author: WISEMAN, Chief Judge.

text:
    Robert W. KELLEY, et al. v. METROPOLITAN COUNTY BOARD OF EDUCATION OF NASHVILLE & DAVIDSON COUNTY, TENNESSEE, et al., v. STATE OF TENNESSEE; Lamar Alexander, Governor of the State of Tennessee; Robert L. McElrath, Commissioner of Education; and State Board of Education.
    Nos. 2094, 2956.
    United States District Court, M.D. Tennessee, Nashville Division.
    Aug. 14, 1985.

      Avon N. Williams, Jr., Richard H. Din-kins, Williams & Dinkins, Nashville, James M. Nabrit, III, Theodore M. Shaw, Bill Lann Lee, New York City, for plaintiffs Robert W. Kelley, et al.
    William R. Willis, Jr., Marian F. Harrison, Willis & Knight, Nashville, Tenn., for defendants Metro, et al.
    R. Stephen Doughty, Deputy Atty. Gen., Stephen Nunn, Asst. Atty. Gen., Nashville, Tenn., for defendants State of Tenn., et al.
   MEMORANDUM

WISEMAN, Chief Judge.

The City of Nashville and surrounding Davidson County have struggled with desegregation since 1956. Social and political turmoil created by the issue have made the process particularly arduous—and in recent years expensive. Between 1971 and 1982, Metropolitan Nashville and Davidson County [Metro] spent approximately $20,000,000 to desegregate its public schools, with an estimated annual recurring cost (as of 1982) of $6,000,000.

Until today, Metro Nashville has gone it alone. The State of Tennessee has viewed desegregation strictly as a local matter. The Court now rules that State officials shall be enjoined from further refusing to carry out their affirmative, continuing duty to eliminate the vestiges of segregation which Tennessee’s own constitution, statutes, policies and practices created and maintained during the last one hundred years. Pursuant to the injunction, the Court orders the State to assume sixty percent (60%) of the costs of the desegregation program in Metropolitan Nashville and Davidson County.

The Court grants the motion for partial summary judgment of third party plaintiff Metropolitan County Board of Education of Nashville and Davidson County. Fed.R. Civ.P. 56.

Jurisdiction

The Court proceeds under 28 U.S.C. § 1343 and 2201 to adjudicate issues arising under the Civil Rights Acts, 42 U.S.C. § 1983 and 1985. The Eleventh Amendment does not bar the action since third party plaintiffs seek to enjoin state officials from refusing to conform their conduct to well established constitutional standards. Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). The Court is vested with legal authority to decide the merits of the claims against these officials and to issue such ancillary orders as equity deems necessary to enforce the injunction. Bradley v. Milliken, 540 F.2d 229, 245-46 (6th Cir.1976), aff’d, 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977).

Facts

This case has proceeded before this Court since 1956. The facts are long and detailed. For purposes of the current issue, the Court confines its consideration to the conduct of state and county officials in carrying out the mandate of Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), which ordered the end of state-imposed segregation and directed states to desegregate public schools “with all deliberate speed.”

The issue presented is whether the undisputed facts demonstrate that the State of Tennessee is a “constitutional wrongdoer” culpable for the continuing effects of state-imposed segregation and is therefore subject to an injunction and ancillary order directing the State to share in the costs of desegregating Metro schools.

The Thirteenth, Fourteenth and Fifteenth Amendments represent the end of a century of slavery throughout the South. Despite Congress’ enactment of the Civil Rights Acts, 42 U.S.C. § 1981, et seq., to protect blacks against unfair treatment by state officials and to assure them the rights and privileges guaranteed to all persons within the United States, enforcement of the Jim Crow laws through the mid-1960’s diminished the rights of blacks, segregating them from other American citizens and limiting their opportunities to obtain quality education, housing, and medical care.

In 1954 the Supreme Court, recognizing the inequitable position of the nation’s minorities, declared an end to the “separate, but equal” policies practiced by many states. Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954). In 1955, Chief Justice Warren, speaking for the Court in Brown v. Board of Education, 349 U.S. 294, 299-301, 75 S.Ct. 753, 755-756, 99 L.Ed. 1083 (1955) (Brown II), directed school authorities to devise and implement policies to assure the admission of all students to public schools on racially nondiscriminatory bases at the earliest practicable date.

The Brown decision had an immediate impact in Tennessee. At the time Brown was decided, the Tennessee Constitution mandated separation of the races in public schools. Article XI § 12 provided in relevant part:

No school established or aided under this section shall allow white and negro children to be received as scholars in the same school.

The Tennessee Supreme Court struck down the provision as unconstitutional in 1956. Roy v. Brittain, 201 Tenn. 140, 297 S.W.2d 72 (1956). The State of Tennessee held four constitutional conventions between 1959 and 1978. Despite the Brittain Court’s ruling, the provision was not removed from Tennessee’s official books until the fourth convention in 1978.

The Brown II directive created great apprehension throughout many communities. Local school boards were particularly concerned about their responsibility to desegregate schools. In response to numerous requests for advice and direction, Attorney General George McCanless issued an opinion letter defining the State’s legal responsibility in implementing the Brown II mandate and that of the local school boards. The June 16, 1955, letter states:

Under the Code of Tennessee the management of the public schools is solely the business of the local school boards. These boards, within the limits of applicable law, determine all of the local school problems. This has been the law since the origin of the public school system in Tennessee and is the law today. Under this state of the law it is the responsibility of each local school board to determine for itself the way in which it is going to meet the problem of desegregating the schools under its jurisdiction.
Each board must determine for itself, in light of all existing applicable circumstances, (physical, fiscal, sociological, transportation problems, etc.) when, where, how and to what degree, the schools under its jurisdiction are to be desegregated. This imposes upon each board the duty of considering for itself its own course of action.
Local school boards which are sued by negroes seeking admission to schools under their jurisdiction must be prepared to defend their own action determining the manner in which their schools shall be desegregated. It will be necessary for legal counsel for defense of such suit to be provided by the county, the city, or special school district involved. While the office of the Attorney General is aware of the problems that will confront the school boards and is sympathetic with their problems, the office can do no more than to advise with representatives of the boards with respect to these problems as they arise. Under the Constitution and the statutes of Tennessee, the office of the Attorney General is limited to representation of the state and of state officials with respect to state revenue and other state matters. Counties, cities, and special districts have always been required by law to provide their own legal counsel in matters affecting them, and this has not been changed because of the desegregation opinion; however, within the limits of our ability and to the extent permitted by the most favorable interpretation of the statutes defining and regulating our duties, we stand ready to furnish such advice and guidance as under the circumstances we can.
While, as indicated above, the State Department of Education has no legal responsibility to determine the manner in which the segregation problem will be dealt with in each school district, there is much the Department can do by way of correlation of information and other things which will occur to you as the responsible head of that Department. As a result of conferences with you I know that you intend to have the Department of Education do all that it can within the framework of existing law to assist local school boards in the solution of their heavy and vexing problems.

The McCanless opinion letter established the State’s policy to keep out the politics of desegregation, leaving local communities to grapple with the issue. The State asserts in its brief that the McCanless letter represents the State of Tennessee’s policy on desegregation which continues today. Third Party Defendant’s Motion for Summary Judgment, Memorandum at 7 (filed December 19, 1984).

The plaintiffs in this case filed their complaint on September 23, 1955. The State was not named as a defendant.

Despite General McCanless’ 1955 statement that desegregation was purely a “local school problem,” in January of 1957, the Tennessee legislature passed the parental preference statutes permitting “voluntary segregation” of the races in public schools. T.C.A. § 49-3704 (1957); see Transcript of Debate on House Bill 29 (1957), Exhibit D, Third Party Plaintiffs Motion for Summary Judgment (filed 12-19-84). In September of 1957, this Court struck down the parental preference statutes; the holding later was affirmed by the Sixth Circuit. Kelley v. Board of Education, 270 F.2d 209, 230 (6th Cir.), cert. denied 361 U.S. 924, 80 S.Ct. 293, 4 L.Ed.2d 240 (1959). Ignoring the ruling, in December of 1957, the Nashville School Board submitted a desegregation plan to this Court grounded on the parental preference statute and the principles of “voluntary desegregation.” This Court disapproved of the plan.

In 1960, a separate suit was filed seeking the desegregation of Davidson County schools. Subsequently, in 1963, that suit was consolidated with the original Nashville desegregation suit.

