Appendix — School District of Pontiac v. Duncan

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APPENDIX A

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

[Filed 11/23/2005]

Civil Action No. 05-CV-71535-DT

SCHOOL DISTRICT OF THE CITY OF PONTIAC, et al.,

Plaintiffs,

VS.

MARGARET SPELLINGS,

Defendant.

HON. BERNARD A. FRIEDMAN

OPINION AND ORDER GRANTING

DEFENDANT'S MOTION TO DISMISS

This matter is presently before the court on defen

dant’s motion to dismiss the complaint pursuant

to Fed. R. Civ. P. 12(b)(1) or (b)(6). Plaintiffs have

responded, defendant has replied, and the court has

heard oral argument. For the reasons stated below,

the court shall grant the motion.

The plaintiffs in this case include several school

districts in three States (Michigan, Texas, Vermont),

the National Education Association (“NEA”), and

NEA-affiliates in ten states (Connecticut, Illinois,

Indiana, Michigan, New Hampshire, Ohio, Penn-

sylvania, Texas, Utah and Vermont). The defendant

is Margaret Spellings, in her official capacity as

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Secretary of the United States Department of

Education.

Plaintiffs allege that defendant, by enforcing vari-

ous provisions of the No Child Left Behind (“NCLB”)

Act, is imposing unfunded mandates on the States,

although unfunded mandates are prohibited by the

statute. The case is well summarized in the

introductory section of the complaint:

This is a lawsuit for declaratory and injunctive

relief based upon Section 9527(a) of the No Child

Left Behind Act (“NCLB”), which provides in full

as follows:

(a) 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 education 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)]

Plaintiffs contend that the Secretary of Edu-

cation is violating this “Unfunded Mandates

Provision” by requiring states and school dis-

tricts to comply fully with all of the NCLB

mandates even though states and school districts

have not been provided with sufficient federal

funds to pay for such compliance. Plaintiffs

further contend that by failing to honor the

commitment mace by the Unfunded Mandates

Provision—namely, that the federal government

would fund the mandates or not require com-

pliance with them—the Secretary of Education is

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violating the Spending Clause of the United

States Constitution.

Complaint, pp. 3-4. The complaint summarizes the

“NCLB mandates” as follows:

32. The NCLB dictates that any state that

accepts Title I funding must (a) revise the state’s

curriculum standards in core academic areas, (b)

develop standardized tests aligned with the cur-

riculum standards to measure the progress of

public school students in meeting those stan-

dards, (c) require school districts to administer

those tests to all but a very small group of

students, (d) based on the performance of stu-

dents on those tests, both overall and within

specified subgroups (viz., major racial and ethnic

groups, low income students, limited English

proficiency students and disabled students), re-

quire school districts to determine whether

schools, and whether the school districts them-

selves, are making AYP [adequate yearly

progress] in improving student performance on

those tests, (e) if schools and school districts are

not making AYP, take certain specified actions

against those schools and school districts, and,

finally, (f) ensure that school staff (teachers and

paraprofessionals) meet prescribed qualifications

requirements. As detailed below, the costs of

complying with these NCLB mandates are

enormous, and far exceed the limited increase in

Title I federal funding that followed enactment of

the NCLB.

Several pages of the complaint are devoted to

demonstrating the shortfall between the costs of

compliance and the federal funds appropriated. For

example, regarding “curriculum and testing man-

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dates,” plaintiffs allege that Illinois will spend $15.4

million per year to develop and administer required

tests, whereas the federal government currently gives

Illinois $13 million per year for this purpose, a $2.4

million annual shortfall. Regarding “data collection,

grading and reporting mandates,” the complaint cites

Anchorage (Alaska) and Jordan (Utah) as examples

of school districts which had to spend more money

just to collect, analyze and report data, than they

received in total NCLB funds. The complaint also

alleges that federal funding for required “technical

assistance” is woefully inadequate. Connecticut, for

example, received just $218,000 in 2005 to provide

such assistance to 93 schools, whereas the actual cost

of this mandate was over $18 million.

