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Buettner-Hartsoe v. Baltimore Lutheran High School Association
Buettner-Hartsoe v. Baltimore Lutheran High School Association
PUBLISHED
No. 23-1453
Plaintiffs - Appellees,
v.
Defendant - Appellant,
and
Defendant.
------------------------------
Appeal from the United States District Court for the District of Maryland, at Baltimore.
Richard D. Bennett, Senior District Judge. (1:20-cv-03132-RDB)
Reversed and remanded by published opinion. Judge Thacker wrote the opinion, in which
Judge Harris and Judge Rushing joined.
ARGUED: Gregg Edward Viola, ECCLESTON & WOLF, P.C., Hanover, Maryland, for
Appellant. Howard Jonathan Bashman, LAW OFFICES OF HOWARD J. BASHMAN,
Fort Washington, Pennsylvania, for Appellees. Joshua W.B. Richards, for Amicus
National Association of Independent Schools. Sean Ouellette, for Amici Civil Rights and
Survivor Advocacy Organizations. ON BRIEF: Mark P. Johnson, ECCLESTON &
WOLF, P.C., Hanover, Maryland, for Appellant. Brian Ketterer, Whitney J. Butcher,
KETTERER, BROWNE & ASSOCIATES, LLC, Bel Air, Maryland, for Appellees. James
P. Ulwick, Geoffrey H. Genth, Steven M. Klepper, KRAMON & GRAHAM, P.A.,
Baltimore, Maryland, for Amicus The Association of Independent Maryland & DC
Schools. J. Douglas Baldridge, Washington, D.C., Geoffrey R. Garinther, Evan T. Shea,
William B. King, Elizabeth C. Rinehart, VENABLE LLP, Baltimore, Maryland; Joshua
W.B. Richards, SAUL EWING LLP, Philadelphia, Pennsylvania, for Amici The National
Association of Independent Schools, The National Business Officers Association, The
Association of Independent Schools of Greater Washington, The Southern Association of
Independent Schools, The Virginia Association of Independent Schools, The North
Carolina Association of Independent Schools, and the Palmetto Association of Independent
Schools. Megan H. Mann, NATIONAL ASSOCIATION OF INDEPENDENT
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N.H. and her mother, Donna Buettner-Hartsoe (“Appellees”) sued Concordia Prep for
violating Title IX of the Education Amendments of 1972 (“Title IX”). To support their
Title IX claim, Appellees alleged that Concordia Prep received federal financial assistance
Appellees’ Title IX claim on the ground that it was not subject to Title IX because it did
not receive federal financial assistance. Appellees opposed Concordia Prep’s motion,
arguing that the school’s 26 U.S.C. § 501(c)(3) tax exempt status constituted federal
The district court agreed with Appellees and denied Concordia Prep’s motion to
dismiss. But the district court nonetheless certified an interlocutory appeal on the issue of
whether § 501(c)(3) status constitutes receiving federal financial assistance for Title IX
We conclude that § 501(c)(3) status does not constitute receipt of federal financial
assistance. Therefore, we reverse and remand to the district court for further proceedings.
1
Baltimore Lutheran High School Association, doing business as Concordia
Preparatory School.
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I.
A.
N.H. was a student at Concordia Prep during the 2017–18 academic year. She
alleges that during that time, she was sexually harassed, assaulted, and bullied at school.
As this is an interlocutory appeal separate from the merits of N.H.’s harassment, we do not
B.
In 2020, Appellees sued Concordia Prep, alleging violations of Maryland state law
and Title IX. 2 Appellees alleged that because Concordia Prep receives federal education
funding, it is subject to Title IX. Concordia Prep filed a Partial Motion to Dismiss,
asserting that Concordia Prep did not receive federal education funding during N.H.’s
academic year. Concordia Prep admitted receiving grants from the State of Maryland but
denied receiving any direct federal funding or federal financial assistance. Thus,
Concordia Prep argued that it was not subject to Title IX and, therefore, Appellees’ Title
IX claim should be dismissed. Appellees opposed Concordia Prep’s motion. They argued
2
Appellees’ state law claims are not currently before us, as Concordia Prep moved
to dismiss only the Title IX claim.
