Commonwealth of VA v. Riley

REHEARING EN BANC GRANTED BY ORDER FILED

10/11/96; PUBLISHED OPINION FILED 6/19/96

IS VACATED

Filed: June 24, 1996

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 95-2627

(94-76-0)

Commonwealth of Virginia Department of Education,

Petitioner,

versus

Richard W. Riley, etc., et al,

Respondents.

O R D E R

The Court amends its opinion filed June 19, 1996, as follows:

On page 29, line 5 of indented quotation -- the number "48" at

the end of the quote is deleted.

On page 30, first paragraph, line 4 -- the comma after the

words "state judges" is changed to a dash.

On page 31, footnote 9, line 11 -- the comma after the word

"relies" is deleted.

For the Court - By Direction

/s/ Bert M. Montague

Clerk

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

COMMONWEALTH OF VIRGINIA

DEPARTMENT OF EDUCATION,

Petitioner,

v.

RICHARD W. RILEY, United States

No. 95-2627

Secretary of Education; UNITED

STATES DEPARTMENT OF EDUCATION,

Respondents.

VIRGINIA SCHOOL BOARDS

ASSOCIATION,

Amicus Curiae.

On Petition for Review of an Order

of the United States Department of Education.

(94-76-0)

Argued: April 4, 1996

Decided: June 19, 1996

Before MURNAGHAN and LUTTIG, Circuit Judges, and LAY,

Senior Circuit Judge of the United States Court of Appeals

for the Eighth Circuit, sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Judge Murnaghan wrote the majority

opinion, in which Senior Judge Lay joined. Judge Luttig wrote a dis-

senting opinion.

_________________________________________________________________

COUNSEL

ARGUED: William Henry Hurd, Deputy Attorney General, OFFICE

OF THE ATTORNEY GENERAL, Richmond, Virginia, for Peti-

tioner. Leslie A. Simon, UNITED STATES DEPARTMENT OF

JUSTICE, Washington, D.C., for Respondent. ON BRIEF: James S.

Gilmore, III, Attorney General, Paul J. Forch, Senior Assistant Attor-

ney General, Joan W. Murphy, Assistant Attorney General, OFFICE

OF THE ATTORNEY GENERAL, Richmond, Virginia, for Peti-

tioner. Deval L. Patrick, Assistant Attorney General, Dennis J. Dim-

sey, UNITED STATES DEPARTMENT OF JUSTICE, Washington,

D.C., for Respondent. D. Patrick Lacy, Jr., Kathleen S. Mehfoud,

HAZEL & THOMAS, P.C., Richmond, Virginia, for Amicus Curiae.

_________________________________________________________________

OPINION

MURNAGHAN, Circuit Judge:

Under Part B of the Individuals with Disabilities Education Act

("IDEA" or "IDEA-B"), federal funds are provided to participating

states for the purpose of helping them to educate disabled children.

In order to be eligible for the federal assistance, a state must meet

numerous requirements prescribed by Congress, one of which is that

the state "assure[ ] all children with disabilities the right to a free

appropriate public education." After learning that Virginia has a pol-

icy under which a disabled child may be deprived of all educational

services by way of expulsion or long-term suspension if that child

misbehaves in a manner unrelated to his or her disability, the United

States Department of Education threatened to withhold all of Virgin-

ia's IDEA-B funds unless it amended that policy so that expelled or

suspended disabled children could receive educational services in an

alternative setting. In Virginia Department of Education v. Riley

(Riley I), 23 F.3d 80 (4th Cir. 1994), we ordered the Department to

conduct a hearing on the matter. Following that hearing, the Secretary

of Education ruled that Virginia's entire allotment of IDEA-B funds

could indeed be withheld until the state agreed to amend its disciplin-

ary policies. Virginia has appealed that ruling on numerous grounds.

We affirm.

2

I.

A.

In Part B of the IDEA--formerly known as the Education of the

Handicapped Act1--Congress has directed the Department of Educa-

tion to provide financial assistance, under prescribed conditions, to

state and local education agencies for the education of disabled chil-

dren. See 20 U.S.C. §§ 1411-20 (1990 & Supp. 1996). The IDEA-B

program is administered by the Office of Special Education Programs

("OSEP"), housed within the Department of Education's Office of

Special Education and Rehabilitative Services ("OSERS"). 20 U.S.C.

§ 1402(a) (Supp. 1996). To receive IDEA-B funds, a state must do

two things. First, the state must submit to OSEP a plan covering a

period of three fiscal years, describing (among other things) the poli-

cies and procedures that will govern the expenditure of the federal

funds. See 20 U.S.C. § 1413 (1990 & Supp. 1996); 34 C.F.R.

§ 300.110. Second, the state must meet the eligibility requirements

described in the Act. One of those requirements is that the state have

"in effect a policy that assures all children with disabilities the right

to a free appropriate public education."2 20 U.S.C. § 1412(1) (Supp.

1996); see also 34 C.F.R. § 300.121(a) ("Each State plan must include

information that shows that the State has in effect a policy that

ensures that all children with disabilities have the right to FAPE [free

appropriate public education] within the age ranges and timelines

under § 300.122."). If the Secretary of Education determines, after

notice and an opportunity for a hearing, that the state has failed sub-

stantially to comply with that or other requirements set out in sections

1412 and 1413, he or she "shall, after notifying the State educational

_________________________________________________________________

1 Congress changed the title of the Act in 1990. See Education of the

Handicapped Act Amendments of 1990, Pub. L. No. 101-476, 104 Stat.

1103, 1141-42 (codified as amended at 20 U.S.C. § 1400(a) (Supp.

1996)).

2 Congress stated that its purpose in enacting the legislation was "to

assure that all children with disabilities have available to them . . . a free

appropriate public education which emphasizes special education and

related services designed to meet their unique needs." 20 U.S.C.

§ 1400(c) (Supp. 1996).

3

agency, withhold any further [IDEA-B] payments to the State." 20

U.S.C. § 1416(a) (Supp. 1996).

B.

In August 1992, Virginia submitted to OSEP its IDEA-B plan for

fiscal years 1993, 1994, and 1995. The Assistant Secretary of Educa-

tion for OSERS conditionally approved the plan in October 1992 and

permitted Virginia to receive its funds for fiscal year 1993. The

Department of Education thereafter discovered that Virginia has a

stated policy under which, "[i]f there is no causal connection

[between a child's misconduct and his or her disability] and if the

child was appropriately placed at the time of the misconduct, the child

may be disciplined the same as a non-handicapped child."3 On

December 17, 1993, the Department notified Virginia officials that it

would not release Virginia's IDEA-B funds for fiscal years 1994 and

1995 unless Virginia altered that policy. Relying upon the Act's state-

ment that a participating state must have "in effect a policy that

assures all children with disabilities the right to a free appropriate

public education," as well as upon the Department's prior interpreta-

tion of that provision, the Department asserted that "even during a

disciplinary removal that exceeds 10 school days, [participating

states] may not cease educational services to students with disabilities

. . . regardless of whether the student's misconduct is determined to

be a manifestation of the student's disability."

Virginia refused to amend its policy, insisting that, if a child's mis-

behavior is unrelated to his or her disability, IDEA-B does not strip

school officials of their right to deprive the student of all educational

services by expelling him or her or by suspending him or her for an

extended period of time. After the Department refused to grant it a

hearing on the matter, Virginia petitioned this court for interlocutory

relief, seeking the release of its $50.2 million IDEA-B allotment for

fiscal year 1994. We granted Virginia the relief it requested, holding

that, under 20 U.S.C. § 1416(a), Virginia could not be deprived of its

_________________________________________________________________

3 An iteration of the policy appeared in the documents originally sub-

mitted by Virginia with its 1993-95 plan. The Department either did not

notice or did not become concerned about the policy until many months

later.

4

IDEA-B funds without reasonable notice and an opportunity for a

hearing. Riley I, 23 F.3d at 84-87. The Secretary complied with that

ruling, releasing the funds for fiscal year 1994 and ordering that a

hearing be held concerning the disposition of the funds for fiscal year

1995.

In October 1994, a hearing was indeed held. The Hearing Officer

found (1) that "IDEA-B requires states to assure that eligible students

with disabilities suspended long-term or expelled for conduct unre-

lated to their disabilities continue to receive special education ser-

vices;" (2) that the Department's policy on the matter had been

articulated in the form of "an interpretive rule not subject to the notice

and comment provisions" of the Administrative Procedure Act

("APA"); (3) that the Department's demand that Virginia amend its

policy "did not amount to imposing [on Virginia] an impermissible

new condition;" and (4) that the Secretary was acting within the scope

of his lawful discretion when he proposed that Virginia's entire allot-

ment of IDEA-B funds for fiscal year 1995, as well as all future

IDEA-B funds, be withheld if Virginia refused to amend its policies

in the manner demanded by the Department.

Pursuant to 34 C.F.R. § 300.585, the Secretary reviewed the Hear-

ing Officer's findings, then issued his final decision on July 3, 1995.

