn't have anything to do with my point. Well, did they sign a contract with the state?

MR. KAROL: Yes, with the local school committees and state agencies.

QUESTION: With the state?

MR. KAROL: Agents of the state or instrumentalities of the state, state agencies.

QUESTION: They filed a contract to teach and to be paid. Did they file that with the school or the school board?

MR. KAROL: No, I mean the school -- perhaps I misunderstood Your Honor's question.

QUESTION: I thought you did.

MR. KAROL: The school itself signs a contract with the state agency.

QUESTION: I thought so. The state didn't have anything to do with it. The state is -- they are completely different groups of people.

MR. KAROL: They are different groups of people, but the state is responsible for the students being there, and it is responsible for the school's existence. If I may draw an analogy to other decisions by this Court, for example, Williams versus United States, reported at 341 U.S. Reports, was a case where a private security policeman was held subject to constitutional obligations in a criminal case, the counterpart of the civil statute involved here, because he was acting under a license by the state, and he beat up a group of private employees.

QUESTION: Which license gave him the right to carry a gun and kill somebody.

MR. KAROL: Well, the --

QUESTION: Well, that's -- what did these teachers have from the state? What license, if any?

MR. KAROL: They were specially accredited -- they were accredited by the state to teach, but that does not distinguish them from ordinary public school teachers. However, in order to teach in the New Perspectives School or other accredited schools, you must receive the same -- comparable certification to public school teachers, which is a higher certification than the certification required --

QUESTION: Isn't that true for all private schools?

MR. KAROL: No, it is not.

QUESTION: Really?

MR. KAROL: The certification required --

QUESTION: For some states, it is, right? Some states have the same certification.

MR. KAROL: I don't know the answer to that. I would not be surprised. But in Massachusetts, the certification requirements are now higher for special education teachers in private schools than for ordinary teachers. Now --

QUESTION: Mr. Karol, even if the school is acting in a sovereign role as to the students, how can you argue that the school is acting in a sovereign role with regard to its personnel policies? Where is the nexus --

MR. KAROL: The nexus --

QUESTION: -- for personnel policies?

MR. KAROL: The nexus comes from the fact that it is the function of providing education which is important here. Under what we would maintain this functional approach to be, the school should be subject to the same constitutional obligations as an ordinary public school to the extent its conduct has a material affect on the delivery of the service, and firing --

QUESTION: Mr. Karol, it is a concern, because a number of cities and counties and governmental units in the country are contracting with private employers, if you will, to perform certain functions, for example, fire protection, or garbage pick up services. This is a rather widespread practice around the country. Under your theory, then, all of these employees of these private contractors with a city or a county would now be considered to be engaged in state action. Is that right?

MR. KAROL: State action for some purposes, not necessarily all purposes. That would be state action only to the extent that the challenged conduct had a material effect on the delivery of the service, so that there might well be instances where the private security police, for example, or the private fireman would not be subject to constitutional obligations. It would only be in connection with those activities which the private citizen who is receiving the benefit of that service will expect will have a material effect on the quality of the service itself. Now, in --

QUESTION: Well, under your theory, I take it that any labor-management dispute in the company that was providing the trash service or the fire protection service would affect the delivery of the service, since you are basically dealing with a labor-management dispute here at the New Perspectives School.

MR. KAROL: I think what is more important than the particular episode is whether a rule of law which says that the private entity may do something or other might have the effect on the future delivery of that service. For example, if we take a case of a private maintenance company which is plowing city streets, I think that if the maintenance company plowed the streets in the minority ethnic neighborhoods last, over and over, that that conduct is clearly affecting the quality of the delivery of the service, and it should be subject to a constitutional obligation.

However, when that same maintenance company makes decisions about who it is going to hire, or what equipment it is going to buy, or who it is going to buy equipment from, the impact on the quality of the service is substantially less, and that is why I come back in this case to the point that if teachers know that they may be discharged for expressing professional opinions about the quality of education, then the quality of education will seriously suffer.

QUESTION: What if one of several supervisors of a private fire company that is employed by a city to furnish fire protection services makes a statement to the press that this organization is poorly run from top to bottom and follows antiquated fire protection procedures, and we ought to get rid of top management?

