By Brian G. Nuedling, of Jackson Lewis P.C.
(Editor’s Note: The following appeared in Title IX Alert, a periodical produced by Hackney Publications.)
Whether financial aid has been fairly allocated to men’s and women’s sports must be measured using data that counts the student-athletes only once. That was the holding of the United States District Court for the Eastern District of California in a case alleging a financial aid imbalance at Fresno State University.
FACTUAL BACKGROUND
In Anders v. California State University,[1]plaintiffs filed a putative class action in 2021, alleging an effective accommodation claim, an equal treatment claim, and a financial aid claim under Title IX of the Education Amendments of 1972 (“Title IX”).[2] The dispute originated in October 2020, after the school announced that it would stop sponsoring women’s lacrosse, men’s wrestling, and men’s tennis, to take effect in the 2021-22 academic year. The plaintiffs were members of the women’s lacrosse team.
After plaintiffs filed a first amended complaint, the California State University Board of Trustees (the “Board”) filed a motion to dismiss. The court denied the motion as to the effective accommodation and equal treatment claims, but granted the motion (with leave to amend) as to the financial aid claim. Plaintiffs then filed a second amended complaint, prompting the Board to seek dismissal of the financial aid portion for failure to state a claim for relief under Federal Rule 12(b)(6) and for lack of standing under Federal Rule 12(b)(1).
In conducting its analysis of the financial aid claim, the court first noted that Title IX provides for a “triumvirate of compliance-related claims” that are comprised of financial aid, or scholarship, claims, effective accommodation claims, and equal treatment claims. As to financial aid relating to athletics, a recipient of federal funding that awards scholarships or grants-in-aid “must provide reasonable opportunities for such awards for members of each sex[,] in proportion to the number of students of each sex participating in interscholastic or intercollegiate athletics.”[3] Compliance with the financial aid requirement is monitored by the U.S. Department of Education, which analyzes whether “proportionately equal amounts of financial assistance (scholarship aid) are available to men’s and women’s programs.”[4] Compliance is determined by dividing the amounts of aid available to men’s and women’s athletic programs by the number of male or female participants in the athletic program and comparing the results.[5] Schools will be found to be in compliance if the comparison results in substantially equal amounts, or if a resulting disparity can be explained by adjustments that take into account legitimate, non-discriminatory factors.[6]
The court further prefaced its analysis by citing the Department of Education’s Title IX Athletics Investigator’s Manual and further adopting the opinions of other courts that have found it to be an “important guide[] … in unraveling the requirements of Title IX regulations, worthy of “considerable weight,” in that it “sets forth the analysis that should be used to determine whether an educational institution offers proportionately equal amounts of scholarship aid to men’s and women’s athletic programs.” [7]
ISSUES FOR THE COURT
As to the financial aid claim, the issue for the court boiled down to what should be the proper methodology for evaluating the number of athletic participants. While Fresno State relied on the Title IX criteria, plaintiffs urged the court to apply the counting methodology for effective accommodation claims as set forth in federal regulations. Under 34 C.F.R. § 106.37, an equal allocation would mean that Fresno State must provide its female athletes with financial assistance in the same proportion that it allocates athletic participation opportunities to its female athletes. By contrast, the Department of Education’s Investigators Manual states that student-athletes “who participate on more than one team will be counted only once” for the purposes of assessing financial aid claims. The court noted that plaintiffs had cited no authority to support the proposition that financial aid is to be provided in proportion to participation opportunities, as opposed to the number of student-athletes of each gender.[8]
COURT ANALYSIS
As the court agreed with other holdings that found the Investigator’s Manual formula to be the proper guide for counting student-athletes, the court then analyzed the parties’ claims in the light of data specific to the academic years of 2018-19 and 2019-20, as alleged in the complaint.
