National Ass'n for the Advancement of Colored People v. Medical Center, Inc.

657 F.2d 1322, 69 A.L.R. Fed. 539

• Court: Court of Appeals for the Third Circuit
• Decided: June 29, 1981
• Docket: No. 80-1893
• Status: Published

Opinions

OPINION OF THE COURT

WEIS, Circuit Judge.

The Wilmington Medical Center has been embroiled in litigation for the past five years because of its proposal to construct a new building in the suburbs and renovate one of its buildings in downtown Wilmington, Delaware. In this latest appeal, we hold that disparate impacts of a neutral policy may be adequate to establish discrimination under Title VI of the Civil Rights Act of 1964. Assuming, without deciding, that the plaintiffs presented a prima facie case, we conclude that the Medical Center produced adequate evidence to justify its relocation and reorganization plan. Accordingly, we will affirm the action of the district court in refusing to enjoin implementation of the proposal.

Alleging unlawful discrimination, the plaintiff organizations, representing minority, handicapped, and elderly persons, sought an injunction against the relocation and reorganization of the Medical Center. After we held that the plaintiffs had private rights of action under Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d et seq. (1976), and § 504 of the Rehabilitation Act of 1975, 29 U.S.C. § 794 (Supp. II 1978), see NAACP v. The Medical Center, Inc., 599 F.2d 1247 (3d Cir. 1979), the district court brought the matter to trial. The City of Wilmington was added as a party plaintiff, and the complaint was amended to include allegations that the Age Discrimination Act, 42 U.S.C. §§ 6101-6107 (1976 & Supp. II 1978) had been violated. In addition, plaintiffs charged the defendant with intentional discrimination as well as conduct that had a disparate impact on the classes represented by the plaintiffs.

Following a bench trial lasting more than a month, the district court filed a comprehensive and detailed opinion, concluding that the plaintiffs had failed to prove discrimination under any of the three statutes. Judgment was accordingly entered for the defendant. NAACP v. Wilmington Medical Center, Inc., 491 F.Supp. 290 (D.Del.1980).¹ The plaintiffs’ appeal was heard initially by a panel and then, because of the nature of the issues, was reheard by the court in banc.

The Wilmington Medical Center (WMC) was organized in 1965 by the merger of three non-profit hospitals, General, Memorial, and Delaware, in different areas of Wilmington. WMC furnishes general medical and surgical services, as well as secondary and tertiary hospital care. It provides 1,104 of the 1,471 non-profit, acute general hospital beds in New Castle County. Other institutions in the county include St. Francis Hospital, which has approximately 290 beds, and Riverside Osteopathic Hospital, with a capacity of 100. The concentration of hospital beds in Wilmington proper is higher than is desirable under national standards, while at the same time the southwestern part of the county surrounding Newark, Delaware, is quite underserved.

WMC is the only hospital in the county with a teaching program approved by the American Medical Association. Medical students and residents are important to WMC’s delivery of health care to the community. Without their assistance, current levels of care could not be maintained,

Because its physical structures are aging and are not in compliance with Delaware’s licensing law, WMC has encountered serious problems. Recruitment for its residency program has been hindered by the fragmenting of its plants, as well as by a lack of conference space and adequate research facilities. The surgical residency program has been placed on probation by its accrediting body and WMC itself is also in danger of losing its certification by the Joint Commission on Accreditation of Hospitals. On two recent occasions, only “probational” accreditation was granted. Loss of accreditation could result in denial of Medicare and Medicaid reimbursements, a situation which would be disastrous to WMC financially, since it relies on these funds for more than one third of its total budget.

WMC has other monetary problems. It provides the largest amount of free care in the county — approximately $8,000,000 annually. Because Medicare and Medicaid do not reimburse it for any portion of fees attributable to subsidization of free care, WMC must depend upon its endowment and the fees assessed upon paying patients and private insurers.

The population shift to the southwestern suburbs and the possibility that another health care institution might be established in that area present another threat to WMC. If it should lose the patronage of people there, most of whom pay for services or are privately insured, the subsidization of a higher percentage of unreimbursed care would become an even more serious drain on its financial resources.

Recognizing the need for remedial action, the WMC Board canvassed the options open to it. After studying about 50 plans for relocation and consolidation, it decided upon Plan Omega. Essentially, this proposal would close the General and Memorial facilities, renovate the Delaware one, and reduce the number of downtown beds to 250. In addition, a new facility of 780 beds would be built in the suburban area 9.35 miles southwest of the Delaware plant. A division of services between the two locations was part of the arrangement.²

After the district court ordered a departmental review, HEW found discriminatory effects in the plan. To ensure that Omega would comply with Title VI and the Rehabilitation Act, WMC contracted to make a number of modifications. Because no public transportation to the southwest site is available, WMC agreed to provide shuttle bus service between the Delaware and Southwest divisions for the convenience of patients, visitors, and employees. In addition, WMC committed itself to renovate the Delaware plant, devise inpatient service plans for the two branches to prevent racial identifiability at either location, and operate the two facilities on a unitary basis.

Upon acceptance of these conditions, HEW withdrew its objections to Omega.³ Plaintiffs, however, continued their opposition, contending in the district court that the relocation would subject members of the class to inferior health care and disproportionate travel burdens. Moreover, it was alleged that there has been a misallocation of services between the two divisions.

The district court analyzed the case under alternate theories of intentional discrimination and unintended discriminatory effects. The court first determined that there was no evidence of discriminatory purpose. It then applied a disparate effect standard, but concluded after a lengthy review of the evidence that plaintiffs had failed to present a prima facie case.

Rather than ending the inquiry at that point, the court assumed arguendo that a showing of disparate impact had been made. The record was then scrutinized to determine if the defendant had successfully rebutted the plaintiffs’ contentions. The court concluded that even if disparate impact had been shown, WMC had demonstrated it had bona fide needs that could not be satisfied by any less discriminatory plan. Finally, the court determined that plaintiffs did not prove that a feasible alternative to Omega was available.