MR. KAROL: I think that this is similar to the question before about the bridge supervisor. If this person is simply an individual who is expressing his own opinions, and is not in a position which confers upon him the responsibility to express opinions about type, then when he is discharged for expressing such opinions, he is -- the company discharging him is exercising a private function. He is performing a private function because this particular individual's speech is probably not any significantly more important than any other individual's speech insofar as that quality of service is concerned, and you do have to separate the functions of the private entity which are private from the functions of the private entity which are public.

I think the state action requirement, the primary purpose is to protect a zone of privacy, to establish a zone of privacy, and it is a sensitive balancing of interests which is involved here.

QUESTION: Well, you would have, I would think, a stronger case if there had been some express permission. Say a state statute said, you may fire any of your people without a hearing without losing your grant, without losing your -- and the school fired somebody without a hearing.

MR. KAROL: I think --

QUESTION: But there isn't even that here, is there?

MR. KAROL: No. What there is is an abdication of responsibility, and I think that that is akin to the situation you had in the so-called White Primary cases, where the Democratic Party, particularly, for example, in Terry versus Adams, was not retained by the state to determine voter eligibility requirements in general elections, but the state in effect abdicated responsibility to the Party to permit it to determine eligibility requirements in the only elections which counted, namely, the Democratic pre-primaries, so that in that case, the party was held subject to constitutional obligations to the extent the state permitted it to perform that function.

So that I think abdication of responsibility or, as in this case, an express delegation of responsibility is a substitute for the kind of regulatory involvement that the Court has dealt with from time to time, where the private entity is ordered to do something. We are certainly not dealing with a case where a private entity has been ordered to do something. We are dealing with a case where the state has expressly retained the private entity to discharge an obligation of the state to provide an essential service.

QUESTION: Mr. Karol, would your argument be the same if this particular school had only one or two students out of the public sector for which the state is paying?

MR. KAROL: In that case, I think we would acknowledge that the school would be performing a dual function. To the extent it is providing education to those one or two students, certainly it is discharging a public obligation, but it is also performing a private obligation. The parents who send their children to that school voluntarily do have a right, an important right to have those children taught in a manner and by people that they are comfortable with.

I think that to the extent you can separate the dual nature of the function, you should do so. For example, I think it would be unconstitutional for the school you describe to threaten one student with dismissal for writing a letter to a local paper if that one student --

QUESTION: What about this case? If the school had only one student publicly funded, would you think that your regulatory argument would stand up here?

MR. KAROL: I think in that case you would have to say which function predominates it. In that case, I would say the private function predominates. I would say that the likelihood is in that case that the school had taken that one student more as an accommodation to the state than in order to provide for its own continued existence, and that would be a different case than the one we have here, where the school obviously was depending upon the state for its very existence, because all of its students were provided by the state.

I would like to reserve the balance of my time for rebuttal.

QUESTION: Excuse me. Do they get any private money? Is it in the record?

MR. KAROL: I think -- There are two years covered in the discovery. In one year it was about 9 percent. In the second year, it was 1 percent.

QUESTION: Of --

MR. KAROL: Of operating funds. I don't know what the endowment is of the school. I don't believe that is in the record. But in the second year with which this case is concerned, 99 percent of the operating funds were provided by the state.

Thank you.

CHIEF JUSTICE BURGER: Mr. Feinberg.

ORAL ARGUMENT OF MATTHEW H. FEINBERG, ESQ., ON BEHALF OF THE RESPONDENTS

MR. FEINBERG: Thank you. Mr. Chief Justice, and may it please the Court, the New Perspectives School is a private, autonomous, independent private school. It retains all of the essential characteristics of a private school. Nothing in its operation or in the operation of the Massachusetts special education statute, Chapter 766, alters the essential private nature of that school.

The school was incorporated in 1971, prior to --

QUESTION: Most private schools don't get 99 percent of their funds from the state, either.

MR. FEINBERG: That is correct, Your Honor. The fact, however, that the school gets that kind of money through the state in no way alters the essential private characteristics of the school. That is to say, with regard to who goes to the school, who teaches at the school, and what the teachers teach at the school, the school itself and only the school retains the decision-making authority.