Plaintiffs argued that while Fresno State’s athletics programs were comprised of 323 females (55.8%) and 256 males (44.2%) in 2018-19, a male participant received an average award of $15,112.69 (of a total share of $8,110,310 in financial aid), while a female student-athlete received an average award of $13,123.53 (or 3.5% less). The court rejected this summary because it relied on the disputed methodology that allowed for redundancy in participant totals. The “unduplicated count” showed that in 2018-19, females accounted for 51.9% of Fresno State’s student-athletes and received 52.3% of athletics-based financial aid, while males accounted for 48.1% of student-athletes and received 47.7% of athletics-based financial aid. The court concluded that the data, when applied in a manner consistent with the Investigator’s Manual, showed that the female share of financial aid exceeded the female share of Fresno State’s student-athlete population, and that the average financial aid award for female student-athletes exceeded that of the male athletes.
The court reached a similar finding with respect to 2019-20. Using the unduplicated counts, the court noted that females accounted for 53.1% of Fresno State’s student-athlete population and received 54.1% of athletics-based financial aid that year, with an average award of $15,609.33. Males, by contrast, accounted for 46.9% of the student-athlete population and received 45.9% of the financial aid, with an average award totaling $15,020.90. Thus, the court concluded, the female share of financial aid again exceeded the female share of the student-athlete population, and the average financial aid award for female student-athletes exceeded the award for the males.
As plaintiffs also brought allegations related to 2003-04 through 2018-19, the court conducted a brief analysis of this time period as well. Among other things, plaintiffs alleged that during the earlier period, financial aid for female student-athletes trailed that of their male counterparts by more than $5.3 million, and that during the entire period, there was an average shortfall of 7.6% in financial aid to female participants. The Board challenged the claim based on the two-year statute of limitations that applies to financial aid claims and further argued that disparities that might account for the “cumulative shortfall” might have occurred in years that fall outside of the window for timely claims. Plaintiffs acknowledged that conduct prior to 2018-19 did not give rise to standalone claims, but they argued that the data supported a reasonable inference that Fresno State acted with discriminatory intent in more recent years.
The court denied the claims based on the alleged cumulative shortfalls since 2003-04, concluding that this data would likely have the same counting flaw as the analysis for the 2018-19 and 2019-20 academic years. In addition, the court agreed with the Board’s argument that claims for relief cannot be based on allegations that predate 2018-19.
COURT CONCLUSION
The court found that plaintiffs had failed to plead a financial claim under Title IX. The court found that plaintiffs’ data, when correctly applied, failed to show that the female share of athletics-based financial aid was less than the female share of the student-athlete population at Fresno State, in either 2018-19 or 2019-20. Moreover, the court concluded that the allegations regarding the cumulative financial aid imbalance since 2003-04 could not reasonably be interpreted to show a financial aid deficit within two years of the filing of plaintiffs’ action.
Noting that this represented plaintiffs’ third opportunity to plead a financial aid claim, and finding that a fourth amendment would likely be “futile,” the Court dismissed the claim of unequal allocation of financial assistance with prejudice. As such, the court concluded it was unnecessary to address standing or any issues in the parties’ briefing.
[1] No. 1:21-cv-00179-AWI-BAM, 2021 U.S. Dist. LEXIS 209890 (E.D. Cal. Oct. 29, 2021).
[2] The plaintiffs also brought a motion for a preliminary injunction, seeking to bar Fresno State from eliminating women’s lacrosse and requiring the school to treat women’s lacrosse to the same degree as other varsity team while this action was pending. The trial court did not bar the elimination of women’s lacrosse but did order Fresno State to give women’s lacrosse equal treatment through the conclusion of the 2020-21 season.
[3] 34 C.F.R. § 106.37(c)(1).
[4] See “A Policy Interpretation, Title IX and Intercollegiate Athletics, OCFR, Dep’t of Edu., 44 Fed. Reg. 71413, 71415 (Dec. 11, 1979).
[5] Id.
[6] Id.
[7] The court cited the holdings in Beasley v. Alabama State Univ., 3 F. Supp. 2d 1325 (M.D. Ala. 1998), and Gonyo v. Drake Univ., 879 F. Supp. 1000 (S.D. Iowa 1995).
[8] As to standing, plaintiffs argued that they had the required injury for Article III standing because they had all “suffered the psychological harm associated with … Fresno State’s discriminatory conduct[.]” The Board argued that the injury required for standing was lacking because none of the plaintiffs had shown that the size of her financial aid award was affected by Fresno State’s alleged Title IX violations with respect to financial aid.
