Pontiac School Dist v. Sec'y US Dept Ed

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 09a0366p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

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SCHOOL DISTRICT OF THE CITY OF PONTIAC,

Plaintiffs-Appellants, --

et al.,

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No. 05-2708

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v.

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SECRETARY OF THE UNITED STATES

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DEPARTMENT OF EDUCATION,

Defendant-Appellee. -

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Appeal from the United States District Court

for the Eastern District of Michigan at Detroit.

No. 05-71535—Bernard A. Friedman, District Judge.

Argued: December 10, 2008

Decided and Filed: October 16, 2009

Before: BATCHELDER, Chief Judge; MARTIN, BOGGS, DAUGHTREY, MOORE,

COLE, CLAY, GILMAN, GIBBONS, ROGERS, SUTTON, COOK, McKEAGUE,

GRIFFIN, KETHLEDGE, and WHITE, Circuit Judges.

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COUNSEL

ARGUED: Robert H. Chanin, BREDHOFF & KAISER, P.L.L.C., Washington, D.C., for

Appellants. Alisa B. Klein, UNITED STATES DEPARTMENT OF JUSTICE, Washington,

D.C., for Appellee. ON BRIEF: Robert H. Chanin, Jeremiah A. Collins, BREDHOFF &

KAISER, P.L.L.C., Washington, D.C., Dennis R. Pollard, THRUM LAW FIRM, P.C.,

Bloomfield Hills, Michigan, Alice Margaret O’Brien, CALIFORNIA TEACHERS

ASSOCIATION, Burlingame, California, Philip A. Hostak, OFFICE OF GENERAL

COUNSEL, NATIONAL EDUCATION ASSOCIATION, Washington, D.C., for

Appellants. Alisa B. Klein, Mark B. Stern, UNITED STATES DEPARTMENT OF

JUSTICE, Washington, D.C., for Appellee.

COLE, J., (pp. 2–36) delivered an opinion in favor of reversing the district court’s

judgment of dismissal, in which MARTIN, DAUGHTREY, MOORE, CLAY, GILMAN,

and WHITE, JJ., joined, and in which GIBBONS, J., joined in part. SUTTON, J., (pp.

37–67) delivered a separate opinion concurring in the order affirming the district court’s

judgment, in which BATCHELDER, C.J., BOGGS, COOK, and KETHLEDGE, JJ., joined,

and in which McKEAGUE, J., joined as to Part II only, with McKEAGUE, J., (pp. 68–88)

also delivering a separate opinion concurring in affirming dismissal, in which ROGERS and

1

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 2

of the United States Dep’t of Educ.

GRIFFIN, JJ., joined as to Part II only. GIBBONS, J., (pp. 89–93) delivered a separate

opinion in favor of reversing the judgment of the district court.

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OPINION

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COLE, Circuit Judge. The controversy presently before this Court is neither

particularly complicated nor inherently political. Understanding the precise question before

us means understanding what this case does not present—namely, this case does not ask us

to enter the political arena to judge the relative merits of the No Child Left Behind Act of

2001 (“NCLB” or “the Act”), 20 U.S.C. §§ 6301–7941. Also, this case has nothing to do

with the ongoing debate between the various advocates of state versus federal educational

funding. Rather, we need to answer only a straightforward question of statutory

interpretation: Whether, analyzed under the Spending Clause of the United States

Constitution, the obligations set forth in NCLB are unambiguous such that a state official

would clearly understand her responsibilities under the Act.

Plaintiffs-Appellants are school districts and education associations (collectively,

1

“Plaintiffs”) that receive federal funding under NCLB in exchange for complying with

the Act’s various educational requirements and accountability measures. Based on the

so-called “Unfunded Mandates Provision,” which provides that “[n]othing 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,” 20 U.S.C. § 7907(a), Plaintiffs filed suit

in district court against the Secretary of the United States Department of Education (the

1

Plaintiffs consist of nine school districts from three different States (Michigan, Texas, and

Vermont) and ten education associations from ten different States (Connecticut, Illinois, Indiana,

Michigan, New Hampshire, Ohio, Pennsylvania, Texas, Utah, and Vermont). The school districts are

Pontiac School District, Laredo Independent School District, Leicester Town School District, Neshobe

Elementary School District, Otter Valley Union High School, Pittsford Town School District, Rutland

Northeast Supervisory Union (which itself contains eleven school districts), Sudbury Town School District,

and Whiting Town School District (collectively, the “school district Plaintiffs”). The education

associations are the National Education Association (“NEA”) and ten NEA-affiliate education associations:

the Connecticut Education Association, the Illinois Education Association, the Michigan Education

Association, the Ohio Education Association, the Reading Education Association, the Utah Education

Association, the Indiana State Teachers Association, the Texas State Teachers Association, NEA-New

Hampshire, and the Vermont NEA (collectively, the “education association Plaintiffs”).

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 3

of the United States Dep’t of Educ.

“Secretary”) seeking a declaratory judgment that they need not comply with the Act’s

requirements where doing so would result in increased costs of compliance not covered

by federal funds. The district court concluded that Plaintiffs must comply with the Act’s

requirements regardless of any federal-funding shortfall and, accordingly, granted the

Secretary’s motion to dismiss the complaint for failure to state a claim upon which relief

can be granted.

I. BACKGROUND

A. The No Child Left Behind Act

On January 8, 2002, then-President George W. Bush signed NCLB into law. The

Act—“a comprehensive educational reform”—amended the Elementary and Secondary

Education Act of 1965 (“ESEA”), Pub. L. No. 89-10, 79 Stat. 27 (codified as amended

at 20 U.S.C. §§ 6301–7941 (2003)). See Connecticut v. Spellings, 453 F. Supp. 2d 459,

468 (D. Conn. 2006). The ESEA targeted funding to students in low-income schools,

and its purposes included overcoming “any effects of past racial discrimination.”

George v. O’Kelly, 448 F.2d 148, 151 (5th Cir. 1971); accord Barrera v. Wheeler, 475

F.2d 1338, 1340 (8th Cir. 1973); United States v. Jefferson County Bd. of Educ., 372

F.2d 836, 851 (5th Cir. 1966). The ESEA was periodically reauthorized and amended

over the next few decades.

In contrast to prior ESEA iterations, NCLB “provides increased flexibility of

funds, accountability for student achievement and more options for parents.” 147 Cong.

Rec. S13365, 13366 (2001) (statement of Sen. Bunning). The Act focuses federal

funding more narrowly on the poorest students and demands accountability from

schools, with serious consequences for schools that fail to meet academic-achievement

requirements. Id. at 13366, 13372 (statements of Sens. Bunning, Landrieu, and

Kennedy). States may choose not to participate in NCLB and forgo the federal funds

available under the Act, but if they do accept such funds, they must comply with NCLB

requirements. See, e.g., 20 U.S.C. § 6311 (“For any State desiring to receive a grant

under this part, the State educational agency shall submit to the Secretary a plan . . . .”)

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 4

of the United States Dep’t of Educ.

(emphasis added); see also Spellings, 453 F. Supp. 2d at 469 (“In return for federal

educational funds under the Act, Congress imposed on states a comprehensive regime

of educational assessments and accountability measures.”). In addition, with enumerated

exceptions, under NCLB “the Secretary may waive any statutory or regulatory

requirement . . . for a State educational agency, local educational agency, Indian tribe,

or school through a local educational agency, that . . . receives funds under a program

authorized by this Act.” 20 U.S.C. § 7861(a).

Title I, Part A, of NCLB, titled “Improving Basic Programs Operated by Local

Educational Agencies,” continues to pursue the objectives of the ESEA and imposes

extensive educational requirements on participating States and school districts, and,

likewise, provides the largest amount of federal appropriations to participating States.

For example, in fiscal year 2006, NCLB authorized $22.75 billion in appropriations for

Title I, Part A, compared to $14.1 billion for the remaining twenty-six parts of NCLB

combined. Title I, Part A’s stated purposes include meeting “the educational needs of

low-achieving children in our Nation’s highest-poverty schools, limited English

proficient children, migratory children, children with disabilities, Indian children,

neglected or delinquent children, and young children in need of reading assistance.” 20

U.S.C. § 6301(2).

In addition to Title I, Part A, NCLB establishes numerous other programs,

including a literacy initiative for young children and poor families (Title I, Part B),

special services for the education of children of migrant workers (Title I, Part C),

requirements that all teachers be “highly qualified” (Title II, Part A), and instruction in

English for children with limited English ability (Title III). Plaintiffs’ complaint focuses

on the educational requirements and funding provisions of Title I, Part A.

To qualify for federal funding under Title I, Part A, States must first submit to

the Secretary a “State plan,” developed by the State’s department of education in

consultation with school districts, parents, teachers, and other administrators. 20 U.S.C.

§ 6311(a)(1). A State plan must “demonstrate that the State has adopted challenging

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 5

of the United States Dep’t of Educ.

academic content standards and challenging student academic achievement standards”

against which to measure the academic achievement of the State’s students. Id.

§ 6311(b)(1)(A). The standards in the State plan must be uniformly applicable to

students in all of the State’s public schools, and must cover at least reading or language

arts; math; and, by the fourth grade, science skills. Id. § 6311(b)(1)(C).

States also must develop, and school districts must administer, assessments to

determine students’ levels of achievement under plan standards. Id. § 6311(b)(2)(A).

These assessments must show the percentage of students achieving “proficiency” among

“economically disadvantaged students,” “students from major racial and ethnic groups,”

“students with disabilities,” and “students with limited English proficiency.” Id.

§ 6311(b)(2)(C)(v)(II). Schools and districts are responsible for making “adequate

yearly progress” (“AYP”) on these assessments, meaning that a minimum percentage of

students, both overall and in each subgroup, must attain proficiency. 34 C.F.R.

§ 200.20(a)(1).

A school’s failure to achieve AYP triggers other requirements of Title I, Part A.

See 20 U.S.C. § 6316(b). If a school fails to make AYP for two consecutive years, it

must be identified by the local educational agency for school improvement. 20 U.S.C.

§ 6316(b)(1)(A). Among other things, a school in improvement status must inform all

of its students, including those who have been assessed as proficient, that they are

permitted to transfer to any school within the district that has not been identified for

school improvement. Id. § 6316(b)(1)(E)(i). The school also must develop a two-year

plan setting forth extensive measures to improve student performance, including further

education for teachers and possible before- or after-school instruction or summer

instruction. Id. §§ 6316(b)(3)(A)(iii), (ix).

If a school does not achieve AYP after two years of improvement status, it is

“identif[ied] . . . for corrective action.” Id. § 6316(b)(7)(C)(iv). Corrective action

involves significant changes, such as replacing teachers who are “relevant to the failure

to make [AYP],” or instituting an entirely new curriculum. Id. § 6316(b)(7)(C)(iv)(I).

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 6

of the United States Dep’t of Educ.

If, after a year of corrective action, a school still has not reached AYP, the district must

restructure the school entirely; options for restructuring include “[r]eopening the school

as a public charter school,” replacing the majority of the staff, or allowing the State’s

department of education to run the school directly. Id. § 6316(b)(8)(B)(i).

The issue of who must pay to implement these requirements is the heart of this

case. NCLB requires that States use federal funds made available under the Act “only

to supplement the funds that would, in the absence of such Federal funds, be made

available from non-Federal sources for the education of pupils participating in programs

assisted under this part, and not to supplant such funds.” 20 U.S.C. § 6321(b)(1). That

is, States and school districts remain responsible for the majority of the funding for

public education, and the funds distributed under Title I are to be used only to implement

Title I programming, not to replace funds already being used for general programming.2

While Plaintiffs recognize that the majority of funding for education continues

to come from state and local sources, they contend that NCLB does not require them to

spend the money drawn from state and local sources on the additional programs required

by NCLB. They point to § 7907(a), entitled “Prohibitions on Federal government and

use of Federal funds,” often referred to as the “Unfunded Mandates Provision,” which

provides that “[n]othing 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.

20 U.S.C. § 7907(a) (emphasis added). Plaintiffs argue that this section specifically

exempts them from complying with NCLB’s requirements where federal funding does

not cover the additional costs of complying with those requirements. They further note

that former Secretary of Education Rod Paige has explained that “[t]here is language in

the bill that prohibits requiring anything that is not paid for.” (Pls.’ Compl. for

Declaratory and Injunctive Relief (“Compl.”) 12; Joint Appendix (“JA”) 21 (quoting

Paige statement of Dec. 2, 2003).)

2

Plaintiffs do not argue that the funds distributed by NCLB are a substitute for those funds that

have historically come from state and local sources. Instead, Plaintiffs argue only that they should not be

required to incur additional funding obligations to comply with NCLB when those obligations would not

be incurred absent the State’s attempt at NCLB compliance.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 7

of the United States Dep’t of Educ.

B. Procedural history

Plaintiffs brought suit in the United States District Court for the Eastern District

of Michigan seeking a declaratory judgment that NCLB does not require school districts

to comply with the Act’s educational requirements if doing so would require the

expenditure of state and local funds to cover the additional costs of compliance. In the

alternative, the complaint alleged that the Act is ambiguous as to whether school districts

are required to spend their own funds, and that imposing such a requirement would

violate the Spending Clause.

Plaintiffs alleged that in the years following the enactment of NCLB, Congress

has not provided States and school districts with sufficient federal funds to comply fully

with the Act. For example, for the five years from fiscal year 2002 to fiscal year 2006,

Congress appropriated $30.8 billion dollars less for Title I grants to school districts than

it authorized in NCLB. (JA 27.) Plaintiffs sought a declaratory judgment stating that

“states and school districts are not required to spend non-NCLB funds to comply with

the NCLB mandates, and that a failure to comply with the NCLB mandates for this

reason does not provide a basis for withholding any federal funds to which they

otherwise are entitled under the NCLB.” (JA 67.) Plaintiffs also sought an injunction

prohibiting the Secretary from “withholding from states and school districts any federal

funds to which they are entitled under the NCLB because of a failure to comply with the

mandates of the NCLB that is attributable to a refusal to spend non-NCLB funds to

achieve such compliance.” (Id.)

The district court dismissed the complaint for failure to state a claim. The court

focused on the first part of § 7907(a), which, for clarity, we restate in full below:

General prohibition. Nothing in this Act shall be construed to authorize

an officer or employee of the Federal Government to mandate, direct, or

control a State, local educational agency, or school’s curriculum,

program of instruction, or allocation of State or local resources, or

mandate a State or any subdivision thereof to spend any funds or incur

any costs not paid for under this Act.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 8

of the United States Dep’t of Educ.

20 U.S.C. § 7907(a) (emphasis added). The court concluded that “[b]y including the

words ‘an officer or employee of,’ Congress clearly meant [merely] to prohibit federal

officers and employees from imposing additional, unfunded requirements, beyond those

provided for in the statute.” Sch. Dist. of Pontiac v. Spellings, No. 05-CV-71535, 2005

U.S. Dist. LEXIS 29253, at *12 (E.D. Mich. Nov. 23, 2005). “This does not mean,” the

court explained, “that Congress could not [require States or school districts to spend any

funds or incur any costs not paid for under this Act], which it obviously has done by

passing the NCLB Act.” Id. at *11. In other words, the district court read § 7907(a)

merely to prohibit federal officers and employees from imposing requirements that were

not authorized by the Act on States and school districts, and rejected Plaintiffs’ argument

that § 7907(a) excuses compliance with requirements of the Act that impose additional

costs on the States not funded by the federal government.

Plaintiffs appealed. In a divided, published opinion, the panel below reversed

the judgment of the district court. Pontiac Sch. Dist. v. Sec’y of U.S. Dep’t of Educ., 512

F.3d 252, 254 (6th Cir. 2008) (vacated). That decision found that Plaintiffs had standing

to bring suit and that NCLB failed to provide clear notice to States as required by the

Spending Clause. Id. at 259, 261. The panel majority concluded that based on the text

of § 7907(a), NCLB failed to provide clear notice because a state official could plausibly

conclude that the State need not comply with those NCLB requirements that were not

covered by federal funding. Id. at 269.