Consideration of the alleged disparate impact was divided into several general categories — access, quality of care, linguistic discrimination, and racial identifiability. Initially, the court found that Plan Omega would bring about vast improvements in the quality of care for all patients, including the classes represented by the plaintiffs. The detrimental effects to minorities and the elderly were determined to be minor and insignificant. With respect to the handicapped, plaintiffs failed to show any adverse impact.

The first issue considered was the plaintiffs’ contention that they will lack access to the Southwest facility and, consequently, will suffer a diminution in health care. The court found that WMC would meet its obligation under the HEW agreement to provide adequate shuttle bus and ambulance service. Furthermore, the court concluded that the increased travel time would generally not deter patients from seeking treatment for serious illness at the Southwest division.

A possible exception was a group of women in need of services at the high risk obstetrical clinics at the Southwest division. It was acknowledged that minority women have a greater incidence of high risk pregnancies and that patients seeking prenatal care are more likely to be deterred from seeking medical attention than others. However, the court found that the plaintiffs had overestimated minority usage of the high risk clinics in the Southwest facility and that utilization by whites would be slightly less proportionately.

The plaintiffs’ expert erroneously included in her high risk category minority teenagers who are poor users of health care and statistically more likely to have pregnancies with complications. Omega, however, included special clinics at the Delaware division for teenagers and Hispanics. Thus, the group affected by the location of high risk clinics at Southwest division would be much smaller than plaintiffs projected. In addition, the WMC director of obstetrics testified that if a large number of high risk patients appeared at the Delaware division, a clinic would be created at that location, although some patients might have to be referred to Southwest where the most sophisticated equipment would be placed.

Plaintiffs also were concerned with the fact that because obstetrical services would be offered at the Southwest division, emergency room treatment of those cases at Delaware would be inferior. The court, however, found that the vast majority of women about to deliver and those with obstetrical problems would go directly to Southwest. In only exceptional instances would the absence of inhouse obstetricians affect emergency room treatment, because an obstetrical resident would be assigned to the clinics and obstetricians would be on call. The court opined that the cases where treatment would be impaired would be extremely rare, assuming that any at all would occur. In this context, therefore, the possibility of detrimental effects was insignificant, particularly when contrasted with the improvement in quality of care Omega would provide.

The other adverse impact that plaintiffs attributed to travel difficulties is a possible decrease in the number of minority and elderly visitors to inpatients at the Southwest facility. Plaintiffs suggested that visitors would be discouraged by the longer ride to unfamiliar surroundings. Evening visits would be further hindered because the proposed shuttle bus service would stop at 7:00 p. m.

The district judge found that elderly inpatients might have fewer visitors at the Southwest division. While this might result in some detriment to the health of elderly patients, the district court characterized the level of harm as “very minor.” 491 F.Supp. at 332. The court similarly concluded that the negative impact on obstetrical patients would be “insubstantial.” Id.

Plaintiffs also argued that another group, minority pediatric inpatients, would be adversely affected by a decrease in the number of visitors caused by the location of services at Southwest. Recognizing the importance of family visits to the health of a child, the court determined that steps would be taken under Omega to provide those visits. Parents would be encouraged, and in some cases required, to spend the night with their children. When parents of infants could not stay, the hospital would assign staff members to give special attention to those children.⁴

With respect to plaintiffs’ second major contention — that treatment at the Delaware division would be inferior — the court stated, “[T]he general medical and surgical care that will be rendered at the Delaware Division under Omega will be entirely equal to that rendered at the Southwest Division and superior to that which is now rendered by WMC.” 491 F.Supp. at 325.

Plaintiffs asserted that the Delaware division would be housed in an inferior building and even after the proposed renovations, the two facilities would not be comparable. Moreover, it was questioned whether WMC would be financially able to meet its commitment to rehabilitate the Delaware plant. The court described these contentions as “purely speculative and wholly unsupported on the record.” 491 F.Supp. at 325. In addition to assuming an obligation under the HEW agreement to refurbish, WMC had allocated more than $12,000,000 for that purpose up to the time of trial. This amount, coupled with projected commitments and funds to be set aside under the agreement, produced a total of $18,000,-000 committed to renovation. The judge concluded that the additional $4,000,000 needed to complete the work could be raised from either the operating budget or unrestricted funds.

Furthermore, the court was convinced that shuttle bus service would, in fact, be provided. The cost would be minimal in comparison with WMC’s annual budget and could be absorbed with no strain on the institution’s financial resources.

After their expert suggested that operating deficits might occur in the years following completion of construction, plaintiffs questioned whether the high cost of Omega would cause WMC to discontinue the remodeling and free care. The court found such evidence irrelevant and believed that financial feasibility of Plan Omega would be determined by bond market forces: “[T]he Court refuse[d] to construe the civil rights statutes as a license ... to act as a financial overseer to those who provide services to minorities.” 491 F.Supp. at 328.

Finally, the district court rejected the claims that Omega would create linguistic discrimination or racial identifiability. Plaintiffs’ fear of a shortage of interpreters for Hispanics at the Southwest division was rejected. The trial judge found no present shortage of WMC personnel capable of acting as interpreters for Hispanics and expected that none would arise under Plan Omega. Additionally, the court held that Plan Omega as drafted would not create two racially identifiable facilities but if, in practice, problems arose, remedial measures would be taken. All other arguments raised by the plaintiffs were found to be frivolous, and the court concluded that they had failed to present a prima facie case of disproportionate impact.

Recognizing that review in this lengthy and hard-fought litigation was inevitable, however, the trial judge assumed arguendo that a prima facie case had been established and discussed the defendant’s burden. Concluding that the defendant was required to go forward with rebuttal evidence, the court found that WMC had met its burden of showing that it had bona fide needs, that Omega would satisfy them, and that other, less discriminatory plans would not.

The court recognized that WMC’s immediate need to preserve its educational program and accreditation, as well as improve its quality of care, made it obvious that something had to be done. WMC was aware that to insure its financial stability, and at the same time care for those dependent on its services, it had to provide facilities both in the city and on the outskirts. Omega met these requirements, and the court found “Omega can be completed within WMC’s means and will allow WMC to hold its costs down.” 491 F.Supp. at 340.

