the purchase of equipment from out-of-state companies.
Consequently, the court denied the defendant's motion to dismiss
for lack of subject matter jurisdiction. Id. at 175, 182.
Defendant's activities in this case are easily distinguished
from those in EEOC v. Rinella & Rinella, 401 F. Supp. 175 (1975).
In that case, there was extensive out-of-state travel for
business purposes amounting to approximately $2,000.00. In
addition, the firm in Rinella purchased office equipment
amounting to $8,400 and law and reference books amounting to
$2,500.00 from out-of-state companies. Id. at 182. In this case,
it has been shown that defendant purchased office supplies from
out-of-state companies, but there is no indication that these
purchases affected commerce. In other words, plaintiff states
that these purchases amount to substantial economic dealings
which affect interstate commerce, without showing the nature and
amount of these purchases, much less their origin.
Further, plaintiff alleges that defendant's long-distance
telephone bills are also indicative of substantial effect on
interstate commerce. Plaintiff refers to the telephone bills
because the court in Rinella included the firm's long-distance
telephone bill of $1,277.01 as one of the factors in determining
that it engaged in activity affecting commerce. Rinella, 401
F. Supp. at 182. However, the law firm's telephone bill of
$1,277.01 is a far cry from the $175.00 long-distance charges
incurred by the defendant over a one-year period, the same amount
of time reflected in Rinella's charges, especially in light of
many of defendant's telephone calls being the result of
unauthorized use of its telephones by its wards.
Although there is no set of standards an activity must meet in
order to determine whether it affected commerce within the
meaning of the Civil Rights Act of 1964, the economic effect on
interstate commerce must be substantial. Katzenbach v. McClung,
379 U.S. 294, 85 S.Ct. 377, 13 L.Ed.2d 290 (1964) (citing with
approval Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed.
122 (1942)). It is the opinion of this court that defendant's
long-distance telephone charges amounting to $175.00, and
purchase of office supplies from various companies, is not
substantial; and in fact, is a de minimis level of activity. If
this activity were found to affect interstate commerce, it is
conceivable that no person or entity could be excluded from the
definition of "industry . . . activity affecting interstate
commerce." Surely this was not the intent of Congress.
Analogous support for the result reached by this court may be
found in cases before the National Labor Relations Board in which
the board's jurisdiction was at issue. It has set a $500,000.00
standard for non-retail entities below which it will not assert
jurisdiction. And it has determined that out-of-state purchases
below this amount are not substantial and, therefore do not
affect interstate commerce. National Labor Relations Board v.
Custom Excavating Inc., ___ N.L.R.B. ___, 98 L.R.R.M. 2259,
enforced 575 F.2d 1340 (7th Cir. 1978); Father Flanagan's Boys'
Home and Boys Town Education Association, 225 N.L.R.B. 782
(1976); Cf., National Labor Relations Board v. Reliance Fuel Oil
Corp., 371 U.S. 224, 83 S.Ct. 312, 9 L.Ed.2d 279 (1963). For
these reasons, this court concludes that plaintiff has not met
his burden of establishing that this court has jurisdiction over
defendant under Title VII. Thus, the motion to dismiss Counts I
and II must be granted.
Count III, The Rehabilitation Act Claim
The court must next determine whether it has jurisdiction
pursuant to Section 504 of the Rehabilitation Act of 1973,
29 U.S.C. § 794 (1976) as alleged in Count III. First, the court
must decide whether defendant is a recipient of federal funds.
Recently, the Supreme Court affirmed the Third Circuit's
conclusion that a college was subject to Title IX of the
Education Amendments of 1972 (20 U.S.C. § 1681 et seq.) because
it received indirect federal assistance. Grove City College v.
Bell, 687 F.2d 684 (3d Cir.
1982), aff'd, 465 U.S. 555, 104 S.Ct. 1211, 79 L.Ed.2d 516
The college and its students sought to void the Department of
Education's termination of students' financial aid; a large
number of students enrolled in the college received Basic
Educational Opportunity Grants (BEOGs) allocated by the
Department of Education. The BEOGs were paid directly to the
students; the college itself did not receive any direct federal
or state assistance. However, the Department determined that the
college received federal financial assistance via the students'
BEOGs, and attempted to secure an Assurance of compliance with
Title IX which prohibits sex discrimination in any education
program receiving federal funds. Grove City College, 687 F.2d at
In determining whether the college received indirect federal
financial assistance, the court considered the Department of
Education's contention that the institution fell within the
definition of "recipient" in its regulations,
34 C.F.R. § 106.2(h). The Department argued that the college was a
"recipient" because its students received the BEOGs from the
federal government which were used to pay their educational
expenses. The college, however, argued that Section 901 of Title
IX did not apply to it, interpreting the statute to apply only to
entities receiving direct rather than indirect federal aid. Id.
The court also considered the legislative history of Title IX,
and concluded that it was consistent with the Department's
position that Title IX applies not only to institutions receiving
direct financial assistance, but also to those receiving indirect
aid. The court stated, ". . . we are satisfied that monies which
are paid to students, who in turn use those funds for their
education, constitute no less a part of a college's revenues than
federal monies paid directly to the institution itself." Id. at
693. Additionally, the court said that "the Department was well
within its authority when it defined `recipient' to include any
institution which receives federal financial assistance through
another recipient" Grove City College v. Bell, 687 F.2d 684, 693
(3d Cir. 1982), aff'd, 465 U.S. 555, 104 S.Ct. 1211, 79 L.Ed.2d
As the Department of Education issues regulations pursuant to
Title IX, so the Office of the Secretary of Labor and the
Department of Health and Human Services issue regulations
pursuant to the Rehabilitation Act. In both instances, the term
"recipient" is defined as:
any state or its political subdivisions, any
instrumentality of a state or its political
subdivisions, any public or private agency,
institution, organization, or other entity, or any
person to which Federal financial assistance is
extended directly or through another recipient,
including any successor, assignee or transferee of a
recipient, but excluding the ultimate beneficiary of
29 C.F.R. § 32.3, 45 C.F.R. § 84.3(f) [emphasis supplied].