On May 1, 2008, a majority of judges of this Court voted to rehear the case en

banc, vacating the panel’s opinion and restoring this case to the docket as a pending

appeal.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 9

of the United States Dep’t of Educ.

II. DISCUSSION

A. Justiciability

A threshold question is whether this case is properly before us. As we have

previously explained, “[a] claim is not ‘amenable to . . . the judicial process,’ Steel Co.

v. Citizens for a Better Env’t, 523 U.S. 83, 102 [] (1998), when it is filed too early

(making it unripe), when it is filed too late (making it moot) or when the claimant lacks

a sufficiently concrete and redressable interest in the dispute (depriving the plaintiff of

standing).” Warshak v. United States, 532 F.3d 521, 525 (6th Cir. 2008) (en banc). This

controversy implicates two of these doctrines—standing and ripeness.

1. Standing

First, we must decide whether Plaintiffs have standing to challenge NCLB under

the Spending Clause. We review the question of standing de novo. Sandusky County

Democratic Party v. Blackwell, 387 F.3d 565, 573 (6th Cir. 2004). Plaintiffs, as the

parties now asserting federal jurisdiction, have the burden of establishing standing.

DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.3 (2006). To satisfy the

constitutional requirement of standing,

a plaintiff must show (1) it has suffered an “injury in fact” that is

(a) concrete and particularized and (b) actual or imminent, not

conjectural or hypothetical; (2) the injury is fairly traceable to the

challenged action of the defendant; and (3) it is likely, as opposed to

merely speculative, that the injury will be redressed by a favorable

decision.

Friends of the Earth, Inc. v. Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180–81 (2000)

(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)). The injury

suffered must be “an invasion of a legally protected interest.” United States v. Hays, 515

U.S. 737, 743 (1995). This tripartite standing requirement applies to claims under

NCLB. See Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152, 1157 (D.C. Cir.

2005) (citing Lujan, 504 U.S. at 560–61).

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 10

of the United States Dep’t of Educ.

Here, because the district court dismissed the complaint at the pleading stage, the

assessment of standing is confined to the allegations in the complaint. “At the pleading

stage, general factual allegations of injury resulting from the defendant’s conduct may

suffice”; more is required to defeat a motion for summary judgment, and even more is

required for a decision on the merits. Lujan, 504 U.S. at 561.

We conclude that the school district Plaintiffs meet the three requirements for

standing based on their allegation that they must spend state and local funds to pay for

NCLB compliance. Since at least one Plaintiff in this action has standing, there is no

need to consider whether the education association Plaintiffs also have standing. See

Clinton v. City of N.Y., 524 U.S. 417, 431 n.19 (1998); Bowsher v. Synar, 478 U.S. 714,

721 (1986). Additionally, we need not address whether the school district

Plaintiffs’other alleged injuries are sufficient to establish standing. See Nuclear Energy

Inst., Inc. v. EPA, 373 F.3d 1251, 1266 (D.C. Cir. 2004) (finding standing where,

although one alleged injury might not occur “for thousands of years,” another injury

allegedly would occur very soon).

a. Injury in fact

School district Plaintiffs allege that they must spend state and local funds to pay

for NCLB compliance:

Because of the multi-billion dollar national funding shortfalls of NCLB,

and the insistence by [the Secretary] that . . . school districts comply fully

with all of the NCLB mandates imposed upon them even if NCLB funds

that they receive are insufficient to pay for such compliance, . . . school

districts have had and will have to spend a substantial amount of non-

NCLB funds to comply with those mandates, diverting those funds from

other important educational programs and priorities, such as programs for

gifted and talented students, courses in foreign languages, art, music,

computers, and other non-NCLB subjects, class size reduction efforts,

and extracurricular activities.

(JA 61–62.) They also allege that if they do not comply with all NCLB requirements,

the districts “face the withholding [by the Secretary] of federal funds to which they

otherwise are entitled under the NCLB.” (JA 65.) Additionally, the school district

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 11

of the United States Dep’t of Educ.

Plaintiffs claim that inadequate federal funding has caused low rates of student

proficiency on standardized tests.

The Secretary consistently has maintained that the school district Plaintiffs must

comply with NCLB requirements even if they must spend non-federal funds to do so.

School district Plaintiffs allege that the Secretary’s insistence that school districts

comply fully with NCLB has already forced them to spend state and local funds on

NCLB requirements and will continue to require such expenditures in the future.

Because this injury already has occurred and is ongoing, it is concrete and actual.

Moreover, the alleged ongoing need of school district Plaintiffs to spend non-

federal funds to comply with NCLB requirements is not dependent on the hypothetical

actions of “decisions made by the appropriate [state] authorities, who are not parties to

this case.” Warth v. Seldin, 422 U.S. 490, 509 (1975) (holding that city of Rochester

taxpayers could not sue the town of Penfield on the theory that Penfield’s zoning

practices would increase Rochester taxes, because Rochester was not a party). That is,

under NCLB, States do not have the discretion to decide that, in the event of a federal-

funding shortfall, some districts will continue to receive their previous level of funding

and others will not. Instead, under NCLB, state departments of education “shall”

allocate federal NCLB funds to counties or school districts based on formulas provided

in NCLB and approved by the Secretary. 20 U.S.C. § 6333(a)(3)(C). Thus, the “injury

in this case . . . does not turn on the independent actions of third parties,” but on NCLB’s

funding requirements, which dictate the quantum of funding provided to each school

district. Clinton, 524 U.S. at 431 n.19. To the extent the funding received by the school

district Plaintiffs under NCLB is insufficient to defray the cost of compliance with

NCLB requirements, the districts have sustained a cognizable injury in fact.

b. Traceability

School district Plaintiffs’ obligation to spend non-federal funds to comply with

NCLB is traceable to the challenged action of the Secretary. The Secretary has

interpreted NCLB to mean that “‘[i]f a state decides to accept the federal funds [offered

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 12

of the United States Dep’t of Educ.

under the NCLB], then it’s required to implement the law in its entirety.’” (Compl. 12;

JA 21 (quoting Rodney Paige, Sec’y, U.S. Dep’t of Educ., Remarks to National Urban

League (Mar. 25, 2004)) (alterations in original).) And, the Secretary has not granted

waivers of NCLB educational requirements based on the insufficiency of federal

funding.3 Therefore, school district Plaintiffs alleged that the spending of non-federal

funds to comply with NCLB requirements is directly traceable to the Secretary’s

interpretation of NCLB.

c. Redressability

Finally, school district Plaintiffs’ injury must be redressable by a favorable

decision. Among other relief, Plaintiffs seek a declaratory judgment that “school

districts are not required to spend non-NCLB funds to comply with the NCLB

mandates.” (JA 67.) Such a judgment would forbid the Secretary from requiring the

expenditure of non-federal funds on NCLB compliance. This would redress the injury

alleged by Plaintiffs.

2. Ripeness

Next, we must decide whether Plaintiffs’ challenge to NCLB is ripe for judicial

review. This Court reviews questions of ripeness de novo. Ammex, Inc. v. Cox, 351

F.3d 697, 706 (6th Cir. 2003). “In ascertaining whether a claim is ripe for judicial

resolution, we ask two basic questions: (1) is the claim ‘fit[] . . . for judicial decision’ in

the sense that it arises in a concrete factual context and concerns a dispute that is likely

to come to pass? and (2) what is ‘the hardship to the parties of withholding court

consideration’?” Warshak, 532 F.3d at 525 (quoting Abbott Labs. v. Gardner, 387 U.S.

136, 149 (1967)) (alternations in original).

3

Plaintiffs allege that “it would be futile for the plaintiff school districts to ask” for a waiver

because of the Secretary’s uniform rejection of requests for waivers. (JA 22–23.) The Secretary does not

dispute that a request would be futile. Moreover, even if the Secretary granted waivers for the Plaintiffs

here, it would not change this Court’s Spending Clause analysis, nor would it protect other school districts

that may not be granted waivers in the future.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 13

of the United States Dep’t of Educ.

This case is ripe for judicial review. In discussing ripeness, this Court aptly has

provided both that “the basic rationale of the ripeness doctrine ‘is to prevent the courts,

through premature adjudication, from entangling themselves in abstract disagreements,’”

Nat’l Rifle Ass’n of Am. v. Magaw, 132 F.3d 272, 284 (6th Cir. 1997) (quoting Thomas

v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580 (1985)), and that “[r]ipeness

becomes an issue when a case is anchored in future events that may not occur as

anticipated, or at all.” Id. (citations omitted). These concerns are not present here. The

question before this Court is neither abstract nor hypothetical. Plaintiffs present a

straightforward, concrete question of statutory interpretation, the answer to which is not

dependent on further development of facts or further administrative action. See

Warshak, 532 F.3d at 528 (explaining that legal questions that are answered “differently

in different settings” lack fitness for review). In short, unless we decide this matter,

school district Plaintiffs will be forced to continue expending limited state resources to

comply with NCLB.

a. Fitness

There is no doubt that Congress has not fully funded the cost of complying with

NCLB, and school district Plaintiffs assert that they are forced to spend non-federal

monies to comply with NCLB—meaning this dispute over school funding is

unquestionably “likely to come to pass.” Plaintiffs assert that they already have suffered

injury in the expenditure of non-refundable, non-federal dollars in pursuit of compliance

with the NCLB. Thus, we need not concern ourselves with the hypothetical, as Plaintiffs

are prepared to establish actual ongoing harm.

Similarly, Plaintiffs have demonstrated that their claims arise in a concrete

factual context. Simply, we are asked whether under the plain language of NCLB, when

the Act is considered in parallel with the Spending Clause, the Secretary may require

States to expend non-federal monies. We are not being asked to invalidate the law or

to apply NCLB to any particular set of factual circumstances in which we would benefit

from further administrative developments. We must decide only—through traditional

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 14

of the United States Dep’t of Educ.

techniques of statutory interpretation—whether NCLB complies with the clear-notice

requirements of the Spending Clause.

b. Hardship

This dispute falls within the traditional conception of a “hardship” case—namely,

a “claimant who faces a choice between immediately complying with a burdensome law

or ‘risk[ing] serious criminal and civil penalties.’” Warshak, 532 F.3d at 531 (quoting

Abbott Labs., 387 U.S. at 149) (alterations in original).

We see no reason to depart from the jurisprudence that “where a regulation

requires an immediate and significant change in the plaintiffs’ conduct of their affairs

with serious penalties attached to noncompliance, hardship has been demonstrated.”

Suitum v. Tahoe Reg’l Planning Agency, 520 U.S. 725, 743–44 (1997) (internal

quotation marks omitted). Here, school district Plaintiffs must decide between drastic

budget reallocation to comply with NCLB and serious statutory consequences, including

teacher replacement, school restructuring, school closure and reopening as a charter

school, or having schools run by the State’s department of education. See 20 U.S.C.

§§ 6316(b)(7)(C)(iv), (b)(8)(B).

B. Federal Rule of Civil Procedure 19

My colleague Judge McKeague argues that this case must be dismissed under

Federal Rule of Civil Procedure 19 because absent parties are necessary to this litigation.

McKeague Op. 73–86. Specifically, Judge McKeague contends that the States of

Michigan, Texas, and Vermont are required parties to this litigation incapable of joinder

and that any relief granted in their absence would be incomplete. McKeague Op. 76–80.

However, this reasoning is not supported by the text of Rule 19 or the relevant case law.

Moreover, such a broad interpretation of Rule 19 could have the undesirable effect of

foreclosing a vast category of legitimate challenges to federal laws.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 15

of the United States Dep’t of Educ.

1. The text of Rule 19

Under Federal Rule of Civil Procedure 19, “whether a party is indispensable for

a just adjudication requires a determination regarding whether the absent party is

necessary to the litigation; if so, whether the absent party can be joined in the litigation;

and if joinder is infeasible, whether the lawsuit can nevertheless proceed ‘in equity and

good conscience.’” Kickapoo Tribe v. Babbitt, 43 F.3d 1491, 1494 (D.C. Cir. 1995)

(quoting former Fed. R. Civ. P. 19 and citing W. Md. Ry. Co. v. Harbor Ins. Co., 910

F.2d 960, 961 (D.C. Cir. 1990)). An absent party is required for a litigation if:

(A) in [the party’s] absence, the court cannot accord complete relief

among existing parties; or

(B) that [party] claims an interest relating to the subject of the action and

is so situated that disposing of the action in the [party’s] absence may:

(i) as a practical matter impair or impede the [party’s] ability to

protect the interest; or

(ii) leave an existing party subject to a substantial risk of

incurring double, multiple, or otherwise inconsistent obligations

because of the interest.

Fed. R. Civ. P. 19(a)(1). If an absent required party cannot be joined in the lawsuit, Rule

19 provides that:

the court must determine whether, in equity and good conscience, the

action should proceed among the existing parties or should be dismissed.

The factors for the court to consider include:

(1) the extent to which a judgment rendered in the [party’s]

absence might prejudice that [party] or the existing parties;

(2) the extent to which any prejudice could be lessened or

avoided by:

(A) protective provisions in the judgment;

(B) shaping the relief; or

(C) other measures;

(3) whether a judgment rendered in the [party’s] absence would

be adequate; and

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 16

of the United States Dep’t of Educ.

(4) whether the plaintiff would have an adequate remedy if the

action were dismissed for nonjoinder.

Fed. R. Civ. P. 19(b). Our analysis involves two steps: first, we must examine whether

the States of Michigan, Texas, and Vermont (the “States”) are required parties; second,

we must determine whether, in their absence, equity and good conscience require the

case to be dismissed. If the answer to either question is no, then Rule 19 does not

foreclose this litigation.

Under Rule 19(a), we first determine whether this Court can “accord complete

relief among existing parties” in the States’ absence. Fed. R. Civ. P. 19(a)(1)(A).

“Completeness is determined on the basis of those persons who are already parties, and

not as between a party and the absent person whose joinder is sought.” Angst v. Royal

Maccabees Life Ins. Co., 77 F.3d 701, 705 (3d Cir. 1996) (citing Sindia Expedition, Inc.

v. Wrecked & Abandoned Vessel, 895 F.2d 116, 121 (3d Cir. 1990) and quoting 3A

Moore’s Federal Practice 19.07-11 at 93–98 (2d ed. 1989) (internal quotations omitted

in original)); see also United States v. County of Arlington, 669 F.2d 925, 929 (4th Cir.

1982); Eldredge v. Carpenters 46 N. Cal. Counties Joint Apprenticeship & Training

Comm., 662 F.2d 534, 537 (9th Cir. 1981). Here, neither Plaintiffs nor the Secretary

would receive incomplete relief without the States as parties. As will be discussed in

detail below, the issue arising between Plaintiffs and the Secretary is whether NCLB

provides the clear notice required under the Spending Clause. If NCLB fails to provide

clear notice, this Court may uphold the Plaintiffs’ interpretation of § 7907(a), thus

preventing the forced expenditure of non-NCLB funds. If NCLB provides clear notice,

this Court may uphold the Secretary’s interpretation. Such declaratory relief for either

side is complete relief and does not require joinder of the States.

While it is true that both statewide plans and district plans may need to be

amended following the disposition of this case, NCLB itself contemplates periodic

review of these plans and the submission of revisions to the Secretary as necessary. See

20 U.S.C. § 6311(a), (f). Such administrative actions have no bearing on the

completeness of the requested declaratory relief. Moreover, even if some future

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of the United States Dep’t of Educ.

litigation were likely between Plaintiffs or the Secretary and the States, the “possibility

that the successful party to the original litigation would have to defend its rights in a

subsequent suit by the [absent party] does not make it a necessary party to the action.”