Although the WMC Board had investigated many different plans, six alternatives were discussed. Assuming that any plan which had all or substantially more beds in Wilmington would be less discriminatory, the court found that these plans would not meet WMC’s needs. Some were financially infeasible, as in the example of a single large hospital in the city. Rehabilitation of all existing structures within the city was objectionable because it would perpetuate excessive fragmentation. A more even division of services between the Delaware and Southwest facilities (450 beds at Delaware, 570 at Southwest) was rejected by the medical staff as failing to meet the goal of consolidation. Thus after reviewing the options, the court concluded, “WMC has met its burden upon rebuttal by showing that even if Omega may have some meager disparate impacts, those impacts are justified by bona fide needs which could not be accomplished by any less discriminatory plan.” 491 F.Supp. at 343.

In turn, plaintiffs attempted to show that “Reverse Omega” (800 beds at Delaware and 200 at Southwest) was a feasible alternative. The court, however, found that cost estimates of reverse Omega given by plaintiffs’ expert were unreliable, and concluded that this plan would be “prohibitively expensive.” 491 F.Supp. at 342. The court determined, therefore, that “plaintiffs have failed to meet their burden of persuasion of showing a feasible, less discriminatory alternative.” 491 F.Supp. at 345.

I

The lengthy recitation of the background makes it clear that this case turns largely on factual matters. There are, however, several discrete legal issues essential to a resolution of the dispute. The first that we shall discuss implicates the nature of the evidence necessary to show a violation of Title VI. If the plaintiff must show intent to discriminate, then our task is a simple one because the trial court found no such evidence and that holding is not contested. We are persuaded, however, that intent is not required under Title VI and proof of disparate impact or effects is sufficient. Our conclusion applies to the other two statutes that have been invoked as well.

Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d (1976), bans discrimination based on race, color, or national origin in any program receiving federal financial assistance.⁵ WMC concedes that Medicare and Medicaid payments made to it call Title VI into play.

In Lau v. Nichols, 414 U.S. 563, 94 S.Ct. 786, 39 L.Ed.2d 1 (1974), the Supreme Court was confronted with a racial discrimination charge growing out of a school system’s decision not to provide English language instruction to students of Chinese ancestry. The Court declined to reach an equal protection argument but chose instead to rely on Title VI, interpreting it as follows:

“Discrimination is barred which has that effect even though no purposeful design is present: a recipient ‘may not .. . utilize criteria or methods of administration which have the effect of subjecting individuals to discrimination’ or have ‘the effect of defeating or substantially impairing accomplishment of the objectives of the program as respect individuals of a particular race, color, or national origin.’ ”

Id. at 568, 94 S.Ct. at 789 (emphasis the Court’s), quoting HEW regulation, 45 C.F.R. § 80.3(b)(2).

Lau makes it clear that discriminatory impact is enough to constitute a violation of Title VI. WMC, however, argues that Lau was overruled by Board of Education v. Harris, 444 U.S. 130, 100 S.Ct. 363, 62 L.Ed.2d 275 (1979), and Regents of the University of California v. Bakke, 438 U.S. 265, 98 S.Ct. 2733, 57 L.Ed.2d 750 (1978).⁶ We are not convinced, however, that either case did so.

In Bakke, the question was whether a state school could properly adopt an admissions policy clearly intended to prefer minorities. It is true, as WMC notes, that five justices expressed reservations in Bakke about the holding in Lau. In the opinion written by Justice Brennan, in which Justices White, Marshall, and Blackmun joined, it was said, “[W]e have serious doubts concerning the correctness of what appears to be the premise of [Lau ].” 438 U.S. at 352, 98 S.Ct. at 2779.

The issue did not have to be resolved, however, because “even accepting Lau’s implication that impact alone is in some contexts sufficient to establish a prima facie violation of Title VI, contrary to our view that Title Vi’s definition of racial discrimination is absolutely coextensive with the Constitution’s, this would not assist the respondent in the least.” 438 U.S. at 352-53, 98 S.Ct. at 2779. It did not matter, the group wrote, whether Title VI proscribed some acts, such as those at issue in Lau, that would survive constitutional scrutiny. As the group read the legislative history of the Civil Rights Act, Congress did not intend to proscribe the particular type of practice challenged by Bakke — preferences designed to remedy past discrimination. As stated in another portion of the opinion, “[AJpplied to the case before us, Title VI goes no further in prohibiting the use of race than the Equal Protection Clause of the Fourteenth Amendment itself.” 438 U.S. at 325, 98 S.Ct. at 2766 (emphasis supplied).

In a separate opinion, Justice Powell used language that may be inconsistent with Lau, but he stopped short of advocating that the case be overruled. He wrote, “Title VI must be held to proscribe only those racial classifications that would violate the Equal Protection Clause or the Fifth Amendment.” 438 U.S. at 287, 98 S.Ct. at . He then went on to distinguish Lau, saying significantly, “[T]he ‘preference’ approved [in Lau ] did not result in the denial of the relevant benefit — ‘meaningful opportunity to participate in the educational program’ — to anyone else.” 438 U.S. at 304, 98 S.Ct. at 2755.

In determining what weight is to be given to these separate statements, it is important to recognize that the issue presented to the Court in Bakke differs substantially from that in the case at bar. It was clear in Bakke that whatever the reach of Title VI, the plaintiff had established a prima facie case by showing intentional discrimination. The question facing the Court, then, was whether some forms of intentional discrimination were nevertheless permissible. A majority of the Court concluded that those forms of intentional discrimination that would survive constitutional analysis also were exempt from Title VI. Congress, in enacting the Civil Rights Act of 1964, did not intend to prohibit those racial preferences that are permitted under the Constitution.

It does not inexorably follow, however, that Congress also intended the constitutional standard to control every allegation of discrimination. It would be consistent with Congress’s expansive, remedial intent to interpret Title VI as prohibiting acts that have the effect of discrimination yet permitting patent preferences designed to remedy past discrimination.