The complaint asserts two causes of action. The

first alleges that defendant is violating the Spending

Clause of the U. S. Constitution “by changing one of

the conditions pursuant to which states and school

districts accepted federal funds under the NCLB—

viz., that states and school districts would not be

required to spend any funds or incur any costs not

paid for under this Act.” The second cause of action

makes the identical allegation but asserts a claim

directly under the “unfunded mandate” section of the

NCLB. For relief, plaintiffs request that the court:

(1) Issue an order declaring that states and

school districts are not required to spend non-

NCLB funds to comply with the NCLB man-

dates, 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;

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(2) Enjoin defendant and any other officer or

employee of ED 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;

(3) Award to plaintiffs . . . costs, fees and other

expenses incurred in prosecuting this lawsuit;

and

(4) Order such other and further relief as this

Court may deem appropriate.

In her motion to dismiss, defendant first argues

that the court lacks subject matter jurisdiction be-

cause plaintiffs lack standing. Alternatively, defen-

dant argues that the complaint should be dismissed

for failure to state a claim because the section of the

NCLB at issue, 20 U.S.C. § 7907(a), does not provide

the relief plaintiffs seek.

“Standing doctrines are employed to refuse to

determine the merits of a legal claim, on the ground

that even though the claim may be correct the

litigant advancing it is not properly situated to be

entitled to its judicial determination. The focus is on

the party, not the claim itself.” 13 C. Wright & A.

Miller, Federal Practice and Procedure § 3531, pp.

338-39 (1984). The Supreme Court has devised a

three-part test for determining whether a plaintiff

has standing:

It has been established by a long line of cases

that a party seeking to invoke a federal court’s

jurisdiction must demonstrate three things: (1)

“injury in fact,” by which we mean an invasion of

a legally protected interest that is “(a) concrete

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and particularized, and (b) actual or imminent,

not conjectural or hypothetical,” (2) a causal

relationship between the injury and the chal-

lenged conduct, by which we mean that the

injury “fairly can be traced to the challenged

action of the defendant,” and has not resulted

“from the independent action of some third party

not before the court,” and (3) a likelihood that the

injury will be redressed by a favorable decision,

by which we mean that the “prospect of obtaining

relief from the injury as a result of a favorable

ruling” is not “too speculative.” These elements

are the “irreducible minimum” required by the

Constitution.

General Contractors of Am. v. City of Jacksonville,

113 S. Ct. 2297, 2301-2302 (1993). See also Havens

Realty Corp. v. Coleman, 455 U.S. 363, 375-76 (1982)

(plaintiff must allege injury in fact, which means

“distinct and palpable injuries that are fairly trace-

able to [defendants] actions”). In the present case,

defendant argue that plaintiffs have failed to allege

or show (1) an “injury in fact,” (2) causation, or (3)

that the relief sought will redress the injury.

In particular, defendant argues that the NEA and

its affiliates lack standing because they are alleging

injury to third-parties—namely, States and school

districts. The NEA-plaintiffs also allege that they

suffer “stigma” and harm to their reputation when

the schools they are associated with are found, under

the NCLB, to be performing poorly. However,

defendant cites solid authority, including Allen v.

Wright, 468 U.S. 737, 755 (1984), for the proposition

that stigma alone generally is not sufficient to confer

standing. In response, the NEA-plaintiffs argue that

they are not alleging stigma alone, but also direct

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harm to their members, caused by the fact that

funding is now being diverted from NEA-supported

programs to pay for NCLB requirements, such as

testing. As for the plaintiff school districts, defendant

argues that they are likewise asserting rights of

third-parties—i.e., the States and all other school

districts around the country. Although defendant

acknowledges that the plaintiff school districts do

allege injury to themselves, defendant argues that

they are misinterpreting and misapplying the NCLB.