Angst, 77 F.3d at 705 (citing Sindia, 895 F.2d at 122); see also MasterCard Int’l, Inc.

v. Visa Int’l Serv. Ass’n, Inc., 471 F.3d 377, 385 (2d Cir. 2006) (“While there is no

question that further litigation [involving an absent party] is inevitable if MasterCard

prevails in this lawsuit, Rule 19(a)(1) is concerned only with those who are already

parties.”); LLC Corp. v. Pension Benefit Guar. Corp., 703 F.2d 301, 305 (8th Cir. 1983)

(determining that Rule 19(a)(1)(A) applies to current parties, “not [to] the speculative

possibility of further litigation between a party and an absent person”). “Rule 19 calls

for a pragmatic approach; simply because some forms of relief might not be available

due to the absence of certain parties, the entire suit should not be dismissed if

meaningful relief can still be accorded.” Smith v. United Bhd. of Carpenters & Joiners

of Am., 685 F.2d 164, 166 (6th Cir. 1982); see also Bank of Am. Nat’l Trust & Sav. Ass’n

v. Hotel Rittenhouse Assocs., 844 F.2d 1050, 1054 n.5 (3d Cir. 1988) (“We observe that

the advisory committee note to Rule 19(a) indicates that the question of ‘complete relief’

may not denote final adjudications of all claims between the parties, so long as the relief

actually afforded to the parties in the action is meaningful.”). Regardless of the presence

or absence of Michigan, Texas, or Vermont in this case, the declaratory relief this Court

can provide is meaningful and complete, and we thus conclude that the States are not

required parties under 19(a)(1)(A).

Notwithstanding this determination, the States still may be required under Rule

19(a)(1)(B). Rule 19(a)(1)(B)(i) exists to protect absentee parties, asking the Court to

consider whether disposing of the matter in the parties’ absence would “impair or

impede the [parties’] ability to protect the interest.” Fed. R. Civ. P. 19(a)(1)(B)(i). We

find that resolving this dispute does not impair or impede such an interest. First, the

States do not have an obvious interest in this dispute that requires protection. In general,

under NCLB, the States act as intermediaries through which federal funds flow to local

schools to fund NCLB initiatives. Accordingly, the States’ interests do not readily align

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 18

of the United States Dep’t of Educ.

with either the Plaintiffs’ or the Secretary’s interpretation of NCLB in this Spending

Clause dispute. Because no party has articulated an interest unique to the States and

because we are disinclined to speculate as to the existence of such interests, there simply

is no basis on which to find that the States possess an interest requiring its participation.

Second, even if the States have a particular interest in this dispute, they had the

opportunity to intervene to protect that interest but declined to participate. Had

Michigan, Texas, or Vermont sought intervention, there is little doubt that this Court

would have allowed each State to join as an intervenor. See Jansen v. City of Cincinnati,

904 F.2d 336, 342 (6th Cir. 1990) (“We join other circuits in holding that the possibility

of adverse stare decisis effects provides intervenors with sufficient interest to join an

action.”). Moreover, the States could have provided the Court with arguments as to their

interests without jeopardizing sovereign immunity by appearing as amici curiae.

However, it would turn Rule 19 analysis on its head to argue that the States’ interests are

now impaired because they declined to participate in this much-publicized case.4

Last, we believe that the States’ interests, if they have any, are adequately

represented by the existing parties. See Republic of the Philippines v. Pimentel, 128 S.

Ct. 2180, 2189 (2008) (stating that parties “are required entities because [w]ithout them

. . . their interests in the subject matter are not protected”) (alterations in original); see

also Ohio Valley Envtl. Coal. v. Bulen, 429 F.3d 493, 504–05 (4th Cir. 2005)

(determining that absentees were not necessary parties when their interests were

identical to those of existing parties who were capable of adequately representing the

absentees’ interests); Washington v. Daley, 173 F.3d 1158, 1167–68 (9th Cir. 1999)

(concluding, in a challenge to fishing regulations, that the United States adequately

represented tribes who were, therefore, not necessary parties); see also Rochester

Methodist Hosp. v. Travelers Ins. Co., 728 F.2d 1006, 1016 (8th Cir. 1984) (reasoning

that the Department of Health & Human Services (“HHS”) was not a necessary party

4

In fact, several States did participate in this lawsuit as amici curiae. See Amici Curiae Br. of

the States of Connecticut, Delaware, Illinois, Maine, Oklahoma, Wisconsin, and the District of Columbia

(filed Apr. 3, 2006); Amicus Curiae Br. of the Governor of the Commonwealth of Pennsylvania (filed Apr.

6, 2006).

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of the United States Dep’t of Educ.

under Fed. R. Civ. P. 19(a)(1)(B)(i) because its interests were adequately protected by

the United States Attorney who would make “every argument that HHS would or could

make”). For these reasons, the States are not required parties under Rule 19(a)(1)(B)(i).

Finally, in examining if the States are required parties under the text of Rule 19,

we must consider whether disposing of this action without the States would “leave an

existing party subject to a substantial risk of incurring double, multiple, or otherwise

inconsistent obligations because of the interest.” Here, no such risk exists. In fact, the

opposite is true. Judicial economy is served, and the threat of inconsistent obligations

is reduced, by deciding the present controversy because the existing parties as well as

absent parties then will be aware of their rights and responsibilities under NCLB. Thus,

under Rule 19(a)(1)(B)(ii), we conclude that the States are not required parties.

2. Relevant Rule 19 case law

There is little precedent supporting the broad reading of Rule 19 urged by my

colleague. In the closest case, Kickapoo Tribe, the D.C. Circuit concluded that Kansas

was an indispensable party under Rule 19 and remanded to the district court with

instructions to dismiss the case. 43 F.3d at 1500. The lawsuit filed by the Kickapoo

Tribe against the Secretary of the Interior sought to invalidate a compact approved by

the Secretary under the Indian Gaming Regulatory Act (“Gaming Act”). Id. at 1493–94.

However, that case presented an entirely different challenge from the one at hand.

Rather than challenging the federal Gaming Act, the Kickapoo Indians challenged a

compact made between the Kickapoo Indians and the State of Kansas, and the case

involved a question of the Kansas Governor’s authority under Kansas law to sign the

compact. Id. at 1494. There, it was clear that Kansas had an interest both in the compact

and in the Governor’s authority under Kansas law. Here, the States possess no similar

interest in the interpretation of NCLB, nor is there any challenge to the States’ authority

to administer their educational programs under state law. With Kickapoo Tribe

distinguished, there is no support for extending Rule 19 to the case before us. In fact,

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 20

of the United States Dep’t of Educ.

we are unable to find a single case in which a court of appeals has dismissed a challenge

to the interpretation of a federal statute because a relevant State could not be joined.

On the other hand, many federal laws requiring state administration and

implementation have been challenged without participation by the relevant States. For

example, the recent Supreme Court cases of Forest Grove School District v. T.A., No.

08-305, 2009 U.S. LEXIS 4645 (June 22, 2009), Winkelman v. Parma City School

District, 550 U.S. 516 (2007), and Arlington Central School District Board of Education

v. Murphy, 548 U.S. 291 (2006), all involved challenges similar to this case (albeit to the

Individuals with Disabilities Education Act (“IDEA”)), in which, as Judge McKeague

acknowledged, the Court “issued holdings that were not only binding on the parties, but

also, for all practical purposes, binding as precedent on the respective States” yet none

of those cases was dismissed under Rule 19. McKeague Op. 84. Similarly, the Supreme

Court has decided environmental cases involving challenges to the interpretation of

federal statutes administered, in part, by the States without requiring state participation.

See, e.g., Envtl. Def. v. Duke Energy Corp., 549 U.S. 561 (2007) (interpreting the federal

Clean Air Act without North Carolina’s participation); S. Fla. Water Mgmt. Dist. v.

Miccosukee Tribe of Indians, 541 U.S. 95 (2004) (interpreting the federal Clean Water

Act without Florida’s participation). Thus, under Rule 19, a State’s participation is not

required simply because the case’s outcome might affect the State.

3. Policy

To hold that Rule 19 requires the States’ joinder in this case would greatly

expand the class of required or necessary parties under the Rule. Making the States

required parties in this litigation and ultimately dismissing this action would have the

undesirable effect of foreclosing a vast category of challenges to federal laws—namely,

any challenge to a federal statute where a State plays a role in the administration of the

statute and possesses an interest in its administration, but chooses not to join the lawsuit.

Under my colleague’s reasoning, all pending and future NCLB and IDEA challenges in

this Circuit would be foreclosed. Such an interpretation would also provide strong

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 21

of the United States Dep’t of Educ.

precedent for the dismissal of pending and future challenges regarding environmental,

transportation, and other Spending-Clause suits, if the relevant States choose not to

participate. This cannot be the intended purpose or effect of Rule 19.

While the States may have an interest in the outcome of this case, that is not

enough. To be considered required parties, Michigan, Texas, and Vermont must fall

within either of Rule 19’s two categories. They do not. The States are simply not

required parties under Rule 19, and their joinder is unnecessary for the continuation of

this lawsuit.

C. The clear-notice requirement under the Spending Clause

Under the Spending Clause, “Congress has broad power to set the terms on

which it disburses federal money to the States.” Arlington, 548 U.S. at 296 (citing South

Dakota v. Dole, 483 U.S. 203, 206–07 (1987)). “[B]ut when Congress attaches

conditions to a State’s acceptance of federal funds, the conditions must be set out

‘unambiguously.’” Id. (citing Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1,

17 (1981) and Bd. of Educ. v. Rowley, 458 U.S. 176, 204 n.26 (1982)). Legislation

enacted under “‘the spending power is much in the nature of a contract,’ and therefore,

to be bound by ‘federally imposed conditions,’ recipients of federal funds must accept

them ‘voluntarily and knowingly.’” Id. (quoting Pennhurst, 451 U.S. at 17). “States

cannot knowingly accept conditions of which they are ‘unaware’ or which they are

‘unable to ascertain.’” Id. (quoting Pennhurst, 451 U.S. at 17). “By insisting that

Congress speak with a clear voice,” the Supreme Court enables States “to exercise their

choice knowingly, cognizant of the consequences of their participation.” Pennhurst, 451

U.S. at 17. Moreover, “in those instances where Congress has intended the States to

fund certain entitlements as a condition of receiving federal funds, it has proved capable

of saying so explicitly.” Id. at 17–18.

In Pennhurst, the Supreme Court applied these principles to conclude that States

participating in the Developmentally Disabled Assistance and Bill of Rights Act of 1975

(“DDA”), 42 U.S.C. §§ 6000–81, were not required to assume the costs of providing

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 22

of the United States Dep’t of Educ.

certain treatment and services to mentally disabled citizens. 451 U.S. at 5. The DDA

provided financial assistance to participating States to aid them in creating programs to

care for and treat the mentally disabled. Id. at 11. The DDA also included a variety of

requirements for the receipt of federal funds, such that the States submit a plan to the

Secretary of the Department of Health and Human Services to evaluate the services

provided under the DDA. Id. at 12. At the heart of the case was the DDA’s “bill of

rights” provision, which provided that mentally disabled citizens “have a right to

appropriate treatment, services, and habilitation for such disabilities” to be provided “in

the setting that is least restrictive of the person’s personal liberty.” Id. at 13. The

plaintiffs, certain disabled citizens of Pennsylvania (a participant in the DDA), sued their

state-owned institution to enforce these “rights”; that is, to compel Pennsylvania to pay

for the costs of the services promised by the “bill of rights.” Id.

The Supreme Court held, however, that the language in the DDA’s “bill of

rights” provision did not create enforceable obligations on the State. Id. at 22. The

Court explained that the provision’s terms, “when viewed in the context of the more

specific provisions of the Act, represent general statements of federal policy, not newly

created legal duties.” Id. at 22–23. The Court also noted that the Act’s “plain language”

supported this view. Id. at 23. It stated that “[w]hen Congress intended to impose

conditions on the grant of federal funds,” as it did in other sections of the DDA, “it

proved capable of doing so in clear terms,” by, for example, using the term

“conditioned.” Id. The “bill of rights” section, “in marked contrast, in no way

suggest[ed] that the grant of federal funds [was] ‘conditioned’ on a State’s funding the

rights described therein.” Id. The Court further explained that the federal Government

had no authority under the DDA to withhold funds from States for failing to comply with

the “bill of rights” section. Id. Accordingly, that section could “hardly be considered

a ‘condition’ of the grant of federal funds.” Id. The Court also explained that the funds

Congress provided to Pennsylvania under the DDA were “woefully inadequate to meet

the enormous financial burden of providing ‘appropriate’ treatment in the ‘least

restrictive’ setting.” Id. at 24. This confirmed that “Congress must have had a limited

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of the United States Dep’t of Educ.

purpose in enacting” this provision because Congress “usually makes a far more

substantial contribution to defray costs” when it “impose[s] affirmative obligations on

the States.” Id. “It defies common sense,” the Court reasoned, “to suppose that

Congress implicitly imposed this massive obligation on participating States.”5 Id.

The Court reiterated that “Congress must express clearly its intent to impose

conditions on the grant of federal funds so that the States can knowingly decide whether

or not to accept those funds.” Id. “That canon,” the Court continued, “applies with

greatest force where, as here, a State’s potential obligations under the Act are largely

indeterminate.” Id. “The crucial inquiry, however, is not whether a State would

knowingly undertake that obligation, but whether Congress spoke so clearly that we can

fairly say that the State could make an informed choice.” Id. at 25 (emphasis added).

Thus, the Court concluded that “Congress fell well short of providing clear notice to the

States that they, by accepting funds under the Act, would indeed be obligated to comply

with” the “bill of rights” provision in the DDA. Id.

The Supreme Court applied these principles again in Arlington, where a similar

question arose under the IDEA, 20 U.S.C. § 1400 et. seq. Arlington, 548 U.S. at

296–300. Enacted under the Spending Clause, the IDEA “provides federal funds to

assist state and local agencies in educating children with disabilities and conditions such

funding upon a State’s compliance with extensive goals and procedures.” Id. at 295

(internal quotation marks and citation omitted). The plaintiffs in Arlington sued under

the IDEA on behalf of their son to require the Arlington Board of Education to pay for

their son’s private-school tuition for specified school years. Id. at 294. The plaintiffs

prevailed in the district court, and the Second Circuit affirmed. Id. As the prevailing

parties, the plaintiffs then sought fees for the services of an educational consultant who

assisted them throughout the litigation. Id. Central to the dispute in Arlington was the

IDEA’s provision that a court “‘may award reasonable attorneys’ fees as part of the

5

In this case, Plaintiffs do not dispute that Congress did clearly intend to place conditions on the

grant of federal funds. However, there is no mention of the cost of compliance anywhere in the text of

NCLB. Plaintiffs argue that Congress’s silence cannot be interpreted as a clear statement that States and

local governments would be required to spend their own funds to cover any shortfall of federal funds.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 24

of the United States Dep’t of Educ.

costs’” to parents who prevail in an action brought under the Act. Id. at 297 (quoting 20

U.S.C. § 1415(i)(3)(B)).

Noting that “resolution of the question presented in this case is guided by the fact

that Congress enacted the IDEA pursuant to the Spending Clause,” the Supreme Court

ultimately held that the plaintiffs were not entitled to the expert fees requested. Id. at

295. The Court reaffirmed Pennhurst’s principle requiring clear notice to States of their

obligations under such legislation and explained how that principle should be applied:

The Court “must view the IDEA from the perspective of a state official who is engaged

in the process of deciding whether the State should accept IDEA funds and the

obligations that go with those funds.” Id. The Court “must ask whether such a state

official would clearly understand that one of the obligations of the Act is the obligation

to compensate prevailing parents for expert fees.” Id. “In other words,” the Court

continued, “we must ask whether the IDEA furnishes clear notice regarding the liability

at issue in this case.” Id.

Applying these principles, the Court first considered the text of the IDEA. Id.

The Court noted that it has “stated time and again that courts must presume that a

legislature says in a statute what it means and means in a statute what it says there.” Id.