The Powell-Brennan opinions, therefore, may be read as expressing the theory that at least when the charge is intentional discrimination in the nature of a governmental preference, Title VI incorporates the constitutional standard. The case sub judice, however, is not one of a discriminatory governmental preference but one of a neutral program with disparate impact. As we see it, it is still permissible to hold that when the charge is disparate impact, a prima facie case can be established without proof of intent.

The other case on which defendant relies, Board of Education v. Harris, supra, held that § 702(b) of the Emergency School Aid Act (ESAA) prohibits school districts from maintaining racially identifiable faculties even when the segregation is unintentional. The Court upheld the power of Congress in the exercise of its authority under the spending clause to require the recipients of federal funds to go further in eliminating discrimination than mandated by the Constitution. Lau v. Nichols was not cited.

In dissent, Justice Stewart argued that since five justices in Bakke had stated Title VI prohibited only intentional discrimination, the same premise should govern claims under the ESAA. 444 U.S. at 160, 100 S.Ct. at 379. In this argument, however, he was joined only by Justice Powell. The majority expressly disclaimed any necessity to pass on the standard applicable to Title VI. Id. at 149, 100 S.Ct. at 373.

Fullilove v. Klutznick, 448 U.S. 448, 100 S.Ct. 2758, 65 L.Ed.2d 902 (1980), is another case that considered the constitutionality of a statutory preferential program. A plurality of the Court cited with approval Lau’s validation of the HEW regulation proscribing actions “which have the effect” of discriminating. 448 U.S. at 479, 100 S.Ct. at 2775 (emphasis supplied by Court). Joining in the opinion were Justices White and Powell, who in Bakke had taken the position that intent was necessary to establish a Title VI violation.

Although there is ample ground for argument that the Supreme Court has doubts about Lau’s continued viability, a requiem may be premature and, in any event, should not be sung by this choir. The prerogative of overruling its cases rests with the Supreme Court, and not with us. Americans United for Separation of Church and State, Inc. v. HEW, 619 F.2d 252, 271 (1980) (Weis, J., dissenting), cert. granted, Valley Forge Christian College v. Americans United for Separation of Church and State, Inc., 450 U.S. 909, 101 S.Ct. 1345, 67 L.Ed.2d 332 (1981); United States ex rel. Gockley v. Myers, 450 F.2d 232 (3d Cir. 1971), cert. denied, 404 U.S. 1063, 92 S.Ct. 738, 30 L.Ed.2d 752 (1972).⁷

The question is not one of congressional power but rather of intent. Providing federal funding conditioned on an even-handed application is a positive measure to discourage all forms of discrimination, intentional or not. The use of an effects test, therefore, is consistent with the legislative aim of eliminating discrimination and is in harmony with Title VII of the same Act, and Title VIII, Resident Advisory Board v. Rizzo, 564 F.2d 126 (3d Cir. 1977), cert. denied, 435 U.S. 908, 98 S.Ct. 1457, 55 L.Ed.2d 499 (1978), as well as our previous reference to Title VI in Shannon v. United States Department of Housing & Urban Development, 436 F.2d 809, 816, 820 (3d Cir. 1970) (Title VI provides redress for discriminatory effects of local housing plans). Moreover this approach parallels regulations adopted by HEW and other departments charged under § 602 of the Civil Rights Act, 42 U.S.C. § 2000d-l, with enforcing the statute.⁸

With due deference to Lau v. Nichols and congressional intent as we perceive it, therefore, we conclude that plaintiffs in a Title VI case alleging discrimination in the application of federal funds in a facially neutral program need only establish disparate impact. The Rehabilitation Act and the Age Discrimination Act of 1975 provide equally strong cases for application of an impact test since both are patterned after Title VI.⁹ We therefore use the same standard.

II

The next inquiry is whether, applying an effects test, the plaintiffs have established a prima facie case. Before addressing this issue, it is helpful to review the provisions of the agreement between WMC and HEW. Included in the early paragraphs is a statement that the Secretary of HEW desires assurances that operation of the hospital facilities under Plan Omega will be in compliance with Title VI and the Rehabilitation Act.

The agreement obligates WMC to provide free transportation between the Delaware and Southwest divisions, to designate an ombudsman to receive and act upon complaints of discrimination, to adopt a system of inpatient utilization control, and to prevent either division from becoming racially identifiable. It is additionally required that both divisions be operated on a unitary basis, with a single Board of Directors, Executive Committee, medical staff, teaching program and accounting procedure. Any proposed expansion of services at Southwest or reduction at Delaware must be first submitted to HEW for approval. WMC agreed to set aside $2,800,000 for use exclusively in renovating the Delaware facility. WMC also agreed to recognize the need for employment by minority groups, “including in particular urban minority groups.” As noted earlier, the court found that WMC would carry out its categorical obligations under this agreement.

A. THE HANDICAPPED

There is no evidence that either facility will not comply with the structural requirements of the Rehabilitation Act. Indeed, the provisions for handicapped with respect to barriers, entry, and free movement within the buildings will be an improvement over existing conditions. The alleged disparate impact upon the handicapped, therefore, rests upon the location of major portions of hospital services and jobs in the Southwest division. The plaintiffs produced no credible evidence, however, establishing the residential distribution of handicapped persons within the county. In the absence of such information, we cannot tell what effect, if any, Plan Omega will have upon disabled persons in the area, and thus agree with the district court that plaintiffs did not establish a prima facie case under § 504.

B. THE AGED AND MINORITIES

Unlike the evidence with respect to the handicapped, there was testimony that most of the elderly and minorities who would be served by the Wilmington Medical Center live closer to the Delaware than the Southwest division some nine miles away.¹⁰ Since many of the medical services would be located at the suburban building, transportation to the new facility would be required, and hence treatment would not be as convenient as if provided at Delaware. Although the trial court did find that there would be some effect upon the elderly and minorities because of the travel aspects, those impacts upon patients were described as “de minimis,” “insignificant,” and “minor.” ¹¹ We agree with these characterizations and have serious doubts that such effects are enough to establish a prima facie case of discrimination.

