U.S. Court Of Appeals For The Fourth Circuit Holds Section 501(C)(3) Status Does Not Subject A Non-Profit Organization To Title IX Requirements

CATEGORY: Private Education Matters
CLIENT TYPE: Private Education
DATE: Apr 25, 2024

Title IX is a law that prohibits discrimination on the basis of gender by educational institutions receiving federal assistance.  Generally, private schools that do not receive federal financial aid have not been considered subject to Title IX’s requirements.

In July of 2022, we issued a Special Bulletin regarding a California District Court’s decision in E.H. v. Valley Christian Academy (2022) Case No. 2:21-cv-07574-MEMF, which held otherwise.  In that decision, the court held that a private school’s federal tax-exempt status as a 501(c)(3) non-profit corporation constituted “federal financial assistance” for the purpose of subjecting the school to Title IX requirements.  The lawsuit subsequently settled.  To date, neither the Ninth Circuit Court of Appeals, which has jurisdiction over California, nor other courts in California, have ruled on this issue and Title IX does not define the term “federal financial assistance.”

In our prior Special Bulletin, we referenced a similar court decision from Maryland in Buettner-Hartsoe v. Baltimore Lutheran High School Association d/b/a Concordia Preparatory School.  In that case, several women sued their former high school, Concordia Preparatory School, alleging they were subjected to sexual assault and harassment by male students at the school in violation of Title IX.  The school argued the lawsuit should be dismissed because, as a private school that did not receive federal financial assistance, it was not subject to Title IX.  The district court held that because the school received a federal tax exemption as a 501(c)(3) organization, it was subject to Title IX, regardless of the fact the school did receive any federal funding.

On March 27, 2024, the U.S. Court of Appeals for the Fourth Circuit, which has jurisdiction over Maryland, reversed the district court’s decision and concluded that Section 501(c)(3) status does not constitute receipt of federal financial assistance for purposes of subjecting an organization to Title IX.  In its analysis, the Court explained that “federal financial assistance,” means the taking or accepting of federal financial aid, help, or support, whereas an organization’s 503(c) status is the withholding of a tax burden, rather than the affirmative grant of funds.

Note: While the Fourth Circuit’s decision is not binding in California, the decision is instructive, and one that California courts and the Ninth Circuit may consider.  If you have any questions, contact a member of LCW’s private education practice group. 

Buettner-Hartsoe v. Balt. Lutheran High Sch. Ass’n (4th Cir. Mar. 27, 2024) 2024 U.S. App. LEXIS 7229.

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