In 1971, Judge Morton entered a comprehensive order directing the desegregation of Metro Nashville and Davidson County schools. Kelley v. Board of Education, Nos. 2094, 2956, at 6 (M.D.Tenn. June 28, 1971); see also Kelley, 492 F.Supp. 167 (M.D.Tenn.1980). The order constitutes a watershed event in this litigation, finding that the separation of races in the public schools was the result of a policy of de jure segregation. See Kelley v. Board of Education, 687 F.2d 814, 815-16 (6th Cir.1982). During 1971, this Court increasingly became concerned over Metro’s “half heart-ed” efforts to devise and implement an effective program to desegregate its public schools. See 492 F.Supp. 167, 171. Ultimately, the Court found Metro to have failed to act in good faith. See 687 F.2d at 816.

While Metro dragged its feet, the State of Tennessee did nothing to facilitate the desegregation process. In 1972 the legislature passed a bill providing that if a local school board voluntarily adopted a transportation plan aimed at achieving racial, balance, the governor was authorized to order the withholding of all state funds from the local school board. T.C.A. § 49-6-2101(f) (1983). This is the law today. During the early 1970’s, State officials also adopted a number of anti-busing resolutions.

The State of Tennessee along with a number of State officials were joined as defendants in this case in 1981. Twenty-six years had elapsed since the filing of the original complaint, and ten years from Judge Morton’s entry of the 1971 comprehensive order. The Metropolitan County Board of Education of Nashville and Davidson County, Tennessee now seek (1) an injunction prohibiting the State from continuing to refuse to participate in the desegregation process and (2) ancillary orders directing the State to provide funds to assist Metro in carrying on the desegregation plan ordered by this Court.

Issues

The State asserts three principal propositions which they argue preclude issuance of the relief sought by the third party plaintiffs.

1. The State is not now and has not-been a “constitutional wrongdoer.” That is, the State claims that it has committed no post-Brown acts that have adversely affected desegregation in Nashville. Moreover, the State claims that the exercise of federal jurisdiction over Nashville and Davidson County schools has made State intervention into the local desegregation program inappropriate and, as such, has absolved the State of any affirmative duty that may have required them to participate in the elimination of vestiges of state-imposed segregation.

2. The Eleventh Amendment bars the award of retrospective or prospective relief against the state.

3. Plaintiffs are barred from relief by-operation of both the statute of limitations to the equitable doctrines of laches and unclean hands.

Discussion

A. The State of Tennessee is Obliged to Eliminate the Vestiges of State-Imposed Segregation.

The State of Tennessee asserts that it cannot be held responsible for the costs of desegregating Metro schools because, although admittedly a historical force imposing mandatory segregation, it has been innocent of any culpable conduct since the 1954 decision in Brown. The State argues that only upon a showing of “direct impact” of its policies or practices—either in maintaining segregation or in inhibiting the desegregation efforts—can the State be implicated and thereby held responsible for desegregating Nashville’s schools.

This Court views the State’s responsibility quite differently from the view adopted by state officials. A state is obliged to do more than merely abandon its prior discriminatory conduct. Dayton Board of Education v. Brinkman, 443 U.S. 526, 538, 99 S.Ct. 2971, 2979, 61 L.Ed.2d 720 (1979) (Dayton II). A state which initially creates a dual system of education for its citizens has a continuing, affirmative duty to eradicate all the lingering effects of its pro-segregation efforts. Reed v. Rhodes, 500 F.Supp. 404, 424 (N.D. Ohio 1980), aff’d 662 F.2d 1219 (6th Cir. 1981) cert. denied, 455 U.S. 1018, 102 S.Ct. 1713, 72 L.Ed.2d 135 (1982); United States v. State of Missouri, 363 F.Supp. 739, 747 (E.D.Mo.1973), aff’d in relevant part, 515 F.2d 1365 (8th Cir.1975), cert. denied, 423 U.S. 951, 96 S.Ct. 374, 46 L.Ed.2d 288 (1975); Liddell v. Board of Education of City of St. Louis, 491 F.Supp. 351, 359 (E.D.Mo.1980) 667 F.2d 643 (8th Cir.), cert. denied 454 U,S. 1081, 102 S.Ct. 634, 70 L.Ed.2d 614 (1981) (subsequent citation history omitted). Contrary to the position of the State, when it became necessary for this Court to step in and supervise the dismantling of the dual system, the presence of the Court did not end the obligation of the State to participate in eliminating segregation—it merely limited the State’s discretion in directing the overall process. The limitation did not release the State from its constitutional and statutory duty to end the discriminatory system it had created and maintained for a significant period of time and to take affirmative steps to remedy the debilitating effects that resulted from the system.

B. The Eleventh Amendment Permits this Court Both to Enjoin Tennessee Officials from Refusing to Perform Their Constitutional Duties and to Issue Appropriate Ancillary Orders Aimed at Assuring Compliance.

1. The “Prospective Compliance" Exception to the Eleventh Amendment

“The Eleventh Amendment does not prevent enforcement of the Fourteenth Amendment____” United States v. Board of Education of the City of Indianapolis, 503 F.2d 68, 82 (7th Cir.1974), cert. denied 421 U.S. 929, 95 S.Ct. 1654, 44 L.Ed.2d 86 (1975); Bradley v. Milliken, 540 F.2d 229, 244 (6th Cir.1976), aff’d 433 U.S. 267, 97 S.Ct. 2749, 53 L.Ed.2d 745 (1977). Federal courts are empowered to enjoin state officials from acting in a manner that violates federal constitutional or statutory law or from failing to carry out an affirmative duty imposed under federal constitutional or statutory provisions. Ex parte Young, 209 U.S. at 160, 28 S.Ct. at 454. As discussed below, the undisputed facts presented before the Court establish as a matter of law that state officials have failed to carry out their affirmative legal obligation to eradicate the lingering effects of state-imposed segregation and are therefore liable for a continuing violation of the Fourteenth Amendment rights of the black citizens of Metropolitan Nashville and Davidson County. The Court deems it appropriate to issue an injunction enjoining state officials from further refusing to carry out their affirmative obligations and to issue such ancillary orders as are necessary to ensure proper compliance with the injunctive relief ordered.

Well established principles of federal law recognize the authority of this Court to issue the ordered relief. The Eleventh Amendment provides:

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State or by Citizens or Subjects of any foreign state.

The Amendment constitutionalizes the doctrine of sovereign immunity of the states, imposing a constitutional limitation on the federal judicial power established under Article III of the Constitution. Pennhurst State School & Hospital v. Halderman, 465 U.S. 89, —, 104 S.Ct. 900, 906, 79 L.Ed.2d 67, 77 (1984). In the absence of a state’s consent, federal courts may not entertain suits against a state or one of its agencies or departments, or against a state official when the state is the “real substantial party in interest.” Ford Motor Co. v. Department of Treasury, 323 U.S. 459, 464, 65 S.Ct. 347, 350, 89 L.Ed. 389 (1945).

Third party plaintiff’s claims against the State of Tennessee would be lost but for the saving grace of Ex parte Young, 209 U.S. 123, 28 S.Ct. 441, 52 L.Ed. 714 (1908). In Young, the Supreme Court recognized the “prospective-compliance” exception to the jurisdictional bar of the Eleventh Amendment, permitting federal courts to enjoin ongoing conduct by a state official that is in violation of federal law. The “fiction” of Young holds that a state may not authorize an unconstitutional action by its officers. Hence, for Eleventh Amendment purposes, a state official is stripped of his official status and subject to the consequences of his conduct when he acts in an unlawful manner. Ex parte Young, 209 U.S. at 160, 28 S.Ct. at 454.

2. Tennessee Officials Continue to Fail to Discharge the State’s Duty to Assure the Desegregation of Metro Schools

The State of Tennessee argues that this Court lacks authority to order injunctive relief against the State because none of its officials currently is acting in violation of federal constitutional or statutory law. The State admits that although prior to Brown the State mandated strict separation of the races in public schools, presently no officials are acting in a matter to intentionally foster such segregation. The State argues further that the duty to desegregate schools and to eliminate the lingering effects of past discrimination is solely an issue of local county concern and, as such, the State has no present, affirmative duty to participate in Metro’s desegregation program. The State relies on the recent decision in Banas v. Dempsey, 742 F.2d 277 (6th Cir.1984), cert. granted, sub nom., Green v. Mansour, — U.S. —, 105 S.Ct. 1863, 85 L.Ed.2d 158 (1985), for the proposition that in the absence of ongoing unlawful conduct, federal district courts have no basis on which to issue an injunction since the requisite facts (warranting the Young prospective compliance exception to the jurisdictional bar of the Eleventh Amendment) are no longer present. Id. at 286-87.