The nine mile trip in an area like Wilmington does not impose a significant hardship. Changes to alleviate some problems, even though resulting in improvement, often impose other burdens or confer unequal benefits. Whatever was done here could not possibly distribute the inconveniences and benefits with precise equality, but inaction would have a profound adverse impact upon all who depend upon the medical center.

All concede that something must be done or all will suffer. To establish a prima facie case under Title VI in these circumstances, some definite, measurable disparate impact is required, otherwise needed and worthwhile efforts at improvement will be paralyzed. Reasonable accommodations must be made, but when they have been reached, new programs must be allowed to proceed. Although all of us are not completely persuaded that plaintiffs met their burden here, we will assume arguendo, as did the district court, that a prima facie case was presented.¹²

Ill

The next step, therefore, is to determine what burden is placed upon the defendant and whether it was met in this case. The district court concluded that once the plaintiffs had met their initial burden, the defendant had to go forward with evidence to “rebut [that] prima facie case.” 491 F.Supp. at 315. The plaintiffs argue that the defendant’s burden is a heavier one, that of persuasion.

The parties agree that the decisional law allocating the burdens of production and persuasion under Title VII is instructive in this case, but disagree as to the proper interpretation of the opinions. It is not disputed that when a prima facie Title VII ease of discriminatory intent is established, the defendant must go forward with evidence of a legitimate, nondiscriminatory reason for its action. The plaintiff may rebut by showing that the stated reason is mere pretext.

The ultimate burden of persuasion on the issue of illegal discrimination always remains with the plaintiff. Whatever doubt may have existed on that score has been resolved in recent years by a series of cases in the Supreme Court and this court. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981); Board of Trustees of Keene State College v. Sweeney, 439 U.S. 24, 99 S.Ct. 295, 58 L.Ed.2d 216 (1978); Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978); McNeil v. McDonough, 648 F.2d 178 (3d Cir., 1981); Smithers v. Bailar, 629 F.2d 892 (3d Cir. 1980); Kunda v. Muhlenberg College, 621 F.2d 532, 543 n.3 (3d Cir. 1980); and Whack v. Peabody & Wind Engineering Co., 595 F.2d 190 (3d Cir. 1979). See also Resident Advisory Board v. Rizzo, supra at 149 n.37 (Title VIII); Rodriguez v. Taylor, 569 F.2d 1231, 1239 (3d Cir. 1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978) (Age Discrimination in Employment Act).

The plaintiffs contend that there should be a difference in the defendant’s burden when the charge is discriminatory impact rather than discriminatory intent. Their theory is that in countering a prima facie case of discriminatory impact, the defendant is presenting something in the nature of an affirmative defense that requires shouldering the burden of persuasion. See Kirby v. Colony Furniture Co., 613 F.2d 696, 703 n.5 (8th Cir. 1980) (opinion of one judge, others not joining).

That reasoning is not convincing. One could just as readily say in an intent case that the necessity to prove a nondiscriminatory reason is an affirmative defense carrying a burden of persuasion. Holdings of the Supreme Court and this court, however, are to the contrary.

In Furnco Construction Corp. v. Waters, supra, the Supreme Court explained its allocation of the burden of proof in intentional discrimination cases. If the plaintiff produces evidence sufficient to meet the standards of a prima facie case under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973)¡ an inference of discrimination is raised “because we presume [the complained of] acts, if otherwise unexplained, are more likely than not based on the consideration of impermissible factors.” Furnco Construction Corp. v. Waters, supra, 438 U.S. at 577, 98 S.Ct. at 2949. The effect of such a prima facie case is only to put in issue whether the employer’s conduct “was based upon legitimate, nondiscriminatory reasons and therefore permissible.” Id. at 576 n.8, 98 S.Ct. at 2949, n.8. A prima facie case does not necessarily constitute proof of the ultimate fact of discrimination under Title VII. Id. at 576, 98 S.Ct. at 2949.

To meet a McDonnell Douglas prima facie case, a defendant must produce evidence of an acceptable reason but is not required to show an absence of discriminatory motive. Board of Trustees of Keene State College v. Sweeney, supra, 439 U.S. at 24, 99 S.Ct. at 295. The burden of persuasion on the ultimate fact of discrimination remains with the plaintiff who may show that the proffered legitimate reason was a pretext. Furnco Construction Corp. v. Waters, supra, 438 U.S. at 578, 98 S.Ct. at 2950; McDonnell Douglas Corp. v. Green, supra 411 U.S. at 804, 93 S.Ct. at 1825.

Disproportionate impact or effect is simply an additional method of demonstrating impermissible discrimination under Title VII. Teamsters v. United States, 431 U.S. 324, 336 n.15, 97 S.Ct. 1843, 1854 n.15, 52 L.Ed.2d 396 (1977). In Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975), the Court held that a prima facie case could be established under the impact theory if the plaintiff demonstrated that a facially neutral policy disproportionately affected persons protected by Title VII. If the plaintiff meets his initial burden, the defendant must show “ ‘that any given requirement [has] ... a manifest relationship to the employment in question.’ ” Id. at 425, 95 S.Ct. at 2375, quoting Griggs v. Duke Power Co., supra 401 U.S. at 432, 91 S.Ct. at 854. In formulating this approach, the Court referred to the related test it had devised in Albemarle Paper Co. v. Moody, supra, 422 U.S. at 425, 95 S.Ct. at 2375, and went on to include a similar third step: “it remains open to the complaining party to show that other . . . selection devices, without a similarly undesirable . . . effect, would also serve the . . . legitimate interest.” 422 U.S. at 425, 95 S.Ct. at 2375.

In characterizing the defendant’s obligation to show a manifest relationship as an affirmative defense, the plaintiffs here apparently assume that making out a prima face case of disproportionate impact is the equivalent of establishing a Title VII violation by a preponderance of the evidence. This assumption cannot stand because the Furnco analysis should control impact, as well as intent, cases.¹³

When the Supreme Court first held that Title VII prohibited some facially neutral practices, it described the congressional purpose as “the removal of artificial, arbitrary, and unnecessary barriers . . . when the barriers operate invidiously to discriminate on the basis of racial or other impermissible classification.” Griggs v. Duke Power Co., supra, 401 U.S. at 431, 91 S.Ct. at 853. A showing of disproportionate effect or impact alone may not establish a violation. “The touchstone is business necessity. If an employment practice which operates to exclude . . . cannot be shown to be related to job performance, the practice is prohibited.” Id. To be proscribed, then, the challenged practice must not only affect disproportionately, it must do so unnecessarily.