QUESTION: You mean the state board of education has no jurisdiction over the school at all?

MR. FEINBERG: The state board of education has regulatory authority.

QUESTION: I thought so.

MR. FEINBERG: But it does not have direct control in the sense that it does not have any control over the decision-making powers of the school in it's day-to-day operation, who it hires, who it fires, and indeed, who even goes to the school.

QUESTION: Well, do you suggest that the students are selected only by the school and not assigned by the state?

MR. FEINBERG: That is a absolutely correct, Your Honor. What happens in the admission policy of the school is as follows. A referring public agency, such as a school committee, will send over to the school the child and usually, in fact always, the child's parents. An interview is arranged. A certain amount of testing is accomplished, and at that point a -- what is known as the individual educational plan is developed. That plan is looked at by the school, and a decision is made whether or not to admit that child to the school. The school may at that --

QUESTION: Is that the school committee?

MR. FEINBERG: I'm sorry?

QUESTION: Is that the school committee?

MR. FEINBERG: That is not the school committee, Your Honor.

QUESTION: Well, what does the school committee do?

MR. FEINBERG: All the school committee does, the ultimate -- the last responsibility of the school committee is to refer a child whom they have deemed to be qualified for a private placement outside of the public school system.

QUESTION: And that is a public committee, not a private committee.

MR. FEINBERG: The referral itself is the public function of the school committee. The decision --

QUESTION: Pursuant to state law?

MR. FEINBERG: That is correct, under the chapter.

QUESTION: Pursuant to state law.

MR. FEINBERG: That is correct. The decision, however, whether or not to accept that child rests with the school.

QUESTION: And if the child is rejected, how does the state -- the school board discharge its obligation to provide special education?

MR. FEINBERG: It must discharge its obligation by referring that child to another school, another school whereby that child's individual educational plan is more consonant with that other school.

QUESTION: And if this process ends up that no other school will take the child, then how is the child educated?

MR. FEINBERG: Then the public school must establish its own program for the school within the public school system. There is no -- There is an obligation upon the public school system to do something for that child, but it is not necessarily so that the child must go to the New Perspectives School or any other privately operated institution.

QUESTION: Actually, in the two years involved here, how many of the children at New Perspectives School were referred by some public school board?

MR. FEINBERG: I believe the percentages were -- well, it was over 80 percent. Forty-three students were referred by public school systems; seven students cane through other state agencies. The other state agencies, Your Honor, were the --

QUESTION: Well, are there any of them who had not been referred by some state agency?

MR. FEINBERG: Not in the two years in question, Your Honor. All 50 of these students were referred by some state agency. However, the school did have --

QUESTION: How many referred children were rejected?

MR. FEINBERG: The record is totally silent with regard to that, Your Honor. It is clear, however, that the school has the authority to reject students. It has the authority as well to admit private referrals that have -- that are outside of the system of special education within the Commonwealth, and in the two years in question the record is again silent with regard -- is not silent with regard to that. There were none in the two years in question with regard to that.

QUESTION: Mr. Feinberg, putting Section 1981 and Runyan against McCrarry to one side for the purpose of my question, do you think the school could, consistently with the Fourteenth Amendment and 1983, reject children on the basis of race?

MR. FEINBERG: For these purposes, yes, Your Honor.

QUESTION: Yes.

MR. FEINBERG: I would suggest to the Court that for these purposes, this school is a private school, and is protected by the First Amendment's rights of free association, and a right to pursue an independent educational policy, including that kind of discriminatory policy. Now, in addition to McCrarry, there is also, of course, state law which would preclude them in this instance from that kind of discrimination on the basis of race, and if there were such petitioners, they would have their remedy under state law.

QUESTION: Do you rely at all on the fact that this is a teacher discharge case rather than a student rejection case?

MR. FEINBERG: I am not sure I understand the --

QUESTION: Well, do you think the constitutional issue would be any different if the plaintiff were not a teacher who was denied employment for speaking out against the school policy, but rather were a child who had been denied admission because of his race or religion?