The Secretary largely concurred with the Hearing Officer's conclu-

sions, finding (1) "that the IDEA-B, its interpretive guidance, and the

case law require the continuation of education services to eligible dis-

abled school children who are suspended long-term or expelled from

their current school setting when their misconduct is unrelated to their

disability;" (2) that "the Department's interpretation of IDEA-Part B

is an interpretive rule not subject to the notice and comment provi-

sions of the APA;" (3) that concerns we expressed in Riley I regarding

whether the Department was imposing an impermissible new condi-

tion on Virginia were cured when Virginia was given the opportunity

to present its arguments to the Hearing Officer; (4) that the Depart-

ment was, in fact, not imposing such an impermissible new condition;

(5) that Congress had given the Secretary the authority to withhold all

of a state's IDEA-B funds if the state refuses to comply with the Act's

requirements; and (6) that, despite those findings, Virginia would

have access to its 1995 funds pending its appeal of the Secretary's

decision.

5

Virginia has appealed, contending that Congress must clearly dem-

onstrate its intent to override local authority concerning school disci-

plinary policies before the federal government may intrude in such

matters, and that no such intent has been evinced here. Virginia also

argues that the position taken by the Department in the instant case

violates the "equal access" purpose of IDEA-B, that the Department

is unlawfully coercing Virginia by threatening to withhold its entire

IDEA-B allotment, and that the Department's policies cannot be

imposed on Virginia because they were not promulgated in compli-

ance with the APA.

C.

We must regard the Secretary's findings of fact as conclusive if

they are supported by substantial evidence. 20 U.S.C. § 1416(b)(2).

As we explain below, we find the pertinent statutory provisions

unambiguous and therefore review the Secretary's conclusions of law

de novo.4 See Chevron U.S.A. v. Natural Resources Defense Council,

_________________________________________________________________

4 Virginia agrees that the Secretary's conclusions of law must be

reviewed de novo. Its argument, though, is curious. Virginia believes that

the terms of IDEA-B are unambiguous and that we therefore should not

defer to the Secretary's interpretation of the statute, but should instead

enforce the statute's plain meaning. Yet, as we suggest below, Virginia

also believes that, when Congress said that participating states must have

in place "a policy that assures all children with disabilities the right to

a free appropriate public education," it really did not mean "all." Con-

gress, in Virginia's view, intended that an exception be made for dis-

abled students who have been expelled or suspended long-term due to

misbehavior that is unrelated to their disabilities. To find that Congress

intended that such an exception be made, we would have to find ambigu-

ity in Congress's use of the word "all." And if ambiguity did inhere in

the statute, the Secretary's interpretation of it would be entitled to sub-

stantial deference. See, e.g., Honig v. Doe, 484 U.S. 305, 325 n.8 (1988)

(deferring to the Secretary's interpretation of the phrase "change in

placement" in IDEA-B, see 20 U.S.C. § 1415(e)(3), because that phrase

is ambiguous); Chevron U.S.A., 467 U.S. at 843-45 (holding that a court

must defer to an agency's construction of a statute that the agency

administers when Congress has not "directly spoken to the precise ques-

tion at issue" and when the agency's interpretation of the statute is a rea-

sonable one).

6

467 U.S. 837, 842-43 (1984) ("If the intent of Congress is clear, that

is the end of the matter; for the court, as well as the agency, must give

effect to the unambiguously expressed intent of Congress.").

II.

Virginia's principal contention on appeal has been that the author-

ity of state and local school officials to discipline their students as

they reasonably see fit can only be overridden by a federal agency

when Congress has unambiguously authorized it to do so. Virginia

has pointed out that education is an area "where States historically

have been sovereign," United States v. Lopez, ___ U.S. ___, 115 S.

Ct. 1624, 1632 (1995), and that "[n]o single tradition in public educa-

tion is more deeply rooted than local control over the operation of

schools," Milliken v. Bradley, 418 U.S. 717, 741 (1974). Virginia

believes that the Department of Education is trying to blunt one of

school officials' most useful disciplinary tools: total exclusion from

the education process by way of expulsion or long-term suspension.

See Goss v. Lopez, 419 U.S. 565, 580 (1975) (observing that

"[s]uspension is considered . . . to be a necessary tool to maintain

order"). Virginia therefore contends that, because Congress has not

clearly given it permission to do so, the Department cannot attempt

to compel the state to alter its disciplinary policies by withholding its

allotment of federal funds.5

The principles governing Congress's ability to place conditions on

the states' receipt of federal funds are fairly well established. In South

Dakota v. Dole, 483 U.S. 203 (1987), the Supreme Court acknowl-

edged Congress's broad power, pursuant to its spending authority

under Article I, Section 8,6 to "attach conditions on the receipt of fed-

eral funds" in an effort "`to further broad policy objectives.'" Id. at

_________________________________________________________________

5 Contrary to Virginia's implicit suggestion, the Supreme Court has not

articulated education-specific rules to be applied in the area of condi-

tional federal spending. Virginia does employ the proper terms of analy-

sis, however, insofar as it asks whether Congress has unambiguously

spoken to the matter at issue.

6 Clause 1 of Section 8 states, in pertinent part: "The Congress shall

have Power To . . . provide for the common Defence and general Welfare

of the United States . . . ."

7

206 (quoting Fullilove v. Klutznick, 448 U.S. 448, 474 (1980) (opin-

ion of Burger, C.J.)). That power to place conditions on the receipt

of federal funds is subject, though, to at least four restrictions: (1)

Congress "must be in pursuit of `the general welfare,'" id. at 207; (2)

Congress must unambiguously articulate the applicable conditions,

thereby "`enabl[ing] the States to exercise their choice knowingly,

cognizant of the consequences of their participation,'"7 id. (quoting

Pennhurst State Sch. and Hosp. v. Halderman, 451 U.S. 1, 17

(1981)); (3) the conditions must be related "`to the federal interest in

particular national projects or programs,'" id. (quoting Massachusetts

v. United States, 435 U.S. 444, 461 (1978) (plurality opinion)); and

(4) "other constitutional provisions may provide an independent bar

to the conditional grant of federal funds,"8 id. at 208. It is the second

of those restrictions that Virginia believes precludes the Department's

withholding of federal funds in the case at bar.

The principal issue in the instant case is therefore this: When Con-

gress stated that all states receiving IDEA-B funds must have "in

effect a policy that assures all children with disabilities the right to a

free appropriate public education," did it clearly indicate that states

receiving IDEA-B funds could not deprive a disabled student of all

educational services, even if the student had been expelled or sus-

pended due to conduct unrelated to his or her disability?

_________________________________________________________________

7 The Court has explained that

legislation enacted pursuant to the spending power is much in the

nature of a contract: in return for federal funds, the States agree

to comply with federally imposed conditions. The legitimacy of

Congress' power to legislate under the spending power thus rests

on whether the State voluntarily and knowingly accepts the

terms of the "contract."

Pennhurst, 451 U.S. at 17.

8 The Dole Court rejected the notion that, absent undue coercion, the

Tenth Amendment may constitute such an "independent bar." See 483

U.S. at 210 ("We have also held that a perceived Tenth Amendment limi-

tation on congressional regulation of state affairs did not concomitantly

limit the range of conditions legitimately placed on federal grants."). By

making reference to "an independent bar," the Court meant only "that the

[spending] power may not be used to induce the States to engage in

activities that would themselves be unconstitutional." Id.

8

In order to answer that question, it is useful to review the facts

underlying two of the Supreme Court's leading decisions in the area

of conditional federal grants, Pennhurst and Dole. In Pennhurst, the

Court reviewed the provisions of the Developmentally Disabled

Assistance and Bill of Rights Act of 1975, then codified at 42 U.S.C.

§§ 6000 et seq.9 Under the Act, the federal government offered to pro-

vide funds to the states in order to help them implement programs

designed to care for and treat developmentally disabled individuals.

451 U.S. at 11. Each state could choose either to comply with the con-

ditions set forth in the Act and thereby receive the federal funds or

instead to forego the opportunity to participate in the program. Id. Six

sections of the Act described, in explicit terms, the conditions a state

was required to meet in order to receive federal support. Id. at 12-13,

23. A seventh section--section 6010, the so-called "bill of rights"

section--contained Congress's findings with respect to the kinds of

programs to which it believed individuals with developmental disabil-

ities were entitled.10 Id. at 13.

The Solicitor General contended that, in section 6010, Congress

had prescribed conditions that a state must meet in order to receive

federal funds under the Act. Id. at 22. The Court rejected that proposi-

tion on several grounds. First, unlike the six sections in which condi-

tions had been expressly prescribed, Congress gave no express

indication that section 6010 was intended to impose conditions. Id. at

23. Second, unlike the Solicitor General, the Department of Health

and Human Services--the agency charged with administering the

Act, id. at 11--had taken the position that the Department could not

withhold federal funds if a state failed to act fully in accordance with

section 6010's findings, id. at 23. Third, the small sum ($1.6 million)

provided to the given state was "woefully inadequate to meet the

enormous financial burden" of complying with each of section 6010's

_________________________________________________________________

9 The Act has since been substantially amended. All references are to

the version of the Act then before the Court.

10 Section 6010 stated, inter alia, that "[p]ersons with developmental

disabilities have a right to appropriate treatment, services, and habilita-

tion for such disabilities," and that such "treatment, services, and habili-

tation . . . should be designed to maximize the developmental potential

of the person and should be provided in the setting that is least restrictive

of the person's personal liberty." 451 U.S. at 13.