(internal quotation marks and citation omitted). The Court then explained that, although

the IDEA fee provision “provides for an award of ‘reasonable attorneys’ fees,’ this

provision does not even hint that acceptance of IDEA funds makes a State responsible

for reimbursing prevailing parents for services rendered by experts.” Id. at 297.

Accordingly, the Court rejected the plaintiffs’ argument that, because expert fees

amounted to “costs” in IDEA proceedings and because the provision allowed for

reasonable attorneys’ fees “as part of the costs,” the plaintiffs were entitled to expert

fees. Id. at 297–98. The Court explained that the provision “certainly fails to provide

the clear notice that is required under the Spending Clause.” Id. at 298. The Court then

explained that other provisions of the IDEA supported this view of the text. Id. at

298–301. For example, the IDEA includes detailed provisions to ensure that attorneys’

fees are reasonable, but lacks comparable provisions regarding expert fees. Id. at 298.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 25

of the United States Dep’t of Educ.

Additionally, the Court concluded that its holding was consistent with prior cases

addressing the definitions of costs and fees. Id. at 301–02.

The Court remained unswayed in this conclusion even in light of evidence that

Congress intended the opposite interpretation of the expert-fees provision. The plaintiffs

noted that Congress approved a Conference Report stating that “[t]he conferees

intend[ed] that the term ‘attorneys’ fees as part of the costs’ include[s] reasonable

expenses and fees of expert witnesses . . . .” Id. at 304 (quoting H.R. Conf. Rep. No. 99-

687, at 5 (1986)). “No Senator or Representative voiced any opposition to this statement

in the discussion preceding the vote on the Conference Report—the last vote on the bill

before it was sent to the President.” Id. at 309 (Souter, J., dissenting). The Court

responded that, “[u]nder these circumstances, where everything other than the legislative

history overwhelmingly suggests that expert fees may not be recovered, the legislative

history is simply not enough.” Id. at 304. “In a Spending Clause case, the key is not

what a majority of the Members of both Houses intend but what the States are clearly

told regarding the conditions that go along with the acceptance of those funds.” Id.

(emphasis added). This legislative history, therefore, was not “sufficient to provide the

requisite fair notice” that States bore this liability under the IDEA. Id.; but see id. at 309

(Souter, J., dissenting) (“I can find no good reason for this Court to interpret the

language of this statute as meaning the precise opposite of what Congress told us it

intended.”).

D. NCLB

1. Text of the Act

We must view NCLB from the perspective of a state official who is engaged in

the process of deciding whether the State should accept NCLB funds and the obligations

that accompany those funds. See Arlington, 548 U.S. at 295. In other words, we must

determine whether NCLB furnishes clear notice to the official that her State, if it chooses

to participate, will have to pay for any additional costs of implementing the Act that are

not covered by the federal funding provided for under the Act. In examining NCLB,

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of the United States Dep’t of Educ.

“we must not be guided by a single sentence or member of a sentence, but look to the

provisions of the whole law, and to its object and policy,” Pennhurst, 451 U.S. at 18

(citations and internal quotations omitted), however, “if Congress intends to impose a

condition on the grant of federal moneys, it must do so unambiguously.” Barnes v.

Gorman, 536 U.S. 181, 186 (2002) (citations omitted). “Indeed, in those instances

where Congress has intended the States to fund certain entitlements as a condition of

receiving federal funds, it has proved capable of saying so explicitly.” Pennhurst, 451

U.S. at 17–18 (citation omitted). Here, no such provision exists. NCLB simply does not

include any specific, unambiguous mandate requiring the expenditure of non-NCLB

funds. Neither Judge McKeague, Judge Sutton nor the parties set forth any provision of

NCLB that explicitly spells out the States’ fiduciary obligations under this Act. To the

contrary, § 7907(a) of NCLB provides that “[n]othing 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.” Based on this provision, a state official likely would reach

the opposite conclusion—namely, that her State would not be forced to provide funding

for NCLB requirements for which federal funding falls short. Thus, we conclude a state

official would not clearly understand that accepting federal NCLB funds meant agreeing

to use state and local funds to meet goals rendered otherwise unreachable by deficient

federal funding.

This is not to say that the Secretary’s interpretation of the Act is frivolous. But

the only relevant question is whether the Act provides clear notice to the States of their

obligation. See Arlington, 548 U.S. at 296. With this rule in mind, we turn to the

various interpretations of the text offered by the parties and explain why we are not

persuaded that the States’ funding obligations are clear.

2. Plaintiffs’ interpretation

Plaintiffs argue that the plain language of § 7907(a) excuses them from paying

for the costs of compliance with NCLB that exceed those covered by federal funding.

See Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246, 252 (2004)

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 27

of the United States Dep’t of Educ.

(“Statutory construction must begin with the language employed by Congress and the

assumption that the ordinary meaning of that language accurately expresses the

legislative purpose.” (internal quotation marks omitted)). For convenience, the language

of § 7907(a) is as follows:

General prohibition. Nothing in this Act shall be construed to authorize

an officer or employee of the Federal Government to mandate, direct, or

control a State, local educational agency, or school’s curriculum,

program of instruction, or allocation of State or local resources, or

mandate a State or any subdivision thereof to spend any funds or incur

any costs not paid for under this Act.

20 U.S.C. § 7907(a) (emphasis added). The operative language under the Plaintiffs’

reading of § 7907(a) is: “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.” Read in this way, the clause exempts Plaintiffs from any costs that exceed federal

funds.

Admittedly, there are problems with this interpretation. First, § 7907(a)’s

placement within the statute weakens Plaintiffs’ argument. Located in a section entitled,

“Prohibitions on Federal Government and use of Federal funds,” § 7907(a) is followed

by three additional prohibitions: “Prohibition on endorsement of curriculum,”

“Prohibition on requiring Federal approval or certification of standards,” and a

prohibition on “mandat[ing] national school building standards.” 20 U.S.C. § 7907(b),

(c), and (d). These provisions expressly prohibit federal officials from imposing on

States certain additional conditions to the requirements of NCLB. Because agencies

generally have broad power to interpret and administer law, this section might be

concerned with preventing federal commandeering of state officials as well as limiting

agency authority in administering NCLB.

Interpreted in this way, the first clause of § 7907(a) prohibits federal officers or

employees from commandeering the state educational system. 20 U.S.C. § 7907(a)

(“Nothing in this Act shall be construed to authorize an officer or employee of the

Federal Government to mandate, direct, or control a State, local educational agency, or

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 28

of the United States Dep’t of Educ.

school’s curriculum, program of instruction, or allocation of State or local resources

. . . .”). Like the other subsections of § 7907, § 7907(a) arguably could be concerned

with preventing the imposition of additional costs on states. Instead of prohibiting

states from bearing any costs of compliance, the second clause may prohibit additional

impositions on a State that are not agreed to by the State or set forth in NCLB. In other

words, Congress may have intended to prohibit the expansion of any of the requirements

under NCLB to micro-manage state officials in any way not expressly provided for

under NCLB.

Second, while the Plaintiffs provide strong evidence that many States and indeed

the former Secretary interpreted NCLB not to impose costs exceeding federal funding,6

their interpretation ignores the history of education funding, which suggests that

Congress did not intend to fund all aspects of compliance with NCLB. The prior panel’s

dissent noted as much: “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.” Pontiac Sch. Dist., 512 F.3d at 277 (McKeague,

J., dissenting). Certainly, the history of education funding cuts against Plaintiffs’

reading of § 7907(a) that Congress intended to exempt States from the costs of

compliance with NCLB.

3. The Secretary’s interpretations of the text

Two other interpretations of § 7907(a) have been advanced in this case, both of

which—if Congress had clearly expressed them—would counter Plaintiffs’ argument

that § 7907(a) exempts the States from covering the costs of NCLB compliance in excess

of federal funding. The first, which the district court adopted, is that this section merely

6

Former Secretary of Education Rod Paige described the Act as “contain[ing] language that says

things that are not funded are not required.” (Compl. 11; JA 20.) He later emphasized that “if it is not

funded, it’s not required. There is language in the bill that prohibits requiring anything that is not paid

for.” (Compl. 12; JA 21.)

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 29

of the United States Dep’t of Educ.

prevents officers and employees of the federal government from imposing additional,

unauthorized requirements on the participating States. The second is that this section

simply emphasizes that state participation in NCLB is entirely voluntary, but that once

a State chooses to participate, it must comply fully with NCLB requirements regardless

of whether federal funding is adequate to cover the cost of compliance. As discussed

below, neither of these interpretations is self-evident.

a. Stopping rogue federal officers or employees

The view that § 7907(a) simply restricts federal officials from imposing

additional requirements—that is, those not authorized by the Act—on participating

States arises from the first part of § 7907(a), which discusses “an officer or employee of

the Federal Government.” This reading interprets the Act to preclude any such officer

or employee from mandating that a State incur costs not paid for under (that is, costs not

authorized by) the Act:

General prohibition. Nothing in this Act shall be construed to authorize

an officer or employee of the Federal Government to mandate, direct, or

control a State, local educational agency, or school’s curriculum,

program of instruction, or allocation of State or local resources, or

mandate a State or any subdivision thereof to spend any funds or incur

any costs not paid for under this Act.

20 U.S.C. § 7907(a) (emphasis added).

In accepting this interpretation, the district court explained, the “[d]efendant

argues convincingly that this sentence simply means no federal ‘officer or employee’ can

require states or school districts to ‘spend any funds or incur any costs not paid for under

this Act.’” Pontiac, 2005 U.S. Dist. LEXIS 29253, at *11. The court further explained

that, “[b]y including the words ‘an officer or employee of,’ Congress clearly meant to

prohibit federal officers and employees from imposing additional, unfunded

requirements, beyond those provided for in the statute.” Id. at *12. In sum, the court

concluded that § 7907(a) merely prevents rogue officers from imposing requirements not

authorized by the Act. There are two problems with this interpretation.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 30

of the United States Dep’t of Educ.

First, it is not evident that the “officer or employee” language modifies the final

clause of § 7907(a) discussing incurring costs under the Act. In other words, the “officer

or employee” language reasonably can be read to modify only the middle clause

regarding state and local control over curricula, as follows: “Nothing in this Act shall

be construed to authorize an officer or employee of the Federal Government to mandate,

direct, or control a State, local educational agency, or school’s curriculum, program of

instruction, or allocation of State or local resources . . . .” 20 U.S.C. § 7907(a). Under

this reading, the final clause is modified by the opening clause: “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.” Id. In this way, the Act prevents federal

officers from controlling school curricula and allocations of local funds, but says nothing

about officers mandating States to spend funds or incur costs for unauthorized

obligations.

Second, if the “officer or employee” language is interpreted to modify the final

clause, more fundamental problems emerge. For one, such a reading would require us

to substitute words that are not in the statutory text (“Nothing in this Act shall be

construed to authorize an officer or employee of the Federal Government to . . . mandate

a State or any subdivision thereof to spend any funds or incur any costs not [authorized

under this Act]”) for words that are in the text (“. . . or incur any costs not paid for under

this Act”). Stating that a federal officer cannot require a State to incur any costs “not

paid for” under the Act is, to say the least, is an unusual way of saying that an officer

cannot require a State to incur costs for something that is not authorized under the Act.

Were Congress truly concerned about this sort of ultra vires conduct by federal officers

and employees, it could have said so expressly. Even if this were Congress’s concern,

we would be left with the following tautology: This Act does not authorize federal

officers or employees to require States to incur costs for anything that the Act does not

authorize.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 31

of the United States Dep’t of Educ.

b. Emphasizing that participating in the Act is voluntary

The Secretary also contends that the reference in the final clause of § 7907(a) to

a State’s costs under the Act simply emphasizes that a State’s decision to accept federal

funding under NCLB is entirely voluntary. The Secretary notes that this section

provides limits on what the Act (or, if one accepts the reading discussed above, on what

federal officers and employees) can “mandate” the States to do:

General prohibition. Nothing in this Act shall be construed to authorize

an officer or employee of the Federal Government to mandate, direct, or

control a State, local educational agency, or school’s curriculum,

program of instruction, or allocation of State or local resources, or

mandate a State or any subdivision thereof to spend any funds or incur

any costs not paid for under this Act.

20 U.S.C. § 7907(a) (emphasis added). The Secretary argues that Congress fully

understood that a statute, such as NCLB, that imposes conditions on a receipt of federal

funds is not a mandate. Rather, the section is intended to clarify that States would not

be subject to requirements that formed no part of the conditions set out in the statute.

To support this reading, the Secretary notes that the Unfunded Mandates Act (“UMA”),

2 U.S.C. § 658(5)(A)(i)(II), defines “federal intergovernmental mandate” to exclude

voluntary participation in federal programs. This reading is also flawed.

Plaintiffs do not contend that NCLB—as a whole—is an unfunded mandate

forced upon the States. They appear willing to concede that NCLB is a voluntary

program, and, therefore, their argument focuses on § 7907(a), not on the UMA.7

Plaintiffs argue that, now that they are participating in NCLB, the Secretary is imposing

(that is, “mandating”) liabilities that they did not bargain for—and that are expressly

prohibited by § 7907(a)—when they signed onto NCLB. There are at least three

7

The amici question, however, whether a State can, as a practical financial matter, refuse federal

funding under NCLB. See, e.g., Amicus Curiae Br. of the Governor of the Commonwealth of

Pennsylvania at 20 (noting that “states have come to depend upon [federal] funds to provide extra

assistance to students who are economically and academically disadvantaged” and that “states are coerced

to accept additional and financially burdensome requirements, so that they may continue to provide

services and programs that they have offered to their neediest students for years”); see also New York v.

United States, 505 U.S. 144, 175 (1992) (noting in another context that “Congress has crossed the line

distinguishing encouragement from coercion”).

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 32

of the United States Dep’t of Educ.

additional reasons why § 7907(a) should not be read to merely emphasize the

voluntariness of the program.

First, it is not apparent that § 7907(a) addresses States’ voluntary participation

in NCLB as opposed to their obligations after they have agreed to participate. The

Secretary’s reading would be easier if the Act stated that nothing in it shall be construed

to mandate a State to “comply with the Act” or that nothing in the Act shall be construed

to mandate a State to “incur any costs under this Act”—language like that would indicate

that States can choose not to comply with the Act altogether. Instead, the text provides

that nothing in the Act shall be construed to mandate a State to “incur any costs not paid

for under this Act”—language that a State could plausibly interpret to relate to its

obligations after it has agreed to comply with the Act. Indeed, based on the text of

§ 7907(a), Vermont has passed a law providing that neither the State nor its subdivisions

will be required to “incur any costs not paid for under the Act in order to comply with

the provisions of the Act.” Vt. Stat. Ann. tit. 16 § 165 (2003). In short, it is not apparent

that § 7907(a) relates merely to the States’ freedom to choose whether to opt into the Act

in the first place.

Second, the use of the exact language of § 7907(a) in the Perkins Vocational

Education Act (“Perkins Act”), 20 U.S.C. §§ 2301–2471 (1988), indicates that this

language concerns a State’s funding obligations under NCLB, rather than voluntary

compliance with the Act. Under the Perkins Act, federal grants are issued to “‘assist the

States to expand, improve, modernize, and develop quality vocational education

programs in order to meet the needs of the Nation’s existing and future work force for

marketable skills and to improve productivity and promote economic growth.’”

Pennylvania v. Riley, 84 F.3d 125, 127 (3d Cir. 1996) (quoting 20 U.S.C. § 2301(1)).

Section 2306a of the Perkins Act, entitled “Prohibitions,” mirrors NCLB’s § 7907(a),

but adds a final clause:

(a) Local control. Nothing in this Act shall be construed to authorize an

officer or employee of the Federal Government to mandate, direct, or

control a State, local educational agency, or school’s curriculum,

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 33

of the United States Dep’t of Educ.

program of instruction, or allocation of State or local resources, or

mandate a State or any subdivision thereof to spend any funds or incur

any costs not paid for under this Act, except as required under sections

112(b), 311(b), and 323.