MR. FEINBERG: I think, Your Honor, that it would certainly be a different kind of a case, in the sense that at least with regard to the child, the entitlement program would certainly -- is directed toward providing services to the child, as the First Circuit distinguished the child from the teacher, but for purposes of the state action requirement, that threshold inquiry would be the same, Your Honor, and under that threshold inquiry, the argument of the Respondents here would be that the school still would retain its private quality, and it would make no constitutional difference.

QUESTION: Well, putting perhaps the same question in a little different form, if the Wilmington Parking case had not involved discrimination against a patron, but rather had been firing an employee or something, you would say that case would still equally apply to a discharge of an employee? You don't think the Constitution draws any distinction based on the character of the claim, anyway, when you are analyzing the state action issue?

MR. FEINBERG: No, not necessarily, Your Honor. What I would suggest, however, is that the Wilmington case is substantially different from this case in the sense that in the Wilmington case, we are talking about the closeness of the relationship between the entity and the state, whereas here the major argument of the Petitioners is that there has been a delegation or a farming out, as Mr. Karol indicated, of the function, and under that kind of analysis, the public function doctrine concept under Flagg Brothers and under the election cases, that kind of analysis would indicate that we would have to have here a delegation, a whole full delegation of the public function, a function that was exclusively given over to -- in the state's hand. That is exactly the opposite of what we have here.

In this instance, what we have is a situation in which historically the education of handicapped children has never been a public function. Historically, indeed, the education of such handicapped children has always been in private hands, and such children were routinely excluded from the public sector.

QUESTION: When you say always, you are talking about all 50 states?

MR. FEINBERG: No, I am talking about Massachusetts, Your Honor.

QUESTION: You didn't say so. I thought you --

MR. FEINBERG: I'm sorry. My expertise and knowledge in this area is limited to the Commonwealth of Massachusetts for these purposes, but within that context, the state has never entered into this field until the very recent past, and when it did, under Chapter 766, what it did was to encourage an outreach to the private sector rather than incorporate it into its public school system. What it was doing here by establishing a special education program was to say, we cannot do it alone, and we establish an entitlement program whereby if we can't do it, we will seek in every way we can to find an appropriate placement for a child in the private sector, and pay for it, and that is exactly what has happened in this instance.

QUESTION: Well, now I can see why the answer to Mr. Justice Stevens' question by you, you couldn't do that on race.

MR. FEINBERG: I'm sorry, Your Honor, I'm --

QUESTION: Gaines against Missouri says, if you've got a school, you can't relegate the Negro to some other school. You have to let him in that school.

MR. FEINBERG: But, Your Honor --

QUESTION: So I see why you don't want to get to admission in there.

MR. FEINBERG: But, Your Honor, even though -- I would suggest to the Court that when we talk about discrimination cases, we are not talking about the same generic kind of case that this is. This is a state entitlement program that is neutral on its face. It is not a situation in which we are dealing at all with a discriminatory practice by the school with regard to the admission of students, and in that sense we don't have to face any of the issues that are raised in those cases. Your Honor --

QUESTION: Would you concede, Mr. Feinberg, that the school acts in the form of state action with respect to any function at all?

MR. FEINBERG: I would not, Your Honor. I would not in the following sense. With regard to all of its essential functions, and I have already gone through the admission practice, but in addition, with regard as well to its educational plan, and with regard to its personnel practices, and I would suggest to the Court that those are the three major functions of any school, private or public, in terms of its decision-making authority, that the private board of directors and the privately employed staff of that school make those decisions, who goes to the school, what is taught at the school, the philosophy of the school, the educational program, and who indeed teaches at the school, who is hired and fired.

QUESTION: Do you think that the court of appeals adopted such an extreme view in its opinion?

MR. FEINBERG: I believe the court of appeals concerned itself with the question of whether or not indeed if a student was making a claim against a school, the circumstances might be different for purposes of a state action analysis, and indeed, under the nexus theory of this Court, that, I would concede that that would be a very, very different question. We are here, however, under a public function doctrine analysis primarily, and I have assumed that the Petitioners have largely conceded the nexus argument under Jackson and the symbiosis argument under Burton for purposes of this argument, and it is for that reason that I have focused on the exclusivity aspect of this school's functioning, or the lack of exclusivity, and the other aspects and elements of that doctrine.