Banas was a class action alleging that the State of Michigan wrongfully had denied certain AFDC recipients benefits by refusing to permit deductions appropriate under federal law. After the suit was filed, but before the district court ruled on the plaintiffs’ motion for a preliminary injunction, Congress amended the Social Security Act, 42 U.S.C. § 602(a), with the result that Michigan’s actions, though improper under former law, became legal. The Bañas court held that the Eleventh Amendment barred the court from issuing any order requiring notice of any possible past unlawful state conduct to the putative classes. Congress’ amendment of the Social Security Act legitimized Michigan’s actions, eliminating the possibility for prospective relief in the suit. As a result, the plaintiffs’ claims were only for relief for past harm—and therefore barred. The Eleventh Amendment prohibits “the award of an accrued monetary liability” which represents “retroactive payments.” Edelman v. Jordan, 415 U.S. 651, 663-64, 94 S.Ct. 1347, 1355-56, 39 L.Ed.2d 662 (1974). That is, federal courts may only issue prospective relief against a State or its officials; principles of sovereign immunity preclude the award of relief for past wrongs. This Court finds that the undisputed facts demonstrate that State officials continue to deny their responsibility to participate in Metro’s “local problem” of desegregation. For purposes of Bañas, this refusal constitutes ongoing unlawful conduct—conduct which this Court has the power to enjoin. The Court is empowered to order the State to share in the prospective costs of desegregation; however, the Eleventh Amendment prohibits a retroactive award for costs already sustained by Metro. The order is made effective from March 16, 1981, the date on which the motion to implead third party defendants was filed.

a. Public Education is Primarily a State Function; Therefore, Desegregation Requires the Formulation and Implementation of State Public Policy.

Contrary to the opinion of Attorney General McCanless, segregation in county schools is not merely a local problem. Public education is a state function, involving a delegation to local officials the duty to administer the details of daily operations.

Since the inauguration of the present system of [Tennessee] public schools, in 1873, it has never been even suggested that the state and counties may have different systems and schools, the state operating a state school, and the county a county school, but the basic idea is that the county may supplement the state funds, so as to enlarge and improve the state schools____ We are of the opinion that the legislature ... may as well establish a uniform system of schools and a uniform administration of them, as it may establish a uniform system of criminal laws and of courts to execute them. The object of the criminal laws is, by punishment, to deter others from the commission of crimes, and thus preserve the peace, morals, good order, and well-being of society; and the object of the public-school system is to prevent crime, by educating the people, and thus, by providing and securing a higher state of intelligence and morals, conserve the peace, good order, and well-being of society. The prevention of crime, and preservation of good order and peace, is the highest exercise of the police power of the state, whether done by punishing offenders or educating the children.
* * * * * *
[T]he schools, in which are educated and trained children who are to become rulers of the commonwealth, are matters of state, and not local, jurisdiction; that in such matters the state is a unit, and the legislature a source of power; that the establishment and control of public schools is a function of the general assembly, both under the constitution and because it is a matter of state concern____ Power thus asserted is exercised in a manner which is not of common right, but which concerns institutions founded and fostered by the state. The regulation, in its entire scope, relates exclusively to the enjoyment of the privilege afforded a system of education created and maintained by the state for the general good, and it must follow that the state does have power to make the regulations effective by prescribing the method which shall be pursued by those who seek to enjoy the privilege it has created. Certainly, no one will deny the existence of such a right, and, if it does exist, it must reside in the law making power of the state.

Leeper v. State, 103 Tenn. 500, 53 S.W. 962 (1899) (upholding as constitutional the Tennessee Uniform Textbook Act). The Leeper court’s analysis of the state’s authority over public schools is as valid today as when it was spoken at the turn of the century.

The Tennessee Constitution establishes the State’s central role in public education.

Education’s Inherent Value—Public SCHOOLS-SuPPORT OF HIGHER EDUCATION. —The State of Tennessee recognizes the inherent value of education and encourages it support. The General Assembly shall provide for the maintenance, support and eligibility standards of a system of free public schools. The General Assembly may establish and support such post secondary educational institutions, including public institutions of higher learning, as it determines,

(emphasis added). Tennessee Const. Art. XI, § 12 (amended March 31, 1978). Title 49 of the Tennessee Code addresses public education within the State of Tennessee. Its thirteen chapters illustrate the control state officials exert over local school matters. For example, the State regulates teacher compensation and advancement under the “master teacher” program; it approves the location of new school facilities, and frequently prescribes the curriculum offered in schools.

Counties do not operate their own, autonomous schools; rather, local districts operate state schools at the direction and for the benefit of the state, serving those children who reside within their jurisdictional boundaries. Matters which affect the educational milieu in a local school district are matters of state concern. Desegregation certainly is one such matter. General McCanless’ opinion letter declaring the State shall stay out of the “local problem” of desegregation establishes a policy to delegate fully the State’s responsibility to formulate and achieve a solution.

b. The State Deliberately Has Refrained From Participating in the Desegregation of Public Schools.

The State has the nondelegable duty to participate in the desegregation of local schools. State officials have abdicated that duty. The violation continues today. Placing all consideration of the State’s post-Brown conduct aside, this Court believes that State action prior to 1954—in mandating strict separation of the races in public schools—serves, in and of itself, as a sufficient basis on which to find the State responsible for eliminating the continuing effects of racial discrimination. The decision by Tennessee to cease its official discrimination against blacks in light of Brown did not eliminate the debilitating effects created by generations of segregation. The effects continue today. Milliken v. Bradley, 433 U.S. 267, 287-88, 97 S.Ct. 2749, 2760-61, 53 L.Ed.2d 745 (1977) (“[p]upil assignment does not automatically remedy the impact of previous, unlawful educational isolation; the consequences linger and can be dealt with only by independent measures.”).

There exist numerous post-Brown acts, however, that demonstrate the State’s refusal to discharge its duty to participate in the desegregation of Metro schools. The Sixth Circuit Court of Appeals has set forth a five-part test for determining whether a state has intentionally supported a segregated school system. In Penick v. Columbus Board of Education, 583 F.2d 787, 818 (6th Cir.1978), aff’d 443 U.S. 449, 99 S.Ct. 2941, 61 L.Ed.2d 666 (1979), the court remanded the case to the district court to make more detailed findings of fact concerning:

1. The State School Board’s knowledge (if any) of the [local school board’s] intentional segregative practices;
2. The State Board’s failure to protest or restrain [the local board] by withholding funds,
3. The State Board’s continuance of support in the face of such knowledge,
4. The motivation of the State Board in failing to investigate the reasons for de facto segregation, and
5. The effect of findings, if any, under 1, 2, 3 and 4.

Applying the Penick test to the undisputed facts presented by the parties the Court makes the following findings: following the original decision in Brown, the local boards looked to the State Department of Education for guidance, only to be rebuffed and east adrift by Attorney General McCanless’s letter of June 16, 1955. Faced with the Supreme Court mandate to desegregate its public schools, the State abdicated its responsibility, placing the onus upon each individual school district. Rather than coordinating, the State created chaos. General McCanless was correct in stating “[The local school boards], within the limits of applicable law, determine all of the local school problems.” That is to say, the local school boards could do whatever they desired so long as their actions comported with state law on the subject. For example, a local school district currently faced with the “local problem” of segregated schools may voluntarily pursue a desegregation policy so long as the program does not “use or authorize the use of any school transportation facility for the purpose of achieving a racial balance ... in any school by requiring the transportation of any student or pupil from one school to another or from one school district ... to another.” T.C.A. § 49-6-2101(f)(l). Statutory prohibition of the principal remedial approach to desegregation of public schools illustrates the State’s involvement in the “local” issue of desegregation.

More fundamentally, however, this Court does not believe that state-imposed segregation is merely a “local school problem.” Mandated by the Tennessee Constitution and regulated by Tennessee statutes, the dual system of public education was wholly a product of State-inspired segregation. General McCanless’ opinion letter established the State’s “hands off” policy. Yet, what the State characterizes as a federalism-based respect for the jurisdiction of the United States District Court, the Court views as a failure to discharge the affirmative responsibility to participate in devising and implementing an effective remedy. Burton v. Wilmington Parking Authority, 365 U.S. 715, 725, 81 S.Ct. 856, 861, 6 L.Ed.2d 45 (1961) (“[n]o State may abdicate its responsibilities by either ignoring them or by merely failing to discharge them whatever the motive may be.”).

Acknowledging the less than good faith efforts of Metro preceding the 1971 order, the Court nevertheless believes that the State’s failure to assume a strong leadership role promoting desegregation has delayed the efficient implementation of desegregation plans throughout the State and has fueled the intransigent attitudes held by many local school boards. Although the Tennessee Supreme Court struck down the Tennessee constitutional provision mandating separation of the races in public schools in Roy v. Brittain, 201 Tenn. 140, 297 S.W.2d 72 (1956), the State maintained the provisions on its books until 1978. While the State had no authority to enforce the provisions, the continued publication may be construed as an official statement of State policy on the issue of desegregation. The 1957 parental preference statutes, the statutory prohibition on voluntary busing and the numerous official antibusing resolutions reaffirm the State’s lack of commitment to eliminate the vestiges of discrimination in Tennessee.