20 U.S.C. § 2306a(a) (emphasis added). The sections referred to in this final clause

require agencies in participating States to spend non-federal funds for specific purposes.

See, e.g., 20 U.S.C. § 2413(a) (Perkins Act § 323) (“Except as provided in subsection

(b), for each fiscal year for which an eligible agency receives assistance under this Act,

the eligible agency shall provide, from non-Federal sources for the costs the eligible

agency incurs for the administration of programs under this Act, an amount that is not

less than the amount provided by the eligible agency from non-Federal sources for such

costs for the preceding fiscal year.”). Thus, the final clause—absent in NCLB—provides

explicit exceptions describing when participating States do have to expend their own

funds when complying with the Perkins Act’s requirements. The common language in

these Acts, therefore, does not simply reiterate that States may or may not participate in

the federal program. While there are differences between the Perkins Act and NCLB,

the differences in the overall structure of the statutes do not negate the informative role

that the identical sixty-two-word provision found in both of the statutes can provide. In

the Perkins Act, the sixty-two-word provision is followed by exceptions to the provision.

In NCLB, the sixty-two-word provision is followed by no exceptions. The difference

between the Perkins Act and NCLB in this regard shows that Congress is capable of

explicitly stating when States must provide funding under these Acts. Cf. Pennhurst,

451 U.S. at 17–18 (“[I]n those instances where Congress has intended the States to fund

certain entitlements as a condition of receiving federal funds, it has proved capable of

saying so explicitly.”).

Third, the Secretary’s comparison with the provisions of the UMA sheds little

light here, as (1) NCLB makes no reference to the UMA’s definition of “mandate,”

which excludes voluntary participation in federal programs, and (2) “the label ‘mandate’

is often applied to obligations that states assume voluntarily in order to qualify for

federal funds.” Patricia T. Northrop, Note, The Constitutional Insignificance of Funding

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 34

of the United States Dep’t of Educ.

for Federal Mandates, 46 Duke L.J. 903, 903 n.2 (1997). Indeed, another section of the

UMA itself defines “mandate” to include a duty arising from voluntary participation in

federal programs. 2 U.S.C. § 1555 (defining the phrase for purposes of a commission

that would review federal mandates).

E. Whether NCLB satisfies the clear-notice requirement of the Spending

Clause

Whether or not Congress intended to fund all the costs of compliance with

NCLB, if Congress did not provide clear notice to the States, any requirement that States

fund the excess costs of compliance is unenforceable. The Spending Clause permits

Congress to condition its grant of federal money to States only if it does so

unambiguously. The appropriate inquiry is not whether Congress intended States to fund

some of the costs of compliance, but whether it provided the States with clear notice of

this intention. See Arlington, 548 U.S. at 296.

Viewing the Spending Clause relationship between a State and the federal

government as a contract, the Supreme Court has stated that “[t]he legitimacy of

Congress’ power to legislate under the spending power thus rests on whether the State

voluntarily and knowingly accepts the terms of th[at] ‘contract.’” Pennhurst, 451 U.S.

at 17. The Secretary cites Bennett v. Ky. Dep’t of Educ., 470 U.S. 656, 669 (1985), for

the proposition that “[u]nlike normal contractual undertakings, federal grant programs

originate in and remain governed by statutory provisions expressing the judgment of

Congress concerning desirable public policy.” The Secretary argues that, in contrast to

general contract law, ambiguities in a grant program must not necessarily “be resolved

against the party who drafted the agreement, i.e., the Federal Government.” Id. at 666.

However, even when the textual ambiguities are resolved in favor of the federal

Government, NCLB still fails the Spending Clause inquiry because it does not provide

clear notice to States that they must incur the costs of compliance. In § 6332(b)(1),

Congress acknowledged the possibility that it might not be able to provide all of the

funds for which States are eligible under NCLB, and Congress provided for a pro rata

distribution if such a shortfall were to occur. But Congress never clearly explained who

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 35

of the United States Dep’t of Educ.

would be responsible for the remaining costs if and when it could not cover them. Thus,

not only did Congress never specifically articulate that States would be responsible for

covering any additional costs of compliance, but Congress’s inclusion of § 7907(a)

further confuses the issue of potential state liability.

When asking “whether such a state official would clearly understand . . . the

obligations,” Arlington, 548 U.S. at 296, the answer must, therefore, be “No.” We need

not decide which of the three above described interpretations of § 7907(a) is correct as

that is not our relevant inquiry. They are all plausible, and they are all flawed. While

the Secretary may be correct that Congress did not intend to provide full funding for

NCLB, many reasonable authorities have interpreted NCLB to mean precisely the

opposite. “When [Connecticut, Delaware, Illinois, Maine, New Mexico, Oklahoma,

Wisconsin, and the District of Columbia] acted to accept NCLB Act funding and to

adopt NCLB Act requirements, it was with the understanding that the Secretary of

Education would comply with all of the provisions of the NCLB Act, including the

Unfunded Mandates Provision.” (Amicus Br. of the States of Conn., Del., Ill., Me.,

N.M., Okla., Wis., D.C. at 4.) Further, the district court, this Court’s prior panel

majority, and the panel dissent all have interpreted § 7907(a) differently. Even the

former Secretary of Education found that § 7907(a) means the opposite of what the

current Secretary claims. Consequently, the only thing clear about § 7907(a) is that it

is unclear.

III. CONCLUSION

NCLB 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.” 20 U.S.C. § 6301.

Here, nobody challenges that aim. But a state official deciding to participate in NCLB

reasonably could read § 7907(a) to mean that the State need not comply with

requirements that are “not paid for under the Act” with federal funds.

Congress has not “spoke[n] so clearly that we can fairly say that the State[s]

could make an informed choice” to participate in the Act with the knowledge that they

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 36

of the United States Dep’t of Educ.

would have to spend non-NCLB funds to comply with the Act’s requirements.

Pennhurst, 451 U.S. at 25. If Congress intended otherwise, the ball is properly left in

its court to make that clear. See Arlington, 548 U.S. at 306 (Ginsburg, J., concurring).

Finally, I would not have this opinion read so broadly as to eviscerate the other

mandates of NCLB. The record is clear that the States accepted NCLB funding under

conditions spelled out in the Act. There should be no doubt that States and school

districts must comply with the mandates to the extent of NCLB funds received and must

support their own prior levels of funding as NCLB requires. Plaintiffs’ ongoing

responsibilities under NCLB are thus among the issues that I would have the parties and

the district court consider on remand. Accordingly, I would reverse the district court’s

judgment dismissing Plaintiffs’ complaint and remand for further proceedings consistent

with this opinion.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 37

of the United States Dep’t of Educ.

____________________

OPINION

____________________

SUTTON, Circuit Judge, concurring in the order. Judge Cole and Judge

McKeague have written well-reasoned opinions about this difficult case, but I find

myself unable to join either one in full. I write separately to explain my position, which

comes down to embracing Judge Cole’s standing and justiciability conclusion and Judge

McKeague’s merits conclusion at the panel stage.

I.

Standing. I agree with Judge Cole that the school districts have Article III

standing to file this lawsuit. Cole Op. at 9–12. The school districts have alleged a

sufficient “injury in fact”: the Secretary’s threatened withholding of federal funds to

which they are otherwise entitled. In a declaratory judgment action, “injury in fact”

turns on whether the threatened harm is real and imminent, as opposed to speculative and

distant. See MedImmune, Inc v. Genentech, Inc., 549 U.S. 118, 127–28 (2007). This

threatened harm is real and sufficiently imminent. The Secretary has consistently denied

waivers seeking to evade the Act’s requirements due to insufficient federal funding, and

the school districts fairly allege that “noncompliance with [the Act’s] mandates due to

lack of funds will result in the withholding of . . . federal funds.” Compl. ¶ 16; see Lujan

v. Defenders of Wildlife, 504 U.S. 555, 561–62 (1992). Putting the school districts to the

choice of abandoning their legal claim or risking sanctions “is a dilemma that it was the

very purpose of the Declaratory Judgment Act to ameliorate.” MedImmune, 549 U.S.

at 128 (internal quotation marks omitted). South Dakota v. Dole, 483 U.S. 203, 205

(1987), involved a similar threat—that the government would withhold federal

funds—and the Court resolved the merits of that declaratory judgment action without

saying a word about standing.

The injury also is fairly traceable to the challenged action of the Secretary, who

has authority to withhold the funds and who has declined to relax the testing and

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 38

of the United States Dep’t of Educ.

assessment requirements of the Act, even if the school districts cannot meet the

requirements with federal funds alone. See Friends of the Earth, Inc. v. Laidlaw Envtl.

Servs. (TOC), Inc., 528 U.S. 167, 180 (2000). And enjoining the Secretary from

withholding federal funds for failing to comply with the Act’s requirements will redress

the threatened injury. See id. at 180–81; Cole Op. at 12.

(As an aside, the school districts separately claim injury in fact due to their

ongoing expenditure of local funds to comply with the Act. See also Cole Op. at 10–11.

But this theory does not necessarily establish a redressable injury. An injunction against

the Secretary will stop him from cutting off federal funds for non-compliance, but it will

not require the States to roll back their statutes and regulations implementing the Act’s

requirements. A State’s alteration of its own statutes and regulations turns on “choices

made by independent actors not before the courts and whose exercise of broad and

legitimate discretion the courts cannot presume either to control or to predict.” ASARCO

Inc. v. Kadish, 490 U.S. 605, 615 (1989). The pleadings do not disclose how Michigan,

Texas and Vermont “implement[] a single, statewide State accountability system”

ensuring adequately yearly progress, 20 U.S.C. § 6311(b)(2)(A), but their implementing

regulations almost assuredly affect the school districts. Yet because one redressable

injury suffices to establish standing, the validity of this alternative theory makes no

difference.)

Ripeness. The claims also are fit for judicial review, and the districts would

suffer hardship if we declined to consider them. See Abbott Labs. v. Gardner, 387 U.S.

136, 149 (1967); Cole Op. at 12–14. Because this dispute raises an unvarnished question

of law that will not benefit from further factual development, it presumptively is ripe for

review. See Dixie Fuel Co. v. Comm’r of Social Sec., 171 F.3d 1052, 1058 (6th Cir.

1999), overruled on other grounds by Barnhart v. Peabody Coal Co., 537 U.S. 149, 157

(2003). “Nothing would be gained by postponing a decision” when “[t]he issue

presented in this case is purely legal, . . . will not be clarified by further factual

development” and hardship to the parties exists. Thomas v. Union Carbide Agric. Prods.

Co., 473 U.S. 568, 581–82 (1985); see Cole Op. at 13–14.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 39

of the United States Dep’t of Educ.

While further administrative proceedings might sharpen the nature of some of the

school districts’ claims, they would not alter or make more concrete the nature of the

legal question. The Secretary has made his position about the meaning of the Act clear

in public statements, in his stance in this case and in related litigation pending in the

Second Circuit. Requiring the school districts to seek waivers or propose plan revisions

that the Secretary has confirmed he will not grant—because his interpretation of the Act

prevents him from doing so—would merely prolong the litigation, already entering its

fifth year. Nor would it help any of the participants in this case, least of all the students

attending the affected schools, which presumably is why no party raised this issue on its

own. See Union Carbide, 473 U.S. at 581–82. No Lawyer Left Behind is not the name

of the Act.

Civil Rule 19 (a). I do not agree that Michigan, Texas and Vermont are

necessary parties, now called “required” parties, under Rule 19(a) and cannot agree that

we must dismiss the complaint in their absence. Let me start by resisting the idea that

we must, or should, suddenly invoke Rule 19 to resolve this case—a rule that would

appear for the first time in the record and pleadings of this case in our decision

dismissing the complaint. I accept that the federal courts may, as a matter of discretion,

raise required-party issues under Rule 19(a) on their own and may do so for the first time

on appeal—even when the parties have forfeited the issue. Provident Tradesmens Bank

& Trust Co. v. Patterson, 390 U.S. 102, 111 (1968); see also Bowling Transp., Inc. v.

N.L.R.B., 352 F.3d 274, 281 (6th Cir. 2003). But that does not make the issue one of

subject matter jurisdiction, which it is not. Lincoln Property Co. v. Roche, 546 U.S. 81,

90 (2005). And it does not establish that we should insert Rule 19(a) into a case

whenever it occurs to us, only when it is prudent. This case, and the equally high-profile

case pending in the Second Circuit, have been going on since 2005. See Connecticut v.

Spellings, 453 F. Supp. 2d 459, 465 (D. Conn. 2006). The three affected

States—Michigan, Texas and Vermont—surely know about this litigation and just as

surely have made considered decisions not to join it. Indeed, it is quite possible that,

even if we required the Governors of these States or the Secretaries of their respective

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 40

of the United States Dep’t of Educ.

departments of education to join the case, they still would opt not to take a position on

the issue at hand. I am not sure we can make a State take a stand on the point, and I

know we cannot make it take a coherent one. What we might gain from such a ruling

thus is far from clear.

What is more, after the parties filed supplemental briefs before the en banc court

and after the en banc oral argument, we sua sponte raised three “justiciability” questions.

While the third question asked whether we should proceed in the absence of the States,

we did not ask the parties to brief Rule 19—not classically thought of as a justiciability

doctrine—and we still have not done so. Not surprisingly, in their supplements to the

supplemental en banc briefs, no party—and not one of the four amici in their merits

briefs—identified a lurking Rule 19 problem, and it remains quite possible that all of the

participants in this case disagree that there is one. Cf. Huber v. Taylor, 532 F.3d 237,

249 (3d Cir. 2008). While no party to the case would be surprised if we resolved the

case on ripeness grounds, relying in part on the absence of the States, all parties to the

case (I suspect) would be surprised to see us dismiss the case under Rule 19. No doubt,

had we discovered an absence of subject matter jurisdiction at this late stage of the case,

we would have to dismiss the dispute, no matter how lamentable that development

would be, no matter how astonished the parties would be. But I am aware of no

precedent that compels us sua sponte to insert Rule 19 into the case at this point and to

dismiss the case in its fifth year of litigation. In my view, we should answer the question

of statutory interpretation that the school districts’ complaint asked us to answer and

leave Rule 19 out of it.

Be that as it may, Michigan, Texas and Vermont are not “required” parties under

Rule 19(a)(1). An entity is a “required party” if:

(A) in that person’s absence, the court cannot accord complete relief

among existing parties; or

(B) that person claims an interest relating to the subject of the action and

is so situated that disposing of the action in the person’s absence may:

(i) as a practical matter impair or impede the person’s

ability to protect the interest; or

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 41

of the United States Dep’t of Educ.

(ii) leave an existing party subject to substantial risk of incurring

double, multiple, or otherwise inconsistent obligations because

of the interest.

Fed. R. Civ. P. 19(a)(1).

The first ground for treating the three States as required parties—that the court

“cannot accord complete relief” without them, Fed. R. Civ. P. 19(a)(1)(A)—does not

exist. The school districts seek to enjoin the Secretary “from withholding from states

and school districts any federal funds . . . because of a failure to comply with the

mandates of the NCLB that is attributable to a refusal to spend non-NCLB funds.”

Compl. at 58. Enjoining the Secretary from withholding federal funds from the school

districts and the States does not require the presence of the States. It requires only the

presence of the Secretary.

It also is far from clear that the three States claim the kind of “interest,” Fed. R.

Civ. P. 19(a)(1)(B), that is cognizable under the other two grounds for treating the States

as required parties. The States do not have a legally protected interest that resolution of

the Pennhurst question would threaten, a missing ingredient that is fatal in several

circuits. See, e.g., United Keetoowah Band of Cherokee Indians of Okla. v. United

States, 480 F.3d 1318, 1324–25 (Fed. Cir. 2007); Liberty Mut. Ins. Co. v. Treesdale, Inc.,

419 F.3d 216, 230 (3d Cir. 2005); Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th

Cir. 1990). The States instead have an “interest in promoting what [they] regard[] as

enlightened public policy,” Am. Maritime Transp., Inc., 870 F.2d 1559, 1562 (Fed. Cir.

