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decided: June 27, 1986.



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. 613.

Author: Powell

[ 477 U.S. Page 599]

 JUSTICE POWELL delivered the opinion of the Court.

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 created by the Airport and Airway Development Act of 1970. The Government also operates a nationwide air traffic control system. This case presents the question whether, by virtue of such federal assistance, § 504 is applicable to commercial airlines.*fn1


Respondents successfully challenged regulations promulgated by the Civil Aeronautics Board (CAB) to implement § 504 of the Rehabilitation Act of 1973, 87 Stat. 390, as amended; 29 U. S. C. § 790 et seq. (1982 ed. and Supp. II). To understand respondents' arguments, it is necessary to review the process by which the regulations were promulgated.

A. The Rulemaking Process

Section 504 provides:

"No otherwise qualified handicapped individual in the United States . . . shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance. . . ." 29 U. S. C. § 794.

The statute did not specifically provide for administrative implementation. In 1976, however, the President issued Executive Order No. 11914, 3 CFR 117 (1976-1980), calling on the

[ 477 U.S. Page 600]

     Secretary of Health, Education, and Welfare*fn2 to coordinate rulemaking under § 504 by all federal agencies. At that time two federal agencies were principally concerned with aviation: the Federal Aviation Administration (FAA), which is primarily concerned with the Air Traffic Control System and the safety of airline operations, including airports, and CAB, which was primarily concerned with economic regulation of the airline industry.*fn3 Because § 504 had been modeled after Title VI of the Civil Rights Act of 1964, 42 U. S. C. § 2000d et seq.,*fn4 both FAA and CAB patterned their proposed rules after the regulations issued to implement Title VI.

1. The Notice of Proposed Rulemaking Under § 504

CAB issued a Notice of Proposed Rulemaking on June 6, 1979.*fn5 CAB concluded that its authority under § 504 was limited to those few airlines that receive a subsidy under § 406(b) or § 419 of the Federal Aviation Act.*fn6 CAB announced

[ 477 U.S. Page 601]

     its intention, however, to go beyond its § 504 jurisdiction in order to regulate the activities of all commercial airlines. CAB relied on its authority under § 404 of the Federal Aviation Act of 1958, 49 U. S. C. App. § 1374.

Section 404 contains two provisions relevant here: § 404(a)(1), requiring all air carriers to "provide safe and adequate service, equipment, and facilities," and § 404(b), prohibiting carriers from "subjecting any particular person . . . to any unjust discrimination or any undue or unreasonable prejudice or disadvantage in any respect whatsoever." CAB explained that "the proposed rules would emphasize that the handicapped are protected by the adequacy of service and antidiscrimination provisions of Section 404 . . . which are applicable to all air carriers, whether or not receiving Federal financial assistance." 44 Fed. Reg. 32401-32402 (1979). Somewhat inexplicably, CAB relied on both provisions of § 404 taken together to support its regulatory authority over the on-board activities of air carriers, even though it was aware that, under the Airline Deregulation Act of 1978,*fn7 the antidiscrimination provision of § 404(b) would lapse as of January

[ 477 U.S. Page 6021]

     , 1983, and only § 404(a)(1), requiring "safe and adequate service," would remain in effect.

2. The Final Regulations

CAB received public comment on the proposed regulations. Several airlines and the Air Transport Association challenged CAB's regulatory jurisdiction over the airlines. In the interim, Executive Order No. 12250, 3 CFR 298 (1981), transferred responsibility for coordinating the administration of various civil rights statutes, including § 504, from the Secretary of Health and Human Services to the Attorney General. After public comment and consultation with the Attorney General, CAB issued final regulations. 14 CFR pt. 382 (1986), 47 Fed. Reg. 25948 et seq. (1982).

The regulations have three subparts. Subpart A prohibits discrimination in air transportation against qualified handicapped persons. Subpart B contains specific, detailed requirements that must be followed by all air carriers in providing service to the handicapped. Subpart C sets forth compliance and enforcement mechanisms. As to all three subparts, CAB adhered to its original position that § 504 supported regulatory jurisdiction only over those carriers that receive funds under § 406 or § 419. CAB concluded, however, that the surviving portion of § 404 -- the "safe and adequate service" clause of § 404(a)(1) -- did not support imposition of the specific provisions of subparts B and C on nonsubsidized carriers. Thus, those subparts would apply only to the extent authorized by § 504, that is, to carriers receiving subsidies under § 406 or § 419. CAB concluded, however, that it had authority to extend the reach of subpart A to all air carriers by virtue of § 404(a)(1)'s "safe and adequate service" clause. The Attorney General approved these regulations.

B. The Court of Appeals Decision

Respondents Paralyzed Veterans of America and two other organizations representing handicapped individuals

[ 477 U.S. Page 603]

     (collectively PVA)*fn8 brought this action in the Court of Appeals for the District of Columbia Circuit. PVA challenged the substance of some of the regulations, as well as CAB's conclusion regarding its rulemaking authority under § 504. Only the latter claim is before us. On that issue, PVA contended that CAB's interpretation of the scope of its rulemaking authority under § 504 was inconsistent with congressional intent and controlling legal precedent.

The Court of Appeals agreed with PVA's position. Paralyzed Veterans of America v. CAB, 243 U. S. App. D.C. 237, 752 F.2d 694 (1985). In the court's view, § 504 gave CAB jurisdiction over all air carriers by virtue of the extensive program of federal financial assistance to airports under the Airport and Airway Development Act of 1970, 49 U. S. C. § 1714, as amended (1976 ed., Supp. V).*fn9 The Court of Appeals found an additional source of financial assistance to airlines in the form of the air traffic control system in place at all major airports. The court vacated the regulations to the extent that their application was limited to carriers receiving funds under § 406 or § 419. It instructed DOT -- CAB's successor agency after CAB was disbanded*fn10 -- to issue new regulations that would apply to all commercial airlines.

We granted certiorari to resolve the question of the scope of DOT's regulatory jurisdiction under § 504. 474 ...

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