QUESTIONS: Do you know of any other governmental function that is in private hands that the government pays 99 percent of the costs?

MR. FEINBERG: Your Honor, I could not cite that for you, but I would suggest strongly that there are a number of companies, for example, the bridge-building company, that may very well depend almost exclusively on the state for its funding. There are certainly many areas in the private sector, for example, a drug store that provides --

QUESTION: I didn't know that bridge-building was a governmental function.

MR. FEINBERG: I would agree with you, Your Honor, that it is not. When we talk about the question --

QUESTION: I mean, for example, could you turn the police department over to a private company?

MR. FEINBERG: I would suggest, Your Honor --

QUESTION: And give that company 99 percent?

MR. FEINBERG: I would suggest, Your Honor, that you would have a very different case in that instance, because it would be a delegation of something that we would all agree would be a traditional and almost exclusively governmental function.

QUESTION: Well, how long has Massachusetts been in the business of educating? I know since 1855.

MR. FEINBERG: It has been in the business of educating, Your Honor, for some 300 years.

QUESTION: That's what I thought.

MR. FEINBERG: And the first 100 years of that educating was done exclusively in the private sector. It was only approximately 200 years ago that the public school system began to arise within the Commonwealth, and it has always been a parallel function ever since.

QUESTION: Well, do you think that helps you?

MR. FEINBERG: I think, Your Honor, the fact that there is --

QUESTION: Well, why did they all of a sudden shop it out? Why did they all of a -- have they shopped out any other part of the educational system?

MR. FEINBERG: Certainly, Your Honor, in the sense that since the 1860's public funds have been made available to private schools for the purpose of educating handicapped children, there has always been a relationship between the public and private sector when it came to handicapped children.

QUESTION: I thought you said that this was the first time the state took over the education of handicapped children.

MR. FEINBERG: I am sorry, Your Honor. That is not my position, and it is not in fact the historical truth. The reality is that the state has had a trickle of public funds involved in the education of these children for some years.

QUESTION: Now, to my question. What other part of public education has Massachusetts shopped out to somebody else?

MR. FEINBERG: Well, I would suggest, Your Honor, that the phrase --

QUESTION: I don't want a suggestion, I want an answer.

MR. FEINBERG: I don't believe that the Commonwealth of Massachusetts has shopped out its educational function in this instance, Your Honor, and I don't believe that it has shopped out its function in any instance other than in the sense that private and parochial schools and private schools such as the New Perspectives School are assisting the state in carrying out a function --

QUESTION: Did the state set up parochial schools?

MR. FEINBERG: No, it does not, Your Honor, but certainly --

QUESTION: Well, the state set this one up, didn't it?

MR. FEINBERG: No, it did not, Your Honor.

QUESTION: It just passed a statute.

MR. FEINBERG: It did not -- This school, Your Honor, was set up prior to the passage of the statute.

QUESTION: How much prior?

MR. FEINBERG: 1971, Your Honor.

QUESTION: How many years is that?

MR. FEINBERG: That was three years prior to the operation of the statute.

QUESTION: That is a long time.

MR. FEINBERG: Your Honor, it is long enough to indicate to Respondents --

QUESTION: That somebody can make some money.

MR. FEINBERG: Your Honor, if Your Honor please, it is long enough to indicate to the Respondents that the purpose of the school was not set up to take advantage of the Chapter 766, but was set up by a group of private parents to obtain an alternative, an alternative in the private sector for children who are either incapable or unable to attend public school, and in that sense, Your Honor, this school fulfills a function in the best tradition of the pluralistic, creative aspects of the private sector. It is a school which performs an important service, not a public function in the exclusive state sense, but an important service in the public interest sense, and in that sense, Your Honor, Chapter 766 did not intend that this school be incorporated into the public school system. It only intended that this school become a partner with the public school system to assist in the education of the most difficult children to educate in the Commonwealth of Massachusetts.

QUESTION: You made a mistake. You said, become a part of the educational system.

MR. FEINBERG: I'm sorry. I said a partner.

QUESTION: Oh, oh. I'm sorry.

MR. FEINBERG: A partner in the educational system.