1989)—namely, their vision of how the Act should be interpreted—and have an interest

concerning the obligations that come with accepting funding under the Act, see Liberty

Mut. Ins. Co., 419 F.3d at 230 (holding “merely a financial interest” is not enough under

Rule 19(a)(1)(B)). I recognize that we have not yet spoken clearly on what types of

interests Rule 19 encompasses, and I see no need to take a stand today. I note only that

the States’ presumed “interests” in this case are a distant cry from the types of interests

that normally implicate Rule 19(a)(1)(B), and that they are more reminiscent of the kinds

of interests that require just notice, not mandatory joinder. See Fed R. Civ. P. 5.1

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 42

of the United States Dep’t of Educ.

(requiring a party to notify the state attorney general when challenging a state law but

not requiring a court to consider whether the state attorney general is a necessary party);

see also Republic of Philippines v. Pimentel, __ U.S. __, 128 S. Ct. 2180, 2185–86, 2189

(2008) (finding the Republic of the Philippines a required party in case involving claims

against the property of Ferdinand Marcos); Minnesota v. United States, 305 U.S. 382,

386–88 (1939) (condemnation dispute); Hooper v. Wolfe, 396 F.3d 744, 747–48 (6th Cir.

2005) (recovery of diverted assets); Keweenaw Bay Indian Community v. Michigan, 11

F.3d 1341, 1343–44, 1347 (6th Cir. 1993) (tribal fishing rights).

Even if the States have a cognizable interest, however, they are not required

parties under other requirements of Rule 19(a)(1)(B). Proceeding without them will not

“as a practical matter impair or impede” their ability “to protect the[ir] interest[s].” Fed.

R. Civ. P. 19(a)(1)(B)(i). When States stick their heads in the sand for nearly five years

of litigation about a high-profile lawsuit, it is difficult to say that proceeding without

them will impair their interests—which so far seem focused above all on not being

forced to take a public stand on the issues presented.

Nor is there any risk of prejudice to the States if we proceed to the merits without

them. See Republic of the Philippines v. Pimentel, 128 S. Ct. at 2189. The matter at

hand is not a challenge to the constitutionality of a state law or even to the meaning of

a state law. It concerns the meaning of a federal law: Namely, did Congress satisfy the

Pennhurst clear-statement rule by “clearly” describing “the conditions that go along with

the acceptance of . . . funds” under the Act? Arlington Cent. Sch. Dist. Bd. of Educ. v.

Murphy, 548 U.S. 291, 304 (2006). We know that States need not invariably be parties

to Pennhurst clear-statement cases because there are many decisions from the Supreme

Court involving just a local government as a party, but not a State or even the Federal

Government, including one decided a few months ago. See, e.g., Forest Grove Sch. Dist.

v. T.A., ___ U.S. ___, 129 S. Ct. 2484 (2009); Winkelman v. Parma City Sch. Dist., 550

U.S. 516 (2007); Arlington Cent. Sch. Dist., 548 U.S. 291; Jackson v. Birmingham Bd.

of Educ., 544 U.S. 167 (2005); Barnes v. Gorman, 536 U.S. 181 (2002); Davis v.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 43

of the United States Dep’t of Educ.

Monroe County Bd. of Educ., 526 U.S. 629 (1999); Gebser v. Lago Vista Indep. Sch.

Dist., 524 U.S. 274 (1998); Franklin v. Gwinnett County Pub. Schs., 503 U.S. 60 (1992).

The facts of this case illustrate why that often will be so. Whichever side

Michigan, Texas or Vermont ultimately take on this discrete legal question, there is no

reason to think that the present parties will not protect it. Perhaps the States (silently)

agree with the policy underlying the Act—that the threat of reduced federal funds is

precisely the incentive that the States and school districts need to make “adequate yearly

progress” in the achievement tests required under the Act. If so, there is no reason to

think that the Secretary will not ably advance that position, and in fact he (and she)

already has done so in the five years of litigation. Or perhaps the States (silently) side

with the school districts, believing that they should not have to meet achievement test

standards that they cannot reach with federal funds alone. Here, too, the school districts

have ably advanced this position throughout this litigation, and they have ample

incentives to continue doing so. In the end, the Pennhurst question at the heart of this

case turns on an issue of statutory meaning, one that will not change—it cannot

change—based on equitable or other considerations that a State might or might not

choose to raise.

In the absence of any unprotected interests, no prejudice—not even a risk of

prejudice—exists. What we have instead is a frustrating reality: How could the three

States, all deeply involved in the implementation of the Act, not take a public stance on

how this significant piece of legislation should be construed? Whether as intervening

parties or as amici, the three States would have done well to offer their views. Yet

whatever the explanation may be for their resounding silence, Rule 19(a) does not kick

in whenever an entity should take a public stand in litigation; it applies only when its

absence irreparably prejudices the entity’s interests. That simply is not the case here.

The last ground for invoking Rule 19(a)(1)—subjecting an existing party to

multiple or otherwise inconsistent obligations—also is missing. Inconsistent obligations

arise only when a party cannot simultaneously comply with the orders of different

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 44

of the United States Dep’t of Educ.

courts. See Delgado v. Plaza Las Americas, Inc., 139 F.3d 1, 3 (1st Cir. 1998); cf.

PaineWebber, Inc. v. Cohen, 276 F.3d 197, 201 (6th Cir. 2001). Here, the Secretary

risks only a possible injunction prohibiting him from withholding federal funds if the

affected school districts cannot comply with the Act due to inadequate funding. He can

readily comply with this order and any subsequent order in cases involving Michigan,

Texas and Vermont.

One of Judge McKeague’s primary disagreements with me turns on whether we

can grant “complete relief” without the States. McKeague Op. at 76–77. Because the

districts must follow the Act and the existing plans of their respective States, he points

out, those plans would have to be amended for the school districts to obtain the relief

they seek. But Rule 19 does not turn on the relief that the claimants could have sought

but on the relief they did seek. “Rule 19 can be utilized only to bring in parties necessary

to a complete and just adjudication of the issues presently before the court.” Ross. v.

Houston Indep. Sch. Dist., 699 F.2d 218, 230 (5th Cir. 1983) (emphasis added); see also

Local 670, United Rubber, Cork, Linoleum and Plastic Workers of Am., AFL-CIO v.

Armstrong Rubber Co., 822 F.2d 613, 620 (6th Cir. 1987); 7 Charles Alan Wright,

Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1604 (3d ed.

2009). The claimants do not seek to be relieved from a specific mandate of the Act but

only to enjoin the Secretary from withholding funds. That relief is not contingent on

actions of the States, and it is relief we have the power to grant. See LaChemise Lacoste

v. General Mills, Inc., 487 F.2d 312, 314 (3d Cir. 1973); cf. 4 James Wm. Moore et al.,

Moore’s Federal Practice, § 19.03[2][d] (3d ed. 2009) (“Joinder should not be

compelled when meaningful relief can be granted without the absentee.”).

That the three States retain independent authority to withhold funds “[i]n order

to enforce the Federal requirements” of the Act, 20 U.S.C. § 1232c(b), or perhaps

impose some other form of sanction, does not change things. Rule 19(a)(1)(A) “focuses

on relief between the parties and not on the speculative possibility of further litigation”

or administrative proceedings “between a party and an absent person.” Sales v.

Marshall, 873 F.2d 115, 122 (6th Cir. 1989) (internal quotation marks omitted). The

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 45

of the United States Dep’t of Educ.

States have not threatened or even hinted that they would invoke their § 1232c(b)

authority if the school districts won this case, and there is no indication that a State has

ever invoked that authority, even though it applies to a wide variety of education

programs. Under these circumstances, indeed, it is quite likely that the school districts

would not have had standing to name the States as party defendants to enjoin them from

this speculative, ill-defined and distant threat. Surely Rule 19(a)(1) does not require

what Article III prevents.

II.

That takes me to the merits—the meaning of the No Child Left Behind Act and

the nature of the obligation that the school districts and the States undertook when they

accepted federal funds under the Act starting in 2002. As the school districts see it,

“states and school districts that accept NCLB funding are not required to use their own

funds for NCLB compliance,” Pontiac Supp. Br. at 12, and accordingly any “failure to

comply with the NCLB mandates for this reason does not provide a basis for

withholding any federal funds to which they are otherwise entitled under the NCLB,”

Compl. at 58. As the Secretary sees it, “a State’s obligation to implement its plan is not

contingent upon a particular appropriation of federal funds or capped at a particular level

of state expenditures.” Final Br. for the Appellee at 17.

A.

A few rules set the stage for deciding who is right. Congress passed the Act

under the Spending Clause. U.S. Const. art. 1, § 8, cl. 1. Congress’s spending authority

permits it to condition the allocation of federal funds to the States on their compliance

with federal regulations, including most notably regulations that Congress otherwise

lacks the power to impose. See Dole, 483 U.S. at 207. Put another way, the Tenth

Amendment, the Eleventh Amendment and the Constitution’s other structural limitations

on congressional authority do not limit properly enacted spending-clause legislation.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 46

of the United States Dep’t of Educ.

Yet other limitations constrain Congress’s spending authority: two constitutional

limits and a statutory one. As a constitutional matter, Congress may not impose

conditions “unrelated to the federal interest” in enacting spending legislation, id. at

207–08 (internal quotation marks omitted), and it may not “coerc[e]” the States into

accepting funds and the regulations that come with them, id. at 211. These restrictions,

however, need not detain us here. Surely there is a legitimate connection between the

Act’s funding and the conditions imposed on the States who accept it. Congress did not

give the States federal money for education, then insist that they move the location of

their capitals or rename their state birds. Congress asked them to meet a series of

educational requirements in return for receiving education funding.

Perhaps more plausibly, the school districts’ complaint could be read to include

a claim that the Act is unconstitutionally “coercive,” a choice-bending contract of

adhesion. After all, what State in these fiscally challenging times would have the

fortitude to turn down hundreds of millions of dollars in education funding? (Perhaps

suggesting that there is something to the point, no State refused aid under the Act,

notwithstanding the conditions that came with it.) But in their briefs in the district court

and on appeal, the school districts have not claimed that they were coerced into

accepting this bargain. Because they have not developed this claim in any way and

because they have trained their arguments not on invalidating the Act but on limiting

their responsibilities under it, they have forfeited any claim of unconstitutionality.

The statutory limitation on Congress’s spending power, by contrast, lies at the

core of this dispute. Given the breadth of Congress’s power to impose conditions on

States that accept federal money, Arlington Cent. Sch. Dist., 548 U.S. at 296, given its

authority under the Spending Clause to regulate the States beyond the limited and

enumerated powers the Constitution otherwise gives it and given that the States are not

represented in the Halls of Congress, the federal courts have required Congress to state

those conditions “unambiguously” in the text of the statute, Pennhurst State Sch. &

Hosp. v. Halderman, 451 U.S. 1, 17 (1981). Analogizing spending clause legislation to

a contract that “requires offer and acceptance of its terms,” Barnes v. Gorman, 536 U.S.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 47

of the United States Dep’t of Educ.

181, 186 (2002), the Court has explained that Congress’s authority to impose conditions

on a State “rests on whether the State voluntarily and knowingly accepts the terms of the

‘contract,’” Pennhurst, 451 U.S. at 17. Just as parties to a contract “cannot knowingly

accept conditions . . . which they are unable to ascertain,” neither can the States.

Arlington Cent. Sch. Dist., 548 U.S. at 296 (internal quotation marks omitted). Spending

clause conditions thus bind the States only when Congress spells them out clearly in the

text of the law.

Even though this clear-statement rule has constitutional roots, it remains a rule

of statutory interpretation, one constrained by other canons of statutory interpretation.

A State or a school district cannot escape a federal regulation merely by showing

possible ways in which a law may be unclear; it must identify a plausible alternative

interpretation of the law consistent with its theory of ambiguity. See Bell v. New Jersey,

461 U.S. 773, 783 n.8 (1983) (rejecting a reading of a statute as “no more than remotely

plausible” in favor of a better reading of the law even though it imposed additional

obligations on the States); Bennett v. Ky. Dep’t of Educ., 470 U.S. 656, 672 (1985)

(finding no ambiguity in a provision of the predecessor of the NCLB, the Elementary

and Secondary Education Act of 1965, Pub. L. No. 89-10, 79 Stat. 27, because “[n]o

plausible reading of the statute or regulations suggests that” Kentucky’s actions

comported with the statute). A State cannot tenably complain about a congressional bait

and switch when the alleged “bait” is premised on an implausible reading of the statute.

As is true in other areas of the law, the implausibility of an alternative interpretation of

a statute defeats a claim of threshold ambiguity. See Auto-Owners Ins. Co. v. Redland

Ins. Co., 549 F.3d 1043, 1047 (6th Cir. 2008) (insurance contract); Zirnhelt v. Michigan

Cons’l Gas Co., 526 F.3d 282, 287 (6th Cir. 2008) (ERISA plan); cf. Cuomo v. Clearing

House Ass’n, L.L.C., __ U.S. __, 129 S. Ct. 2710, 2715 (2009) (Chevron).

In gauging statutory ambiguity, the courts also apply a wide-angle, not a

telephoto, lens. What matters is not whether a provision is ambiguous when read in

isolation but whether it is ambiguous when read in context. See, e.g., Pennhurst, 451

U.S. at 19 (Spending Clause); FDA v. Brown & Williamson Tobacco Corp., 529 U.S.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 48

of the United States Dep’t of Educ.

120, 132 (2000) (Chevron); Prater v. Ohio Educ. Ass’n, 505 F.3d 437, 441 (6th Cir.

2007) (contract).

B.

Measured by these yardsticks, the No Child Left Behind Act clearly requires the

States (and school districts) to comply with its requirements, whether doing so requires

the expenditure of state and local funds or not. A contrary interpretation is implausible

and fails to account for, and effectively eviscerates, numerous components of the Act.

The basic bargain underlying the Act works like this. On the federal side,

Congress offers to allocate substantial funds to the States on an annual basis—nearly $14

billion in 2008 for Title I, Part A, a 60% increase in relevant federal funding since

2001—exercising relatively little oversight over how the funds are spent. On the State

side, the States agree to test all of their students on a variety of subjects and to hold

themselves and their schools responsible for making adequate yearly progress in the test

scores of all students. In broad brush strokes, the Act thus allocates substantial federal

funds to the States and school districts and gives them substantial flexibility in deciding

how and where to spend the money on various educational “inputs,” but in return the

schools must achieve progress in meeting certain educational “outputs” as measured by

the Act’s testing benchmarks. As the Supreme Court recently explained:

NCLB marked a dramatic shift in federal educational policy. It reflects

Congress’ judgment that the best way to raise the level of education

nationwide is by granting state and local officials flexibility to develop

and implement educational programs that address local needs, while

holding them accountable for the results. NCLB implements this

approach by requiring States receiving federal funds to define

performance standards and to make regular assessments of progress

toward the attainment of those standards. 20 U.S.C. § 6311(b)(2).

NCLB conditions the continued receipt of funds on demonstrations of

“adequate yearly progress.” Ibid.

Horne v. Flores, __ U. S. __, 129 S. Ct. 2579, 2601 (2009). The school districts’

position—that they can accept the federal dollars, spend them largely as they wish, yet

exempt themselves from the Act’s requirements if compliance would require any local

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 49

of the United States Dep’t of Educ.

money—undoes this bargain by nullifying some provisions of the Act and undermining

several others.

Accountability. Accountability is the centerpiece of the Act, and a plausible

interpretation of the legislation cannot ignore that reality. Instead of focusing on how

much money school districts spend on each child or “dictating funding levels,” the Act

“focuses on the demonstrated progress of students through accountability reforms.” Id.

at 2603. The Act begins with a “Statement of Purpose” that drives home Congress’s

interest in establishing accountable public schools: “ensuring . . . high-quality academic

assessments [and] accountability systems”; “holding schools, local education agencies,

and States accountable for improving the academic achievement of all students”;

“improving and strengthening accountability”; and “providing . . . greater responsibility

for student performance.” 20 U.S.C. §§ 6301(1), (4), (6), (7). See Appendix (containing

the full Statement of Purpose).

