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26 J.C. & U.L. 119 Journal of College and University Law Summer 1999 NATIONAL COLLEGIATE ATHLETIC ASSOCIATION V. SMITH: MUST THE NCAA PLAY BY THE RULES? Isaac Ruiz a1 Copyright (c) 1999 by the National Association of College & University Attorneys; Isaac Ruiz Sport is as American as apple pie, 1 but historically, women have not received their fair share. 2 In 1972, Congress passed a law that promised to give women more opportunities to participate in athletics, at least in the context of certain federally-assisted education programs. 3 The law, 20 U.S.C. 1681, which is universally referred to as Title IX, states that [n]o 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 4 And while it is probably true that the ordinary American, after reading the text of Section 1681, would say that the statute was aimed primarily at securing for women equal opportunities in schoolrooms, it is also true that most Americans can say that they have learned everything they know about Title IX from the sports page. 5 *120 In 1974, Congress enacted Section 1682, providing for the publication of administrative regulations covering, among other things, intercollegiate athletic activities. 6 Today, interpretation of Title IX is aided in large part by departmental (Department of Education and Department of Health and Human Services) regulations, which appear at 34 C.F.R. 106, 7 and an administrative Policy Interpretation. 8 Not to be outdone by the legislative and executive branches, the Supreme Court has recognized for Title IX a private enforcement action that is not explicitly provided for in the text of the statute. 9 Thus, today the law's enforcement consists of the administrative mechanism, which is officially nonconfrontational, 10 plus the private action, which activists have criticized as an inefficient, second-best solution. 11 *121 Among the difficult interpretative questions that have arisen following the enactment of Title IX are: What is the meaning of receiving Federal financial assistance? 12 What is the meaning of education programs or activities? 13 and What is the meaning of excluded from participation in, denied the benefits of, subjected to discrimination under, or on the basis of sex? 14 This Comment focuses on the first of these questions. Recently, the Supreme Court in National Collegiate Athletic Association v. Smith 15 considered whether the National Collegiate Athletic Association 16 (NCAA or Association) could be sued under Title IX simply by virtue of receiving membership dues from colleges and universities that receive federal financial assistance. In an opinion written by Justice Ruth Bader Ginsburg, the unanimous Court said the answer to this question was no. 17

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A close look at Smith reveals that it preserves the possibility of Title IX litigation against the NCAA. Specifically, the Court did not pass on various theories, among them whether the Association could be brought under Title IX because it receives federal financial assistance through the National Youth Sports Program, which it administers, 18 and whether the Association is subject to Title IX because recipients of federal dollars (i.e., its member institutions) have delegated to it authority over part of a federally assisted program. 19 Under the Civil Rights Restoration Act of 1987, each of the NCAA's education programs or activities would be covered by Title IX if a future litigant could show that the NCAA somehow receives (as opposed to merely benefits *122 from) federal financial assistance; and the Supreme Court's Smith decision is an indication that this showing may not be an impossible feat. 20 The facts of NCAA v. Smith are discussed in Part I. Relevant statutes, regulations, and case law are reviewed in Part II, and Part III compares the Third Circuit's interpretation of recipient with the Supreme Court's reasoning in Smith. Part III also discusses Cureton v. NCAA, 21 a case in which a federal district court determined that the NCAA fell under Title VI under indirect recipient and controlling authority theories. Part IV concludes this Comment by considering the viability of Title IX litigation involving the NCAA.

I. FACTS IN NCAA V. SMITH Shortly after graduating from high school in 1991, Renee Smith enrolled at St. Bonaventure University and became a member of the intercollegiate volleyball team. 22 She played for two consecutive seasons (1991-92 and 1992-93) but elected not to play during a third season (1993-94). 23 Smith graduated from St. Bonaventure after only two and one-half years, and she enrolled in graduate programs at Hofstra University (1994-95) and then at the University of Pittsburgh (1995-96). 24 Students generally are not allowed to exhaust remaining NCAA eligibility as graduate students, 25 but NCAA Bylaw 14.1.8.2 creates an exception for graduate students continuing on at their undergraduate institution. 26 Because Smith wished to return to volleyball but St. Bonaventure did not offer the graduate programs she desired, she relied on her graduate schools, Hofstra *123 and Pittsburgh, to petition the Association for a waiver of the eligibility bylaw. 27 The NCAA refused to grant the schools' requests. 28 In August 1996, Smith filed a pro se complaint claiming that the NCAA had violated Title IX in rejecting the waiver requests from Hofstra and Pittsburgh, asserting that the NCAA granted a disproportionate number of waivers to male athletes. 29 The Association moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), arguing that because Smith's complaint did not allege that the NCAA received federal financial assistance, her complaint should be dismissed for failure to state a claim upon which relief could be granted. 30 In addition, the NCAA argued that even if it was covered by Title IX, Smith would not be able to prove her case on the merits. 31 The district court did not address the latter argument. 32 At the time, Smith had not tried to allege that the NCAA was a direct recipient of federal funding. She argued instead that Title IX applied because (1) the Association governs and operates an educational program or activity; (2) the Association benefits from financial assistance given to student athletes; and (3) the Association receives federal financial assistance indirectly via the membership dues and fees paid by member institutions. 33 Smith also suggested that Title IX should be construed to cover the NCAA based on public policy. 34 Judge Donatella Ambrose dismissed the complaint, stressing the facts that Smith had not alleged that the Association itself was a recipient of federal money, 35 and that the alleged indirect receipt of funds was too attenuated to bring the

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NCAA under Title IX scrutiny. 36 Smith appealed to the Court of Appeals for the Third Circuit, which was asked to decide whether the NCAA could be characterized as a recipient of federal funds. 37 The Third Circuit's reasoning is discussed in Part III, following a *124 review of existing statutory, regulatory, and judicial definitions of recipient.