Plaintiffs note that at the pleading stage they need

only allege facts in support of standing and, further,

on a motion to dismiss the allegations of the com-

plaint are accepted as true. Plaintiffs cite Bennett v.

Spear, 520 U.S. 154, 168 (1997), for its statement

that “general factual allegations of injury” are suffi-

cient; and National Organization for Women, Inc. v.

Scheidler, 510 U.S. 249, 256 (1994), for the rule that

a complaint should not be dismissed for lack of

standing so long as “relief could be granted under any

set of facts that could be proved consistent with the

allegations.”

The court is persuaded that standing has been

adequately alleged. Plaintiffs claim they are being

directly harmed by the NCLB’s “unfunded man-

dates.” Defendant’s arguments would more properly

be raised in support of a motion for summary judg-

ment. At the pleading stage, however, the court must

accept the allegations in the complaint as true.

Plaintiffs have met their “relatively light” burden of

alleging injury, causation and redressability. There-

fore, the court shall not dismiss the complaint for

lack of standing.

Defendant’s second argument is that the complaint

should be dismissed for failure to state a claim. De-

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fendant submits that plaintiffs are reading too much

into the section of the NCLB cited in the complaint.

As noted above, plaintiffs’ entire case is based on 20

U.S.C. § 7907(a), section 9527(a) of the Act, which

states:

(a) 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 education agency, or school’s curricu-

lum, 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.

Defendant argues convincingly that this sentence

simply means no federal “officer of employee” can

require states or school districts to “spend any funds

or incur any costs not paid for under this Act.” This

does not mean that Congress could not do so, which it

obviously has done by passing the NCLB Act. Defen-

dant also argues that it would make no sense for

Congress to pass this elaborate statute—which does

require many things of States and schoo! districts as

a condition of receiving federal education funds—if

the States could avoid the requirements simply by

claiming that they have to spend some of their own

funds in order to comply with those requirements.

The court is convinced by defendant’s argument

that plaintiffs’ reading of the statute is defeated by

inclusion of the words “an officer or employee of.” If

Congress had meant that federal funding would pay

for 100% of all NCLB requirements, then the inclu-

sion of these words would have been unnecessary. If

Congress meant to prohibit “unfunded mandates” in

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the NCLB, it would have phrased 20 U.S.C. § 7907(a)

to say so clearly and unambiguously. By including

the words “an officer or employee of,” Congress

clearly meant to prohibit federal officers and em-

ployees from imposing additional, unfunded require-

ments, beyond those provided for in the statute. If, as

plaintiffs contend, Congress intended to prohibit

unfunded mandates, it would have omitted the words

“an officer or employee of” or simply stated that the

Federal Government will reimburse the States for all

costs they incur in complying with the requirements

of this statute. Congress has appropriated significant

funding for NCLB requirements. See 20 U.S.C.

§ 6302(a). However, plaintiffs have pointed to no

statutory provision other than § 7907(a) to support

their argument that Congress intended for these

requirements to be paid for solely by the federal

appropriations.

In short, 20 U.S.C. § 7907(a) cannot reasonably be

interpreted to prohibit Congress itself from offering

federal funds on the condition that States and school

districts comply with the many statutory require-

ments, such as devising and administering tests,

improving test scores, and training teachers. The

statute plaintiffs cite does not support their claim.

Accordingly,

IT IS ORDERED that defendant’s motion to

dismiss the complaint pursuant to Fed. R. Civ. P.

12(b)(6) is granted.

/s/ Bernard A. Friedman

Dated: 11/23/2005 BERNARD A. FRIEDMAN

Detroit, Mict.'gan CHIEF UNITED STATES

DISTRICT JUDGE

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APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 05-2708

SCHOOL DISTRICT OF THE CITY OF PONTIAC, et ai.,

Plaintiffs-Appellants,

V.

SECRETARY OF THE UNITED STATES

DEPARTMENT OF EDUCATION,

Defendant-Appellee.

Appeal from the United States District Court for the

Eastern District of Michigan at Detroit.