QUESTION: Mr. Feinberg, before this school was organized and before the statute was passed, what happened to children such as those that now go to the school?

MR. FEINBERG: Some of those children, Your Honor, did not go to school. Some of them were routinely excluded from school. Some, if they could, paid for private schools at their own expense, at their families' expense, and indeed, it was not until the passage of this statute that it was made compulsory that such children attend school at all, so that there was a variety of dead ends, if you will, for such children other than those who could afford to pursue a private education.

QUESTION: Are the other schools in Massachusetts identical to this particular school?

MR. FEINBERG: Yes, Your Honor. There is a list at the back of amicu's brief that would indicate a wide variety of schools, some of which are well known throughout the country, such as the Perkins School for the Blind, that have been providing private education for literally over 100 years in Massachusetts to children such as the children at New Perspectives School. The only difference between these schools is the amount and degree of public referral. The New Perspectives school fortuitously, and I suggest that it is fortuitous, the New Perspectives School in the two years in question had such substantial public funding.

At base, indeed, the Petitioners' petition comes down to just that, to the question of whether or not this school falls within the state action rubric of the Fourteenth Amendment on the grounds of its substantial public funding, and in that sense, I would suggest to the Court that this school is no different from any other state entitlement program, and in that sense, the amount of funding is not a relevant consideration here, given the nature of this entity.

For example, with regard to what we have in Massachusetts as a Medicaid program, there is -- the same analogy can be made. That is to say, in the Medicaid program, a beneficiary qualifies for services. The state then will provide those medical or health services, and make a direct payment to the health provider. That health provider is no different in its service and the importance of its service to the community than the New Perspectives School.

QUESTION: Then you are suggesting that if the Petitioners' argument were adopted, possibly private hospitals which receive a large percentage of their income from government sources might likewise be subject to the state action?

MR. FEINBERG: Absolutely, Your Honor. I would suggest that that is precisely the result. In fact and indeed, I think we could come to the absurd result of the corner drugstore dispensing a Medicaid prescription being subject to the state action requirement, and being subject to the Fourteenth Amendment.

QUESTION: But your opponent conceded that if it were simply one out of 50 students in the school which got state aid, he wouldn't argue for the state action application.

MR. FEINBERG: I would suggest, Your Honor, that to play that numbers game would be a very dangerous game. In the first place, of course, whether there is one or 100 students in the school who are publicly funded, the nature of the school remains the same.

QUESTION: But we have one here where 100 percent of the children are assigned by the state, and where one point less than 100 percent of the money comes from the state. That is this case, and no numbers game will help you on that.

MR. FEINBERG: That is correct, Your Honor, but --

QUESTION: Would you answer my question when you have a chance?

MR. FEINBERG: Thank you, Your Honor.

QUESTION: With that in mind.

(General laughter.)

MR. FEINBERG: The second -- The realities of dealing with a mixed school are that the party or the child who comes to that school because it is the correct school for that child perhaps or perhaps not fortuitously, depending upon the percentage and the cutoff point, has an entire school subject to state action and the Fourteenth Amendment, and what I would suggest to the Court are the considerable restraints that would be imposed on a more freewheeling educational policy at that school, and in that sense, certainly such a result would impact adversely and unfairly upon the private person who simply wants to obtain the best placement for his child, his or her child.

I might also add, Your Honor, that to play with percentages, all a school need do to avoid the restraints of the Fourteenth Amendment would be to hold open two or three or five or whatever number of places would be necessary for a private referral in order to avoid the Fourteenth Amendment, so that what we have in dealing with that kind of problem is a situation in which the Fourteenth Amendment is either on the one hand easily circumvented, or on the other hand a system in which the schools are fortuitously either in or out of the Fourteenth Amendment, simply depending upon what percentage this Court would impose upon the school as one which triggers the Fourteenth Amendment.

The two other aspects of this case that I think are important to bring forward are that in no sense does this school perform a delegated function under the public function doctrine. There has been no delegation in the ordinary sense that that word is used, for example, in the Flagg Brothers versus Brooks case, the election cases in Marsh versus Alabama. In those cases, there was either on the one hand a complete abdication of the state's functioning, or on the other hand a total absence of the state, for example, in the company town situation.