II. RECIPIENT JURISPRUDENCE: A PRIMER Congress' ability to cut deals with recipients of federal assistance stems from its constitutional spending power. 38 Title IX, like other similar legislation, creates a relationship akin to a contract between the federal government and the federal financial assistance recipient. 39 When Congress offers to fund a program to, for example, teach students to read, in effect it has offered to fund a nondiscriminatory reading program. Once the hypothetical reading program, which is like an offeree, accepts the federal financial assistance, achieving anything less than a nondiscriminatory program is like a breach of the contract. Furthermore, as a result of a 1988 Civil Rights Restoration Act, 40 20 U.S.C. 1687 requires the hypothetical reading program to do moreeven if the financially assisted program is operated in a nondiscriminatory manner, a breach occurs if any other of the recipient's operations is operated discriminatorily on the basis of sex. 41 In addition to the statute, administrative regulations and case law are relevant on the issue considered by this Commentwhat does it take to become a recipient of federal financial assistance for purposes of Title IX?

A. Regulations In 20 U.S.C. 1682, Congress authorized issuance of Title IX regulations. The regulations define recipient in the following manner: (h) Recipient means any State or political subdivision thereof, or any instrumentality of a State or political subdivision thereof, any public or private agency, institution, or organization, or other entity, or any person, to whom Federal financial assistance is extended directly or through another recipient and which operates an education program or activity which receives or benefits from such assistance, including any subunit, successor, assignee, or transferee thereof. 42 Federal financial assistance is also defined broadly:

*125 (g) Federal financial assistance means any of the following, when authorized or extended under a law administered by the Department: (1) A grant or loan of Federal financial assistance, including funds made available for: (ii) Scholarships, loans, grants, wages or other funds extended to any entity for payment to or on behalf of students admitted to that entity, or extended directly to such students for payment to that entity. (5) Any other contract, agreement, or arrangement which has as one of its purposes the provision of assistance to any education program or activity, except a contract of insurance or guarantee. 43 Under the regulatory definitions of recipient and federal financial assistance, a university, assuming it is an education program or activity, 44 clearly falls under Title IX if the assistance is authorized or extended under a law administered by the Department of Education (DOE) or the Department of Health and Human Services. 45

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B. Cases Before Smith, only two Supreme Court cases had dealt with the recipient issue. The first, Grove City College v. Bell, 46 is most famous for its holding that receipt of federal financial assistance by one of Grove City's educational programs did not require institution-wide compliance with Title IX. 47 That holding, which was subsequently rendered obsolete by Congressional enactment, is discussed briefly below, 48 and for now, it is sufficient to note that another aspect of Grove Cityone concerning the meaning of recipientremains good law.

1. Grove City a. Grove City and the Meaning of Recipient When the Grove City litigation began, Grove City College (Grove City) was a private, co-ed, liberal arts college that had repeatedly refused to accept federal financial assistance. 49 Wishing to avoid federal oversight, it also refused to participate in a financial aid program that would have required the college to determine student eligibility for loans. 50 Instead, Grove City students relied on the Alternate Disbursement System, under which the Secretary of Education calculated and disbursed student financial aid awards. 51 *126 Despite Grove City's strategy, the Department of Education determined that the college was a recipient of federal funding according to the Title IX administrative regulations 52 and asked the college to sign an Assurance of Compliance. 53 Grove City refused, and the Department sought to make the College and its students ineligible for federal aid. 54 In the ensuing litigation, Grove City argued that none of its programs were subject to Title IX because none of its programs received direct financial assistance from the federal government. The Supreme Court, per Justice White, disagreed. Drawing on the fact that the grants in question had been created by the same legislation that created Title IX, Justice White said that it would indeed be anomalous to discover that one of the primary components of Congress' comprehensive package of federal aid, was not intended to trigger coverage under Title IX. 55 With respect to the direct/indirect distinction, the Court refused to mak[e] the application of the nondiscrimination principle dependent on the manner in which a program or activity receives federal assistance. 56 The Court had little trouble concluding that Title IX coverage is not foreclosed because federal funds are granted to Grove City's students rather than directly to one of the College's education programs. 57 The school eventually received assistance, and that is what mattered, the Court said. 58

b. Grove City and Congressional Rejection of Program Specificity After deciding that Grove City was a recipient of federal financial assistance and thus covered by Title IX, the Supreme Court went on to decide that receipt of federal financial assistance by one of Grove City's educational programs did not require institution-wide compliance with Title IX. 59 The Court concluded that [i]n purpose and effect, [the grants] represent federal financial *127 assistance to the College's own financial aid program, and it is that program that may properly be regulated under Title IX. 60 Grove City's program-specificity requirement 61 immediately chilled Title IX litigation. 62

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Although Grove City lost the skirmish to free itself of any Title IX coverage, it won the battle to avoid federal oversight of the entire college. Grove City's success was short-lived, as it ultimately lost the real war when Congress rejected program-specificity; after two unsuccessful tries, Congress overturned Grove City by passing the Civil Rights Restoration Act of 1987. 63 As a result of this law, 20 U.S.C. 1687 now defines program or activity as all of the operations of federal financial assistance recipients. 64

*128 2. Paralyzed Veterans The Restoration Act did not address the issue of what it means to receive federal financial assistance. 65 Therefore, the first holding in Grove City, rejecting the college's distinction between direct and indirect federal assistance, remains good law. The issue was revisited in 1986 in United States Department of Transportation v. Paralyzed Veterans of America, 66 a Section 504 case. 67 Paralyzed Veterans influenced Title IX litigation because like Title IX, Section 504 is an arrangement in the nature of a contract with the recipients of the funds: the recipient's acceptance of the funds triggers coverage under the nondiscrimination provision. 68 In Paralyzed Veterans, the Court held that commercial airlines could not be brought under Section 504 by virtue of federal financial assistance 69 extended to airport operators. 70 In doing so, the majority, in an opinion authored by Justice Powell, stressed that Congress had made it explicitly clear that [the] funds [were] to go to airport operators. Not a single penny of the money [was] given to the airlines. 71 Comparing the government-recipient relationship to that of contractual parties, Justice Powell stated that Congress *129 limited coverage of Section 504 to recipients because only recipients can accept or reject commitments that come with receiving federal funds. 72 He distinguished between intended recipients and intended beneficiaries: 73 While we observed in Grove City that there is no distinction between direct and indirect aid and that [t]here is no basis in the statute for the view that only institutions that themselves apply for federal aid or receive checks directly from the Federal Government are subject to regulation, we made these statements in the context of determining whom Congress intended to receive the federal money, and thereby be covered by Title IX.... While Grove City stands for the proposition that Title IX coverage extends to Congress' intended recipient, whether receiving the aid directly or indirectly, it does not stand for the proposition that federal coverage follows the aid past the recipient to those who merely benefit from the aid. 74 In the wake of Paralyzed Veterans, the question to ask to determine whether an entity is a recipientdirect or indirector a beneficiary is Who gets the money? Courts have suggested that if money is simply funneled through another entity, the eventual recipient is covered by the statute. 75