9

aspirations.11 Id. at 24. Fourth, because much of the language of sec-

tion 6010 was indeterminate, the Court found that Congress had not

"spoke[n] so clearly that [the Court could] fairly say that the State

could make an informed choice." Id. at 25. Finally, the Court believed

that several other provisions of the Act would be rendered superfluous

if the aspirations expressed in section 6010 were deemed to constitute

conditions on the receipt of federal funds. Id. at 25-27.

In Dole, the State of South Dakota asked the Court to review fed-

eral legislation under which the Secretary of Transportation has been

directed to withhold five or ten percent of a state's federal highway

dollars if, under that state's laws, a person less than twenty-one years

of age is permitted to purchase alcoholic beverages. See 23 U.S.C.

§ 158. The Court upheld the Secretary's withholding of federal funds

from South Dakota under that provision, finding, inter alia, that "[t]he

conditions upon which States receive the funds . . . could not be more

clearly stated by Congress." 483 U.S. at 208.

Guided by those cases and the principles they exemplify, we con-

clude that Congress has indicated with sufficient clarity that a state

risks losing all or part of its IDEA-B funds if it refuses to provide

educational services to a disabled student who has been expelled or

suspended for conduct unrelated to his or her disability.12 We reach

that conclusion for several reasons.

_________________________________________________________________

11 In light of the small sum provided under the Act, the Court con-

cluded that it "defie[d] common sense . . . to suppose that Congress

implicitly imposed this massive obligation on participating States." 451

U.S. at 24.

12 A few other courts have reached a contrary conclusion. See Doe v.

Maher, 793 F.2d 1470, 1482 (9th Cir. 1986) (stating that a state does not

violate the Act if it deprives a disabled child of all educational services

because of "misbehavior [that] is properly determined not to be a mani-

festation of his handicap"), aff'd as modified sub nom. Honig v. Doe, 484

U.S. 305 (1988) (the Supreme Court did not address the Ninth Circuit's

finding in this respect); Doe v. Board of Educ., 1996 WL 79411, at *3

(N.D. Ill. Feb. 16, 1996) ("The continued provision of educational ser-

vices to a student who has been expelled for reasons unrelated to a dis-

ability is not expressly required by the IDEA or its regulations, nor is

there any reason to believe that Congress intended to erect an impenetra-

10

First, to the extent that Pennhurst is analogical authority in support

of Virginia's position (as Virginia contends that it is), that case is eas-

ily distinguished. Unlike the legislation in Pennhurst, the statutory

provision in the case at bar appears in a section that expressly imposes

conditions on the receipt of federal funds, the agency charged with

administering the statute believes the statute imposes the condition in

question, the federal funds provided to Virginia each year (more than

$50 million) are not inadequate to meet the burden imposed by that

condition, and holding that that condition has indeed been imposed by

Congress would not render other portions of the Act superfluous.

Second, IDEA-B's plain language leaves no room for exceptions

of the kind that Virginia has asked us to read into it. The Act requires

that participating states have "in effect a policy that assures all chil-

dren with disabilities the right to a free appropriate public education."

If a state refuses to offer educational services to a disabled child due

to that child's conduct--regardless of whether that conduct is a mani-

festation of the child's disability--then it has ceased to assure that

child of "the right to a free appropriate public education." Contrary

to Virginia's belief, the statute in no way indicates that a disabled stu-

dent forfeits that right when he or she misbehaves in a manner unre-

lated to his or her disability. The Act's unqualified language is

therefore sufficiently clear to have enabled Virginia authorities to per-

ceive that they would have to adjust their disciplinary policies for dis-

abled students if they wished to participate in the IDEA-B program.

Compare Timothy W. v. Rochester, New Hampshire, Sch. Dist., 875

F.2d 954, 960-61 (1st Cir.) (rejecting the argument that, in order to

demand educational services under the Act, a child must show that he

or she would benefit from such services; because the Act is unequivo-

cal and "is permeated with the words `all handicapped children' . . .

_________________________________________________________________

ble shield insulating students with disabilities from the consequences of

misconduct totally unrelated to their disabilities."), mot. for recons.

granted, 1996 WL 197690 (N.D. Ill. Apr. 22, 1996) (recognizing that

OSEP had taken a contrary position in an opinion letter and finding "that

the positions taken by OSEP are entitled to deference"); Doe v. Koger,

480 F. Supp. 225, 229 (N.D. Ind. 1979) (stating that the Act "only pro-

hibits the expulsion of handicapped children who are disruptive because

of their handicap").

11

the Act in its entirety makes clear that a `zero-reject' policy is at the

core of the Act"), cert. denied, 493 U.S. 983 (1989).

Third, enforcing the plain meaning of section 1412(1)--that is,

holding that the word "all" does, in fact, mean "all"--need not lead

to absurd results. The Department has pointed out that "the issue of

whether children with disabilities may be expelled or suspended from

school for misconduct unrelated to their disabilities [is wholly distinct

from] the issue of whether the statute requires that continuing special

educational services be provided to [such] students." IDEA-B does

not prevent school officials from suspending or expelling disabled

students who have misbehaved; the statute merely requires that edu-

cational services then be provided in some kind of alternative setting.13

Elsewhere in the Act, Congress has contemplated the provision of

educational services in just such alternative settings. See 20 U.S.C.

§ 1415(e)(3)(B)(i) (Supp. 1996) ("Except as provided in clause (iii),

if the proceedings conducted pursuant to this section involve a child

with a disability who is determined to have brought a weapon to

school under the jurisdiction of such agency, then the child may be

placed in an interim alternative educational setting, in accordance

with State law, for not more than 45 days.") (emphasis added).

Fourth, we believe that upholding the Secretary's decision in the

case at bar is consistent with the Supreme Court's ruling in Honig v.

Doe, 484 U.S. 305 (1988). At issue in Honig was the Act's "stay-put"

provision, which states that a disabled child "shall remain in [his or

her] then current educational placement" until various review pro-

ceedings have been completed, unless local school officials and the

_________________________________________________________________

13 Virginia has concentrated on the interpretation of the phrase "all chil-

dren," but we have concluded that "all" means "all" and that concentra-

tion should more appropriately be focussed on the statutory requirement

of "a free appropriate public education." The right to suspend or expel

for conduct unrelated to a child's disability is in no way forbidden if an

alternative educational setting is provided during the period of suspen-

sion or expulsion. In addition to being the kinds of arguments more

appropriately addressed to Congress than to us, many of Virginia's

policy-based arguments concerning the need to allow local school offi-

cials to discipline their students in an appropriate manner are therefore

largely beside the point.

12

child's parents agree to the contrary. See 20 U.S.C. § 1415(e)(3)

(Supp. 1996). Two students who had been expelled due to "violent

and disruptive conduct" arising from their disabilities, see 484 U.S.

at 312-15, argued that the state could not unilaterally expel them

unless those procedures had been followed. The Supreme Court

agreed.14 The Court held that the language of the statute was unequiv-

ocal, and rejected school officials' attempt "to read a `dangerousness'

exception into the stay-put provision." Id. at 323. The Court disagreed

with the school officials' contention "that Congress thought the resid-

ual authority of school officials to exclude dangerous students from

the classroom too obvious for comment." Id. Instead, the Court rea-

soned as follows:

We think it clear . . . that Congress very much meant to strip

schools of the unilateral authority they had traditionally

employed to exclude disabled students, particularly emo-

tionally disturbed students, from school. In so doing, Con-

gress did not leave school administrators powerless to deal

with dangerous students; it did, however, deny school offi-

cials their former right to "self-help," and directed that in the

future the removal of disabled students could be accom-

plished only with the permission of the parents or, as a last

resort, the courts.

Id. at 323-24. Just as the Court in Honig refused to read a "dangerous-

ness" exception into the Act's stay-put provision, we refuse to read

a "suspension or expulsion for conduct unrelated to disability" excep-

tion into the Act's requirement that "all" disabled children be assured

"the right to a free appropriate public education."

III.

Virginia has argued that, by enacting IDEA-B, Congress intended

merely to provide disabled children with educational opportunities

equal to those enjoyed by their non-disabled counterparts. See, e.g.,

20 U.S.C. § 1400(b)(3) (Supp. 1996) (stating that "more than half of

the children with disabilities in the United States do not receive

_________________________________________________________________

14 The Court found, though, that the issue was moot as to one of the stu-

dents. 484 U.S. at 317-18.

13

appropriate educational services which would enable them to have

full equality of opportunity"). Finding no indication in the statute

"that Congress intended to insulate special education students from

the same discipline that non-disabled students may fairly incur, when

they purposefully engage in identical misconduct unrelated to any

disability," Virginia believes that the Department is attempting to give

disabled students "more rights than other students" in a manner not

contemplated by Congress.

We are unpersuaded by Virginia's reasoning. First, as we have

indicated, the plain language of the statute supports the Secretary's

finding that Congress has imposed on participating states the condi-

tion that the Department seeks to enforce against Virginia here. Sec-

ond, it cannot be disputed that, in other sections of the Act, Congress

has indeed granted disabled children "more rights" than those enjoyed

by non-disabled children. For example, IDEA-B confers upon dis-

abled children the right to an annually reviewed "individualized edu-

cation program," prepared by the school district, the child's teacher

and parents, and, when possible, the disabled child himself or herself.

See 20 U.S.C. §§ 1401(20), 1414(a)(5) (Supp. 1996). The specific

provision at issue in Honig v. Doe--the Act's so-called "stay put"

provision, discussed supra--also confers unique rights upon disabled

children. Any argument founded upon strict equality of treatment

under the Act must therefore fail.