As I have already indicated, Chapter 766, rather than abdicate responsibility, if it stands for nothing else, it stands for an expansion of the state's responsibility in the area of educating handicapped children, and in that sense, it certainly did not delegate to the private school a function which it assumed. Finally, in the sense in which the statute creates a special education program, it does not delegate any of those functions. It does not delegate the function of approving the school or of placing the school -- I'm sorry, of placing the child with a particular school. It does not delegate to the New Perspectives School the function of identifying children who have special needs, and it certainly does not delegate to the school the function of -- other than educating the child, any of the other functions established by the statute as being those functions that the state is responsible for, that is to say, the identification, testing, and eventual placement of the child.

QUESTION: How is the identification done, Mr. Feinberg?

MR. FEINBERG: I'm sorry?

QUESTION: How is the identification done?

MR. FEINBERG: The identification is done, Your Honor, within the -- if it is a public referral, it is done within the context of the public school system.

QUESTION: Well, precisely how in the public school system are the children identified who are then sent to New Perspectives?

MR. FEINBERG: Usually they are identified, at least with regard to New Perspectives School, as children with severe behavioral problems, children who have either alcohol problems, drug problems, and the like.

QUESTION: Yes, and who precisely does the identification?

MR. FEINBERG: The public school system would in the first instance identify a child who is incapable of continuing on in the public school.

QUESTION: Do the parents get into that act too?

MR. FEINBERG: The parents are absolutely in that act, Your Honor. In fact, one of the major goals of Chapter 766 is to involve the parents as advocates and as participants in the process, and I might add that if the parents do not approve of the placement at the New Perspectives School, they have administrative remedies to have the child go to some other school on their own, quite apart from --

QUESTION: And suppose the school decides not to make the referral, are there administrative remedies for the parents to have that reviewed?

MR. FEINBERG: Yes, there are. In other words -- absolutely, Your Honor.

QUESTION: By whom is the review made?

MR. FEINBERG: It is, in the first instance, an administrative review, and ultimately it is a judicial review by the courts, so that both -- the school itself does not necessarily get into the act of approving until the parents have already decided that this would be an appropriate placement, and they have the --

QUESTION: Until the parents or the school board has decided?

MR. FEINBERG: Both.

QUESTION: But the school board has to decide, does it not, that such a referral is appropriate?

MR. FEINBERG: I would say a referral is appropriate, whether to the New Perspectives School or some other school. Indeed, Your Honor, placements can be made outside the state of Massachusetts to other private entities in New Hampshire or adjoining states if that were the only placement that this child --

QUESTION: Does that happen very often?

MR. FEINBERG: It does not happen often, but it is not an uncommon experience, for example, for the town of Brookline to be paving for a child's education -- I know of one example in the state of Maine, where a child is going to school in the state of Maine at the expense of the town of Brookline.

QUESTION: And what kind of school in Maine, a public school?

MR. FEINBERG: No. Oh, no, these would all be private schools, Your Honor.

QUESTION: Private.

MR. FEINBERG: In conclusion, Mr. Justice Marshal in the Jackson case stated, "Private parties performing functions affecting the public interest can often make a persuasive claim to be free of the constitutional requirements applicable to governmental institutions because of the value of preserving a private sector in which the opportunity for individual choice is maximized. The Fourteenth Amendment stands as both a shield and a sword. It is a restraint against state power but at the same time it is a protection for the right to privacy and the right of free association of private institutions such as the New Perspectives School to be free to follow an independent educational policy, free from state interference.

Part of the purpose of Chapter 766 was to bring the diversity and the individuality and the creativity of the private sector to bear upon an important community problem, the need to upgrade the educational opportunities of handicapped and disabled children. The Fourteenth Amendment, it is submitted by the Respondents, was never intended to burden this kind of outreach by the Commonwealth of Massachusetts to private schools such as New Perspectives School. Rather, the Fourteenth Amendment and the First Amendment, Respondents suggest, encourages that kind of outreach. The Fourteenth Amendment ought not to be invoked to challenge the school's authority to pursue an independent educational policy. Rather, the Fourteenth Amendment here acts as a shield to protect and nurture such private schools from interference by the state.