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that Concordia Prep’s tax exempt status pursuant to § 501(c)(3) qualified as federal
financial assistance. 3
The district court denied Concordia Prep’s motion. It held that Concordia Prep’s
§ 501(c)(3) tax exempt status constituted federal financial assistance for purposes of Title
IX. Therefore, the district court reasoned that Concordia Prep could not “avail itself of
federal tax exemption but not adhere to the mandates of Title IX.” J.A. 111. 4
Interlocutory Appeal. Concordia Prep argued that § 501(c)(3) status was not federal
financial assistance and thus did not trigger Title IX compliance. The district court denied
the Motion for Reconsideration but granted the Motion to Certify an Order for Interlocutory
Appeal. We granted Concordia Prep’s Petition for Leave to Appeal on the legal issue of
whether § 501(c)(3) status constitutes receipt of federal financial assistance for purposes
of Title IX.
II.
to dismiss. Dyer v. Smith, 56 F.4th 271, 276 (4th Cir. 2022). We consider questions of
law de novo and construe the evidence in the light most favorable to the non-movant.
EEOC v. Seafarers Int’l Union, 394 F.3d 197, 200 (4th Cir. 2005).
3
Before ruling on Concordia Prep’s motion, the district court consolidated
Appellees’ case with four other cases lodging similar Title IX claims against Concordia
Prep.
4
Citations to the “J.A.” refer to the Joint Appendix filed by the parties in this appeal.
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III.
A.
901(a) of Title IX states: “No person in the United States shall, on the basis of sex, be
excluded from participation in, be denied the benefits of, or be subjected to discrimination
under any education program or activity receiving Federal financial assistance . . . .” Title
IX of the Education Amendments of 1972, Pub. L. No. 92–318, § 901(a), 86 Stat. 235, 373
hook for Title IX to apply is receiving federal financial assistance. But that phrase is
undefined in the statute. Therefore, in this case, we are tasked with determining whether
§ 501(c)(3) tax exempt status equates to “receiving Federal financial assistance” so that
Title IX applies.
B.
We begin with the text. We look to Title IX’s language and to the ordinary meaning
of the words it uses. See United States v. Mills, 850 F.3d 693, 697 (4th Cir. 2017).
Dictionaries cast light on the ordinary meaning of “receiving Federal financial assistance.”
5
Title VI prohibits race discrimination in “any program or activity receiving Federal
financial assistance.” Title VI of the Civil Rights Act of 1964, Pub. L. No. 88–352, § 601,
78 Stat. 241, 252 (codified at 42 U.S.C. § 2000d). Section 504 prohibits discrimination on
the basis of disability in “any program or activity receiving Federal financial assistance.”
Rehabilitation Act of 1973, Pub. L. No. 93–112, § 504, 87 Stat. 355, 394 (codified at 29
U.S.C. § 794(a)). And § 303 of the Age Discrimination Act prohibits discrimination on
the basis of age in “any program or activity receiving Federal financial assistance.” Age
Discrimination Act of 1975, Pub. L. No. 94–135, § 303, 89 Stat. 713, 728 (codified at 42
U.S.C. § 6102).