IV.

Virginia contends that the Department is using IDEA-B's monetary

incentives "as a `club' to beat [Virginia] into submitting to [the

Department's] administrative interpretation" of the statute. Virginia

states that, in 1994, only about 126 of the state's 128,000 disabled

children were expelled for conduct unrelated to their disabilities. By

threatening to withhold Virginia's entire IDEA-B allotment, Virginia

argues that the Department is exercising undue influence over the

state's educational policies in violation of the Tenth Amendment15

and general principles of federalism.

_________________________________________________________________

15 The Tenth Amendment states: "The powers not delegated to the

United States by the Constitution, nor prohibited by it to the States, are

reserved to the States respectively, or to the people."

14

We should begin by noting that the plain language of the statute

authorizes the Department to withhold a state's entire allotment of

IDEA-B funds if the state fails to comply with the conditions

expressed in the statute. See 20 U.S.C. § 1416(a) (Supp. 1996)

("Whenever the Secretary . . . finds that there has been a failure sub-

stantially to comply with any provision of section 1412 or section

1413 of this title, . . . the Secretary shall, after notifying the State edu-

cational agency, withhold any further payments to the State under this

subchapter . . . .") (emphasis added). The issue at hand, therefore, is

whether the Department's exercise of that delegated authority is so

coercive that it violates the Tenth Amendment or principles of feder-

alism implicit in our system of government.

Though the attachment of conditions to the receipt of federal funds

generally does not amount to the kind of commandeering of the

states' legislative processes that is proscribed by the Tenth Amend-

ment, see, e.g., Dole, 483 U.S. at 210, the Supreme Court has indi-

cated that "in some circumstances the financial inducement offered by

Congress might be so coercive as to pass the point at which [permissi-

ble] `pressure turns into [impermissible] compulsion,'" id. at 211

(quoting Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937)).

As we observed earlier this year, however, "[n]o court . . . has ever

struck down a federal statute on grounds that it exceeded the Spend-

ing Power." Commonwealth of Virginia v. Browner, ___ F.3d ___,

1996 WL 138507, at *9 (4th Cir. Mar. 26, 1996); see also State of

Nevada v. Skinner, 884 F.2d 445, 448 (9th Cir. 1989) ("The coercion

theory has been much discussed but infrequently applied in federal

case law, and never in favor of the challenging party."), cert. denied,

493 U.S. 1070 (1990). Indeed, courts have occasionally expressed

doubts with respect to whether a finding of genuine coercion can ever

reliably be made. See, e.g., Steward Machine Co., 301 U.S. at 590

(ruling that no such coercion had occurred in the case then before the

Court, "assum[ing] that such a concept can ever be applied with fit-

ness to the relations between state and nation"); Skinner, 884 F.2d at

448 (identifying numerous difficulties that arise when one attempts to

apply the coercion theory).

We are certain that, wherever the line separating encouragement

from coercion may lie, Congress has not crossed it in the case at bar.

15

It is true that the Department has threatened to withhold all of Vir-

ginia's IDEA-B funds. Contrary to Virginia's suggestion, though, the

mere fact that the federal government threatens to withhold an entire

federal grant, rather than a mere portion of it (such as the five percent

of federal highway dollars in Dole), does not necessarily compel a

state to comply with the conditions attached to that grant. If the fed-

eral government were to offer education grants of a mere $1,000, for

example, a state surely would not genuinely be compelled to comply

with the conditions attached to that grant, even if the government

threatened to withhold 100 percent of it: the sum is small enough that

a state could easily choose to forego the benefits of the grant in favor

of retaining policy-making independence.

In the case at bar, the Department wishes to withhold a substantial

sum--more than $50 million per year. Yet that sum represents a fairly

small percentage of Virginia's total expenditures for the education of

disabled children. The division chief for finance at Virginia's State

Department of Education testified in the proceedings below that Vir-

ginia's education expenditures for disabled children average about

$9,000 per student. She also stated that Virginia currently serves

approximately 128,000 disabled children and that the state's annual

IDEA-B grants provide about $400 per child. Through the IDEA-B

program, therefore, the federal government is providing approxi-

mately five percent of the funds needed to educate Virginia's disabled

children. While we do not doubt for a moment that the loss of those

funds would be sharply felt, we cannot say that the federal govern-

ment is providing such a significant proportion of the funds needed

by Virginia that the state has no choice but to comply with the condi-

tions attached to receiving the federal dollars. We reject Virginia's

coercion argument accordingly.

V.

Virginia has argued that, even if the Department has properly con-

strued the provisions of IDEA-B, it may not enforce that interpreta-

tion of the Act against Virginia because it has acted by way of a

"legislative rule," rather than an "interpretive rule," and therefore

must abide by the notice and comment provisions of the APA. Vir-

ginia has also pointed out that, under 20 U.S.C. § 1417(b), the Secre-

tary was required to "issue, not later than January 1, 1977, . . . such

16

rules and regulations as may be necessary" to "carry[ ] out the provi-

sions of this subchapter" and that "[n]o other less formal method of

implementing such provisions is authorized."

An agency issues an "interpretive rule" when it "simply states what

[it] thinks the statute means, and only reminds affected parties of

existing duties." General Motors Corp. v. Ruckelshaus, 742 F.2d

1561, 1565 (D.C. Cir. 1984) (quotation omitted), cert. denied, 471

U.S. 1074 (1985). An agency issues a "legislative rule" when it "in-

tends to create new law, rights or duties." Id. Unlike interpretive rules,

legislative rules have the force of law; consequently, when an agency

issues a legislative rule, it must abide by the notice and comment pro-

cedures mandated by the APA. Chen Zhou Chai v. Carroll, 48 F.3d

1331, 1340 (4th Cir. 1995); see 5 U.S.C.§ 553.

The Seventh Circuit has addressed the precise issue raised in the

instant case. In Metropolitan School District of Wayne Township v.

Davila, 969 F.2d 485 (7th Cir. 1992), cert. denied, 507 U.S. 949

(1993), the Ohio Department of Education's director of special educa-

tion had asked OSERS whether IDEA-B "requires states to provide

educational services to disabled children who are expelled or sus-

pended for an extended period for reasons unrelated to their disabil-

ity." Id. at 487. OSERS had responded by way of a letter, indicating

that it believed IDEA-B did indeed require such continuation of ser-

vices. Id. An Ohio school district filed suit, contending that OSERS

had issued a legislative rule and that the agency therefore needed to

comply with the APA's notice and comment requirements for issuing

such rules. Id. The Seventh Circuit ruled in favor of the Department

of Education. The court determined that OSERS had merely issued an

interpretive rule, relying upon the statutory language and the legisla-

tive history in an effort to determine what Congress intended. Id. at

492.

We find the Seventh Circuit's reasoning persuasive. The Depart-

ment has simply told Virginia what it believes IDEA-B requires; it

has not attempted to create new rights or duties. Consequently, we

find that the agency has issued an interpretive rule and that the notice

and comment requirements of the APA are inapplicable. We similarly

reject Virginia's argument that 20 U.S.C. § 1417(b) required the

17

Department to employ more formal procedures when it attempted to

enforce the plain language of IDEA-B.

VI.

For the foregoing reasons, we uphold the Secretary's final decision.

AFFIRMED

LUTTIG, Circuit Judge, dissenting:

For misconduct wholly unrelated to their disabilities, the Common-

wealth of Virginia disciplines its handicapped students in the identical

manner that it does its non-handicapped students. Believing that stu-

dents -- handicapped or not -- who so completely disrupt the class-

room as to prevent the educational process to continue or who

actually commit serious crimes against society forfeit by their own

misconduct their right to a free education, the Commonwealth expels

such students from its classrooms until such time as they are willing

to conform their behavior to that necessary for education to occur.

During the period of expulsion, as part of the State's overall program

for discipline in its public schools, the State allows its local school

boards to suspend educational services to the expelled students. That

is, for neither expelled handicapped nor expelled non-handicapped

students does the Commonwealth require its local school boards to

provide private tutors or other educational alternatives following

expulsion, whether the expelled student finds himself in prison, in

detention, or at home. Explaining its reasons for this policy, the State

says: "[A] caring public school organization . . . applies this discipline

as a last resort `wake-up' call of accountability." Br. at 9. And, within

the Commonwealth, this disciplinary tool has proven to be one of the

most effective means of instilling a sense of personal responsibility

and accountability in the few obstinately antisocial among the State's

youths. Indeed, the experience of the State is that "it is rare for an

expelled student, when readmitted [which most are], to be expelled

again." Id. at 11.

Bringing the full weight of the Federal Government to bear against

the Commonwealth's educational policy decision not to require pri-

18

vate tutors in prisons and elsewhere for students who have committed

serious crimes or otherwise so disrupted the educational process as to

require their expulsion, the Department of Education has, in the first

such enforcement action ever against a state, withheld Virginia's

entire $60 million annual Individuals with Disabilities Education Act

("IDEA") grant until the Commonwealth capitulates to the Depart-

ment's demands that it provide private educational services to these

expelled handicapped students, 126 in number. This, notwithstanding

that the State continues to provide education to the some 128,000

handicapped students who have not abused the educational opportu-

nity provided them through the cooperative efforts of the Common-

wealth and the United States, including those handicapped students

whose misconduct warrants expulsion but who are not expelled

because their misconduct relates to their disabilities.