Thank you, Your Honor.

CHIEF JUSTICE BURGER: Do you have anything further, Mr. Karol?

ORAL ARGUMENT OF ZACHARY R. KAROL, ESQ., ON BEHALF OF THE PETITIONERS

MR. KAROL: Yes, thank you.

CHIEF JUSTICE BURGER: You have about three minutes remaining.

MR. KAROL: Thank you. I would like to respond first briefly to the argument that the provision of education by the school in this case is constitutionally indistinguishable from the provision of any other service subsidized by the state. When the state provides service -- financial assistance to persons in need of services, such as medical care, it ordinarily does not thereby assume any obligation to provide the service itself.

Therefore, unlike the provision of education by the school in this case, a private physician is not discharging an obligation of the state when he provides medical care to Medicaid recipients.

However, under the statutory scheme we are dealing with here, the school committee is the one who as a last resort must provide the education if it cannot find anyone else to do so.

QUESTION: But we still get back to the provision of streets and roads in the city. Do you think that is a public obligation?

MR. KAROL: I believe it is in most circumstances. Certainly --

QUESTION: Well, how about -- then we are back to our superintendent of the job, aren't we?

MR. KAROL: Well, again I would say that he must separate the function, that if a company is retained by a city to repair potholes in streets --

QUESTION: So your position necessarily goes that far, anyway.

MR. KAROL: Yes, it goes that far, not for all purposes, but to the extent the private entity is performing services which affect the quality of the service that the state is itself obligated to provide, then citizens have a right to expect that that service will be provided in accordance with the same constitutional obligations as the state.

QUESTION: Mr. Karol, I notice in the amicus brief that lists all the members of this association under the behaviorally disordered group of schools, there are three that I notice, St. Ann's Home, St. Mary's Home for Children, St. Vincent's Home and School. Assume they got most of their students from the state. I don't know whether that is true or not. Could they decline to take any except Catholic children?

MR. KAROL: Yes, I would apply a balancing approach to that kind of a problem where --

QUESTION: You would balance the First Amendment on this?

MR. KAROL: Balancing rights protected by the First Amendment, including freedom of religion and freedom of religious association, against freedom of speech. It is the kind of problem that the Court alluded to in Norwood versus Harrison, under which it was considered impermissible to lend textbooks to private schools which segregated on the basis of race, but it was not impermissible --

QUESTION: Under your analysis, these schools would be engaged in a state function. It would be state action. And they could discriminate among students, and how about their employees? They could only hire a person of the same faith, for example.

MR. KAROL: Yes. I would make an exception for countervailing First Amendment interests based upon freedom of religion. I think that would be a necessary exception.

QUESTION: How about -- Could you make the students salute the flag?

MR. KAROL: I think that the rule there would be the same as it would be in the ordinary public school, and I understand that to be no.

QUESTION: Or a school prayer?

MR. KAROL: There, too, the answer would be no, unless there was --

QUESTION: Well, but supposing the Catholic schools required that as a part of the training program.

MR. KAROL: With the exception that if it is organized as a sectarian school, yes, then the First Amendment would create that exception, or we would recognize that exception because of the First Amendment protection of freedom of religion.

QUESTION: Just one more question, Mr. Carol. Except for the source of payment, is the relationship of the teachers in this school any different, or is it the same as the relationship of teachers in other private schools? I am talking of the relationship between the school and the teachers now.

MR. KAROL: It is a contractual relationship. I don't believe that the teachers in the school would be protected by, for example, the tenure provisions of the Commonwealth's education law, so in that respect the relationship would be different. These would be, as I understand it --

QUESTION: I am not comparing the public schools. Are the teachers in this school, the relationship of the teachers in this school the same as other private schools to the teachers?

MR. KAROL: I know of no differences except the additional certification requirements.

QUESTION: And except that the source of the funds is different here.

MR. KAROL: Certainly, and that the teachers must implement educational programs prescribed by the state rather than by the school itself.

CHIEF JUSTICE BURGER: Thank you, gentlemen. The case is submitted.

(Whereupon, at 11:07 o'clock a.m., the case in the above-entitled matter was submitted.)