stating that “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. . . . But that does not make the issue one of subject matter jurisdiction, which it is not.”
How later courts described this case
- stating that “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. . . . But that does not make the issue one of subject matter jurisdiction, which it is not.”
- concluding that the No Child Left Behind Act "fails the Spending Clause inquiry because it does not provide clear notice to States that they must incur the costs of compliance" without resolving an issue of statutory interpretation central to the merits of plaintiffs' claims
- holding that the plaintiff school districts, which had to spend state and local funds in order to comply with the federal government’s education standards, established injury in fact to challenge those standards
- stating that “federal courts may, as a matter of discretion, raise required-party issues under Rule 19(a
Written by the judges who cited it.
The opinion
JULIA SMITH GIBBONS, Circuit Judge,
concurring in part and dissenting in part.
My colleagues’ opinions are articulate and carefully-reasoned, but I find myself unable to join any of them in full. I concur in Judge Cole’s analysis of justicia-bility and standing and his thoughts about Federal Rule of Civil Procedure 19. And, although Judge Sutton questions the plausibility of any of the possible interpretations of 20 U.S.C. § 7907 (a) that Judge Cole discusses, I find much of Judge Cole’s analysis persuasive. On the other hand, Judge Sutton’s opinion correctly highlights the position of the Spending Clause analysis as a rule of statutory interpretation and logically argues that states enter the bargain offered to them under the No Child Left Behind Act (“NCLB”) with the knowledge that their obligations under the statute must inevitably require use of funds in addition to the federal funds they receive. Judge Sutton’s view has the strength of common sense, without much scrutiny of the precise language at issue, while Judge Cole’s view carefully examines the language of the statute but overlooks *311 the practical implications of the overall context of the NCLB scheme. While I fully appreciate that there are arguments about which approach is legally correct here, from my perspective, the difficulty in choosing between them may well stem from the procedural posture in which we find ourselves.
This case came to us on an appeal from the district court’s granting of defendants’ motion under Federal Rule of Procedure 12(b)(6). Plaintiffs’ complaint is fifty-nine pages long. After its description of the parties, it references the statutory language on which plaintiffs rely, cites two statements by former Secretary of Education Rod Paige (one from the publication Roll Call and one from a speech) that plaintiffs claim support their position, sets forth the position of the Department of Education contrary to plaintiffs’ interpretation, and describes in great detail the extent to which NCLB funding has been insufficient for compliance with the statute and the nature of the requirements imposed on states and school districts by the statute. (Compl. at 11, 12, 13, 14-22.) Plaintiffs seek declaratory and injunctive relief based upon the language contained in 20 U.S.C. § 7907 (a) of NCLB. They have two allegations: 1) the Secretary of Education is violating this provision by requiring school districts to expend their own funds to comply with NCLB’s requirements; and 2) the failure to honor the language of the provision violates the Spending Clause of the United States Constitution. (Compl. at 4.)
Plaintiffs therefore ask for resolution of two different questions: First, what does the provision mean; and, second, if it means that states must expend their own funds to comply with NCLB, whether Congress unambiguously informed the states of this obligation. This bifurcation muddles the fact that the Spending Clause analysis is itself a canon of interpretation. Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 15 , 101 S.Ct. 1531 , 67 L.Ed.2d 694 (1981). Thus, in looking to Congress’s authority under the Spending Clause, courts are attempting to discern the meaning of the statute, in particular the contours of states’ obligations. Id. Relying on the Spending Clause’s restrictions for guidance in statutory interpretation, the Supreme Court said that it “must view the [statute] from the perspective of a state official who is engaged in the process of deciding whether the State should accept [] funds and the obligations that go with those funds.” Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 296 , 126 S.Ct. 2455 , 165 L.Ed.2d 526 (2006). Viewing the statutory language from the state officials’ perspective, we are thus asked to determine what the statute means. Id. If the statutory language does not unambiguously impose obligations on the states, the Spending Clause dictates that the statute cannot be interpreted to require those obligations. In other words, the Spending Clause analysis boils down to rudimentary statutory interpretation: The statute cannot mean what it does not say.
In a sense, we are in an awkward position between two arguably meritorious opinions. First, given the overall statutory scheme that Judge Sutton describes (Op. of Sutton, J. at 285-92), NCLB does seem to require states to spend their own funds to comply with the statute’s requirements. Secondly, however, the language of § 7907(a) is not clear, as Judge Cole demonstrates (Op. of Cole, J. at 271-76), and may not have provided states with clear notice — or, at the very least, plaintiffs have stated a claim to that effect. The correct answer lies in the interplay between these two views. The question is whether § 7907(a) injects so much ambiguity as to cast doubt on the meaning of the rest of the statute. Does it render the *312 statute so unclear as to deprive states of notice of their funding obligations?