In an argument that only the Federal Government could make, and

which the majority uncritically accepts, the Department of Education

and the Department of Justice contend that the State's refusal to pro-

vide private tutors for handicapped students expelled for criminal or

other serious misconduct unrelated in any way to their disabilities vio-

lates the condition on Virginia's receipt of IDEA funds to "assure[ ]

[to] all students with disabilities the right to a free appropriate public

education." According to the Departments of Justice and Education,

both the statute and sound policy require the States to provide private

tutors, at taxpayer's expense, even to convicted murderers:

THE COURT: Does the Department of Education take the

view that if a disabled young person commits a felony mur-

der and is incarcerated, then the State is still obligated to

provide that person with an education?

COUNSEL: Yes, I believe that the statute specifically

contemplates the provision of special education services

even in institutions . . . .

THE COURT: So the State has to go in and provide a

tutor to this felony murderer. That's the Department of Edu-

cation's view?

19

COUNSEL: Yes.

Oral argument, April 4, 1996.

In order to require the States to provide private education to stu-

dents expelled for reasons unrelated to their handicaps, and thus com-

mandeer from the States their core function of ensuring order and

discipline in their schools, Congress would have had to have spoken

in affirmative and unambiguous terms, so that there could be no ques-

tion whatsoever of its intent. Not only did the Congress not unam-

biguously require the States to provide the continuing education at

issue, it all but codified the common sense proviso that such an edu-

cation need not be extended to such students.

Because the majority, in holding that the States must yield to the

Department of Education's demands, places this court's imprimatur

on what I believe to be an unauthorized, if not unconstitutional, exer-

cise of federal authority over matters peculiarly within the province

of the States and reserved to them by the Tenth Amendment to the

Constitution, I dissent.

I.

A.

The Secretary of Education and the Assistant Attorney General

acknowledge, as they must, that IDEA at most only implicitly condi-

tions the States' receipt of funds upon the continued provision of edu-

cational services to students expelled for misconduct unrelated to

their handicaps. See Decision of the Secretary, Proposed Withholding

Proceeding, Docket No. 94-76-0, at 5 (July 3, 1995) ("[T]he IDEA

does not contain explicit language which precludes the cessation of

education services for disabled children who are suspended long-term

or expelled for misconduct unrelated to their disability."); Respon-

dent's Br. at 34, 35 n.11 (conceding that the condition the Secretary

seeks to impose is only "implicit"). Because we are here concerned

with a congressional conditioning of the States' receipt of federal

funds, this acknowledgment is itself sufficient basis upon which to

reject the Federal Government's argument that the States are required

20

to continue providing educational services to these expelled students,

as I discuss infra. For, in order for the States to be bound by a condi-

tion upon the receipt of federal monies, the Congress must have affir-

matively imposed that condition in clear and unmistakable statutory

terms. An adjustment to the critical balance of power between the

Federal Government and the States cannot be authorized implicitly.

But, before turning to the question of whether IDEA satisfies the

heightened standard applicable to federal statutes that affect the distri-

bution of power between the Federal Government and the States, it

should be understood that IDEA does not impose, implicitly or other-

wise, the condition for which the Federal Government argues, under

even ordinary standards of statutory construction. The relevant provi-

sion of the IDEA does not require that the States have in effect "a pol-

icy that assures all handicapped children a free appropriate public

education" -- a condition which, in my view, still would not require

the States to provide education to handicapped children expelled for

misconduct having nothing whatever to do with their disabilities.

Rather, it requires that, in order to qualify for federal special educa-

tion funds, the States "ha[ve] in effect a policy that assures all chil-

dren with disabilities the right to a free appropriate public education."

20 U.S.C. § 1412(1) (emphasis added). Thus, as the Supreme Court

has repeatedly observed, see discussion infra, the statute only requires

that the States provide handicapped children with access to such an

education. And, as with any other right, that right of access to educa-

tional services may be forfeited by criminal or other conduct antitheti-

cal to the right itself. A state, accordingly, no more fails to satisfy the

statute's condition when it refuses to continue educational services to

a student who has forfeited his right to such services, than when it

does not provide an education to a student who chooses not to avail

himself of the opportunity at all.

The majority errs in its interpretation of the statute precisely

because it ignores the key phrase "the right to," and instead focuses

exclusively upon the word "all." See, e.g., ante at 12 n.13 ("Virginia

has concentrated on the interpretation of the phrase`all children,' but

we have concluded that `all' means `all' and that concentration should

more appropriately be focussed on the statutory requirement of `a free

appropriate public education.'"). In doing so, of course, the majority

entirely begs the question we must decide in order to resolve this

21

case. It is indisputable that, as a condition to receipt of the special

education funds, the States must have in place a policy that assures

"all" handicapped children something; the question is, what is that

something. And it could not be clearer from the face of the statute that

that something is only "the right to" a free appropriate public educa-

tion. If this were not evident from the statute's language, then it

should be evident from the derisible result that follows upon the alter-

native interpretation -- that the States are required, at taxpayers'

expense, to dispatch to prisons, jails, and personal residences, private

tutors to instruct those students who have so disrupted the classroom

that their own instruction and that of their fellow students was ren-

dered impossible.

Of course, the Commonwealth of Virginia has in effect the precise

policy required by the statute. Virginia extends to every handicapped

school-age child within the Commonwealth the right to a free public

education appropriate to his disabilities. What it does not do -- and

understandably -- is require that local school boards discipline their

handicapped students (for conduct unrelated to their disabilities) dif-

ferently from their non-handicapped students, and provide educational

services even to those handicapped youths who have forfeited the

right to a free education by wilfully engaging in contumacious con-

duct so serious as to warrant the ultimate discipline of expulsion. See

Regulations Governing Special Education Programs for Children with

Disabilities in Virginia, § 3.3(B)(11)(b)(4) ("If there is no causal con-

nection [between the misconduct and the disability] and if the child

was appropriately placed at the time of the misconduct, the child may

be disciplined the same as a nondisabled child.").1 And nothing in the

_________________________________________________________________

1 Because of the procedural requirements IDEA imposes upon the

States before any change in placement of a disabled student can be

effected, including the requirement that the States prove that the miscon-

duct was wholly unrelated to the student's disability, expulsion of a dis-

abled student actually is, as a practical matter, considerably more

difficult than expulsion of a non-handicapped student. See, e.g., 20

U.S.C. §§ 1415(b)(1)(D), 1415(b)(1)(E), 1415(b)(2), 1415(c),

1415(e)(2); Board of Educ. v. Rowley, 458 U.S. 176, 182 (1982) ("[T]he

Act imposes extensive procedural requirements upon States receiving

federal funds under its provisions.").

As the Commonwealth recounts the process attending the expulsion of

one handicapped student:

22

language of IDEA even purports to condition the Commonwealth's

receipt of IDEA's special education funds upon the State's submis-

sion to the Federal Government's inexplicable demand that it now do

so.

Nor does anything in the purpose of IDEA suggest that the State

is required to succumb to the Federal Government's demands. The

express, codified purpose of the IDEA is "to assure that all children

with disabilities have available to them . .. a free appropriate public

education which emphasizes special education and related services

_________________________________________________________________

1. Student with Attention Deficit/Hyperactivity Disorder

"ADHD" brought knife to school hidden in his boot. The knife

was reported by a female student who alleged he had brought the

knife on other occasions and had threatened to stab her. When

questioned he denied having the knife, refused to untie his boot,

told officials they had no right to search him, but eventually sur-

rendered the knife. The student knew the consequences of being

discovered would probably be expulsion.

2. The first causality committee concluded there was no causal

connection between the conduct and the disability.

3. The parents sought reconsideration and a second causality

committee was convened. It concluded there was no causal rela-

tionship.

4. A discipline review committee was then held to review the

recommended long-term suspension. This committee upheld the

long-term suspension.

5. Parents sought a "due process" hearing.

6. First level hearing officer found no causal connection.

7. Second level hearing officer also found no causal connec-

tion.

8. The incident occurred when the student was 15 and, despite

the IDEA-B stringent time-lines, the due process appeals took

eight months.

Petitioner's Br. at 36 n.21. Even after these procedural steps were taken,

the parents and the disabled student still had the right to challenge the

disciplinary action in state or federal court. See 20 U.S.C. § 1415(e)(2).

23

designed to meet their unique needs . . . [and] to assist States and

localities to provide for the education of all children with disabilities

. . . ." 20 U.S.C. § 1400(c) (emphasis added). As the Supreme Court

has recognized, the statute's purpose was to ensure that disabled stu-

dents are not denied access to a free public education because of their

disabilities, or because of misconduct related to their disabilities. See

Board of Educ. v. Rowley, 458 U.S. 176 (1982) (referring repeatedly

to the purpose of the Act as one giving handicapped children access

to public education); id. at 214 (White, J., dissenting) ("[T]he Act

intends to give handicapped children an educational opportunity com-

mensurate with that given other children.");2 Honig v. Doe, 484 U.S.

305 (1988). The statute was enacted "to open the door of public edu-

cation" to handicapped students, Rowley, 458 U.S. at 192, one million

out of eight million of whom had been excluded from school systems

across the country because of their disabilities, id. at 189, many

through the pretextual use of discipline, see Honig, 484 U.S. at 324.