The State was aware of the segregated conditions in Metro schools and of Metro’s resistance throughout the 1960’s to desegregation. The State did not protest nor threaten sanctions, but continued to fund Metro and to pass legislation consistent with Metro’s obstructionist spirit. The State, like Metro, simply did not want to desegregate Metro schools through a busing remedy. Following a policy of abdication, the State has been free to set up as many hurdles as possible to disrupt those school districts either required by federal court order or voluntarily choosing to desegregate their schools.

The Court concludes that the State of Tennessee has failed to acknowledge its duty imposed under Brown and that State officials continue to refrain from discharging their constitutional obligation to participate in the elimination of the vestiges of state-imposed segregation. See Lid- dell v. Board of Education of City of St. Louis, 491 F.Supp. at 359 (“[i]n sum, the State defendants stand before the Court as primary constitutional wrongdoers who have abdicated their affirmative remedial duty.”).

3. Federal Courts Frequently Have Applied the “Prospective Compliance” Exception to School Desegregation Cases and Have Ordered States to Share the Costs of Desegregation Plans.

“A state which initially compelled or authorized the creation of a local dual system has a continuing affirmative duty to eradicate all lingering effects on segregation; the neglect of that constitutional duty renders the state liable.” Reed v. Rhodes, 500 F.Supp. 404, 424 (N.D.Ohio 1980), aff’d 662 F.2d 1219 (6th Cir. 1981), cert. denied 455 U.S. 1018, 102 S.Ct. 1713, 72 L.Ed.2d 135 (1982). “[T]he primary responsibility for insuring a constitutional structure of public education is the state’s, ... it is appropriate for the Court to order the State to affirmatively participate in remedial efforts ... including the provision of funding, to the extent necessary, for desegregation ordered by the Court. Lid-dell v. Board of Education, 491 F.Supp. at 360. In Reed, the Ohio State Attorney General and state statutes mandated that the state school board participate in the desegregation of local schools. The school board was found to. have failed to do so and, in the light of its post-Brown conduct, was held to have violated the rights of the plaintiffs. The State was ordered to share in the costs of desegregation.

This Court, having determined that State officials are in violation of federal law, has the power to enjoin the continuation of the conduct and to order the State to share in the desegregation costs.

[I]n the event of a constitutional violation all reasonable methods [are] available to formulate an effective remedy, “and that effort should be made by a federal court to employ those methods to achieve the greatest possible degree of relief, taking into account the practicalities of the situation____ Once a right and a violation have been shown, the scope of a district court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent in equitable remedies.

Hills v. Gautreaux, 425 U.S. 284, 297, 96 S.Ct. 1538, 1546, 47 L.Ed.2d 792 (1976). Reviewing the operations of the state school board in Penick v. Columbus Board of Education, 663 F.2d 24, 26 (6th Cir. 1981), the Sixth Circuit Court of Appeals noted that unlike the other activities of the school board, the board operated under a “hands-off” policy with respect to school desegregation. The court found that the state had failed to exercise its power to facilitate the dismantling of the state-created segregated systems and that the “incremental effect of the State Board’s action and inaction [was] the total failure of compliance with the constitution and laws of the United States and of Ohio in the performance of the duty to eliminate racial segregation in the Columbus school system.” The circuit court affirmed the district court’s order directing the state to share in the loss of desegregating Columbus schools. See also United States v. Indianapolis Board of School Commissioners, 677 F.2d 1185 (7th Cir.), cert. denied, 459 U.S. 1086, 103 S.Ct. 568, 74 L.Ed.2d 931 (1982) (ordering State to pay the entire cost of desegregating Indianapolis schools).

While a state’s failure to act, in and of itself, may be insufficient to support a finding of liability against a state, see Reed v. Rhodes, 500 F.Supp. at 423 (citing cases), the undisputed facts presented by the parties in this case support the finding that the creation and maintenance of the segregated school systems in Metro Nashville and Davidson County are the result, in part of the intentional conduct of the state officials. See Dayton Board of Education v. Brinkman, 433 U.S. 406, 413, 97 S.Ct. 2766, 2772, 53 L.Ed.2d 851 (1977). The culpability of the State's inaction is compounded by its active campaign against busing. Such conduct has been counterproductive to the desegregation efforts of local administrators and parents.

The State’s conduct in attempting to undermine the efforts of Metro Nashville and Davidson County is to be distinguished from those eases in which the state was held not liable for the segregated conditions in local schools. In Alexander v. Youngstown Board of Education, 454 F.Supp. 985, 1074 (N.D.Ohio 1978), aff’d, 675 F.2d 787 (6th Cir.1982), the court held that because the local school board was held not liable for intentionally segregating its schools, the state could not be liable. Ohio officials’ failure to investigate and act on information concerning racial imbalances, while supporting the inference of intentional segregation, was held not to be a sufficient basis for liability in light of the state’s other affirmative actions in attempting to secure the desegregation of the Youngstown schools. Id. Similarly, in Arthur v. Nyquist, 573 F.2d 134 (2d Cir.) cert. denied, 439 U.S. 860, 99 S.Ct. 179, 58 L.Ed.2d 169 (1978), the State of New York was held not liable for the segregated conditions in Buffalo schools. In that case, the Commissioner of the Board of Education issued a policy statement on desegregation directing local school districts to eliminate dual systems and threatening to withhold funds for those districts failing to comply. The commissioner’s subsequent failure to withhold funds from recalcitrant school districts ultimately was held to be prudential in light of legitimate policy concerns over unduly disrupting schools. Id. at 146.

In comparison, in this case, the State did nothing constructive ab initio. The State had knowledge of the existence of racial imbalances in Metro schools and knew of Metro’s failure to comply with this Court’s orders to implement an effective desegregation remedy. Rather than assist this Court to aid Metro in dismantling its dual system, state officials passed antibusing resolutions, maintained segregation statutes and constitutional provisions on the books, and threatened to cut off funds to any school system voluntarily imposing busing to alleviate racial balances. In Nyquist, state officials were held not liable for failing to withhold state funds in light of their other affirmative efforts to promote desegregation. Here, state officials have no favorable light to reflect on their actions. No “legitimate policy considerations” justify the State’s conduct.

The Eleventh Amendment does not bar this Court from enjoining state officials from continuing to refuse to discharge their duty to participate in the implementation of desegregation in Metro schools. To assure compliance with the injunction, the Court exercises its remedial authority to order State officials to assist Metro in meeting the costs of eliminating the invidious effects of past discrimination.

C. The Statute of Limitations Does Not Bar Metro from Seeking an Injunction and Appropriate Orders Against the State of Tennessee and Its Officials.

The Court holds that the statute of limitations does not bar the claims of Metropolitan Nashville and Davidson County for injunctive relief against the State of Tennessee because (1) the third party plaintiffs sue in their official governmental capacity seeking relief as an arm of the State for the general good of the population, and (2) the State is liable for a continuing violation of federal law thereby staying the operation of the statute of limitations period.

1. The Claim Pursued by Metropolitan Nashville and Davidson County Involves Conduct in the Discharge of a Public Function Thereby Immunizing Third Party Plaintiffs from the Operation of the Relevant Statute of Limitations.

“Nullum tempus occurritt regi,” that is, the lapse of time does not operate to bar the right of the state to pursue its civil remedies. Williams v. Cravens, 31 Tenn.App. 246, 214 S.W.2d 57, 59 (Tenn. App.) cert. denied (Tenn.1948). In Tennessee, actions for compensatory and/or punitive damages brought under the federal civil rights statutes must be commenced within one year after the cause of action has accrued. T.C.A. § 28-3-104 (1980); Wilson v. Garcia, — U.S. —, —-—, 105 S.Ct. 1938, 1948-49, 85 L.Ed.2d 254, 268-69 (1985) (holding that the applicable statute of limitations for claims arising under the federal Civil Rights Act is to be determined by reference to the state statute of limitations for personal injury actions). The provisions of Title 28 of the Tennessee Code (governing limitation of actions), however, do not apply to bar actions brought by the State unless otherwise expressly provided by law. T.C.A. § 28-1-113 (1980).

Political subdivisions of the State are not automatically entitled to state immunity from the operation of the statute of limitations. Only when a legal corporation, such as a municipality or school board, acts as an agency and arm of the State in executing a public function is that agency entitled to the immunity provided under T.C.A. § 28-1-113; Central Hospital for Insane v. Adams, 134 Tenn. 429, 183 S.W. 1032, 1033 (1916). In Adams, the Supreme Court of Tennessee held that the Central Hospital for the Insane was not barred by the six year statute of limitations in seeking to recover compensation for care given a patient at the hospital. In ruling that the limitations period did not operate to bar the claim, the Court held that the care and custody of insane persons constituted the discharge of a government-assumed duty, thereby cloaking the institution with the sovereign immunity enjoyed by the State. Id., 183 S.W. at 1034. Similarly, in Jennings v. Davidson County, 208 Tenn. 134, 344 S.W.2d 359, 362 (1961), Davidson County was permitted to pursue a claim against the estate of a former patient who, though during treatment was a pauper, had later inherited the modest estate of a relative. The Tennessee Supreme Court held that the provision of medical care to the poor is a public function carried on by local governments and constituted the discharge of a state-assumed duty to the population of all Tennessee.