Judge Cole’s opinion ably sets out the reasons that plaintiffs’ allegations are sufficient to state a claim. And Judge Sutton ably gives the contrary view. I conclude that plaintiffs have stated a claim, but I differ from both Judge Cole and Judge Sutton in concluding that today is not the time for answering the question of whether a state official would clearly understand that expenditures of state funds are required when necessary to comply with NCLB’s requirements. I would stop short of giving that answer and remand the case for further proceedings.
In view of the varying opinions of my colleagues in this case, none of which find the procedural posture problematic, one may reasonably question just what additional record the district court could consider on remand that might assist in the thorny task of statutory interpretation. A couple of possibilities occur to me — this language’s interpretation in other contexts and evidence of the actual understanding of the states at the outset. There may well be others.
Although the motion to dismiss considers only the allegations of the complaint, the parties’ briefs in the district court and here include much discussion of legislative history. Judge Cole steers clear of reliance on legislative history, focusing on the statutory language. And Judge Sutton discounts the role of legislative history in Spending Clause analysis. 1
Even assuming there is no useful legislative history of this statute appropriate for consideration, an assumption in which I lack entire confidence, there may be other legislative materials relevant to notice that the court could consider. The language at issue is hardly unique and is found in a number of statutes other than NCLB. See, e.g., Serve America Act of 2009, 42 U.S.C. § 12645f(a); School-To-Work Opportunities Act of 1994, 20 U.S.C. § 6234 . The interpretation of § 7907 might more easily be resolved by guidance from its interpretation in these other statutes, particularly if such language has a generally understood meaning.
Apart from legislative materials, another possibility for help exists. There is nothing in the complaint about how the states in which the school districts are located actually interpreted their funding obligations under NCLB at its inception. This suit was filed several years after the enactment of NCLB and, as Judge McKeague’s opinion highlights, the states are not parties. Surely, the states’ actual understanding of their obligations from the outset is highly pertinent to whether they had notice. 2 . Judge Sutton finds relevant *313 the notice given to plaintiffs by the Department of Education’s interpretation of NCLB subsequent to its passage. Although this notice is certainly relevant to the equities of a situation in which states want the benefit of federal funds without assuming the obligations that accompany them, 3 it would seem much more pertinent to the notice issue to know what state officials thought from the outset. See Arlington, 548 U.S. at 296 , 126 S.Ct. 2455 . Particularly illuminating is not only what the relevant state officials understood the language to mean when they agreed to the terms of NCLB, but also what they understood the identical language in the School-to-Work Act to mean when agreeing to its terms in 1994.
I conclude that the allegations of the plaintiffs’ complaint are at least sufficient to state a claim. Consequently, I would reverse the grant of the motion to dismiss and remand for further proceedings. Doubtless, these further proceedings will include more motions and, we may hope, more help in interpreting the statute when a court is next called upon to determine the notice issue.
. Judge Sutton relies on Arlington to dismiss the plaintiffs' legislative history arguments. (Op. of Sutton, J. at 281.) Arlington , however, found that the legislative history was insufficient to overcome the overwhelming evidence to the contrary, particularly the unambiguous statutory text and relevant case law. 548 U.S. at 304 , 126 S.Ct. 2455 (concluding that regardless of the "weight this legislative history would merit in another context, it is not sufficient here ... where everything other than the legislative history overwhelming[ly] suggests" a different conclusion). In this case, the statutory text is ambiguous, and there are no cases on point. Legislative history thus remains pertinent to our analysis.
. I note that several states have provided their views in an amicus brief: "[Connecticut, Delaware, Illinois, Maine, New Mexico, Oklahoma, Wisconsin, and the District of Columbia] understood, based on the plain language and statutory context of the Unfunded Mandates Provision, that neither states nor local school districts would be required to spend their own funds to comply with the NCLB mandates." (Amicus Br. of the States of Conn., Del., Ill., Me., N.M., Okla., Wis., D.C. at 2.) Submission of evidence by the parties as *313 to the states' understanding could shed light on the actual notice states were given.
. As an aside, it also seems odd to discount legislative history in favor of looking only at the statutory language but then to supplement the statutory language with post-passage conduct by the executive department charged with implementation of the statute, as Judge Sutton does. (Op. of Sutton, J. at 295-96.)