Not only is there nothing in this laudable purpose of IDEA that

would require the continued provision of educational services to

handicapped students expelled for reasons unrelated to their handicap,

the statutory purpose is fully achieved by interpreting the language so

as not to require such, thereby reserving to the States, in the manner

urged by the Commonwealth, their historical responsibility for the

discipline of their schoolchildren. As even the Ninth Circuit held in

Doe v. Maher, 793 F.2d 1470 (9th Cir. 1986), aff'd as modified sub

nom., Honig v. Doe, 484 U.S. 305 (1988), in a portion of its opinion

notably left undisturbed by the Supreme Court in Honig:3

_________________________________________________________________

2 See also Rowley, 458 U.S. at 199 (referring to caselaw upon which

Congress expressly relied in enacting IDEA as enunciating a "right of

access to free public education"); id. at 200 ("[N]either the Act nor its

history persuasively demonstrates that Congress thought that equal pro-

tection required anything more than equal access."); id. ("Desirable

though [the goal of maximizing each handicapped child's potential]

might be, it is not the standard that Congress imposed upon States which

receive funding under the Act. Rather, Congress sought primarily to

identify and evaluate handicapped children, and to provide them with

access to a free public education.").

3 Although the Department of Justice maintains that Honig effectively

decided the question we confront, the Secretary of Education, as does

24

If the child's misbehavior is properly determined not to be

a manifestation of his handicap, the handicapped child can

be expelled. This conclusion does not conflict with the

[IDEA]. When a child's misbehavior does not result from

his handicapping condition, there is simply no justification

for exempting him from the rules, including those regarding

expulsion, applicable to other children. Therefore, when a

handicapped child is properly expelled, the school district

may cease providing all education services -- just as it

could in any other case. To do otherwise would amount to

asserting that all acts of a handicapped child, both good and

bad, are fairly attributable to his handicap. We know that

that is not so.

Id. at 1482 (emphasis added, footnote and citations omitted); see also

Doe v. Board of Educ., 1996 WL 79411, at *3-4 (N.D. Ill. Feb. 16,

1996);4 Doe v. Koger, 480 F. Supp. 225, 229 (N.D. Ind. 1979).

_________________________________________________________________

even the majority, recognizes that it did not. See Decision of the Secre-

tary, supra, at 6 (noting that an expulsion for conduct unrelated to dis-

ability is "the circumstance left unaddressed by Honig"); ante at 12

("[U]pholding the Secretary's decision in the case at bar is consistent

with the Supreme Court's ruling in Honig v. Doe." (emphasis added));

see also Metropolitan School District v. Davila, 969 F.2d 485, 493 (7th

Cir. 1992) ("Honig did not reach this issue."), cert. denied, 507 U.S. 949

(1993). The Court in Honig addressed only the question of whether

school districts could unilaterally change the placement of disabled stu-

dents for "dangerous or disruptive conduct growing out of their disabili-

ties." 484 U.S. at 308; see also id. at 312 ("The present dispute grows out

of the efforts of [school officials] to expel two emotionally disturbed

children from school indefinitely for violent and disruptive conduct

related to their disabilities." (emphasis added)). To the extent that the

Court's opinion can be read to speak to the issue now before us, it sug-

gests, given the Ninth Circuit's holding quoted above, that the States are

not required to continue to provide educational services to students

expelled for conduct unrelated to their handicaps. Id. at 328.

4 The district court in Doe subsequently agreed to reconsider its deci-

sion, noting that the Department of Education's contrary interpretation of

the statute, of which it had only recently become aware, was entitled to

deference. See 1996 WL 197690, at *2 (N.D. Ill. Apr. 22, 1996). As I

25

That the Department of Justice, in what is emerging as a pattern of

deceptively selective quotation that threatens to undermine in this

court and others the traditional respect accorded the Department, see,

e.g., Thomasson v. Perry, 80 F.3d 915, 939-41 (4th Cir. 1996) (Luttig,

J., concurring), believes it necessary to omit the phrase "the right to"

on virtually every occasion when it recites the statute's requirement

that the States "assure[ ] all children with disabilities the right to a

free appropriate public education,"5 only confirms that it likewise

understands that Congress has not conditioned the States' receipt of

federal funds upon the continued provision of education to expelled

students, or, at the very least, that it understands Congress has not

done so with the clarity required for the appropriation of a core state

function. There would be no other reason for such intentional omis-

sion of these three manifestly relevant (even if, in one's view, not dis-

positive) words from the short, thirteen-word provision before us.

_________________________________________________________________

explain infra, because of the applicability of the "clear statement" rule,

the deference that we ordinarily afford agency interpretations of ambigu-

ous statutes is inapplicable in a case such as this. Thus, I would expect

the district court's original decision to be reaffirmed.

5 In the first substantive sentence of its "Summary of Argument," for

example, the Assistant Attorney General writes that, "[t]he IDEA unam-

biguously requires participating states, as a condition of receiving federal

funds, to assure that a free appropriate public education is provided to

`all children with disabilities.'" Respondent's Br. at 15 (selectively quot-

ing 20 U.S.C. § 1412(1)). In the first sentence of its "Argument," the

Assistant Attorney General, again selectively quoting from section

1412(1), claims that "[t]he language of the IDEA is unambiguous: partic-

ipating states must assure that a free appropriate public education is

available to `all children with disabilities.'" Id. at 17. And throughout the

Department's submissions, the same omission is made. See id. at 16

("[T]he statute mandates provision of special educational services to `all'

children with disabilities."); id. at 25 ("[Congress] has declined to over-

ride the IDEA's mandate that special education services be provided to

all children with disabilities."); id. at 34 ("[The condition] is necessarily

implicit in the IDEA's requirement that a free appropriate public educa-

tion be provided to all children with disabilities."); id. at 36 ("The

requirement that states provide special education services to all children

with disabilities, including those under disciplinary suspension or expul-

sion, is clear and specific.").

26

B.

Whether the majority's interpretation of the statute or that which

I believe Congress intended is the better, however, is not even the

question. The question is whether, in unmistakably clear terms, Con-

gress has conditioned the States' receipt of federal funds upon the

provision of educational services to those handicapped students

expelled for misconduct unrelated to their handicap: "[I]f Congress

desires to condition the States' receipt of federal funds, it `must do so

unambiguously . . . .'" South Dakota v. Dole, 483 U.S. 203, 207

(1987) (quoting Pennhurst State Sch. & Hosp. v. Halderman, 451

U.S. 1, 17 (1981)).6 Indeed, the Supreme Court itself invoked

Pennhurst's clear statement rule in addressing the identical provision

of the IDEA at issue here, reasoning that it is a "fundamental proposi-

tion that Congress, when exercising its spending power, can impose

no burden upon the States unless it does so unambiguously." Rowley,

458 U.S. at 190 n.11 (citing Pennhurst, 451 U.S. at 17). If Congress

has not unequivocally conditioned receipt of federal funds in the man-

ner claimed by the Department of Education, and by the Department

of Justice on its behalf, then our inquiry is at an end.

Insistence upon a clear, unambiguous statutory expression of con-

gressional intent to condition the States' receipt of federal funds in a

particular manner is especially important where, as here, the claimed

_________________________________________________________________

6 Cf. Will v. Michigan Dep't of State Police, 491 U.S. 58, 65 (1989)

(describing as an "ordinary rule of statutory construction" the principle

that "if Congress intends to alter the `usual constitutional balance

between the States and the Federal Government,' it must make its inten-

tion to do so `unmistakably clear in the language of the statute.'" (quot-

ing Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242 (1985), and

citing Pennhurst, 465 U.S. at 99)); Gregory v. Ashcroft, 501 U.S. 452,

460 (1991) ("[Where] [c]ongressional interference [with a core state

function] would upset the usual constitutional balance of federal and

state powers[,] . . . `it is incumbent upon the federal courts to be certain

of Congress' intent before finding that federal law overrides' this bal-

ance." (quoting Atascadero, 473 U.S. at 243, and citing Pennhurst, 465

U.S. at 99)); Torcasio v. Murray, 57 F.3d 1340, 1344-46 (4th Cir. 1995)

(holding that "Congress must speak unequivocally before [courts] will

conclude that it has `clearly'" intruded upon core state functions), cert.

denied, 116 S. Ct. 772 (1996).

27

condition requires the surrender of one of, if not the most significant

of, the powers or functions reserved to the States by the Tenth

Amendment -- the education of our children. See, e.g., Honig, 484

U.S. at 309 ("[E]ducation [is] `perhaps the most important function of

state and local governments.'" (quoting Brown v. Board of Educ., 347

U.S. 483, 493 (1954))); Milliken v. Bradley, 418 U.S. 717, 741 (1974)

("No single tradition in public education is more deeply rooted than

local control over the operation of schools . . . ."); United States v.

Lopez, 115 S. Ct. 1624, 1632 (1995) ("[Education is an area] where

States historically have been sovereign."). In this context, we in the

judiciary labor under a special obligation to "assure[ ] that the legisla-

ture has in fact faced, and intended to bring into issue, the critical

matters involved in the judicial decision." United States v. Bass, 404

U.S. 336, 349 (1971); see also, e.g., Gregory, 501 U.S. at 461 (quot-

ing Bass); Will, 491 U.S. at 65 (same); Torcasio, 57 F.3d at 1344

(same).