III. SMITH ON APPEAL In NCAA v. Smith, the Supreme Court said that the NCAA was not a recipient of federal financial assistance on the ground that member institutions *130 that are recipients of federal dollars pay dues to the association. 76 In doing so, it vacated a decision by the Court of Appeals for the Third Circuit. 77

A. Third Circuit Renee Smith appealed from the district court's orders dismissing her complaint and denying her motion for leave to amend her complaint. Although the Court of Appeals agreed that Smith's complaint had failed to state a claim

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upon which relief could be granted, 78 it stated that the district court erred when it denied Smith the opportunity to amend her complaint 79 with the following language: The NCAA is a recipient of federal funds because it is an entity which receives federal financial assistance through another recipient and operates an educational program or activity which receives or benefits from such assistance. 80 The bulk of the court's analysis, therefore, supported its conclusion that

Smith alleged facts in her proposed amended complaint which, if proven, would establish that the NCAA was a recipient of federal funds within the meaning of Title IX.... [Smith's] allegation plainly allege[d] that the NCAA receives dues from member institutions, which receive federal funds.... [T] his allegation would be sufficient to bring the NCAA within the scope of Title IX as a recipient of federal funds and would survive a motion to dismiss. 81 The court of appeals first consulted the relevant statutory language; then it quickly turned to the federal regulations. Referring to 20 U.S.C. 1681 and 34 C.F.R. 106.2(h), the court noted that [t]he plain language of the statute and regulation is quite broad and encompasses indirect recipients of federal funds. 82

*131 The Third Circuit in Smith compared the facts before it to those in a Sixth Circuit case, Horner v. Kentucky High School Athletic Association. 83 Horner was brought by female student athletes against, among others, the state high school athletic association, alleging that defendants had violated Title IX by sanctioning fewer sports for girls than for boys. 84 The Horner court concluded that the high school association was a recipient for Title IX purposes. 85 Compare the state high school association in Horner with the NCAA: While the NCAA organizes sports at the college level, the Kentucky High School Athletic Association (KHSAA), pursuant to state law, manage[d] interscholastic athletics at the high school level. 86 Like members of the NCAA, members of the KHSAA paid dues, were required to comply with KHSAA rules and bylaws, and elected individuals to representative posts within the organization. 87 The KHSAA did not receive any direct funding from the federal government, but it, unlike the NCAA, was sanctioned by state regulatory law as an agent for the state board of education, which did receive federal funds. 88 The Sixth Circuit's holding rested on this agency relationship 89 an agency relationship that was easily proven, given its statutory nature.

Seemingly applying Horner to the facts before it, the court in Smith rejected the district court's assertion that the NCAA deserved different treatment because it was not created by the state. 90 According to the court of appeals, [t]he NCAA is a voluntary organization created by and comprised of the educational institutions which essentially acts as their surrogate with respect to athletic rules. 91 It appeared that the court would utilize this analysis to conclude that the NCAA, serving as an agent of schools that are subject to Title IX's restrictions, could have been brought under the law itself because it administered an education program or activity on the schools' behalf. But that is not what the court said.

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The Third Circuit stated that under its understanding of the relevant case law, entities that merely benefited from federal financial assistance (as opposed to directly or indirectly receiving federal money) escaped the reach of *132 Title IX. 92 This was a correct reading of Paralyzed Veterans, 93 which, as the Third Circuit said, had compared recipients to contract offerees. 94 The court of appeals, bound by Paralyzed Veterans, instead relied on the regulatory definition of recipient, in particular the portion that includes or benefits from language. 95 According to the Third Circuit, the difference between the Association in Smith and the commercial airlines in Paralyzed Veterans was that unlike the relationship between the NCAA and colleges in Smith, it would be unreasonable to characterize the [airport operators] as surrogates for the airlines. 96 Therefore, a mere benefit to the NCAA was enough to bring it under Title IX. The court did not explain why. The Third Circuit's intuition that the NCAA is like the Kentucky High School Athletics Association in Horner and unlike the commercial airlines in Paralyzed Veterans is commendable; but the court took a wrong turn when it reasoned, on the one hand, that the NCAA was a surrogate or an agent of colleges and universities that are subject to Title IX and, on the other hand, concluded that the NCAA itself fell under Title IX solely because it benefited from, but did not receive, federal dollars. This was a departure from Grove City and Paralyzed Veterans. The court should have made it clearer that the NCAA is more than a mere beneficiary. If the NCAA is an organization through which the nation's colleges and universities speak and act on athletics matters, 97 as the Association itself says, suing the NCAA is the equivalent of suing its members. As we shall see below, a district court has held the NCAA subject to a similar statute under such a controlling authority theory. 98 Instead, Smith left the Third Circuit with a flawit rested not on the idea that the NCAA was a surrogate for its members and therefore had constructively assumed their recipient status, but on the premise that it fell under Title IX because it benefited from federal financial assistance to its dues-paying members. The position, which the court of appeals claimed was supported by Title IX regulations, was arguably inconsistent with Paralyzed Veterans, in which the Supreme Court ruled out the possibility of Title IX coverage of mere beneficiaries.