To establish a prima facie case the plaintiff need not show that the practice was unnecessary but may rely on inferences. If the defendant presents no evidence of business relatedness in his case, the court may assume that there was no permissible reason for the impact.¹⁴ In the event that the defendant does come forward with evidence to meet the inference of discrimination raised by the prima facie case, the plaintiff may still carry his burden of persuasion by demonstrating that a feasible, yet less onerous alternative exists. Albemarle Paper Co. v. Moody, supra, 422 U.S. at 425, 95 S.Ct. at 2375.

The contention plaintiffs make here, that business relatedness constitutes an affirmative defense, is incompatible with the third step of Albemarle. Plaintiffs would have WMC bear the burden of persuasion on this issue by showing a dearth of less objectionable alternatives. But in Albemarle, this burden was imposed on the complaining party. As the Court explained in an analogous context, if the plaintiffs were correct in their assessment of the various burdens of production and persuasion, the third step in the analysis would be rendered “entirely superfluous . . ., since it would place on the [defendant] at the second stage the burden of showing that the reason . . . was not a pretext, rather than requiring such proof from the [plaintiffs] as a part of the third step.” Board of Trustees of Keene State College v. Sweeney, supra 439 U.S. at 24-25 n.1, 99 S.Ct. at 295-296 n.1.

The Supreme Court has not given any indication that it requires a shifting of the burden of persuasion in effects cases. To the contrary, the Court stated in New York Transit Authority v. Beazer, 440 U.S. 568, 587 n.31, 99 S.Ct. 1355, 1366 n.31, 59 L.Ed.2d 587 (1979), that the ultimate burden of proving discriminatory impact is the plaintiff’s. Albemarle Paper Co. v. Moody, supra, was an impact case, yet in referring to the employer’s burden to meet the plaintiff’s prima facie showing, the Court cited McDonnell Douglas Corp. v. Green, supra, an intent case. As other examples of cross-references to McDonnell Douglas in effects cases, see Dothard v. Rawlinson, 433 U.S. 321, 329, 339, 97 S.Ct. 2720, 2726, 2731, 53 L.Ed.2d 786 (1977), and Nashville Gas Co. v. Satty, 434 U.S. 136, 144, 98 S.Ct. 347, 352, 54 L.Ed.2d 356 (1977). See also Teamsters v. United States, 431 U.S. 324, 336, 358, 360, 97 S.Ct. 1843, 1855, 1866, 1867, 52 L.Ed.2d 396 (1977).¹⁵

The plaintiffs have cited no current authority for their position. Precedents antedating Board of Trustees of Keene State College v. Sweeney, supra, have little persuasive effect since that case settled the confusion that surrounded this issue. Although the facts and inferences required to prove a case vary between intent and effect situations, that factor does not call for the shifting of the burdens of production and persuasion depending on the theory advanced.¹⁶

Moreover, it is illogical to impose a heavier burden on a defendant in a case where a neutral policy results in disparate impact than in one where the charge is unlawful animus. Indeed, if there is to be a difference, quite the opposite result should follow. The defendant who intentionally discriminates should not fare better than the one whose conduct may be subjectively blameless, but because of its effects may require remedial action.

As a practical matter, a procedural distinction between the impact and intent cases would cause unnecessary confusion in the trial courts, particularly so in cases like the one at hand in which both theories are advanced. See, e. g., Whack v. Peabody & Wind Engineering Co., supra. It is difficult to understand what important interests would be served by imposing two different burdens on the defendant in a case of this nature. Certainly the multiplication of procedural devices is not a desirable development in trial practice.

All things considered, uniformity in the procedural aspects of impact and intent cases is highly desirable and should not be sacrificed on the dubious theory that plaintiffs advance here. Although we need not worship at its shrine, symmetry is not always sinful. Just as we permit plaintiffs to establish discrimination through effects under both Title VI and VII, so should there be a consistent burden on defendants.

The district court determined that WMC should go forward “with evidence that Omega will ‘in theory and practice’ serve ‘a legitimate bona fide interest of [WMC] . . . and . . . show that no alternative course of action could be adopted that would enable that interest to be served with less discriminatory impact.’ ” 491 F.Supp. at 315-16, quoting Resident Advisory Board v. Rizzo, supra at 149.

Following this, plaintiff was allowed to produce further evidence consistent with the third step of demonstrating pretext that the Supreme Court has mentioned in both intent and impact cases brought under Title VII.¹⁷ McDonnell Douglas Corp. v. Green, supra; Albemarle Paper Co. v. Moody, supra; Teamsters v. United States, supra.

In Resident Advisory Council v. Rizzo, supra, we held that under Title VIII of the Civil Rights Act of 1964, a plaintiff retains the burden of persuasion on the existence of less discriminatory alternatives. Requiring plaintiffs to meet that obligation by demonstrating that feasible, less discriminatory alternatives exist is neither unjust nor impractical in view of the extensive discovery material that was available in this case.

The district court’s test is actually more stringent than that suggested in Jefferson v. Hackney, 406 U.S. 535, 92 S.Ct. 1724, 32 L.Ed.2d 285 (1972). There, the Supreme Court found that application of a percentage reduction factor to determine reduced needs of welfare recipients was rationally related to the purpose of the separate welfare programs and, consequently, did not violate the equal protection clause. For similar reasons, the Court also concluded that the challenged system would not contravene Title VI. The relationship of the reduction factor to the purposes of the State’s welfare programs distinguished Jefferson from Griggs:

“In Griggs, the employment tests having racially discriminatory effects were found not to be job-related, and for that reason were impermissible under the specific language of Title VII of the Civil Rights Act. Since the Texas procedure challenged here is related to the purposes of the welfare programs, it is not proscribed by Title VI simply because of variances in the racial composition of the different categorical programs.”