The Department of Justice argues, in what I understand as a con-

cession, and the majority accepts, in what I understand as an admis-

sion, that in the event of ambiguity in the IDEA provision at issue,

we defer to a reasonable interpretation by the agency, as if we were

interpreting a statute which has no implications for the balance of

power between the Federal Government and the States.7 We do not.

It is axiomatic that statutory ambiguity defeats altogether a claim by

the Federal Government that Congress has unambiguously condi-

tioned the States' receipt of federal monies in the manner asserted. As

the Court stated in Gregory v. Ashcroft:

[I]nasmuch as this Court in Garcia [v. San Antonio Metro.

Transit Auth., 469 U.S. 528 (1985)] has left primarily to the

political process the protection of the States against intrusive

exercises of Congress' Commerce Clause powers, we must

_________________________________________________________________

7 See ante at 6 n.4 (citing Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837, 843-45 (1984)); cf. Respondent's

Br. at 26 ("Even if the statute were ambiguous on this point, however,

the Secretary's interpretation of the statute's requirements is reasonable

and entitled to substantial deference."); id. at 16 ("The only issue is

whether the Secretary's interpretation of [section 1412(1)] is reason-

able.").

28

be absolutely certain that Congress intended such an exer-

cise. "[T]o give the state-displacing weight of federal law to

mere congressional ambiguity would evade the very proce-

dure for lawmaking on which Garcia relied to protect states'

interests."

501 U.S. 452, 464 (1991) (quoting L. Tribe, American Constitutional

Law § 6-25, p. 480 (2d ed. 1988)).

Applying the clear statement rule with the required solicitude for

the rights of the States in our federalist system, it is apparent that

Congress has not spoken through the IDEA with anywhere near the

clarity and the degree of specificity required for us to conclude that

the States' receipt of special education funds is conditioned upon their

continued provision of education to handicapped students expelled for

criminal activity or other misconduct unrelated to their disabilities.

The majority is unable to cite to a single word from the statute or

from the legislative history of IDEA evidencing that Congress even

considered such a condition, much less that it confronted the possibil-

ity of such a condition and its implications for the sovereignty of the

States, and determined to condition the States' funds in this manner.

As the Departments of Education and Justice themselves acknowl-

edge, at most the statute implicitly conditions the receipt of funds in

the manner they contend. And, as I explain above, it does not even

do this; indeed, the better interpretation of the statutory language is

that Congress only required the States to provide handicapped chil-

dren with access to an education, reserving to the States -- intention-

ally or otherwise -- the authority to discipline handicapped students

as they deem appropriate, for criminal actions and misconduct unre-

lated in any way to those students' disabilities.

The majority appears to believe that merely because section 1412

indisputably sets forth conditions on the States' receipt of IDEA

funds, see 20 U.S.C. § 1412 ("In order to qualify for assistance under

this subchapter in any fiscal year, a State shall demonstrate to the Sec-

retary that the following conditions are met: . . . ." (emphasis added)),

Congress has ipso facto spoken sufficiently clearly to satisfy the clear

statement requirement. However, in Gregory, the Supreme Court

rejected this very understanding of the clear statement requirement in

a holding that should control the disposition of the case before us.

29

There, the Court held that the Age Discrimination in Employment

Act, which covered employees of "a State or political subdivision of

a State," 29 U.S.C. § 630(b)(2) -- a provision that under today's

majority opinion would seem unambiguously to cover state judges --

did not apply to state judges because the provision did not unambigu-

ously reveal that Congress intended such a result. In reaching this

conclusion, the Court reasoned that a clear statement is required not

simply in determining whether a statute applies to the States, but also

in determining whether the statute applies in the particular manner

claimed. Gregory, 501 U.S. at 460-70. In fact, Justices White and Ste-

vens declined to join the "clear statement" discussion in Justice

O'Connor's opinion for the Court because it adopted the position

urged by the Commonwealth and rejected by the majority in this case:

[T]he majority nevertheless imposes upon Congress a "plain

statement" requirement. The majority claims to derive this

requirement from the plain statement approach developed in

our Eleventh Amendment cases . . . . The issue in those

cases, however, was whether Congress intended a particular

statute to extend to the States at all. . . . In the present case,

by contrast, Congress has expressly extended the coverage

of the ADEA to the States and their employees. Its intention

to regulate age discrimination by States is thus "unmistak-

ably clear in the language of the statute." Atascadero, [473

U.S.] at 242. . . . The only dispute is over the precise details

of the statute's application. We have never extended the

plain statement approach that far . . . .

Id. at 475-76 (White, J., concurring in part, dissenting in part, and

concurring in the judgment); cf. id. at 493 (Blackmun, J., joined by

Justice Marshall, dissenting) (arguing that Chevron deference, rather

than clear statement rule, was appropriate).

Since neither the text of section 1412(1), the legislative history, nor

the purpose of the IDEA even suggests, much less mandates with the

clarity necessary to confirm that the Congress actually confronted and

deliberately decided, that a state must continue to provide education

services to disabled children after expulsion for misconduct unrelated

to their disabilities, I would reject the Department of Education's new

30

interpretation to the contrary as ultra vires.8 I would hold that the

Commonwealth of Virginia fulfills its statutory obligations under sec-

tion 1412(1) by affording all disabled students the right to a free

appropriate public education -- a right that disabled students, like

non-disabled students, can forfeit by criminal activity or serious mis-

conduct unrelated to their disabilities.9 While the States are free, in

Faustian fashion, to surrender unto the Federal Government that

which separately defines them as powers autonomous from that Gov-

ernment, it is plain that they have not done so in this instance. Nor,

for that matter, has the Congress sought to exact such an abnegation

from them. Indeed, I would be astonished if the Congress of the

United States was even aware that the Departments of Education and

Justice are contending otherwise before this court.

_________________________________________________________________

8 The Department of Education did not even arrive at the interpretation

of section 1412(1) that it advances in this litigation until 1989, fifteen

years after passage of IDEA. See, e.g., Virginia Dep't of Educ. v. Riley,

23 F.3d 80, 85-86 (4th Cir. 1994) (describing the Department's 1989

interpretation as a "new condition" on funding); Decision of the Secre-

tary, supra, at 1 n.1 (referring to the 1989 interpretation as a "`new con-

dition' of compliance"); id. ("The Hearing Officer also found that the

Department's enforcement of IDEA-B, while neither uniform nor cons-

tant, was not arbitrary or capricious . . . ." (emphasis added)).

9 I would categorically reject the Department's byzantine alternative

argument, which it briefed but abandoned at oral argument, that the pol-

icy outlined in the Department's interpretive letter has itself been incor-

porated into the statute by virtue of section 314(b) of the Improving

America's Schools Act of 1994, Pub. L. 103-382, reprinted in 20 U.S.C.

§ 8921 note. That uncodified section provides that the stay-put provision

of the IDEA "shall be interpreted in a manner that is consistent with the

Department's final guidance concerning State and local responsibilities

under the Gun-Free Schools Act of 1994." 20 U.S.C. § 8921 note. The

portion of the guidance memorandum upon which the United States

relies interprets other provisions of the IDEA, not the stay-put provision.

See U.S. Dep't of Educ., Guidance Concerning State and Local Respon-

sibilities Under the Gun-Free Schools Act of 1994, at 3, reprinted in J.A.

at 219 ("[T]he IDEA requires that educational services must continue,

although they may be provided in another setting, for students with dis-

abilities who are properly expelled."). Accordingly, this portion of the

Department of Education's memorandum has not been elevated to statu-

tory law.

31

II.

Because I interpret section 1412(1) of IDEA so as not to impose

upon the States the condition that they provide private tutors and

other alternative educational services to handicapped students

expelled for egregious conduct unrelated to their disabilities, I need

not resolve the Tenth Amendment issue that is presented upon the

contrary reading of the statute. Suffice it to say, however, that I regard

that issue as considerably more substantial than does the majority,

which all but rejects it out of hand.

I recognize that the Court has not invalidated an Act of Congress

under the Spending Clause since United States v. Butler, 297 U.S. 1

(1936), over half a century ago. But cf. United States v. Lopez, 115

S. Ct. 1624 (1995); Seminole Tribe v. Florida, 116 S. Ct. 1114

(1996). However, as Chief Justice Rehnquist, on behalf of the Court,

recently reminded in South Dakota v. Dole, 483 U.S. 203 (1987),

"[the Court's] decisions have recognized that in some circumstances

the financial inducement offered by Congress might be so coercive as

to pass the point at which `pressure turns into compulsion,'" id. at 211

(quoting Steward Machine Co. v. Davis, 301 U.S. 548, 590 (1937)),

"in contravention of the Tenth Amendment or of restrictions implicit

in our federal form of government," Steward Machine Co., 301 U.S.

at 585.

The Court in Dole rejected South Dakota's argument that the Fed-

eral Government's condition that the State raise its drinking age for

all consumers to 21 was impermissibly coercive. In that case, how-

ever, Congress had directed that the States "lose[only] a relatively

small percentage of certain federal highway funds" for their noncom-

pliance. 483 U.S. at 211. Because "all South Dakota would lose if she

adhere[d] to her chosen course as to a suitable minimum drinking age

[was] 5% of the funds otherwise obtainable" under the program, the

Court concluded that Congress had but "offered relatively mild

encouragement to the States to enact higher minimum drinking ages."

