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Published in Print: January 16, 2008, as Court Ruling in NCLB Suit Fuels Fight Over Costs

Court Ruling in NCLB Suit Fuels Fight Over Costs

NEA case’s revival reopens talk of ‘unfunded’ obligations in law.

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The National Education Association suggested this week that school districts need not use their own money to pay for obligations under the No Child Left Behind Act, in the wake of a federal appeals court ruling that revived the union’s lawsuit challenging the law as an unfunded federal mandate.

The Jan. 7 ruling means that “as a condition of participation in the No Child Left Behind Act, a school district or state cannot be compelled to use its own resources to carry out that mandate,” Robert H. Chanin, the general counsel of the NEA and the architect of the lawsuit, argued in an interview.

But other supporters of the lawsuit were more cautious, and the defendant in the case—U.S. Secretary of Education Margaret Spellings—suggested that the decision was far from the last word on the subject.

“No Child Left Behind is strong and on the books, and will be abided by by the states and the federal government,” Ms. Spellings said after a speech at the National Press Club in Washington.

Earlier, she had issued a statement saying that the federal government was exploring all its legal options, and that the law “is not an unfunded mandate but rather a compact between the states and the federal government, which asks that in exchange for federal dollars, results be demonstrated.”

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The decision by a panel of the U.S. Court of Appeals for the 6th Circuit, in Cincinnati—handed down one day before the law’s sixth anniversary—was a victory for the 3.2 million-member NEA and its allies in the suit, which had been dismissed by a federal district court in 2005.

The panel’s 2-1 rulingRequires Adobe Acrobat Reader said that the states were not on clear notice of their potential financial obligations when they agreed to accept federal funding under the law, as legal rulings based on the spending clause in Article I of the U.S. Constitution require.

Central to the case is a provision in the NCLB law that says, “Nothing in this act shall be construed to … mandate a state or any subdivision thereof to spend any funds or incur any costs not paid for under this act.”

Such language was first added to several federal education statutes in 1994, including to that year’s reauthorization of the Elementary and Secondary Education Act, of which the NCLB law is the latest version.

Lengthy Consideration

In an opinion by U.S. Circuit Judge R. Guy Cole Jr., the appeals court said that because of the unfunded-mandate language, “a state official could plausibly contend that she understood … that her state need not comply with NCLB requirements for which federal funding falls short.”

The union’s suit on behalf of itself, some of its state affiliates, and nine school districts in Michigan, Texas, and Vermont had been dismissed by a federal district judge in Detroit in November 2005. ("Suit Challenging NCLB Costs Is Dismissed," Dec. 7, 2005.)

Judges' View of Federal Law

Excerpts from the 2-1 ruling by a panel of the U.S. Court of Appeals for the 6th Circuit in Pontiac School District v. Spellings:

FROM THE MAJORITY OPINION BY U.S. CIRCUIT JUDGE R. GUY COLE JR.

The No Child Left Behind Act rests on the most laudable of goals: to ensure that all children have a fair, equal, and significant opportunity to obtain a high-quality education. Nobody challenges that aim. But a state official deciding to participate in NCLB could reasonably read [the unfunded-mandates provision] to mean that her state need not comply with requirements that are “not paid for under the act” through federal funds.

FROM THE DISSENTING OPINION BY JUDGE DAVID W. MCKEAGUE

The notion that Congress intended to pay in full for a testing and reporting regime of indeterminate cost, designed and implemented by states and school districts, not federal agencies, is not only nonsensical and fiscally irresponsible, but also contravenes the traditional recognition of state and local governments’ primary responsibility for public education. In short, there is nothing in the NCLB that suggests Congress intended to federalize some or all of state and local education.

The 6th Circuit panel had weighed the appeal for a long time, but the union’s case was bolstered by a 2006 U.S. Supreme Court decision. In Arlington Central School District v. Murphy, a case dealing with a legal-fees issue under the Individuals with Disabilities Education Act, the high court reiterated in strong terms a doctrine that in spending-clause legislation, Congress must clearly express its intent to impose conditions on the grant of federal aid so the states may knowingly decide whether to accept the money.