The principle that political subdivisions of the state are, under certain circumstances, entitled to the state’s sovereign immunity when pursuing civil claims was reaffirmed most recently in County of Johnson, Tennessee v. United States Gypsum Company, 580 F.Supp. 284 (E.D.Tenn. 1984). In that case, the district court held that the statute of limitations operated to bar the claims of a county school board suing for damages resulting from the installation of asbestos-containing acoustical and ceiling plaster throughout county schools. The Court reasoned that the maintenance of the physical plant of county structures constituted a purely local function of interest only to the local population. Id. at 288-89. Distinguishing a series of other Tennessee state eases in which local political subdivisions were entitled to immunity from the statute of limitations, the Court held that the county in this particular situation was suing on claims involving contract or property rights, rather than in a governmental capacity for the benefit of the general public. Id. See also Hamblen County v. Cain, 115 Tenn. 279, 89 S.W. 103 (1905); Shelby County v. Bickford, 102 Tenn. 395, 52 S.W. 772 (1899) (action by county to recover against a grantor on covenant against encumbrances).

The maintenance of the physical structure and land of county schools is a local concern and function. However, the provision of public education, involving matters of curriculum, funding, teacher qualifications and compensation, and other academic considerations are state concerns, albeit often shared by local officials. Leeper v. State, 103 Tenn. 500, 53 S.W. 962 (1899). See discussion, supra at pp. 1146-1148.

This Court finds that Metro’s claims constitute claims made as an arm of the state government regarding the discharge of a state assumed public duty. Just as a political subdivision is immune from the running of the statute of limitations for claims involving medical care provided to the indigent or to the insane, third party plaintiffs are entitled to immunity with respect to claims arising from the provision of education to the young.

2. The State of Tennessee is Liable for a Continuing Violation of Federal Law Thereby Staying the Operation of the Statute of Limitations.

The vestiges of state-imposed segregation continue to be present in Davidson County. State officials are under a continuing obligation to act affirmatively to eliminate these debilitating effects. Yet, the State continues to refrain, maintaining that the issue of desegregation is one exclusively between this district court and local officials. This Court views the State’s conduct as malfeasance, indicative of a continuing violation of federal law, thereby staying the running of the relevant statute of limitations.

The statute of limitations begins to run from the date of the injury, or if the injury is not apparent, from the time the harm reasonably should have been discovered. However, when the injury-causing activity continues over time, unabated, that conduct is not legitimized by the passage of time. Unlike the doctrine of adverse possession in real property law, acquiescence to a continuing violation of constitutional rights does not extinguish the individual’s rights. The failure of the attorneys for the various parties in this case to pursue their civil remedies against the State of Tennessee during the asserted statute of limitations period does not constitute a waiver of those rights and will not insulate the State from legal liability.

D. Principles of Equity Do Not Bar Third Party Plaintiffs from Pursuing their Legal Remedies.

1. Laches.

This case was filed in 1955 and a comprehensive desegregation order entered in 1971. Nevertheless, the State of Tennessee was not joined as a defendant until 1981. The State argues therefore that the doctrine of laches should bar the award of any relief against it. The Court disagrees.

Mere delay is insufficient to justify the operation of laches. The doctrine requires both delay and injury. Williams v. Cravens, 31 Tenn.App. 246, 214 S.W.2d 57, 60 (Ct.App.), cert. denied (Tenn. 1948). The State has failed to allege any consequence that the Court reasonably can consider to have injured or prejudiced the interest of the State as a result of other parties’ failure to have joined the State at a earlier date. In seeking to invoke the doctrine of laches, the State calls upon the Court to exercise its powers in equity. Accordingly, the Court will consider the dictates of fairness and justice and will evaluate all factors in determining whether relief should be barred against the State.

The State created and maintained a system of segregation between the races since statehood. That system remained in place, officially, through 1954. Even assuming delinquency on the part of other parties in this case in failing to join the State until 1981, fairness dictates that the actor primarily responsible for the discriminatory system should bear some responsibility for remedying the system’s invidious consequences.

Finally, the racial minorities in Tennessee are, for the most part, concentrated in urban centers. Recognizing the affirmative legal obligation to eliminate the vestiges of state-imposed segregation, it is unfair to call only upon urban dwellers to bear the expenses of desegregation. The remedy should be carried out at the expense of all Tennesseans, both those residing in the cities and those who live in rural areas.

2. Unclean Hands.

The State asserts that in view of Metro Nashville and Davidson County’s recalcitrance in failing to comply with the Court’s order to desegregate local schools, the State should not be forced to share in the cost of desegregating Nashville schools. The Court notes that the State likewise has been less than enthusiastic about the prospects of desegregation. The failure to remove the State’s unlawful constitutional and statutory provisions mandating segregation and its passage of statutory provisions authorizing the cutoff of funds to local schools districts voluntarily desegregating schools through busing reflects conduct taken in less than good faith, vis-a-vis the state’s affirmative obligation to eradicate the effects of past discrimination.

If an equitable doctrine is to apply at all, the Court would look to the principles of in pari delicto. That is, recognizing that both Metro and the State have been culpable of acts taken in bad faith, as between the two, the State is just as, if not more, subject to condemnation for its conduct. The Court, however, refrains from assessing the relative reprehensibility of the conduct of the defendants in this action. Rather, it holds that whatever bad deeds Metro may be responsible for, that conduct will not operate to bar the State from sharing in its responsibility to desegregate Metropolitan Nashville and Davidson County schools.

E. Relief.

The Court hereby enjoins the State officials and the State of Tennessee from refusing to carry out their affirmative obligation to participate in eliminating the vestiges of past discrimination and to participate in the desegregation of Metro Nashville schools. Pursuant to the injunction, the Court directs the State to pay sixty percent (60%) of the costs directly attributable to the desegregation program. Directing payment of state funds is a necessary consequence of compliance in the future with a substantive federal-question determination.” Edelman v. Jordan, 415 U.S. 651, 94 S.Ct. 1347, 39 L.Ed.2d 662 (1974); Milliken v. Bradley, 433 U.S. 267, 289, 97 S.Ct. 2749, 2761, 53 L.Ed.2d 745 (1977).

The relief ordered today complies with the standards set forth by the Eighth Circuit Court of Appeals in Liddell v. State of Missouri, 731 F.2d 1294, 1305-09 (8th Cir. 1984), cert. denied, — U.S. —, 105 S.Ct. 82, 83 L.Ed.2d 30 (1984), for evaluating the boundaries of the remedial power of federal district court in devising relief ordered against State officials in school desegregation cases. The Liddell court set forth three considerations: (1) the remedy must be closely tailored to the nature and scope of the violation; (2) the remedy must seek to restore the victims of discrimination as nearly as possible to the position they would have occupied absent the discrimination; and (3) the order must not unduly infringe on state or local government autonomy.

This Court concludes that the order in this case directing the State to assume part of the costs of desegregating Metro Nashville schools is responsive to the constitutional violations and injuries that have occurred. The infusion of state funds into the Metro desegregation effort will permit Metro to offer those remedial programs which currently are part of the comprehensive remedial plan but presently are not offered because of insufficient funding. The effects of past discrimination continue to be manifested in many school age black children in terms of levels of performance on standardized testing, development of effective communication skills, and the ability to earn high school and higher education degrees. The present desegregation plan seeks to ameliorate these conditions. The payment of State funds to finance the remedial programs seek to improve the educational opportunities for black children so as to permit them to achieve a level of academic performance that reasonably could be expected had the black population not have been subjected to long term segregation in public education. Finally, the Court believes that the impact on the state treasury will not unduly infringe on the state’s ability to carry on traditional state functions. The remedy is not intrusive on the autonomy of state officials to exercise discretion over state affairs.

For these reasons, the Court grants the motion of Metropolitan Nashville and Davidson County for summary judgment.

      . A more detailed review of the history of this case appears in an earlier opinion by this Court. See Kelley v. Board of Education, 492 F.Supp. 167 (M.D.Tenn.1980).