B. Supreme Court's Decision NCAA v. Smith reached the Supreme Court on the Title IX issue. Specifically, the Court considered whether a private organization that does not *133 receive federal financial assistance is subject to Title IX because it receives payments from entities that do. 99 The Supreme Court, like the courts before it, looked first to Title IX's statutory language. Its analysis then focused on its two recipient cases, Grove City and Paralyzed Veterans. 100 To the Third Circuit's conclusion that the regulatory definition of recipient trumped Paralyzed Veterans, Justice Ginsburg effectively said, Next time, read the whole definition. 101 The regulatory definition does include or benefits from language, but in its entirety, it reads: Recipient means any State or political subdivision thereof, or any instrumentality of a State or political subdivision thereof, any public or private agency, institution, or organization, or other entity, or any person, to whom Federal financial assistance is extended directly or through another recipient and which operates an education program or activity which receives or benefits from such assistance, including any subunit, successor, assignee, or transferee thereof. 102 On its face, the regulation requires entities to do more than just benefit from federal financial assistance; it requires direct or indirect receipt of federal money and operation of a program or activity that receives or benefits from the assistance. As Justice Ginsburg wrote, under Title IX, the cases interpreting it, and the relevant

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regulations, [e]ntities that receive federal assistance, whether directly or through an intermediary, are recipients within *134 the meaning of Title IX; entities that only benefit economically from federal assistance are not. 103

Although the Supreme Court vacated the Court of Appeals' decision, a different result might have been warranted had Smith alleged that the federal funds with which members paid NCAA dues had been earmarked for that purpose. 104 Under those facts, the NCAA would have been deemed an indirect recipient and the members intermediaries. Unfortunately for Smith, these facts were not alleged, 105 and the unanimous Court ruled in favor of the NCAA, vacating the Court of Appeals' judgment and remanding for further proceedings. 106 The Court avoided several questions because they [did] not bear on the narrow question we decide today whether an entity that receives dues from recipients of federal funds is for that reason a recipient itself. 107 The Supreme Court observed in dictum that under the Civil Rights Restoration Act, if any part of the NCAA received federal assistance, all NCAA operations would be subject to Title IX. 108 Because the issue was not raised on appeal, the Court declined to consider whether the NCAA directly or indirectly received federal funding through the National Youth Sports Program, which it administers. 109 Nor did the Court address another argumentthat when a recipient cedes controlling authority over a federally funded program to another entity, the controlling entity is covered by Title IX regardless of whether it is itself a recipient. 110 The latter argument is along the same line as the Third Circuit's holding, except that it does not rest on an exception to Paralyzed Veterans' recipient/ beneficiary distinction.

C. After Smith Less than a month after Smith was delivered, Judge Ronald L. Buckwalter of the District Court for the Eastern District of Pennsylvania decided that the NCAA fell under Title VI in Cureton v. NCAA. 111 As the Supreme Court stated in Smith, the scope of Title VI is defined in nearly identical terms as Title IX. 112 In Cureton, a group of black student-athletes alleg[ed] that they were unlawfully denied educational opportunities as freshmen through the operation of initial eligibility rules by the NCAA. Specifically, they claim[ed] that [Proposition 16] utilize[d] a minimum test score requirement that ha[d] an unjustified disparate impact on African-American student-athletes. 113 *135 The district court had before it cross-motions for summary judgment, and prior to deciding that the studentathletes were entitled to judgment on the merits of the Title VI claim, 114 Judge Buckwalter considered whether the Association was subject to Title VI at all. Recognizing that Smith required the athletes to do more than show that recipients of federal assistance paid dues to the NCAA, he stated that [p]laintiffs are not precluded from using this theory in combination with other facts to establish that the NCAA receives federal funds sufficient to trigger Title VI coverage. 115 Specifically, the Cureton plaintiffs had argued (1) that the NCAA directly receives federal financial assistance through the [National Youth Sports Program] Fund [(NYSP)] (which indisputably is a recipient of federal funds) because the Fund is nothing more than the NCAA's alter ego; (2) that the NCAA indirectly receives federal financial assistance through the Fund due to the NCAA's complete control over the Fund; (3) that members [sic] schools who receive federal funds have created and comprise the NCAA and that the NCAA governs its members with respect to athletics rules; and (4) the

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recipients of federal financial assistance have ceded controlling authority over a federal funded program to the NCAA, who then becomes subject to Title VI regardless of whether it is itself a recipient. 116 The plaintiffs failed to prove the first of these theories, but Judge Buckwalter said they had sustained their burden of proving that the NCAA exercises effective control and operation of the Community Services Block Grant given by the United States Department of Health and Human Services. 117 Although the Association maintained that there [was] only an administrative services contract between itself and the [National Youth Sports] Fund, 118 Judge Buckwalter found its influence on the fund to be substantial. While organizations in addition to the United States Department of Agriculture, the Department of Health and Human Services, and the NCAA help pay for the NYSP, the NCAA provides professional staffing and oversight in its national office that makes the program possible. 119 Furthermore, the NCAA conducts thorough evaluations for each local program to ensure that each site is sufficiently working toward accomplishing guidelines. 120 The NCAA also appoints a National Youth Sports Program Committee, which is responsible for administering the National Youth Sports Program. 121 Thus, Judge Buckwalter decided that the true nature of the relationship and operations between the two entities ha[d] been firmly revealed by the record. *136 Consequently, as the NCAA is deemed a recipient of federal funds under this theory, all of its operations including its promulgation of initial eligibility rules, are covered by Title VI. 122

Having found that the NCAA was an indirect recipient of federal financial assistancebut a recipient nonetheless Judge Buckwalter further determined that the NCAA was subject to a private suit under Title VI, irrespective of whether it receives federal funds, directly or indirectly, because its members, which are recipients of federal financial assistance, had ceded control of their sports programs to the NCAA. 123 According to the decision, The NCAA places much stock in Article 2, rule 2.1.1 of its constitution, which states that [i]t is the responsibility of each member institution to control its intercollegiate athletics program in compliance with the rules and regulations of the Association. However, [the rule] merely reinforce[s] the Court's understanding that the NCAA and its members have agreed that the schools exercise control over their intercollegiate athletics programs to the extent permitted by the constitution and bylaws of the NCAA. Once legislation affecting the membership is adopted by the NCAA, it becomes enforceable and binding on the member schools. As in any relationship in which authority is transferred, a school is always free to choose not to abide by the legislation, but it will then either suffer sanctions at the hands of the NCAA or be forced to renounce its membership in the association, a decision that would have grave consequences for its intercollegiate athletics program. 124 Under its controlling authority theory, the district court found the NCAA subject to Title VI because its member schools had granted the Association power to make rules that the members were obligated to follow and enforce. 125

IV. CONCLUSION In a press release following the Smith decision, NCAA President Cedric W. Dempsey was quoted as saying, We have consistently said that the NCAA should be in compliance with Title IX on a voluntary basis and have worked to achieve compliance. 126 In Smith, the Supreme Court refused to bring the Association under Title IX, but its decision merely was that the Court of Appeals erroneously held that dues payments from recipients of federal funds suffice to subject the NCAA to suit under Title IX. 127 The National Youth Sports Program, however, presents a greater obstacle to *137 maintaining the Association's Title IX freedom. Although the NCAA and the