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See Davidson v. United Auto Credit Co., 65 F.4th 124, 129 (4th Cir. 2023) (“Searching for
the plain meaning of a statute’s text often starts with reading dictionaries published close
in time to when it was enacted.”). To “receive” means “to take,” “to accept,” and to “come
Webster’s Seventh New Collegiate Dictionary 714 (1965); The American College
Dictionary 1010 (1970). And “assistance” means “aid,” “help,” or “support.” Webster’s
and means “relating to” or “pertaining to finance.” Webster’s New Collegiate Dictionary
311 (1961); Webster’s Seventh New Collegiate Dictionary 309 (1965). And at least one
Taken together then, the phrase “receiving Federal financial assistance” means
taking or accepting federal financial aid, help, or support. Thus, the plain text of Title IX
contemplates the transfer of funds from the federal government to an entity. 6 This reading
6
This plain text reading is underscored by federal regulations interpreting the phrase
“Federal financial assistance.” See, e.g., 31 C.F.R. § 28.105 (Department of the Treasury);
34 C.F.R. § 106.2(g) (Department of Education); 40 Fed. Reg. 24128 (Department of
Health, Education, and Welfare). Those regulations state:
Federal financial assistance means any of the following, when
authorized or extended under a law administered by the Federal
agency that awards such assistance:
(1) A grant or loan of Federal financial assistance, including
funds made available for:
(i) The acquisition, construction, renovation, restoration, or
repair of a building or facility or any portion thereof; and
(Continued)
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is consistent with Title IX’s neighboring provision which grants enforcement authority to
neighboring provision’s list -- “grant, loan, or contract” -- suggests very strongly that
§ 1681(a)’s “Federal financial assistance” should be read similarly, and thus limited to
With the above dictionary definition in hand, we turn to Supreme Court precedent
which has construed the scope of when federal financial assistance includes indirect
assistance. The Supreme Court has held that federal financial assistance includes
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In Grove City College v. Bell, the Court held that “receiving” included receiving
federal grants through indirect means. 465 U.S. 555, 563–70 (1984). There, Grove City
College enrolled students who received federal aid and paid that aid to the school. Id. at
560–62. Key to the Court’s analysis was that even though the aid flowed through an
intermediary, the school was still a recipient of the aid. Id. at 569–70.
assistance, as in Grove City, and merely benefitting indirectly from federal assistance. The
Court reasoned that receiving federal financial assistance “covers those who receive the
aid, but does not extend as far as those who benefit from it.” U.S. Dep’t of Transp. v.
Paralyzed Veterans of Am., 477 U.S. 597, 607 (1986). Because “Congress tied the
regulatory authority to those programs or activities that receive federal financial assistance;
the key is to identify the recipient of that assistance.” Id. Put differently, “Title IX
coverage is not triggered when an entity merely benefits from federal funding.” Nat’l
through an intermediary, but it does not include mere beneficiaries. In other words, the
phrase “receiving Federal financial assistance” means taking or accepting federal financial
C.
Before applying this definition to entities with tax exempt status, we briefly explain
tax exemption. Tax exemption for charitable institutions is deeply rooted in American
history. Bob Jones Univ. v. United States, 461 U.S. 574, 588 (1983) (“Tax exemptions for
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certain institutes thought beneficial to the social order of the country as a whole, or to a
particular community, are deeply rooted in our history, as in that of England.”). Section
§ 501(c)(3). Along with requiring that entities be organized and operated for an exempt
electioneering. Id. Organizations that meet these requirements, and apply for exemption,
are exempt from federal income taxes. Id. § 501(c)(1)(A). And when taxpayers donate to
organizations with § 501(c)(3) status, they can claim a charitable deduction. Id. § 170.
organizations that operate for illegal purposes or engage in activities contrary to clearly
Tax exempt status is a tax benefit. Bob Jones, 460 U.S. at 587–88. Tax exempt
organizations keep the amount of tax they would have paid on their income. And by
exempting organizations from tax, “all taxpayers are affected” because “other taxpayers
can be said to be indirect and vicarious ‘donors.’” Id. at 591. But even though “exemptions
and deductions . . . are like cash subsidies,” they are not “in all respects identical.” Regan
v. Tax’n with Representation of Wash., 461 U.S. 540, 544 n.5 (1983). “A subsidy involves
7
The IRS has not issued regulations requiring tax exempt organizations to comply
with Title IX, nor has it revoked tax exemption based on gender discrimination. Thus, we
need not decide whether the IRS could condition tax exempt status on organizations
following Title IX or whether ending gender discrimination in schools is a fundamental
public policy akin to ending racial discrimination in schools in Bob Jones. 461 U.S. at 592.