Title I, Part A of the Act carries out this objective by requiring participating

States to test their students and, over time, to establish and meet certain benchmarks in

doing so. Today, the Act requires all public school students in participating States to

take seventeen standardized tests over the course of their school careers, see id.

§ 6311(b)(3)(C), and requires the States to grade schools and school districts on their

ability to make “adequate yearly progress” in the test results, see id. §§ 6311(b)(2)(B),

6316(c)(1). For those participating schools that repeatedly fail to make progress, the Act

requires an escalating series of sanctions: (1) starting with “improvement,” which gives

students the right to transfer into more successful schools and forces schools to develop

better practices; (2) moving to “corrective action,” which may include a new curriculum,

extended hours, or personnel discharges; and (3) ending with “restructuring,” which may

include discharging large portions of the staff or converting the school into a charter

school. Id. § 6316(b); see also id. § 6316(c).

The Act provides limited exceptions to these accountability measures, and none

of them applies here. See, e.g., id. §§ 6311(b)(7), 6311(c)(1), 6311(h)(2)(A)(i),

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 50

of the United States Dep’t of Educ.

6316(b)(7)(D), 6316(c)(10)(F), 6337(e)(3). By cabining the Secretary’s discretion to

excuse failure, the Act furthers an essential objective—the source, indeed, of its

title—that no child, whether living in inner-city school districts or not, whether suffering

from learning disabilities or not, whether English is their second language or not,

whether otherwise disadvantaged or not, would be left behind when it came to ensuring

not just that more resources were devoted to their education but that objectively

measurable progress would be made in their education. See, e.g., id. § 6301(3) (setting

goal of “closing the achievement gap between high- and low-performing children,

especially the achievement gaps between minority and nonminority students, and

between disadvantaged children and their more advantaged peers”). That is why the Act

requires each State to set up an annual system of academic assessments in reading,

science and math, id. § 6311(b)(3)(A), using “the same academic assessments . . . to

measure the achievement of all children,” id. § 6311(b)(3)(C)(i) (emphasis added),

providing for “the participation in such assessments of all students,” id.

§ 6311(b)(3)(C)(ix)(I) (emphasis added), and requiring “each local educational agency”

to collect appropriate data and reports on all student achievement, id. at § 6311(h)(2)(B)

(emphasis added).

The school districts’ interpretation would break the accountability backbone of

the Act. Excusing school districts from compliance with the Act whenever federal

funding fell short would make it hard if not impossible to hold them accountable for

meeting the Act’s goals. If school districts decided they were not given enough money

to test all children, they could test just some children. If school districts decided they

were not given enough money to fix all underperforming schools, they could fix just

some schools. Because the school districts have alleged that virtually every major

requirement of the Act is underfunded, see Compl. ¶¶ 32–86, their interpretation would

excuse them from all of these requirements, transforming a no-exceptions accountability

system into a non-existent one.

The NAACP supports the Secretary in this case, as well as in the Second Circuit

case, not because it is satisfied with the levels of federal funding under the Act (few are)

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 51

of the United States Dep’t of Educ.

but because it does not want the Act’s accountability measures violated with

impunity—letting schools filled with disadvantaged students off the hook. NAACP Br.

at 12 (“The panel’s decision invites States and school districts to evade their obligations

to poor and minority children.”). The NAACP’s concern is reflected in the Act itself,

which begins by saying that the Act is designed “to ensure that all children . . . reach . . .

proficiency on challenging State academic achievement standards and State academic

assessments,” “especially . . . disadvantaged” students. 20 U.S.C. § 6301 (emphasis

added). With the Act’s accountability system in place, these goals have a chance of

success; without them, they have no chance of success, risking a return to (or a

continuation of) a system of lower standards for higher-poverty schools.

Flexibility. The school districts’ interpretation is inconsistent not only with the

Act’s accountability requirements but also with the flexibility the Act gives States and

school districts in return for increased responsibility for student achievement. As the

Act’s Statement of Purpose makes clear, that is the central tradeoff of the Act:

“providing greater decisionmaking authority and flexibility to schools and teachers in

exchange for greater responsibility for student performance.” id. § 6301(7) (emphasis

added); see also Horne, 129 S. Ct. at 2601 (the Act “reflects Congress’ judgment that

the best way to raise the level of education nationwide is by granting state and local

officials flexibility to develop and implement educational programs that address local

needs, while holding them accountable for the results”). Unlike most spending

programs, this one comes with few strings telling the States how they should comply

with its conditions. Under the Act, States develop their own curricula and standards, 20

U.S.C. § 6311(b)(1), their own tests to assess whether students are meeting those

standards, id. § 6311(b)(3), and their own definitions of progress under those standards,

id. § 6311(b)(2)(B), so long as the progress culminates in near-universal proficiency by

2014, id. § 6311(b)(2)(F).

This flexibility extends to spending as well. As the school districts rightly

acknowledge, the Act “provide[s] school districts with unprecedented new flexibility in

their allocation of Title I funds.” Final Reply Br. of Pontiac Sch. Dist. at 3 (internal

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 52

of the United States Dep’t of Educ.

quotation marks omitted). Some federal funds, to be sure, must be spent in certain ways.

See, e.g., 20 U.S.C. § 6303 (reserving some Title I, Part A funds for school

improvement); id. § 6317(c)(1) (same); id. § 6318(a)(3)(A) (reserving some funds for

parental involvement programs); id. § 6319(1) (reserving some funds for professional

development). And the Act strictly confines the use of Title I funds to geographic areas

with heavy concentrations of low-income students. See id. § 6313(a). But within these

areas and with respect to these priority students, the Act gives States and school districts

substantial flexibility in choosing how to spend the money. For instance: Section 6314

gives school districts wide discretion to consolidate funds from various sources and to

focus them on certain schools in whatever ways will improve student performance there;

§ 6313(b) gives school districts discretion to transfer funds between schools within

certain guidelines; and § 7305b allows States and school districts to transfer up to 50%

of the funds allotted to other education programs to supplement their funds under Title

I, Part A.

The substantial flexibility the Act gives recipients over federal funds is surpassed

by the near-complete flexibility they retain over their own funds. The only limitation

is that participating States cannot reduce their own spending and offset it with federal

funding but must use the Act’s federal dollars to supplement, not supplant, their own.

20 U.S.C. §§ 6321, 7901. Beyond that basic requirement—a prohibition on fiscal

cheating, really—the States can use their dollars however they see fit, whether for

teachers or for computers or for facilities or for whatever else they think will help their

students the most.

The express and unprecedented flexibility the Act gives to the States in

prioritizing the spending of federal dollars—especially in Title I, Part A—cannot co-

exist with an interpretation of the statute that allows school districts to exempt

themselves from the accountability side of the bargain whenever their spending choices

do not generate the requisite achievement. Were the school districts correct, a State

could use this flexibility to focus its federal and local resources almost exclusively on

improving, say, teacher quality—a legitimate goal no doubt, but one that would allow

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 53

of the United States Dep’t of Educ.

the State to sidestep the Act’s mandatory assessment requirements by contending that

it lacked the funds to administer them or to make progress under them. Sch. Dist. of City

of Pontiac v. Sec’y of United States Dep’t of Educ., 512 F.3d 252, 284 (6th Cir. 2008)

(McKeague, J. dissenting). That is not what Congress had in mind. It gave the States

a clear and consequential choice: between taking the bitter (accountability) with the

sweet (unprecedented flexibility in spending federal and state dollars) or leaving the

money on the table.

Costs of Compliance. Not surprisingly, in view of the expansive flexibility that

the Act gives States in spending federal and local funds, the Act says nothing about the

bill of particulars at the heart of the school districts’ complaint: the costs of complying

with the Act’s requirements. How could it be otherwise? The Act’s spending flexibility

necessarily makes it impossible to calculate or even define the costs of complying with

the Act’s requirements.

The primary formula for allocating Title I, Part A grant money does not say a

word about costs of compliance. See 20 U.S.C. §§ 6313(c), 6333(a), 6334(a),

6335(a)–(c), 6337. While the Act asks States to submit plans to the Secretary, id.

§ 6311, and asks school districts to submit plans to the States, id. § 6312, it does not

require either entity to estimate the cost of compliance. Nor, in fulfilling their various

reporting responsibilities under the Act, must the States or school districts estimate the

costs of compliance. See, e.g., id. §§ 6311(h), 6316(a)(1)(C). If, as the Supreme Court

recently explained, the Act “expressly refrains from dictating funding levels,” Horne,

129 S. Ct. at 2603, why would Congress exempt failing school districts from the

accountability requirements based on inadequate “funding levels”? The school districts

have no answer.

But even if Congress wished to make costs of compliance a legitimate excuse for,

say, inadequate yearly progress, how would it do so? Once Congress decided to measure

accountability by educational outputs (gauged by tests scores), as opposed to educational

inputs (gauged by dollars), it made objective measurements of compliance costs virtually

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 54

of the United States Dep’t of Educ.

impossible. Any effort to measure these costs surely would vary from school to school,

if not from student to student, and they surely would vary from year to year. The phrase

“costs of compliance” has no discernible meaning in this context, as the Act leaves it to

the States, no matter how little or how much funding Congress provides, to make

discretionary cost choices about how to make meaningful achievement-related progress.

Take a cost estimate for adding an extra hour to the school day, for lengthening

the school year or for hiring more math or reading teachers—all plausible ways to

improve a school’s achievement scores. Each innovation has an estimable cost, to be

sure. But that does not establish that the estimate would lead to the requisite progress.

And if it did not, then what? Perhaps extending the school day by one more hour,

extending the school year by one more week or hiring one more math or reading teacher

would do the trick. But maybe not. What works for one school district might not work

for another. What, indeed, works for one classroom might not work for the classroom

next door, given the correlation between great teachers and great teaching—and the

occasional operation of that principle in reverse. Even more discrete costs like

developing and administering tests cannot be accounted for in advance given the

considerable flexibility States have under the Act in implementing those requirements.

Within certain general limits, a State may develop whatever curricular standards and

tests it wants. 20 U.S.C. § 6311(b). The State may use pre-existing standards that meet

the Act’s requirements, id. § 6311(b)(1)(F), or it may create new ones.

In their complaint, to use one example, the school districts say that Brandon

Town School District “estimates that . . . it needed to spend $390,000 more than it

received in NCLB Title I funding to ensure that the school makes [adequate yearly

progress].” Compl. ¶ 65. The school district may be right, and we have no license to say

that it is not at this Rule 12(b)(6) stage of the case. The issue, however, is not whether

the school districts can fairly say that compliance with “adequate yearly progress”

requires more federal dollars than the Secretary has allocated to them. It is whether a

State could tenably think that the Act excuses non-compliance whenever a school district

maintains that it has insufficient resources to make the required progress. Surely every

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of the United States Dep’t of Educ.

school district could do more with more money. And if that is the case, every failing

school district could do more with more federal money—and maybe enough to make

adequate yearly progress. It is hard to imagine when—or, for that matter, why—a failing

school would ever concede that it was getting sufficient federal funds to make such

progress.

“Reflecting a growing consensus in education research that increased funding

alone does not improve student achievement,” the Act moves from a dollars-and-cents

approach to education policy to a results-based approach that allows local schools to use

substantial additional federal dollars as they see fit in tackling local educational

challenges in return for meeting improvement benchmarks. Horne, 129 S. Ct. at 2603

& n.17. The Act, in short, rejects a money-over-all approach to education policy,

making it implausible that the heartland accountability measures of the law could be

excused whenever schools, exercising their flexibility over how to spend federal and

local dollars, decided they cost too much.

Express waiver authority in some areas and silence in others. Congress knew

how to allow the Secretary to waive obligations under the Act, and it did so in discrete

circumstances. The Act’s general waiver provision allows States and school districts to

seek waivers on just two grounds: that the waiver will “(i) increase the quality of

instruction for students; and (ii) improve the academic achievement of students.”

20 U.S.C. § 7861(b)(1)(B). Neither ground excuses schools from the accountability

measures due to insufficient federal funds.

The Act also specifically describes two types of exceptions from the § 6311

accountability requirements. One applies only in case of “exceptional or uncontrollable

circumstances, such as a natural disaster or a precipitous and unforeseen decline in . . .

financial resources.” Id. §§ 6311(b)(3)(C)(vii), 6311(b)(7), 6311(c)(1), 6311(h)(2)(A)(i).

Not only does neither exemption turn on the sufficiency of federal funding, but one of

them—the “unforeseen decline in . . . financial resources”—creates an exemption for

sharp declines in local funding, which implies that the Act contemplates local spending.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 56

of the United States Dep’t of Educ.

The other type of exception excuses compliance if federal funding is not

sufficient, but again only in limited circumstances. The Act, for instance, allows States

to “suspend the administration of, but not cease the development of,” annual tests if

federal funding falls below certain levels. Id. § 6311(b)(3)(D). Section 6311(c)(2)

requires States to “participate in biennial state academic assessments of 4th and 8th

grade reading and mathematics under the National Assessment of Educational Progress,”

but only if “the Secretary pays the costs of administering such assessments.” Under the

school districts’ interpretation, that final qualification is unnecessary and indeed

pointless. See Astoria Fed. Sav. & Loan Ass’n v. Solimino, 501 U.S. 104, 112 (1991)

(“[W]e construe statutes, where possible, so as to avoid rendering superfluous any parts

thereof.”). Congress likewise capped a school district’s costs for supplemental

educational services at the amount of federal money allocated. Id. § 6316(e)(6). As each

of these examples show, Congress knew how to excuse schools from compliance based

on inadequate funding, but did so only in discrete circumstances—none of them

applicable here. See Hamdan v. Rumsfeld, 548 U.S. 557, 578 (2006) (“A familiar

principle of statutory construction . . . is that a negative inference may be drawn from the

exclusion of language from one statutory provision that is included in other provisions

of the same statute.”).

Inconsistency between the school districts’ interpretation and other provisions

of the Act. Besides conflicting with the hallmark features of the Act and ignoring the

implications and inferences that follow from Congress’s express waiver provisions in

some circumstances but not in others, the school districts’ interpretation conflicts with,

or is at least in tension with, other provisions of the Act. The Act explicitly anticipates

that funding to meet the Act’s requirements will come from a variety of sources, not all

federal. It requires the Secretary, for instance, to examine how States, school districts

and schools have used “Federal, State, and local educational agency funds and

resources to support schools and provide technical assistance to improve the achievement

of students in low-performing schools.” 20 U.S.C. § 6491(a)(2)(E)(iv) (emphases

added); see also id. § 6491(a)(2)(E)(v) (requiring a similar inquiry to determine how

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 57

of the United States Dep’t of Educ.

they have “used State educational agency and local educational funds to help [certain]

schools . . . meet the requirements described in § 6319 of this title of having all teachers

highly qualified not later than the end of the 2005–2006 school year”). This provision

contradicts the notion that States and school districts need only meet the Act’s

requirements to the extent federal funds can do the trick.

Some of the Act’s accountability measures apply to every school in a

participating State regardless of whether the school receives any federal funding at all.

See, e.g., id. § 6311(b)(2). Other requirements apply to every school in a school district

receiving funds, whether or not the school itself receives funds. See id. § 6319. Yet

these universal accountability requirements cannot be squared with an interpretation of

the Act that demands accountability only to the extent a school receives federal funding.

See Pontiac, 512 F.3d at 274–75 (McKeague, J., dissenting). Otherwise, an unfunded

school district would have no accountability responsibilities under the Act, a notion the

Act expressly contradicts.