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NYSP are separate corporate entities, 128 the NCAA created the program 129 and exercises substantial control over it. 130 As mentioned in Smith, other decisions have rejected the Association's arguments on the issue of whether the NCAA qualifies as a recipient of federal financial assistance because of its National Youth Sports Program. 131 Furthermore, federal agencies have deemed the NCAA a recipient of federal funds. 132 Following the most recent development in the Supreme Court's Title IX recipient jurisprudence, NCAA v. Smith, the two most promising theories for bringing the NCAA under Title IX are the very theories the Court explicitly refused to consider. First, the NCAA may receive federal financial assistance for the National Youth Sports Program. This theory was subsequently sustained in Cureton. 133 Second, even if the federal government never issues a check with the Association's name on it, the NCAA may be brought under Title IX by virtue of controlling the NYSP and its members' athletic programs. For now, the Supreme Court has decided to watch from the sideline. 134

Footnotes a1 B.A. 1996, University of Texas; J.D. candidate 2000, Notre Dame Law School. 1
See U.S. COMM'N ON CIVIL RIGHTS, MORE HURDLES TO CLEAR 1 (1980) ( Sport has become a major social institution in America....). See LAW OF PROFESSIONAL AND AMATEUR SPORTS 13.01, at 13-2 (Gary A. Uberstein ed., 1998) (Throughout the nineteenth century and well into the twentieth, sports were identified in American culture as quintessentially masculine. The appropriate role of the female in sports was that of spectator-supporter, not performer, and certain sports were limited only to males.) (footnote omitted); U.S. COMM'N ON CIVIL RIGHTS, supra note 1, at 1-2. See Education Amendments Act of 1972, Pub. L. No. 92-318, tit. IX, 86 Stat. 235, 373 (1972) (codified as amended at 20 U.S.C. 1681-87 (1994)). 20 U.S.C. 1681. Section 1681 does not apply to certain religious, see 1681(a)(3), military, see 1681(a)(4), or voluntary youth service organizations, see 1681(a)(6). Nor does the statute control activities like American Legion Girls State or Boys State, see 1681(a)(7), or father-son day at educational institutions, see 1681(a)(8). Even beauty pageants are protected, so long as beauty queens (or kings) are chosen upon a combination of factors related to the person's appearance, poise, and talent of such individual.... 1681(a)(9). Section 1681 bears a resemblance to other civil rights legislation. See Gebser v. Lago Vista Indep. Sch. Dist., 118 S. Ct. 1989, 1997 (1998)(citations omitted): [Title IX] was modeled after Title VI of the Civil Rights Act of 1964, which is parallel to Title IX except that it prohibits race discrimination, not sex discrimination, and applies in all programs receiving federal funds, not only education programs. The two statutes operate in the same manner, conditioning an offer of federal funding on a promise by the recipient not to discriminate, in what amounts essentially to a contract between the government and the recipient of funds. Id. For a general discussion of Title IX, see 1 RODNEY A. SMOLLA, FEDERAL CIVIL RIGHTS ACTS 8.03, at 8-14 to 8-38 (1998). Neither the House Report nor the Senate Conference Report hints at Section 1681's application to the athletic context, see S. CONF. REP. NO.. 92-798, at 221-22 (1972); H.R. REP. NO. 92-543, at 51-52 (1971), but after the passage of Title IX, it became apparent that high school and college sports programs would be subject to the legislation, see generally Prohibition of Sex Discrimination, 1975: Hearings on S. 2106 Before the Subcomm. on Educ. of the Senate Comm. on Labor and Pub. Welfare, 94th Cong. (1975).

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Nevertheless, Title IX has contributed to a substantial increase in sports opportunities for women, notwithstanding allegations of broad noncompliance by colleges and universities. For example, in 1972, only 300,000 girls participated in high school athletics, but by 1994, that number had increased to 2 million. See Richard E. Lopchick, Eliminating the Battle of the Sexes in College Sports, in SPORT AND SOCIETY: EQUAL OPPORTUNITY OR BUSINESS AS USUAL? 122, 122 (Richard E. Lopchick ed., 1996). Furthermore, between 1982 and 1992, the number of women participating in college sports jumped from 74,000 to 96,000. See id.

See Education Amendments of 1974, Pub. L. 93-380, 844, 88 Stat. 484, 612 (1974) (The Secretary shall prepare and publish regulations implementing the provisions of title IX of the Education Amendments of 1972 relating to the prohibition of sex discrimination in federally assisted education programs which shall include with respect to intercollegiate athletic activities reasonable provisions considering the nature of particular sports.); see also 20 U.S.C. 1682 (1994). An identical set of regulations appears at 45 C.F.R. 86 (1998) (Department of Health and Human Services). Title IX of the Education Amendments of 1972; A Policy Interpretation: Title IX and Intercollegiate Athletics, 44 Fed. Reg. 71413 (1979) [hereinafter Policy Interpretation]. See Cannon v. University of Chicago, 441 U.S. 677, 717 (1979); see also Gebser, 118 S. Ct. at 1996 (observing that federal courts were empowered to shape a sensible remedial scheme that best comports with the statute)(citations omitted); Franklin v. Gwinnett County Pub. Schs., 503 U.S. 60, 76 (1992) (allowing a private litigant to seek monetary damages). See LAW OF PROFESSIONAL AND AMATEUR SPORTS, supra note 2, 13.04 [3] [[[a], at 13-40. See, e.g., Donna A. Lopiano, Equity in Women's Sports: A Health and Fairness Perspective, 13 CLINICS SPORTS MED. 281, 285 (1994). Lopiano states: Institutions have been aware of the fact that the federal government has not been enforcing the law. The Office of Civil Rights (OCR) in the Department of Education has not done its job. Thus, facing no threat of loss of federal funds (the penalty for noncompliance with the law), institutions are ignoring the law. As a result, mothers and fathers are now going to court in increasing numbers to ensure that their daughters are provided the rights and opportunities guaranteed by lawand they are batting 1000. Unfortunately, if this scenario continues, lawyers will be making a lot of money that could have been used to provide sports opportunities for girls and women. Id. See, e.g., National Collegiate Athletic Ass'n v. Smith, 119 S. Ct. 924 (1999); Department of Transp. v. Paralyzed Veterans of Am., 477 U.S. 597 (1986) (Section 504 case); Grove City College v. Bell, 465 U.S. 555 (1984); Cureton v. National Collegiate Athletic Ass'n, 37 F. Supp. 2d 687 (E.D. Pa. 1999) (Title VI case). See, e.g., Civil Rights Restoration Act of 1987, Pub. L. 100-259, 3(a), 102 Stat. 28 (1988) (codified at 20 U.S.C. 1687 (1994)); Grove City. See, e.g., Cohen v. Brown Univ., 991 F.2d 888, 900 (1st Cir. 1993) (approving of district court's use of administrative Policy Interpretation, supra note 8); 34 C.F.R. 106.41 (1998) (discrimination in athletics); Policy Interpretation, supra note 8. 119 S. Ct. 924 (1999). Most colleges and universities with major athletic departments belong to the NCAA. See id. at 926. It is the organization through which the nation's colleges and universities speak and act on athletics matters at the national level. NCAA Online, About the NCAA (visited March 14, 1999) < http://www.ncaa.org/about/>. Furthermore, the Association sets rules of play and of player eligibility. See NCAA CONST. arts. 1.2, 1.3.2. The NCAA also establishes rules regarding recruiting, admitting, and providing financial assistance to student athletes. See id. art. 1.3.2. See Smith, 119 S. Ct. at 926. See id. at 930.