      . Justice Stephens speaks of the Young fiction as a "well-recognized irony” since an official’s unlawful conduct constitutes "state action” under the Fourteenth Amendment but not "state action” under the Eleventh Amendment. Florida Department of State v. Treasurer Salvors, Inc., 458 U.S. 670, 685, 102 S.Ct. 3304, 3315, 73 L.Ed.2d 1057 (1982) (Stephens, J., plurality opinion). See also Banns v. Dempsey, 742 F.2d 277, 284 n. 12 (6th Cir.1984), cert. granted, sub nom., Green v. Mansour, — U.S. —, 105 S.Ct. 1863, 85 L.Ed.2d 158 (1985).

      . This Court views the Johnson County case as setting forth the relevant considerations for determining whether a political subdivision is entitled to immunity from the statute of limitations. However, the Court takes exception to the overbroad statement by the Johnson County Court that "the authorities across the country virtually unanimously hold, the operation of a school system is a particularly local affair." 580 F.Supp. at 290.


source: Caselaw Access Project

author: TERRENCE WILLIAM BOYLE, District Judge.

license: Public Domain

text:
    NORTH CAROLINA STATE BOARD OF REGISTRATION FOR PROFESSIONAL ENGINEERS AND LAND SURVEYORS, Plaintiff, v. FEDERAL TRADE COMMISSION, Defendant.
    No. 84-517-Civ-5.
    United States District Court, E.D. North Carolina, Raleigh Division.
    Aug. 15, 1985.

      Wright T. Dixon, Jr., Carolin Bakewell, Raleigh, N.C., for plaintiff.
    Fred Dooley, F.T.C., Office of Gen. Counsel, Washington, D.C., for defendant.
   ORDER

TERRENCE WILLIAM BOYLE, District Judge.

Plaintiff, North Carolina State Board of Registration for Professional Engineers and Land Surveyors [hereinafter “Board”], brought this action pursuant to 5 U.S.C. § 704; 15 U.S.C. § 49 and 28 U.S.C. §§ 1331, 1337 and 2201. Plaintiff named as defendant the Federal Trade Commission [hereinafter “Commission”]. The plaintiff Board, an entity created by the North Carolina General Assembly, alleges that the defendant Commission’s issuance of a subpoena ad testificandum and a subpoena duces tecum was an ultra vires action not authorized by the Federal Trade Commission Act [hereinafter “FTCA”]. The Board further alleges that the administrative review procedures utilized by the Commission deprived it of procedural due process as guaranteed by the fifth amendment.

The Board seeks declaratory and injunctive relief. Specifically, it requests that the court restrain the Commission from enforcing the two subpoenas issued to the Board and from issuing further subpoenas. Furthermore, the Board requests that the court declare a rule of professional conduct promulgated by the former to be exempt from FTC investigation. The Board has apparently dropped its request for a temporary restraining order in this matter.

The Commission filed a motion to dismiss, alleging that no statutory basis for subject matter jurisdiction exists in this case, and that the plaintiff in any event has failed to state a claim upon which relief may be granted. For the reasons given hereafter, the Commission’s motion to dismiss is granted.

FACTUAL BACKGROUND

The facts- regarding the Commission’s investigation of the plaintiff Board are, for the most part, undisputed. The North Carolina State Board of Registration for Professional Engineers and Land Surveyors was created by the North Carolina General Assembly in 1921. See N.C.Gen.Stat. § 89C-4 (1981). All members of the Board are appointed by the Governor. Id. The Board consists of four registered professional engineers, three registered land surveyors and two public members who are neither professional engineers nor land surveyors. Id. The Board is responsible for promulgating and adopting rules of professional conduct applicable to the practice of engineering and land surveying. N.C.Gen. Stat. § 89C-20 (1981). The Board is required to submit its proposed rules to the North Carolina Attorney General. N.C. Gen.Stat. § 150A-59 (1981).

Pursuant to this legislative authority, the Board in 1979 promulgated and approved Rule 56.071(e)(8) and incorporated the same into its Rules of Professional Conduct. Rule 56.0701(e)(8) provides:

The [Engineer or Land Surveyor] shall not attempt to supplant another engineer or land surveyor in a particular employment after becoming aware that the other has been selected for the employment.

On April 2, 1984, a staff attorney for the Commission notified the Board’s executive secretary that the agency was conducting an investigation to determine whether Rule 56.0701(e)(8) was in violation of § 5 of the FTCA, i.e., 15 U.S.C. § 45. The Commission requested that the Board provide it with certain information regarding the rule. On April 12, 1984, the Board informed the Commission that it would not voluntarily furnish the information requested.

Faced with the Board’s refusal to voluntarily submit information pursuant to an investigation, the Commission resorted to compulsory process and issued a subpoena ad testificandum to the Board’s Chairman and a subpoena duces tecum to the Board’s Executive Secretary. The Board filed a petition to quash these subpoenas on January 16, 1985. The Commission granted the Board an oral hearing on the petition in Washington, D.C. on January 29, 1985. The hearing was held before a single FTC Commissioner, i.e., Commissioner Terry Calvani. Commissioner Calvani denied the Board’s petition to quash in a written decision dated February 11, 1985.

In the second paragraph of the opinion, Commissioner Calvani directed the Board’s attention to FTC Rule 2.7(f), which provides for a three day period within which to file a request with the Secretary of the FTC for a full Commission review. Commissioner Calvani also referred to a notice found in the Federal Register which explicitly stated that full Commission review of an initial ruling would be available only “if a request for a review is received within three days after service of the ruling.” 49 Fed.Reg. 6089 (February 17, 1984).

The Board submitted a request for a full Commission review of Commissioner Calvani’s decision. This request was mailed on February 14, 1985, and received by the Commission on February 19, 1985—the first working day following the three-day time period established by Commission Rule of Practice 2.7(f). The Commission denied the Board’s request for a full Commission hearing on March 8, 1985. The full Commission cited the Board’s failure to timely file its request as the reason for refusing to review Commissioner Calvani’s decision.

The Commission set March 14, 1985, as the deadline for compliance with its subpoenas. On March 13, 1985, the Board filed a motion for a rehearing on its request for a full Commission review of Commissioner Calvani’s decision. That motion was denied by the Commission on March 22,1985. The Board filed this complaint on March 28, 1985. Thereafter, the Commission filed a request for documents with the Board pursuant to the North Carolina Public Records Act, N.C.Gen.Stat. §§ 132-1 through -9 (1981). The Board has complied with this request.

APPLICABLE LAW

The Board’s complaint effectively contains two causes of action. The Board alleges a deprivation of its constitutional right to due process of law, and also maintains that Rule 56.0701(e)(8) is exempt from FTC investigation. The latter claim arises under two separate theories, i.e., that the rule in question does not affect interstate commerce, and that the rule constitutes “state action” exempt from antitrust scrutiny pursuant to Parker v. Brown and its progeny.

A. Due Process Claim

The court considers the Commission’s motion to dismiss the Board’s due process claim to be a 12(b)(6) motion to dismiss for failure to state a claim: the court has subject matter jurisdiction over these claims by virtue of the constitutional implications which they raise. Since this motion was accompanied by affidavits and exhibits, the court will treat it as a motion for summary judgment. Fed.R.Civ.P. 12(b)(6).

The Board alleges that the processing and denial of its request for a full Commission review of Commissioner Calvani’s order deprived the state agency of its right to due process as guaranteed by the fifth amendment. The Board cites the short amount of time (three days) within which the request for review must be received by the Commission in Washington, as well as the Commission’s failure to apprise the Board of FTC Rule of Practice 4.4(b) which specifically stated that the three day time period referred to receipt of the request (as opposed to mere mailing of the same). See 16 C.F.R. § 4.4(b) (1985).

Prior Supreme Court cases foreclose any constitutional argument the Board may make in this case. The Due Process Clause is not offended when an administrative agency uses its subpoena power to gather evidence adverse to an individual or entity. SEC v. Jerry T. O’Brien, Inc., — U.S. —, 104 S.Ct. 2720, 2725, 81 L.Ed.2d 615 (1985). The Due Process Clause is not implicated because an administrative investigation does not adjudicate legal rights. Id. See also Hannah v. Larche, 363 U.S. 420, 440-43, 80 S.Ct. 1502, 1513-15, 4 L.Ed.2d 1307 (1959). In the case at bar, the administrative proceedings are still in an investigative stage, and the Board’s legal rights are not being adjudicated. Moreover, the Commission’s subpoenas are not self-enforcing; the Board will not subject itself to penal sanctions until the Commission attempts to enforce the subpoenas in federal district court. See 15 U.S.C.A. § 49 (1973 & Supp.1985). Consequently, the court finds that the Board’s procedural due process claim fails to state a claim upon which relief may be granted. The Commission’s motion to dismiss is therefore granted as to the Board’s fifth amendment claim.