In passing the Act, Congress also knew how to allocate funds for specific

purposes—in the nature of traditional input-based funding programs. Some provisions

of the Act tell the States exactly how to “use the [federal] funds.” See, e.g., 20 U.S.C.

§§ 6313, 6362(c)(7)(A), 6372, 6381c, 6383, 6393, 7114. But these provisions make all

the more conspicuous the contrast with other provisions of the Act that say nothing about

how to spend the money but mention only the accountability benchmarks the States must

achieve in using it. See, e.g., id. §§ 6311(a), 6316(a). Congress showed that it knew

how to write input-based provisions, limiting the States’ responsibility to spend certain

funds on discrete items, and output-based provisions, allowing the States to spend the

money however they wished so long as they achieved the federal benchmarks. We

should respect the reality that Congress knew how to distinguish between the two. See

BP America Prod. Co. v. Burton, 549 U.S. 84, 92 (2006).

Ongoing implementation of the Act. If for some reason the States or school

districts had any doubt about the nature of the bargain they were undertaking when they

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 58

of the United States Dep’t of Educ.

first accepted federal funds under the Act, time has cleared things up. Since 2002, when

it passed the Act, Congress has made annual appropriations to the States, and each year

the appropriations have not been linked to, or premised on, any effort to ascertain the

funds needed to make adequate yearly progress. See Compl. ¶¶ 25–31. Yet each year

the Department of Education has not wavered: The Secretary consistently has denied

attempts to evade the Act’s requirements due to insufficient federal funding. By the time

the school districts filed this lawsuit in 2005, they plainly were on notice that there was

no linkage between the appropriated federal funds and the States’ duty to comply with

the accountability measures. Notwithstanding that notice, the States continued to

participate in the program—continued to accept the spending-legislation offer of

funding, as it were, in exchange for the continued obligation to meet the Act’s

achievement requirements. See, e.g., Jackson v. Birmingham Bd. of Educ., 544 U.S. 167,

183 (2005) (States had sufficient notice of their responsibility under Title IX because the

regulations had “been on the books” for some time); Davis v. Monroe County Bd. of

Educ., 526 U.S. 629, 643 (1999) (same); cf. Bennett, 470 U.S. at 669 (“the fact that Title

I [of the Elementary and Secondary Education Act of 1965] was an ongoing, cooperative

program meant that grant recipients had an opportunity to seek clarification of the

program requirements”); Brown & Williamson Tobacco, 529 U.S. at 143 (noting in the

context of Chevron that “[o]ver time, . . . subsequent acts can shape or focus” the initial

“range of plausible meanings” that a statute may have). The Act does not permit the

school districts to accept one part of the bargain and discard the other, least of all when

the passage of time confirms the two sides of the bargain.

C.

Resisting this conclusion, the school districts argue that 20 U.S.C. § 7907(a), a

provision that arrives on page 559 of this 674-page Act, 115 Stat. 1425, 1983, changes

everything. Appearing in a section dealing with general rules under the Act, the

provision reads in full:

GENERAL PROHIBITION.—Nothing in this Act shall be

construed to authorize an officer or employee of the Federal

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 59

of the United States Dep’t of Educ.

Government to mandate, direct, or control a State, local

educational agency, or school’s curriculum, program of

instruction, or allocation of State or local resources, or mandate

a State or any subdivision thereof to spend any funds or incur any

costs not paid for under this Act.

20 U.S.C. § 7907(a). According to the school districts, the provision means that the

Federal Government may not require the States (or school districts) to spend their own

money to meet the Act’s requirements—that if the appropriated federal funds do not

suffice to meet the accountability measures, the States are free to ignore them. That is

not true—for several reasons.

First, § 7907(a) by its terms is a rule of construction, which explains how other

sections of the Act should not be “construed.” What the school districts urge, however,

is something different—to “construe” § 7907(a) itself to create a no-unfunded-mandate

exception, to use § 7907(a) to lift § 7907(a) into a sweeping exception to the Act. No

one boot straps a boot strap.

Section 7907(a)’s rule of construction has no job to do here. The Act’s express

trade-off between local flexibility to spend federal funds and local responsibility to

obtain output-based progress in doing so has no ambiguity to speak of and thus no

ambiguity to be “construed.” There is nothing unclear, and no shortage of detail in the

674-page piece of legislation, about this hallmark of the Act. There is no other provision

of the Act—at least as far as this dispute is concerned—that calls out for ambiguity-

clarifying “constru[ction].”

Second, text is context, and a reading of § 7907(a) in its immediate surroundings

confirms the modest role it plays. The section merely re-enforces the flexibility that the

Act gives to school districts in developing their own local programs and spending their

own funds in tackling local education matters. It functions as an anti-commandeering

rule of construction, nothing more. As such, it prevents the Secretary from construing

the Act to “mandate” States or school districts (1) to adopt a particular “curriculum” or

“program of instruction”; (2) to “allocat[e]” state or school district resources in a

particular way; or (3) “to spend any funds or incur any costs not paid for under this Act.”

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 60

of the United States Dep’t of Educ.

All three limitations parallel the Act’s theme of local flexibility—that the States and

school districts must be permitted to make their own decisions about how to spend local

resources in return for taking on the duty to make progress in a results-driven way.

Thus, while the Act requires the schools to make adequate yearly progress, it does not

tell them how to do so or mandate the spending of any local money to do so. If

satisfying the Act’s requirements takes additional money, so be it, but the Act is equally

satisfied whether additional costs are incurred or not. Section 7907(a) simply fortifies

the Act’s focus on results over spending levels, on outputs over inputs. See Horne, 129

S. Ct. at 2603 (the Act “expressly refrains from dictating funding levels”).

Judge Cole notes that the Federal Government cannot point to “any provision”

of the Act “that explicitly spells out the States’ [fiscal] obligations under this Act.” Cole

Op. 26. That is right, but it is consistent with this feature of the Act. The Act does not

tell States to spend; it tells them to do. It does not spell out fiscal obligations; it spells

out performance obligations, reporting obligations, parental-involvement obligations,

teacher-qualification obligations—all of which the Act makes perfectly clear through

hundreds of pages of statutory text. No doubt, these performance obligations cost

money, but the Act in general—and § 7907(a) in particular—leave it to the States to

make these spending and allocation choices for themselves.

Third, as signaled by § 7907(a)’s appearance in a “general” set of provisions, it

does not trump specific directives found elsewhere in the Act. “[I]t is a commonplace

of statutory construction that the specific governs the general,” Morales v. Trans World

Airlines, Inc., 504 U.S. 374, 384 (1992), and accordingly the school districts cannot

leverage § 7907(a)’s “general” rule of construction to destroy the specific bargain

offered to the States: the exchange of federal funds with flexibility to spend them in

return for a no-excuses commitment to meeting the Act’s accountability requirements.

The school districts’ contrary argument not only ignores this “commonplace” rule of

construction but it also undermines other provisions of the Act. To ensure that the Act

does not lead local schools to devote fewer local resources to education, the Act requires

each participating State to preserve a level of local effort—no less than 90% of the prior

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 61

of the United States Dep’t of Educ.

year’s expenditures. 20 U.S.C. §§ 6321, 7901. But if we read § 7907(a) in isolation in

the manner that the school districts urge, it would bar this requirement as well—as a

violation of the prohibition against mandating States to “spend any funds . . . not paid

for under this” Act. The school districts correctly acknowledge that § 7907(a)’s general

rule of construction does not overrule this specific provision, Pontiac Supp. Br. at 20, but

they persist in claiming that it overrules the specific bargain at the heart of the Act. They

cannot have it both ways. The specific governs the general across the board, not just in

some places as opposed to others.

Pennhurst, the school districts’ featured case, embraced this form of analysis,

paying attention to the difference between general and specific statutory provisions. The

statute at hand provided that “[p]ersons with developmental disabilities have a right to

appropriate treatment, services, and habilitation for such disabilities,” 42 U.S.C.

§ 6010(1) (current version at 42 U.S.C. § 15009(a)(1)), and the question was whether

this language imposed mandatory duties or hortatory goals. After comparing the general

language of § 6010 to other provisions that imposed express conditions on federal

funding, the Court concluded that “[t]he existence of explicit conditions throughout the

Act, and the absence of conditional language in § 6010, manifest the limited meaning of

§ 6010.” Pennhurst, 451 U.S. at 23. “[A] brief comparison of the general language of

§ 6010 with the conditions Congress explicitly imposed on the States,” the Court

reasoned, “demonstrates that Congress did not intend to place either absolute or

conditional obligations on the States.” Id. at 25. The same principle applies here. What

was sauce for the States in Pennhurst is sauce for the school districts here.

Fourth, § 7907 as a whole supports this interpretation. Labeled “Prohibitions on

Federal Government and Use of Federal Funds,” the section contains other provisions

that all limit federal officials in imposing more conditions on the States than those

mentioned in the Act. The other subsections prohibit federal officials from requiring any

particular curricula, academic standards or building standards. 20 U.S.C. § 7907(b)–(d).

Because words are “known by the company [they] keep[],” Gustasfson v. Alloyd Co.,

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 62

of the United States Dep’t of Educ.

513 U.S. 561, 575 (1995), these statutory neighbors reenforce the notion that § 7907(a)

is an anti-commandeering rule of construction.

Fifth, it strains credulity to think that Congress, via a single half-sentence 559

pages into the Act, suddenly blinked, changing the hallmark bargain at the core of this

legislation. “Congress . . . does not alter the fundamental details of a regulatory scheme

in vague terms or ancillary provisions.” Whitman v. Am. Trucking Ass’ns, 531 U.S. 457,

468 (2001). The National Legislature “does not . . . hide elephants in mouseholes,” id.,

yet that is precisely what the school districts purport to have found hidden in § 7907(a).

See also Brown v. Gardner, 513 U.S. 115, 118 (1994) (“Ambiguity is a creature not of

definitional possibilities but of statutory context.”).

D.

Stray remarks in the legislative history and offhand comments by former

Secretary of Education Rod Paige do not alter this conclusion. Various Senators and

Representatives made statements for and against the Act, arguing in some places that it

would impose increased costs on the States and in some places that it would not. See

Pontiac, 512 F.3d at 269–271; see also id. at 282–284 (McKeague, J., dissenting). But

that makes no difference. The school districts’ legislative-history-based arguments about

the meaning of § 7907(a) are no more plausible than their text-based ones. In either

case, they ask us to embrace an interpretation of § 7907(a) that cannot be reconciled with

the hallmark features of the Act. Legislative history also cannot alter the outcome in a

clear-statement case. The Pennhurst clear-statement rule turns on textual ambiguity,

not ambiguity in the legislative history. If there is textual ambiguity and a plausible

state-friendly way to read the statute, that ends the matter. But if there is no such

ambiguity, there is nothing for the legislative history to clarify. See Arlington, 548 U.S.

at 304 (“In a Spending Clause case, the key is not what a majority of the Members of

both Houses intended but what the States are clearly told regarding the conditions that

go along with the acceptance of those funds.”); cf. United States v. Nordic Village, Inc.,

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 63

of the United States Dep’t of Educ.

503 U.S. 30, 37 (1992) (“legislative history has no bearing on the ambiguity point” in

applying a clear-statement rule).

The same goes for Secretary Paige’s statements, which no one claims deserve

deference, whether under Chevron or any other doctrine. In one speech, he said that the

Act “contains language that says that things that are not funded are not required,”

Compl. ¶ 15 (quoting Paige speech of Sept. 4, 2003), and in another speech that “if it is

not funded, it’s not required. There is language in the bill that prohibits requiring

anything that is not paid for,” id. (quoting Paige speech of Dec. 2, 2003). These

comments, however, conflict with others in which Secretary Paige “repeatedly”

emphasized that “[i]f a state decides to accept the federal funds [offered under the Act],

then it’s required to implement the law in its entirety.” Compl. ¶ 16 (quoting Paige

speech of Mar. 25, 2004). More importantly, these words conflict with the actions of the

Department of Education, which has consistently held States accountable under the Act,

whether those States are content with the level of federal funding or not. See Compl.

¶ 17–19 (noting the “uniform rejection of requests for waivers from the NCLB mandates

based upon a lack of federal funding”). Whatever Secretary Paige meant in his

comments nearly six years ago (and it is not clear that they are inconsistent with my

reading of § 7907(a)), they are not binding on the Department of Education and cannot

create ambiguity where none otherwise exists.

The school districts, lastly, invoke the 1984 Perkins Vocational Education Act,

20 U.S.C. §§ 2301–2471. Their chain of reasoning goes like this: § 7907(a) parallels

the first part of § 2306a(a) of the Perkins Act; § 2306a(a), unlike § 7907(a), proceeds to

exempt several Perkins Act provisions requiring the expenditure of specific non-federal

funds; this exemption implies that these provisions otherwise would conflict with the

prohibition; because the exempted provisions require the expenditure of non-federal

funds, § 2306a(a) should be read to forbid requiring the expenditure of non-federal funds

except as to the specific provisions exempted, and § 7907(a) should be read the same

way.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 64

of the United States Dep’t of Educ.

The argument proves too much. Two of the provisions excepted in the Perkins

Act—those requiring that States and school districts maintain their financial effort rather

than supplanting their previous spending with federal funds, 20 U.S.C. §§ 2391(a),

2413—have counterparts in No Child Left Behind as well. See id. §§ 6321, 7901. And

although § 7907(a) includes no exceptions for these maintenance-of-effort provisions,

no one, the school districts included, see Pontiac Supp. Br. at 20, claims that § 7907(a)

nullifies the Act’s maintenance-of-effort provisions. See United States v. Atl. Research

Corp., 551 U.S. 128, 137 (2007) (statutes should not be read to make any provision “a

dead letter”). Better, it seems to me, to read § 7907(a) in the context of No Child Left

Behind, not the Perkins Act, which was first enacted 18 years earlier and which adds

nothing that supports a plausible alternative interpretation of § 7907(a).

*****

Depending on whom you ask, the No Child Left Behind Act might be described

in many ways: bold, ground-breaking, noble, naïve, oppressive, all of the above and

more. But one thing it is not is ambiguous, at least when it comes to the central tradeoff

presented to the States: accepting flexibility to spend significant federal funds in return

for (largely) unforgiving responsibility to make progress in using them. The theme

appears in one way or another in virtually every one of the Statements of Purpose of the

Act, and it comes across loud and clear in the remaining 674 pages of legislation. That

§ 7907(a) suddenly transformed the Act into a no-strings-attached grant program, or for

that matter an outright gift program, not only ignores the pages of legislation that

precede it, but it also ignores the words of § 7907(a) itself and one of the eternal

prerogatives of power: control follows money. San Antonio Indep. Sch. Dist. v.

Rodriguez, 411 U.S. 1, 53 n.109 (1973). Here, unlike prior education funding programs,

Congress did not exercise that control by telling the schools how to spend the money but

by telling them to get results with it. Time will tell whether Congress was wise to move

from conditioning federal funds on “adequate” additional local funding to conditioning

federal funds on “adequate” local progress. But no state official who read the Act could

plausibly think that Congress intended to impose neither condition.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 65

of the United States Dep’t of Educ.

That said, I have considerable sympathy for the school districts, many of whom

may well be unable to satisfy the Act’s requirements in the absence of more funding and

thus may face the risk of receiving still less funding in the future. Yet two Presidents of

different parties have embraced the objectives of the Act and committed themselves to

making it work. So have a remarkably diverse group of legislators. If adjustments

should be made, there is good reason to think they will be. But, for now, it is hard to say

that the judiciary will advance matters by taking the teeth out of the hallmark features

of the Act. It is the political branches, not the judiciary, that must make any changes,

because the Act’s requirements are clear, making them enforceable upon participating

States and their school districts.

III.

For these reasons, I concur in the order affirming the district court’s judgment.

No. 05-2708 School District of the City of Pontiac, et al. v. Secretary Page 66

of the United States Dep’t of Educ.

APPENDIX

The purpose of this subchapter is to ensure that all children have a fair, equal, and

significant opp

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