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See id. The Supreme Court also did not address whether the term federal financial assistance means federal funding and nothing more, or whether assistance includes tax expendituresi.e., tax-exempt status that saves educational programs and activities like the NCAA, millions of dollars. See also Cureton v. National Collegiate Athletic Ass'n, 37 F. Supp. 2d 687, 696 (E.D. Pa. 1999) (Whether characterized as a delegation or an assignment of controlling authority, regulation, or supervision, Plaintiffs have established on this record that the member colleges and universities have granted the NCAA the authority to promulgate rules affecting intercollegiate athletics that the members are obligated to abide by and enforce. Under these facts, the NCAA comes sufficiently within the scope of Title VI irrespective of its receipt of federal funds.). Id. See Smith v. National Collegiate Athletic Ass'n, 139 F.3d 180, 183 (3d Cir. 1998), vacated in part, 119 S. Ct. 924 (1999). See id. See id. See 1993-94 NCAA MANUAL 123, Bylaw 14.1.8.1 (NCAA Bylaws). The NCAA Bylaw states: A student-athlete who is enrolled in a graduate or professional school of the institution he or she previously attended as an undergraduate (regardless of whether the individual has received a United States baccalaureate degree or its equivalent), a student-athlete who is enrolled and seeking a second baccalaureate or equivalent degree at the same institution, or a student-athlete who has graduated and is continuing as a full-time student at the same institution while taking course work that would lead to the equivalent of another major or degree as defined and documented by the institution, may participate in intercollegiate athletics, provided the student has eligibility remaining and such participation occurs within the applicable five-year or 10-semester period set forth in [Bylaw] 14.2. NCAA Bylaw 14.1.8.2. See National Collegiate Athletic Ass'n v. Smith, 119 S. Ct. 924, 927 (1999). See id. See Smith v. National Collegiate Athletic Ass'n, 978 F. Supp. 213 (W.D. Pa. 1997), aff'd in part, vacated in part, rev'd in part, 139 F.3d 180 (3d Cir. 1998), vacated in part, 119 S. Ct. 924 (1999). Smith also brought an action under Section 1 of the Sherman Act, 15 U.S.C. 1 (1994), and a state breach of contract claim. See Smith, 978 F. Supp. at 215-218, 220-21. The antitrust claim was rejected because the NCAA, by its eligibility rules, was not attempting to provide itself and its member institutions with a commercial advantage. See id. at 218, aff'd in relevant part, 139 F.3d 180 (1998). With respect to the breach of contract claim, the district court did not exercise supplemental jurisdiction under 28 U.S.C. 1367 (1994). See id. at 220. See id. at 218. See id. at 218 n.2. See id. See id. at 218 (quoting Smith's brief). See id. (Plaintiff further argues on this point that [a]s a matter of public policy, this Court should subject NCAA actions regarding the operation of educational institutions to Title IX scrutiny.). See id. at 219. See id.

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See Smith v. National Collegiate Athletic Ass'n, 139 F.3d 180 (3d Cir. 1998), vacated in part, 119 S. Ct. 924 (1999). See U.S. CONST. art. I, 8; Lau v. Nichols, 414 U.S. 563, 569 (1974) (The Federal Government has the power to fix terms on which its money allotments to the States shall be disbursed.) (Douglas, J.). See Davis v. Monroe County Bd. of Educ., 119 S. Ct. 1661, 1669-70 (1999) (Because we have repeatedly treated Title IX as legislation enacted pursuant to Congress' authority under the Spending Clause private damages actions are available only where recipients of federal funding had adequate notice that they could be liable for the conduct at issue.); Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17 (1981) (stating that legislation enacted pursuant to Spending Clause is much in the nature of a contract: in return for federal funds, the States agree to comply with federally imposed conditions). Pub. L. 100-259, 102 Stat. 28 (1988) (codified at, among other places, 20 U.S.C. 1687 (1994)); see infra note 63-64 and accompanying text. See 20 U.S.C. 1687 (For the purposes of this chapter, the term [sic] program or activity and program mean all of the operations of ). 34 C.F.R. 106.2(h) (1998). 106.2(g). Program and activity are defined by 20 U.S.C. 1687. Title IX regulations exist for both the Department of Education and the Department of Health and Human Services. 465 U.S. 555 (1984). See id. at 573-75. See infra notes 59-64 and accompanying text. See Grove City, 465 U.S. at 559. See id. See id. This determination was made according to 34 C.F.R. 106.2. See 34 C.F.R. 106.4 (1998): (a) General. Every application for Federal financial assistance for any education program or activity shall as condition of its approval contain or be accompanied by an assurance from the applicant or recipient, satisfactory to the Assistant Secretary, that each education program or activity operated by the applicant or recipient and to which this part applies will be operated in compliance with this part.... (b) Duration of obligation.... (c) Form. The Director will specify the form of the assurances required by paragraph (a) of this section and the extent to which such assurances will be required.... Id. See Grove City, 465 U.S. at 561. Grove City itself was a lawsuit brought in the Western District of Pennsylvania by the college and four students. See id. Id. at 563. Id. at 564. Id. at 569-70.