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the direct transfer of public monies to the subsidized enterprise and uses resources exacted
from taxpayers as a whole. An exemption, on the other hand, involves no such transfer.”
Walz v. Tax Comm’n of New York, 397 U.S. 664, 690 (1970) (Brennan, J., concurring).
D.
With that background, we address the issue at hand. Do organizations with tax
exempt status “receiv[e] Federal financial assistance” for Title IX purposes? Incorporating
the plain meaning of that phrase, does tax exempt status constitute accepting federal
1.
Tax exemption is not “Federal financial assistance.” This is not a novel concept.
Indeed, since Title IX’s inception over fifty years ago, it has never been applied to
organizations based solely on their tax exempt status. And for good reason. Although tax
exemption is a tax benefit, that does not mean it is “Federal financial assistance” for Title
IX purposes. As noted above, “assistance” means “aid, help, or support,” which all
connotate financial grants. Tax exemption, however, is the withholding of a tax burden,
rather than the affirmative grant of funds. Thus, tax exemption is not “Federal financial
assistance.”
Appellees argue that tax exemption is akin to the indirect grants in Grove City. They argue
that because § 501(c)(3) status results in a monetary benefit to tax exempt entities, it is the
same as the IRS granting funds to tax exempt entities. We are unconvinced. In Grove
City, the college received federal education funding through its students. 465 U.S. at 559.
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Even though it received the funding through indirect means, that is, its students, there was
still a grant of federal aid to the school. Id. at 564. In contrast, with tax exemption, no
funds actually change hands. Tax exemption merely allows organizations to keep the
money they otherwise would owe in income tax. Therefore, tax exemption is
distinguishable from the federal grants in Grove City as tax exemption is an indirect benefit,
as opposed to federal financial aid through indirect means. See Nat’l Collegiate Athletic
Ass’n, 525 U.S. at 468 (“Title IX coverage is not triggered when an entity merely benefits
2.
Appellees also argue that 26 U.S.C. § 170’s charitable contribution deduction is like
the indirect grants in Grove City. They argue that because donors can receive a § 170
deduction when they donate to tax exempt organizations like Concordia Prep, those
organizations receive more money through donations than they otherwise would have if
the donors received no deduction. An example illustrates their argument. If a donor whose
federal income tax rate is twenty percent wishes to donate $100 of their post-tax income,
this $100 donation costs $125 pre-tax. But if the donor elects a § 170 deduction, the donor
effectively avoids paying tax on the $100 donation -- meaning it costs only $100 pre-tax.
Appellees argue that this $25 difference allows tax exempt organizations like Concordia
Prep to receive higher donations. Appellees contend that these higher donations are
Section 170’s charitable contribution deduction, like § 501(c)(3) tax exempt status,
is far afield from Grove City's funding-by-intermediary scheme. In Grove City, federal
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funds were dispersed, through students, to the school. 465 U.S. at 559. But here, donors
do not actually receive any federal funds by claiming a charitable deduction. Instead, they
are merely allowed to donate the full pre-tax amount of their donation. Thus, the charitable
contribution deduction is not federal financial assistance for Title IX purposes. And even
if it were, any benefit that Concordia Prep receives by donors potentially donating more
after claiming § 170’s charitable contribution deduction is far too attenuated to constitute
IV.
For these reasons, we hold that tax exempt status pursuant to 26 U.S.C. § 501(c)(3)
does not equate to “receiving Federal financial assistance” for purposes of Title IX.
Therefore, we reverse the district court and remand for further proceedings.
8
Because the plain meaning of Title IX excludes tax exempt status from qualifying
as “receiving Federal financial assistance,” we need not reach the alternate grounds for
reversal raised by Concordia Prep and amici.
14