Jefferson v. Hackney, supra at 550 n.19, 92 S.Ct. at 1733 n.19. In Jefferson, the state was not required to produce evidence that alternate formulae for computing need would not have served the purposes of the program with less of a disparate impact.

In Bryan v. Koch, 627 F.2d 612 (2d Cir. 1980), the Court of Appeals for the Second Circuit was confronted with a Title VI challenge to the closing of a city hospital. The court said that Title VI did not require consideration of alternatives beyond “an assessment of all the municipal hospitals in order to select one or more for closing.” Id. at 619. Since the appropriateness of the city’s choice had been sufficiently demonstrated, the court’s role ended. Expressing doubt about the feasibility of a more open ended judicial evaluation of alternative means of economizing, the opinion stated,

“Once a court is drawn into such a complex inquiry, it will inevitably be assessing the wisdom of competing political and economic alternatives. Moreover, such policy choices would be made without broad public participation and without sufficient assurance that the alternative selected will ultimately provide more of a benefit to the minority population.”

Id. The court added that its skepticism extended even to requiring courts to consider “alternative locations for placement ... of facilities.” Id., citing NAACP v. The Wilmington Medical Center, Inc., 491 F.Supp. 290 (D.Del.1980).

By contrast, the district court in the case at hand did evaluate the alternatives. It required WMC to go “forward with evidence showing that it has chosen the least discriminatory alternative.” 491 F.Supp. at 340. That is a stringent standard which more than adequately serves Title VI aims.¹⁸ The court discussed six possible, less discriminatory alternatives to the Omega Plan, including the plaintiffs’ “Reverse Omega” proposal and found that none of the plans would serve WMC’s needs. The court also said that WMC had “investigated approximately 50 different plans, all of which it rejected for bona fide reasons.” Id. at 340 n.314. Indeed, the court found that “Omega is the only plan which can adequately meet WMC’s needs.” Id. at 340.

On this record, we conclude that the district court did not err in concluding that the defendant had carried its burden of meeting the plaintiffs’ prima facie case.¹⁹

IV

The plaintiffs also argue that the district court erred in refusing to assess the financial feasibility of Plan Omega and in deferring instead to the judgment of the bond market. But as noted earlier, the court did make specific findings with respect to WMC’s financial ability to complete the renovation at Delaware and pay for whatever shuttle bus service is required. When the court referred to the sanction of the bond market for the financial consequences of Plan Omega, it apparently was referring to the question whether WMC was wise in undertaking such an extensive project.

As we read the district judge’s opinion, whether funds could be obtained was not a matter which he could confidently predict, but was a circumstance subject to market forces. If the bonds were not sold, Omega could not proceed. Obviously an undertaking of this magnitude involves some element of financial risk and predicting the ultimate outcome is not a field in which the courts have a special competence. The district judge’s hesitancy to wander into this area of uncertainty is understandable. On the record we do not find it to be reversible error.

In fact, it would have been pure speculation for the court to accept the plaintiffs’ argument. Even if it could be demonstrated that WMC was overly optimistic, there is no way of knowing with any certainty what remedial measures would be taken. It is far from clear that WMC would take the path suggested by plaintiffs and reduce free care and renovations of the Delaware division. Not only would this breach the HEW contractual obligations but it would also place WMC in jeopardy of losing its Medicare-Medicaid reimbursements. A facility already in financial difficulty is not likely to risk forfeiting federal funding that makes up 30 percent of its budget.

It must be remembered that the Omega Plan was submitted for administrative review to hospital planning organizations and to HEW. After some changes had been made, the proposal was approved by HEW as being in compliance with Title VI. We are not called upon to appraise the wisdom of Omega but are limited to reviewing the decision of the district court by appropriate appellate guidelines. From that perspective, we do not find legal error in the standards the district court utilized nor can we say that the factual findings are clearly erroneous. Accordingly, the judgment of the district court will be affirmed. The mandate will issue forthwith.

1 . The Department of Health, Education and Welfare, the Bureau of Comprehensive Health Planning, the Health Planning Council, and the directors of the latter two organizations were dismissed before trial.

2 . Both locations would provide the following services: allergy, cardiology, dermatology, endocrinology, internal medicine, rheumatology, physical medicine, chest diseases, infectious disease, general surgery, proctology, otology, and vascular. At the Southwest division, the following services would be provided: gastroenterology, nephrology, neurology, oncology, radiation therapy, neurosurgery, orthopedic surgery, plastic surgery, thoracic surgery, urology, obstetrics, gynecology, pediatrics, newborn, and premature. At Delaware, the following additional services would be provided: psychiatry, family practice, rhinolaryngology, dentistry, and ophthalmology.

In addition, some clinic, outpatient, and support services will also be located exclusively at the Southwest division, including the high-risk prenatal and specialty pediatric and gynecological clinics, and the specialty cardiac, radiation therapy, and hemodialysis support services. The Delaware division will exclusively house the psychiatry, ear, eye, and nose, and dentistry specialties. The primary care clinics will be consolidated and located exclusively at the Delaware division.

3 . The district court held that HEW’s decision was not arbitrary or capricious, NAACP v. The Medical Center, Inc., 453 F.Supp. 280 (D.Del.1978), and that the plaintiffs had no private cause of action under Title VI or the Rehabilitation Act. We reversed the latter action, 599 F.2d 1247 (3d Cir. 1979).

4 . In addition, pediatric inpatient services are offered at the St. Francis and Riverside hospitais in Wilmington proper.

5 . The antidiscrimination provision of Title VI states:

“No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”

42 U.S.C. § 2000d (1976).

6 . Whether intent or impact is sufficient to state a claim under Title VI and the issues surrounding hospital closings and relocations have been the subject of scholarly commentary. See, e. g., Note, The Prima Facie Case and Remedies in Title VI Hospital Relocation Cases, 65 Cornell L.Rev. 689 (1980); Note, Maintaining Health Care in the Inner City: Title VI and Hospital Relocations, 55 N.Y.U.L. Rev. 271 (1980); Note, Title VI: The Impact/Intent Debate Enters the Municipal Services Arena, 55 St. John’s L.Rev. 124 (1980); Note, NAACP v. Medical Center, Inc.: The Evidentiary Hearing Under Title VI, 24 St. Louis U.L.J. 579 (1980).