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Id. at 571-73 (Court agreed with the regulatory definition of federal financial assistance.). See id. at 573-75. Id. at 573-74. Before Grove City, courts did not necessarily adhere to such a requirement. See, e.g., Iron Arrow Honor Soc'y v. Heckler, 702 F.2d 549 (5th Cir. Unit B 1983) ([T]he all-male honor society, in light of its renowned reputation, by its very existence unavoidably and necessarily taints each and every federally assisted program at the University.); Haffer v. Temple Univ., 688 F.2d 14, 17 (3d Cir. 1982) ([I]f Temple University as a whole is to be considered the program or activity for Title IX purposes, it follows that because the University as a whole receives federal monies, its intercollegiate athletic department is governed by Title IX.) (relying on Grove City College v. Bell, 687 F.2d 684 (3d Cir. 1982), rev'd, 465 U.S. 555 (1984)); Rice v. President & Fellows of Harvard College, 663 F.2d 336 (1st Cir. 1981). See S. REP. NO. 100-64, at 11, 1987 WL 61447, at *10 (1988). According to the report: The impact of the decision was immediate. On March 8, 1984a little over a week after the Grove City College decisionthe Department of Education dropped sex discrimination charges against the University of Maryland's intercollegiate athletics program because the athletics program did not receive direct federal funding. The Department's Office for Civil Rightswhich enforces Title VI, Title IX, Section 504 and the Age Discrimination Act as they apply to educationhad uncovered discrimination in several areas, including travel and per diem allowance, the provision of support services, and the accommodation of student interests and abilities. Yet, female athletes and coaches at the University of Maryland and other universities no longer had federal protection .... In the wake of [Grove City,] at least 674 complaints filed under the four civil rights statutes in the Department of Education have been closed, in whole or in part or suspended. Id. (emphasis added). Pub. L. 100-259, 102 Stat. 28 (1988). See 20 U.S.C. 1687 (1994): For the purposes of this chapter, the term [sic] program or activity and program mean all of the operations of (1)(A) a department, agency, special purpose district, or other instrumentality of a State or of a local government; or (B) the entity of such State or local government that distributes such assistance and each such department or agency (and each other State or local government entity) to which the assistance is extended, in the case of assistance to a State or local government; (2)(A) a college, university, or other postsecondary institution, or a public system of higher education; or (B) a local educational agency (as defined in section 8801 of this title), system of vocational education, or other school system; (3)(A) an entire corporation, partnership, or other private organization, or an entire sole proprietorship (i) if assistance is extended to such corporation, partnership, private organization, or sole proprietorship as a whole; or (ii) which is principally engaged in the business of providing education, health care, housing, social services, or parks and recreation; or (B) the entire plant or other comparable, geographically separate facility to which Federal financial assistance is extended, in the case of any other corporation, partnership, private organization, or sole proprietorship; or (4) any other entity which is established by two or more of the entities described in paragraph (1), (2), or (3); any part of which is extended Federal financial assistance, except that such term does not include any operation of an entity which is controlled by a religious organization if the application of section 1681 of this title to such operation would not be consistent with the religious tenets of such organization. Id. See Civil Rights Restoration Act of 1987 7 (Nothing in the amendments made by this Act shall be construed to extend the application of the Acts so amended to ultimate beneficiaries of Federal financial assistance excluded from coverage before the enactment of this Act.). 477 U.S. 597 (1986).

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Section 504 is a provision in the Rehabilitation Act of 1973 and states [n]o otherwise qualified individual with a disability shall be excluded from , or be subjected to discrimination under any program or activity receiving Federal financial assistance Rehabilitation Act of 1973, Pub. L. 93-112, 504, 87 Stat. 355, 394 (codified as amended at 29 U.S.C. 794) (1994) (emphasis added). Today, 29 U.S.C. 794(b) is, for all intents and purposes, identical to 20 U.S.C. 1687, which defines program or activity in Title IX cases. Paralyzed Veterans, 477 U.S. at 605. The United States provides financial assistance to airport operators through grants from a Trust Fund created by the Airport and Airway Development Act of 1970. The Government also operates a nationwide air traffic control system. Id. at 599. See id. at 613. Id. at 605. See id. at 606 (In this case, the only parties in that position are the airport operators.). See id. Id. at 606-07 (emphasis added). The Court feared that if Section 504 was extended to cover economic beneficiaries, such coverage would be almost limitless. See id. at 608-09 (The statutory limitation on 504's coverage would virtually disappear, a result Congress surely did not intend.). It also rejected an argument that airports and airlines come together to form one program or activity. See id. at 610-11. See Moreno v. Consol. Rail Corp., 99 F.3d 782 (6th Cir. 1996) (Section 504 case): [Defendant] argues that it does not receive federal funds, technically, because the federal government distributes the money to the State of Michigan and [defendant] is at most an indirect beneficiary.... We do not find Conrail's arguments persuasive.... An althogether different situation [from Paralyzed Veterans] is presented in the case at bar. Here it is [defendant] that owns and operates the railroad crossing improvements, and it is [defendant] that ultimately receives the money for improvements. The entity that receives the money, Paralyzed Veterans teaches, is the recipient. Id. at 787; see also Dunlap v. Association of Bay Area Gov'ts, 996 F. Supp. 962 (N.D. Cal. 1998): Plaintiff does not argue that BHS received federal funds funneled through the state. Plaintiff argues instead that the [sic] because BHS directly contracts with entities which may be covered , it too must comply with its requirements. Such a holding would stretch the application of the statute far beyond its intended reach and render virtually meaningless the restriction that a defendant be a recipient of federal funds. Id. at 968. See National Collegiate Athletic Ass'n v. Smith, 119 S. Ct. 924 (1999) (Ginsburg, J.). Smith v. National Collegiate Athletic Ass'n, 139 F.3d 180 (3d Cir. 1998), vacated in part, 119 S. Ct. 924 (1999). See id. at 189. See id. Id. at 190. Her complaint previously had not alleged that the Association received federal funds: This action is a request for declaratory relief challenging sex discriminatory practices and policies of the NCAA, Hofstra University, and the University of Pittsburgh in violation of Title IX of the Educational Amendments of 1972, 20 U.S.C. 1681. Title IX prohibits sex discrimination in an educational program or activity receiving federal financial assistance. Id. at 189. Hofstra and Pittsburgh had each petitioned the NCAA for waivers on behalf of Smith. Id. at 190. Id. at 187.