Id.

Here, in stark contrast, the Federal Government has withheld from

the Commonwealth 100% of an annual special education grant of $60

million because of the Commonwealth's failure to provide private

32

educational services to less than one-tenth of one percent (126) of the

128,000 handicapped students for whom the special education funds

were earmarked. And it has withheld the entirety of this $60 million

grant -- only $58,000 of which would, on a pro rata basis, be avail-

able for educational services to the 126 expelled students -- because

the State refused to surrender control over its own classrooms and

schoolchildren by abandoning one of its most effective tools for main-

taining order and discipline, see, e.g., Goss v. Lopez, 419 U.S. 565,

580 (1975) ("Suspension is considered not only to be a necessary tool

to maintain order but a valuable educational device."). As even the

Department of Education concedes, under the interpretation of the

statute embraced by the court today, "Congress [has] drastically cur-

tailed local autonomy with respect to discipline and denial of educa-

tional services to this group of children" "[a]s a condition of receiving

federal funds." Respondent's Br. at 38.

This is a condition considerably more pernicious than the "rela-

tively mild encouragement" at issue in Dole. Withholding the $58,000

pro rata amount of the funds that would be used by the State to pro-

vide services to the 126 expelled students whom the Federal Govern-

ment believes are entitled to educational services under the statute

would be "encouragement." The withholding of almost $60 million

from the State and from the 128,000 disabled students who have

responsibly availed themselves of their educational opportunity, sim-

ply because the State refuses to yield to the federal demands as to the

126 students who have abused their rights, begins to resemble imper-

missible coercion, see Dole, 483 U.S. at 211, if not forbidden regula-

tion in the guise of Spending Clause condition, as well, see id. at 212,

215-218 (O'Connor, J., dissenting); Butler, 297 U.S. at 73 ("There is

an obvious difference between a statute stating the conditions upon

which moneys shall be expended and one effective only upon

assumption of a contractual obligation to submit to a regulation which

otherwise could not be enforced.").

Neither of the majority's two efforts to escape the import of Dole's

reasoning succeeds. The percentage of the total monies expended by

the State for education of the handicapped that is represented by the

federal grant is irrelevant in assessing the coerciveness of the induce-

ment, at least as appears from the Court's opinion in Dole. Were it

otherwise, the same federal grant in the same amount would be

33

unconstitutionally coercive as to one State, but not as to another

which expends a greater amount for the purposes served by the grant;

indeed, were it otherwise, there would be created a perverse incentive

for the States to spend less in areas in which they expected to receive

federal monies, in order to render more vulnerable under the coercion

theory any conditions that were imposed. Thus, the majority's effort

to compare the 100% withholding here to the 5% withholding in

Dole, by noting that the $60 million in special education funds consti-

tutes only "approximately five percent of the funds needed to educate

Virginia's disabled children," ante at 16; compare Respondent's Br.

at 43 (claiming that the federal grant "provides at most nine percent

of the cost of providing special educational services to children with

disabilities"), is to no avail. Equally unavailing is the majority's effort

to avoid the import of Dole by observing that a 100% withholding of

a "mere $1,000" education grant would not be unduly coercive. The

difference between a $1000 grant and, as here, a $60 million grant,

insofar as their coercive potential is concerned, is self-evident.

The argument made by counsel for the Department of Justice is no

more responsive to the constitutional barrier recognized by Dole than

are the majority's. In contending that the withholding is not coercive,

counsel emphasized that there were more coercive steps that might

have been taken, such as the withholding of all federal funds from the

Commonwealth. Sending in the troops would be more coercive still,

but the existence of that more coercive alternative does not render the

withholding to which the Commonwealth is subject noncoercive.

Ultimately, if the Court meant what it said in Dole, then I would

think that a Tenth Amendment claim of the highest order lies where,

as here, the Federal Government (accepting the majority's interpreta-

tion of the statute) withholds the entirety of a substantial federal grant

on the ground that the States refuse to fulfill their federal obligation

in some insubstantial respect rather than submit to the policy dictates

of Washington in a matter peculiarly within their powers as sovereign

States. In such a circumstance, the argument as to coercion is much

more than rhetoric; it is an argument of fact. See Dole, 483 U.S. at

211. It is, as well, an argument that the Federal Government has, in

an act more akin to forbidden regulation than to permissible condi-

tion, supplanted with its own policy preferences the considered judg-

ments of the States as to how best to instill in their youth the sense

34

of personal responsibility and related values essential for them to

function in a free and civilized society. As such, it is an argument

well-grounded in the Tenth Amendment's reservation "to the States

respectively, or to the people" of those "powers not delegated to the

United States by the Constitution, nor prohibited by it to the States."

*****

In the end, this case is about the permissible reach of federal power

under the Spending Clause in a time when the several States have

become increasingly dependent upon the Federal Government for

funds, because the Federal Government has increasingly become

dependent upon the revenues from taxation it receives from the citi-

zens of the several States. In particular, it is about the extent to which

the Federal Government may, in our system of federalism, impose its

policy preferences upon the States by placing conditions upon the

return of revenues that were collected from the States' citizenry in the

first place. As Justice O'Connor aptly observed in Dole:

If the spending power is to be limited only by Congress'

notion of the general welfare, the reality, given the vast

financial resources of the Federal Government, is that the

Spending Clause gives "power to the Congress to tear down

barriers, to invade the states' jurisdiction, and to become a

parliament of the whole people, subject to no restrictions

save such as are self-imposed." [Butler, 297 U.S. at 78].

This, of course, as Butler held, was not the Framers' plan

and it is not the meaning of the Spending Clause.

483 U.S. at 217.

According to counsel for the Department of Education, requiring

the States to continue to provide educational services to handicapped

students expelled for reasons unrelated to their handicaps "make[s]

sense, as a matter of policy, in light of the broad purposes of the stat-

ute[,] . . . [and] allow[ing] individual school districts in their sole dis-

cretion to decide whether or not to deny services to this significant

number of children with disabilities . . . would . .. inflict lasting harm

on these children."

35

The Commonwealth of Virginia, for its part, steadfastly maintains

not only that the Department's policy is misguided, because it

deprives the State of its most effective disciplinary and instructional

tool for instilling in its especially recalcitrant students the sense of

responsibility they so sorely lack, but that it is, in any event, a policy

decision uniquely reserved to the States by the Constitution. And the

wisdom of the Commonwealth's policy is certainly borne out by the

testimony of the State's local educators and administrators. In testi-

mony that speaks volumes, Jane Timian, the Hearing and Legal Assis-

tant for the Fairfax County School Board responsible for overseeing

all student disciplinary matters, described as follows two illustrative

incidents that have recently taken place in the Commonwealth as a

consequence of the Education Department's policy:

In a recent case at one of FCPS' 23 high schools, six stu-

dents were part of a group of students whose actions

resulted in a loaded .357 magnum handgun being recovered

in the school building. The non-special education students

were expelled. One student, however, was identified as

"learning disabled" due to the student's weakness in written

language skills. An IEP team reviewed extensive evalua-

tions and unanimously found no causal relationship between

the student's writing disability and the student's involve-

ment in the weapons violation. The student was not

expelled. The student later bragged to teachers and students

at the school that he could not be expelled.

In another recent case at a different high school, a student

gang which had adopted a specific name was involved in a

mob assault of another student. One student involved in the

melee used a meat hook as a weapon. Three of the gang

members were expelled. The other two members of the gang

were special education students who have not been expelled

and who are still receiving services.

J.A. at 177. And confirming what anyone even remotely familiar with

public education today would have expected, Lucille Brown, Superin-

tendent of Richmond City Public Schools, testified that the "`home-

bound instruction' and `alternative education'[after expulsion]" that

has been required by the Federal Government's Department of Educa-

36

tion has "become just another `badge of honor' flaunted by students

who have bested the public schools again." Petitioner's Br. at 10.

In our federal system of government, such delicate policy deci-

sions, relating so intimately as they do to matters within the exclusive

prerogative of the States, are presumed to be those of the States alone.

If the Federal Government intends to expropriate these or other sover-

eign rights from the States, it must at least do so affirmatively and

unambiguously, so that its design is known and the States may mar-

shal their political will in opposition to that expropriation. Even then,

of course, the Federal Government must effectuate that expropriation

in a manner that is faithful to the limitations on Federal power that

inhere in the Tenth Amendment and in the principles of federalism

that undergird our entire democratic system of governance. Only

when the Government acts within these limitations can one have con-

fidence both that the United States has deliberately determined to sub-

ordinate the rights of the States to the interests of the Federal

Government and that it has done so consistently with the constitu-

tional limitations that even today constrain the Federal Government

as against the People.

In my view, certainly the first, and perhaps the second, of these

essential limitations on Federal power has been exceeded in the IDEA

provision, at least as it is interpreted by the court today. And with

these excesses has come, as always, yet a further incremental, but no

less significant, incursion into the sovereign authority of the several

States. As counsel for the Federal Government responded, after

reflecting for a moment on the court's question whether the Depart-

ment of Education was not simply saying to the States that it knows

better than they what is good for America's schoolchildren and then

imposing that view on the States: "Well your honor, in a sense, that's

what Congress is doing in this whole statute." Unwilling to acquiesce

in such a pretentious arrogation of state power, I dissent.

37