B. Exemption Claim

As a general rule, a private party may not bypass the specific statutory scheme enacted by Congress for judicial review of adverse agency action. General Finance Corp. v. FTC, 700 F.2d 366, 368 (7th Cir.1983). Consequently, a party may not obtain review of an agency decision by circumventing the Administrative Procedure Act’s review provisions via a request for declaratory or injunctive relief pursuant to 28 U.S.C. § 1331 or § 1337. See id. However, there exists a notable exception to this general rule requiring adherence to eongressionally created judicial review procedures. If an agency acts in “brazen defiance” of its statutory authorization, courts will entertain a cause of action based on § 1331 or § 1337 jurisdiction. Phillip Morris, Inc. v. Block, 755 F.2d 368, 369-70 (4th Cir.1985). This exception enables courts to preserve the status quo, to prevent infringement of substantial rights that might otherwise be sacrificed, and to protect against the subversion of congressional policy. See Mayor and City Council of Baltimore v. Mathews, 562 F.2d 914, 920 (4th Cir.1977). See also Leedom v. Kyne, 358 U.S. 184, 79 S.Ct. 180, 3 L.Ed.2d 210 (1958).

Pursuant to the APA, judicial review is appropriate only where agency action is made reviewable by statute or where “final agency action” is taken for which there is no other adequate remedy at law. 5 U.S.C.A. § 704 (1977). Since the FTCA does not specifically provide for judicial review of Commission action, the Board relies on the Act’s “final agency action” language in arguing that the court has subject matter jurisdiction in this case. The Supreme Court interpreted the “final agency action” provision of § 704 in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); Toilet Goods Association v. Gardner, 387 U.S. 158, 87 S.Ct. 1520, 18 L.Ed.2d 697, and Gardner v. Toilet Goods Association, 387 U.S. 167, 87 S.Ct. 1526, 18 L.Ed.2d 704 (1967). As a consequence of the Abbott Laboratories trilogy, agency action previously categorized as “non-final” is now considered to be “final” and reviewable pursuant to § 704 if that action is ripe for judicial review. General Finance, 700 F.2d at 371.

The APA also provides that any applicable form of legal action is available to a litigant in a court of competent jurisdiction should a court find the agency action to be “final” and should the court determine that the special statutory review proceedings are inadequate. 5 U.S.C.A. § 703 (1977). If the adverse administrative decision is ripe for review, § 703 allows a litigant to move under §§ 1331 and 1337 for declaratory and injunctive relief. These latter two sections then provide a court with jurisdiction to entertain a suit in appropriate circumstances.

Abbott Laboratories and its progeny are cases in which the jurisdiction of the agency to promulgate the contested regulations was unquestioned. The agency in Abbott Laboratories was unquestionably acting within its statutory authority; the issue presented in that case involved allegedly erroneous agency action. See Gardner v. Toilet Goods Association, 387 U.S. at 175-76, 87 S.Ct. at 1530-31 (Fortas, J., dissenting). See also FTC v. Standard Oil Company of California, 449 U.S. 232, 101 S.Ct. 488, 66 L.Ed.2d 416 (1980) [hereinafter “SOCAL”] (authority of FTC to issue subpoena not questioned). In this context judicial review is based on the APA. While Abbott Laboratories allows a party to bring suit under § 1331 or § 1337, the litigant’s ability to bring such an action is actually based upon the APA, i.e., 5 U.S.C. §§ 703, 704. See General Finance, 700 F.2d at 371 (.Abbott Laboratories merely a gloss on § 704).

A different question arises when an agency is accused of acting ultra vires, i.e., in excess of its delegated powers and contrary to a prohibition in its authorizing statute. In this context, the appropriate inquiry centers upon the boundaries of an agency's enabling statute and determines whether the agency acted within those boundaries. When agency jurisdiction itself is questioned, judicial review is not based on the APA, but upon independent sources of jurisdiction such as 28 U.S.C. §§ 1331 and the Constitution (particularly the separation of powers doctrine). In Leedom v. Kyne, plaintiff, president of a union of professional employees, alleged that the National Labor Relations Board had violated the National Labor Relations Act. The NLRB allegedly violated the Act by certifying as a collective bargaining representative a unit consisting of both professional and non-professional employees without first allowing the former to vote on whether to be included with the latter in the same unit. 358 U.S. at 185-86, 79 S.Ct. at 182. The Court noted: “Th[e] suit is not one to ‘review,’ in the sense of that term as used in the Act, ____ rather, it is one to strike-down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition of the act.” Id. at 188, 79 S.Ct. at 183.

In short, when one conducts an Abbott Laboratories “ripeness” inquiry, one is conducting review within the statutorily created review process found in the APA. A Leedom -type inquiry, however, constitutes judicial review outside the APA’s ambit. See Mathews, 562 F.2d at 920. But see General Finance, 700 F.2d at 371. Consequently, a court need not conduct a separate Abbott Laboratories inquiry into ripeness to gain subject matter jurisdiction when faced with a situation analogous to Leedom. Conversely, “brazen defiance” of a statute is not a prerequisite to finding a case to be “ripe” for review within the meaning of Abbott Laboratories.

In the present case, there are two issues placed before the court. First, the court must determine whether the Commission is acting in excess of its jurisdictional parameters. Second, the court must decide whether the Commission’s issuance of a subpoena ad testificandum and a subpoena duces tecum, even if within the agency’s jurisdictional authority, constituted “final agency action” now ripe for judicial review. The court will address each inquiry separately.

Neither of the Board’s two reasons for asserting lack of Commission jurisdiction in this case establishes a case of unauthorized agency action amounting to brazen agency defiance of the FTCA. The Board first argues that Rule 56.0701(e)(8) affects only intrastate commerce. However, a mere allegation that conduct is intrastate in nature does not create a presumption that federal statutes and regulations based on the Commerce Clause power are inapplicable. Moreover, such a presumption is especially inappropriate in instances, like in the case at bar, in which the issue has been presented in a cursory fashion. Finally, the court notes that the term “interstate commerce” has been given an expansive definition in similar situations. See McLain v. Real Estate Board, 444 U.S. 232, 242, 100 S.Ct. 502, 509, 62 L.Ed.2d 441 (1980); Goldfarb v. Virginia State Bar, 421 U.S. 773, 783-86, 95 S.Ct. 2004, 2011-13, 44 L.Ed.2d 572 (1975). Considering all these factors, the court concludes that the Commission’s refusal to find that Rule 56.-0701(e)(8) affects only intrastate commerce does not, as a matter of law, constitute brazen defiance of the FTCA.

The Board’s next contends that its exercise of authority in promulgating and adopting Rule 56.0701(e)(8) constitutes “state action” exempt from FTC regulation under the Parker doctrine. The court concludes that the Commission’s initial rejection of the Board’s Parker defense does not constitute agency action done in brazen defiance of the FTCA.

The FTCA authorizes the Commission “to gather and compile information concerning, and to investigate ... any person, partnership, or corporation engaged in or whose business affects commerce____” 15 U.S.C. § 46(a) (1976). States acting within their sovereign capacities are not included within the jurisdiction of the antitrust statutes. Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). However, the standard for determining whether the conduct of a nonsovereign state representative is exempt from antitrust regulation is presently in issue. In California Retail Liquor Dealers Association v. Midcal Aluminum, Inc., the Supreme Court held that actions allegedly exempt under the Parker doctrine must be based on a clear articulation of state policy and must be actively supervised by the state. 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980). See also Hoover v. Ronwin, 466 U.S. 558, 104 S.Ct. 1989,1994, 80 L.Ed.2d 590 (1985). However, that two-prong standard may be partially inapplicable to a state agency. See Town of Hallie v. City of Eau Claire, — U.S. —, 105 S.Ct. 1713, 1720 n. 10, 85 L.Ed.2d 24 (1985). Furthermore, it is questionable whether a state agency need show “compulsion” to satisfy the “clear articulation” prong of Midcal. See Southern Motor Carriers v. United States, — U.S. —, 105 S.Ct. 1721, 85 L.Ed.2d 36 (1985).

Clearly, the law in this area is presently rather unsettled. Moreover, this case does not present a situation analogous to that found in Leedom, in which an explicit and unambiguous statutory prohibition was clearly violated. See Leedom, 358 U.S. at 188-89, 79 S.Ct. at 183-84. Under similar circumstances, a circuit court has refused to allow jurisdiction under the Leedom “brazen defiance” standard. See General Finance, 700 F.2d at 370 (FTC not acting in brazen defiance of statute where it uncertain whether Commission exceeded authority and where Commission did not flout clear legislative directive). This court likewise will not entertain the Board’s action under a “brazen defiance” analysis since the Commission has not violated a clear and explicit statutory prohibition and the case law setting the parameters of that agency’s authority is presently unsettled.