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See Smith, 139 F.3d at 188 (citing Horner v. Kentucky High Sch. Athletic Ass'n, 43 F.3d 265 (6th Cir. 1994)). See Horner, 43 F.3d at 268. See id. at 272. The court relied on 34 C.F.R. 106.2(h), which states the recipient includes subunits, successors, assignees, or transferees. Id. at 268-69. See id. at 269. See id. (citing 702 KY. ADMIN. REGS. 7:065(1) (1993)). See id. at 272. See Smith, 139 F.3d at 188. Id. (emphasis added). See id. Title IX would not apply in the case of an entity that did not benefit at all from federal financial assistance, although such an entity, if it exists, would be difficult to find. See supra Part II.B.2. See Smith, 139 F.3d at 188; see also supra Part II.B.2. See Smith, 139 F.3d at 189 (quoting 34 C.F.R. 106.2(h)). Smith, 139 F.3d at 189. NCAA Online, supra note 16. See infra Part III.C. National Collegiate Athletic Ass'n v. Smith, 119 S. Ct. 924, 928 (1999). By the time Smith's case reached the Supreme Court, it had been taken up by the Washington, D.C., firm Sidley & Austin. Because Smith's complaint had been so poorly drafted and because the Court was considering the narrow question of whether an entity could be subject to a private Title IX action simply because it received dues from entities properly deemed recipients under the statute, the lawyers argued that Grove City and Paralyzed Veterans should not apply because the judicially-created Title IX private cause of action should be broader than the statutorily-created administrative action. There are three reasons Paralyzed Veterans should not be read to provide that a cause of action enforcing Title IX will lie only against recipients of Federal financial assistance, Smith's lawyers argued. Respondent's Brief at 22, National Collegiate Athletic Ass'n v. Smith, 119 S. Ct. 924 (1999) (No. 998-84). First, the cases establishing the private cause of action make plain that the private and administrative actions are not congruent. This was deduced from the fact that the remedies are different. See id. at 23. Second, the commercial airlines in Paralyzed Veterans did not actually participate in the programs funded by the federal government, but in this case, the NCAA did. The Court thus had no occasion to determine whether an entity with authority over the operations of a federally-assisted program or activity is liable for discrimination thereunder in a private cause of action. Id. Third, an exception to the recipient rule for entities that operated programs would not have limitless effects. See id. The Supreme Court rejected this reasoning. We think it would be anomalous to assume that Congress intended the implied private right of action to proscribe conduct that Government enforcement may not check. Smith, 119 S. Ct. at 929 n.5. Ginsburg's exact words are at Smith, 119 S. Ct. at 929 (The Third Circuit's reading of 106.2(h) failed to give effect to the regulation in its entirety.).

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34 C.F.R. 106.2(h) (1998). Smith, 119 S. Ct. at 929. See id. See id. at 929-30. See id. at 930. Id. at 929-30 (emphasis added). Id. at 928. See id. at 930. Id. 37 F. Supp. 2d 687 (E.D. Pa. 1999). Smith, 119 S. Ct. at 928, n.3. Cureton, 37 F. Supp. 2d at 689. See id. at 714. Id. at 693. Id. at 694 (emphasis in original). Id. Id. NCAA Online, National Youth Sports Program Introduction (visited March 14, 1999) <http://www.ncaa.org/edout/ nysp/>. Id. 1995-96 NCAA Bylaw 21.3.20. Cureton, 37 F. Supp. 2d at 694. Id. at 694. Id. at 695-96. Id. at 696 ([E]ach of the member schools is also undeniably subject to Title VI for a challenge to Proposition 16....). NCAA Online, supra note 16. National Collegiate Athletic Ass'n v. Smith, 119 S. Ct. 924, 930 (1999). See Cureton v. National Collegiate Athletic Ass'n, 37 F. Supp. 2d 687, 694 (E.D. Pa. 1999); Petitioner's Reply Brief at 12-13, NCAA v. Smith, 119 S. Ct. 924 (1999) (No. 98-84). NCAA Online, Press Release: USDA Undersecretary Watkins To Visit Notre Dame for 30th Anniversary of NYSP (visited March 14, 1999) <http:// www.ncaa.org/releases/miscellaneous/1999022301ms.htm>. The purpose of the NYSP is to provide[] athletic, educational, health and nutrition instruction each summer to economically disadvantaged children ages 10-16 on 182 colleges [sic] campuses nationwide. Id.

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See supra notes 118-22 and accompanying text. See Smith, 119 S. Ct. at 930; see also Cureton, 37 F. Supp. 2d at 694; Bowers v. National Collegiate Athletic Ass'n, 9 F. Supp. 2d 460, 494 (D.N.J. 1998) (The[] facts illustrate quite convincingly that there are genuine questions of material fact as to whether the NCAA receives federal funds through the [NYSP] or whether the NCAA is intertwined with the [NYSP] such that it cannot be considered separate.); Cureton v. National Collegiate Athletic Ass'n, No. CIV.A.97-131, 1997 WL 634376, *2 (E.D. Pa. Oct. 9, 1997) (If the National Youth Sports Program fund is nothing more than a sham to disguise the NCAA's use of federal funds for its own benefit, then the NCAA does receive federal financial assistance.). See NCAA v. Smith, 119 S. Ct. 924, 930 n.7 (1999) (Department of Health and Human Services); NCAA Online, Press Release: Office of Civil Rights to Review Title IX Findings in NCAA Championship Complaint (visited March, 14, 1999) <http://www.ncaa.org/releases/champother/1999021701co.htm> (Office of Civil Rights of the Department of Education). See supra Part III.C. See Smith, 119 S. Ct. at 930 (reserving judgment on alternative theories to bring NCAA under Title IX).

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