7 . But see Cannon v. University of Chicago, 648 F.2d 1164 (7th Cir. 1981), where it was held that disproportionate impact alone does not establish a violation of Title VI. In Guardians Ass’n of New York City Police Dep’t. Inc. v. Civil Service Commission, 633 F.2d 232, 254 (2d Cir. 1980), a panel of the Court of Appeals for the Second Circuit concluded that only intentional discrimination is actionable under Title VI. An earlier panel of the same court disagreed, however, citing Lau’s impact test as authority after Bakke. Board of Education v. Califano, 584 F.2d 576, 589 (2d Cir. 1978), aff’d on other grounds, Board of Education v. Harris, 444 U.S. 130, 100 S.Ct. 363, 62 L.Ed.2d 275 (1979). Still other panels have either acknowledged that Bakke did not expressly overrule Lau, see Parent Ass’n of Andrew Jackson High School v. Ambach, 598 F.2d 705, 716 (2d Cir. 1979), or have argued in dicta why an effects test probably retains validity. See Bryan v. Koch, 627 F.2d 612 (2d Cir. 1980).

8 . See, e. g., 7 C.F.R. § 15.3 (1980) (Agriculture Dep’t); 14 C.F.R. § 1250.103-1 (1981) (NASA); 18 C.F.R. § 1302.3 (1980) (Tennessee Valley Authority); 45 C.F.R. § 1010.10-2 (1980) (Cornmunity Services Administration); 49 C.F.R. § 21.5 (1980) (Transportation Dep’t).

9 . Section 504 of the Rehabilitation Act provides:

“No otherwise qualified handicapped individual in the United States, as defined in section 706(7) of this title, shall, solely by reason of his handicap, be excluded from the participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance....”

29 U.S.C. § 794 (Supp. II 1978).

Section 303 of the Age Discrimination Act provides:

“Pursuant to regulations prescribed under section 6103 of this title, and except as provided by section 6103(b) and section 6103(c) of this title, no person in the United States shall, on the basis of age, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any program or activity receiving Federal financial assistance.”

42 U.S.C. § 6102 (1976).

10 . Over 87% of the minority residents and 76.3% of the elderly residents of New Castle County live in the northeast area. Elderly and minority families near the Delaware facility are more likely than other families in the area to be without a car. 491 F.Supp. at 302-03.

11 . The district court, relying on 42 U.S.C. § 2000d-3, did not consider the impact of Omega on minority service employees. The plaintiffs had contended that these employees would be assigned in a discriminatory fashion and that this would exacerbate the racial identifiability of the Delaware division caused by discriminatory patient assignments. The argument was never made, however, that assignment of employees would itself result in racial identifiability violative of Title VI. Given our affirmance of the district court’s finding that patient assignment would not result in racial identifiability, it is not necessary to consider plaintiffs’ other argument.

12 . Judge Higginbotham would hold that plaintiffs did establish a prima facie case.

13 . The distinction between establishing a prima facie case and prevailing on the ultimate issue is discussed in IX J. Wigmore, Evidence § 2487 (3d ed. 1940). There Professor Wigmore quotes extensively from Speas v. Merchants’ Bank & Trust Co., 188 N.C. 524, 125 S.E. 398 (1924):

“A ‘prima facie’ case ... does not change the burden of proof. It only stands until its weight is met by evidence to the contrary . .. [A] ‘prima facie’ case .. . need not be overcome by a preponderance of the evidence, or by evidence of greater weight; but the evidence needs only to be balanced, put in equipoise ...; and if this be done, the burden of the evidence has been met and the duty of producing further evidence shifts back to the party having the burden of proof.”

14 . As the Supreme Court noted in Teamsters v. United States, supra, 431 U.S. at 358, 97 S.Ct. at 1866.

“The importance of McDonnell Douglas lies, not in its specification of the discrete elements of proof there required, but in its recognition of the general principle that any Title VII plaintiff must carry the initial burden of offering evidence adequate to create an inference that an employment decision was based on a discriminatory criterion illegal under the Act.”

15 . In Texas Dep’t of Community Affairs v. Burdine, supra, the Court commented that the factual issues and therefore the “character of the evidence presented” differ in effects cases but did not give any indication that a different burden would be imposed on the defendant. 450 U.S. at 252, at n.5, 101 S.Ct. at 1093 n.5.

16 . See generally, Hillman, Teamsters, California Brewers, and Beyond: Seniority Systems and Allocation of the Burden of Proving Bona Fides, 54 St. John’s L.Rev. 706, 711-16 (1980).

17 . In intent cases, if the reasons put forth by the defendant are not his real ones and in fact mask his plan to discriminate, the plaintiff may show the pretext. In impact cases, where no intent is alleged, the pretext may sometimes consist of a defendant’s assertion o'f a bona fide interest in order to conceal another nondiscriminatory reason for not adopting a less discriminatory plan. In other situations, business justification may be the only reason for the decision. It nevertheless remains open to the plaintiff to show that other devices exist which also serve the defendant’s legitimate interest but which do not manifest a similarly prejudicial effect. Indeed, “[s]uch a showing would be evidence that the [defendant] was using its [device] merely ... as a ‘pretext’ for discrimination.” Albemarle Paper Co. v. Moody, supra 422 U.S. at 425, 95 S.Ct. at 2375. It may also be substantive evidence to support plaintiff’s case.

18 . Judges Higginbotham and Sloviter would adopt the standard used by the district court that the discriminatory impacts must be “justified by bona fide needs which could not be accomplished by any less discriminatory plan.” 491 F.Supp. at 343.

19 . The record contains ample evidence supporting justification for such disparate effects as may exist as well as demonstrating that other impacts asserted by plaintiffs will not take place.