Having determined that subject matter jurisdiction cannot be obtained using a Leedom analysis, the pertinent question becomes whether the holding in Abbott Laboratories can be used to establish the court’s jurisdiction through 28 U.S.C. §§ 1331 and 1337 by way of §§ 10(b) and (c) of the APA (i.e., 5 U.S.C. §§ 703, 704). The court notes that the Board’s contentions, aside from its due process claims, allege a lack of Commission authority and an exercise of authority in excess of its delegated powers. There is no argument that the Commission, while acting within its authority, erroneously promulgated a rule or initiated an investigation requiring immediate judicial review.

Under these circumstances, it is questionable whether Abbott Laboratories applies; that case and its progeny dealt with private parties whom were clearly within the “person, partnership and corporation” category of entities subject to FTC regulation. Cf. Abbott Laboratories, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967); Gardner v. Toilet Good Association, 387 U.S. 167, 87 S.Ct. 1526, 18 L.Ed.2d 704 (1967); Wearly, 616 F.2d 662 (3rd Cir.1980); Atlantic Richfield Co. v. FTC, 546 F.2d 646 (5th Cir.1977). The Court in Abbott Laboratories conducted its ripeness inquiry only after determining that it possessed subject matter jurisdiction to hear the case. 387 U.S. at 141, 148, 87 S.Ct. at 1511, 1515. See also SOCAL, 449 U.S. at 239-43, 101 S.Ct. at 493-95 (agency action found to lack finality within meaning of § 704 without referring to ripeness test enunciated in Abbott Laboratories). The ripeness test was used to determine whether the Court should exercise its discretion to hear the petitioner's request for declaratory and injunctive relief. 387 U.S. at 149, 87 S.Ct. at 1515. As this test is not grounded upon jurisdictional concerns but rather upon the equitable relief requested, a genuine question exists as to whether a ripeness inquiry is required in this case.

Yet other courts have considered the ripeness analysis to be a prerequisite to establishing subject matter jurisdiction. See General Finance, 700 F.2d 366 (7th Cir.1983) (applying both Leedora and Abbott Laboratories analyses where plaintiff insurance companies argued lack of agency jurisdiction over them pursuant to McCarran-Ferguson Act—both jurisdictional questions seen as rising from Abbott Laboratories gloss on § 704); Wearly, 616 F.2d at 665-68. In any event, this court must determine whether the Commission’s actions constitute “final agency action” for which there exists no other adequate remedy at law even if the Abbott Laboratories gloss on § 704 is not adopted. 5 U.S.C.A. § 704 (1977).

As in General Finance, the court is unable to find subject matter jurisdiction even under an Abbott Laboratories analysis. The Commission’s issuance of compulsory process to the Board, combined with the agency’s denial of the Board’s petition to quash, do not raise questions which are ripe for review so as to constitute “final agency action.” A matter is ripe for review only if: (1) the issue before the court is presently fit for resolution so that further proceedings are not needed to give sharp focus to the controversy at bar; and (2) the parties would suffer actual hardship in the event the court were to withhold judicial review. See Abbott Laboratories, 387 U.S. at 149, 87 S.Ct. at 1515; General Finance, 700 F.2d at 371; Wearly, 616 F.2d at 666.

Regardless of whether the hardship factor can be satisfied, the court must determine whether the question regarding the Board’s Parker immunity is presently fit for judicial resolution. In order to be fit for resolution, the action complained of must be “final”, i.e., a definitive statement of the pertinent agency’s position. SOCAL, 449 U.S. at 239-40, 101 S.Ct. at 493. See also Wearly, 616 F.2d at 666. The court concludes that the Commission’s actions do not constitute a definitive agency statement, and for this reason the plaintiff’s claim is not ripe for review at this time.

The Commission’s issuance of subpoenas to the Board is not “final” agency action as defined in SOCAL. The agency’s issuance of the two subpoenas, neither of which is self-enforcing, does not comprise a definitive statement of position. At present, these subpoenas do not have any immediate effect on the Board’s daily operations. See SOCAL, 449 U.S. at 242-43, 101 S.Ct. at 494-95. There is no guarantee that the Commission will move the court to enforce these subpoenas pursuant to 15 U.S.C. § 49.

Commissioner Calvani also explicitly stated that the Commission presently lacks the information needed to determine whether Rule 56.0701(e)(8) affects interstate commerce. As mentioned earlier, the Commissioner’s ruling was issued prior to the Supreme Court’s recent holdings in Town of Hallie and Southern Motor Carriers. Given these two recent decisions, and the fact that the Commissioner's ruling was not reviewed on its merits by the full Commission, the possibility exists that the Commission’s position regarding the state action question may change. Finally, the Commissioner noted that his refusal to grant the Board’s petition to quash was based partially on the Commission’s reluctance to determine jurisdictional issues at a preenforcement stage.

Irrespective of the merits of the Board’s Parker and interstate commerce arguments, the Commission’s refusal to hear the Board’s petition en banc, combined with the agency’s use of compulsory process which is not self-enforcing, do not amount to final agency action. The Commission’s actions to date do not constitute a definitive statement of the agency’s position; nor do its actions have any legal force or practical effect upon the Board’s daily business. See SOCAL, 449 U.S. at 239-40, 243, 101 S.Ct. at 493, 494. The servicing of subpoenas to the Board, in short, “represents a threshold determination that further inquiry is warranted.” Id. at 241, 101 S.Ct. at 493. See also Wearly, 616 F.2d at 666 (agency action final only if no further action contemplated). For these reasons, the issue before the Court is presently not fit for judicial resolution and the matter is not ripe for review at this time.

CONCLUSION

Because the Commission’s actions do not constitute “final agency action” within the meaning of § 704, and because the Commission is not acting in clear or brazen defiance of its statutory authority, the court does not possess subject matter jurisdiction to entertain the Board’s non-constitutional claim. Cf. General Finance, 700 F.2d at 372. Accordingly, the Commission’s motion to dismiss the Board’s exemption claim is GRANTED. The Commission’s motion to dismiss the Board’s fifth amendment claim is likewise GRANTED.

      . Federal Trade Commission Act, §§ 1 et seq., 15 U.S.C.A. §§ 41 et seq. (1973 & Supp.1985).

      . A recent amendment to FTC regulations provided for such initial hearings to be held before a single Commissioner. 16 C.F.R. § 2.7(d)(3) (1985).

      . Administrative Procedure Act, [hereinafter "APA”], §§ 1 et seq., as amended 5 U.S.C.A. §§ 551-59, 701-06 (1977 & Supp.1985).

      . Judicial review would be precluded if the authorizing agency statute (in this case, the FTCA) prohibited preenforcement review. The Act, however, does not proscribe such review. Wearly v. Federal Trade Commission, 616 F.2d 662 at 666 (3rd Cir.1980).

      . A separation of powers issue arises in circumstances wherein an agency acts in excess of authority delegated to it by Congress. Where a legislative grant of authority is involved, an administrative agency, as an arm of the executive branch, cannot itself legislate a broader authorizing statute than that given by Congress. “[T]he role of the agencies remains basically to execute legislate policy; they are not more authorized than the courts to rewrite acts of Congress." Talley v. Mathews, 550 F.2d 911, 919 (4th Cir.1977). This same principle also holds true for independent agencies such as the FTC. See, e.g., Int'l Bhd of Teamsters v. Daniel, 439 U.S. 551, 566 n. 20, 99 S.Ct. 790, 800 n. 20, 58 L.Ed.2d 808 (1979); Office of Consumer Counsel v. FERC, 655 F.2d 1132, 1152 (D.C.Cir.1980).

      . Commissioner Calvani noted that there is not yet sufficient information available with which to resolve whether Rule 56.0701(e)(8) affects only intrastate commerce.

      . Assuming arguendo that the Board is entitled to an exemption pursuant to Parker v. Brown, the court is satisfied that the Commission’s issuance of compulsory process itself would constitute a hardship of sufficient degree and immediacy to meet the "hardship” element of the ripeness test. Intrusion upon the intricate balance between the federal and state systems, and the accompanying degredation of state sovereignty, is a wrong that constitutes immediate injury to our constitutional and federal system of government. Such a wrong warrants judicial action at even a preenforcement stage of administrative action.
      The Commission cites a host of cases which deny preenforcement relief to private parties due to those parties’ failure to show any hardship caused by the agency action in question. The court finds these cases to be easily distinguishable. The Commission fails to recognize that private parties are not susceptible to the type of immediate injury that the Board, and indeed our constitutional system of government, would suffer should it be deemed a state entity. Thus, those cases noting a lack of any hardship to the private parties bringing suit are not dis-positive on this issue. Although the Commission would like the court to believe differently, Garcia v. San Antonio Metropolitan Transit Authority, — U.S. ——, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985) does not write the tenth amendment out of the Constitution.