Congress enacted the No Child Left Behind law, like the IDEA, under its spending-clause power. The 6th Circuit panel cited the Arlington Central ruling in holding that the NCLB act does not give the states clear notice of their obligations, in large part because the unfunded-mandate language sends the message that states and districts would not have to spend their own money.

Writing in dissent, Judge David W. McKeague said the more logical purpose of the unfunded-mandates language was to bar federal education officials from imposing additional requirements on states and school districts. And he said the NEA and its allies “ignore the undisputable fact that even if Congress had ‘fully funded’ the NCLB each year, … the funds would still have fallen short of the total purported costs of compliance.”  

The appeals court returned the case to a federal district judge in Detroit, although any appeal by the federal government would likely put off action in the district court. What happens next is further muddied by the fact that the NEA got essentially what it wanted in the suit: a declaration that the law was restricted by the unfunded-mandates provision.  

Mr. Chanin, the union’s lawyer, noted that the suit also seeks an injunction barring the U.S. Department of Education from withholding or threatening to withhold funds from states and districts that do not use their own money to make up for the federal shortfall. That would be something for the district judge to decide.

Mr. Chanin pointed out that in strict terms, the court ruling is binding only in the 6th Circuit, which covers Kentucky, Michigan, Ohio, and Tennessee. But he said that the decision could have a persuasive effect across the country, and that it should give “comfort and heart” to states and school districts. He believes they would be on solid legal ground in refusing to use their own funds to pay for NCLB obligations that were not covered by their allocations of federal aid.

The law requires schools to test students annually in grades 3-8 and at least once in high school in reading and mathematics. Schools that do not make adequate yearly progress in student achievement face a range of consequences, from having to provide after-school tutoring and the option for students to transfer schools to undertaking major restructuring.

“Hundreds of school districts and all of the states now know that at least one court of appeals has said to them, ‘You are right; you don’t have to do anything you are not getting the money to do,’ ’’ Mr. Chanin said.

Joel Packer, the NEA’s chief lobbyist on the No Child Left Behind law, which is awaiting reauthorization by Congress, said that there has been a cumulative $70 billion gap between the amounts authorized under the law for NCLB programs and the amounts appropriated by Congress since the 2002 federal fiscal year.

“Politically, this will up the pressure on President Bush to boost federal spending on Title I and other programs under the law when the president submits his fiscal 2009 budget proposal in a few weeks,” Mr. Packer said.

David Griffith, the director of government affairs for the National Association of State Boards of Education, said the appellate ruling could prompt more states to conduct analyses of the costs of complying with the law.

“There are a lot more requirements in there than we have ever seen before,” said Mr. Griffith, who stressed that his Alexandria, Va.-based group is not involved in the lawsuit. “With that comes an obligation on the part of the federal government to provide the necessary resources to accomplish those requirements.”

‘Bolt of Lightning’

Calvin Cupidore Jr., the interim superintendent of the 8,000-student Pontiac, Mich., school district, which is the lead plaintiff in the NEA’s suit, said he felt encouraged that the ruling would help his district.

“But I’m a realist, and I know this is the educational mandate of the Bush administration, and I expect them to appeal,” he said.

Mr. Cupidore said he was not prepared to accept Mr. Chanin’s advice that a district need not spend any of its own money on compliance with the NCLB law.

“That would call for consultation with our counsel,” Mr. Cupidore said.

Connecticut Attorney General Richard Blumenthal, whose state is challenging the law in its own suit, had filed a friend-of-the-court brief on the NEA’s side with the 6th Circuit court. He issued a statement calling the decision “a bolt of legal lightning igniting new, powerful momentum to our No Child Left Behind case and congressional reform.”

The state also based its suit largely on the grounds that the law imposes unfunded mandates. Connecticut’s case is pending in a federal district court.

Meanwhile this week, Secretary Spellings joined President Bush at an elementary school in Chicago to help recognize the anniversary of his signing of the No Child Left Behind Act into law in 2002.

Vol. 27, Issue 19, Pages 1,19

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