No. 05-71535-Bernard A. Friedman,

Chief District Judge.

Argued: November 28, 2006

Decided and Filed: January 7, 2008

Before: COLE and McKEAGUE, Circuit Judges;

BREEN, District Judge.’

COUNSEL

ARGUED: Robert H. Chanin, BREDHOFF & KAISER,

Washington, D.C., for Appellants. Alisa B. Klein,

UNITED STATES DEPARTMENT OF JUSTICE, Washing-

* The Honorable J. Daniel Breen,

Judge for the Western District of

designation.

United States District

Tennessee, sitting by

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ton, D.C., for Appellee. ON BRIEF: Robert H.

Chanin, Alice Margaret O’Brien, Jeremiah A. Collins,

BREDHOFF & KAISER, Washington, D.C., Dennis R.

Pollard, THRUN LAW FIRM, Bloomfield Hills, Michi-

gan, for Appellants. Alisa B. Klein, Mark B. Stern,

UNITED STATES DEPARTMENT OF JUSTICE, Washing-

ton, D.C., for Appellee. Joseph M. Miller, PENN-

SYLVANIA DEPARTMENT OF EDUCATION, Harrisburg,

Pennsylvania, Kari Krogseng, James C. Harrison,

REMCHO, JOHANSEN & PURCELL, San Leandro, Cali-

fornia, Gene C. Lange, LUMAN, LANGE, THOMAS &

MCMULLEN, Washington, D.C., Richard Blumenthal,

ATTORNEY GENERAL OF THE STATE OF CONNECTICUT,

Hartford, Connecticut, for Amici Curiae.

COLE, J., delivered the opinion of the court, in

which BREEN, D. J., joined. MCKEAGUE, J. (pp. 19-

29), delivered a separate dissenting opinion.

OPINION

R. GUY COLE, Jr., Circuit Judge. This case

requires us to decide a fundamental question of

federal versus state funding under the No Child Left

Behind Act of 2001 (“NCLB” or “the Act”), 20 U.S.C.

§§ 6301-7941. Plaintiffs-Appellants are school districts

and education associations 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

“(njothing 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 Education

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seeking, among other relief, a judgment declaring

that they need not comply with the Act’s require-

ments where federal funds do not cover the increased

costs of compliance. The district court concluded,

however, that Plaintiffs must comply with the

Act’s requirements regardless of any fedeval-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. Because

statutes enacted under the Spending Clause of the

United States Constitution must provide clear notice

to the States of their liabilities should they decide to

accept federal funding under those statutes, and

because we conclude that NCLB fails to provide clear

notice as to who bears the additional costs of com-

pliance, we REVERSE the judgment of the district

court and REMAND this case for further proceedings

consistent with this opinion.

I. BACKGROUND

A. The No Child Left Behind Act

On January 8, 2002, President George W. Bush

signed into law the No Child Left Behind Act. The

Act—a comprehensive, and in some quarters contro-

versial, educational reform—amended the Elemen-

tary 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 133 8, 1340 (8th Cir.

1973); United States v. Jefferson County Bd. of Educ.,

372 F.2d 836, 851 (5th Cir. 1966). The ESEA was

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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 conse-

quences for schools that fail to meet academic-

achievement requirements. Jd. at 13366, 13372

(statements of Sens. Bunning, Landrieu, and

Kennedy). States may choose not to participate in

NCLB and forego the federal funds that accompany

the Act. If they do accept the 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... .”) (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 educa-

tional assessments and accountability measures.”).

Title I, Part A, of NCLB, titled “Improving Basic

Programs Operated by Local Educational Agencies,”

continues to pursue the objectives of the original

ESEA and imposes the most extensive educational

requirements on participating States and _ school

districts, and likewise provides the largest amount of

federal appropriations to participating States. For

example, in 2005-06, NCLB authorized $22.75 billion

in appropriations for Title I, Part A, compared to

$14.1 billion for the remaining 26 parts of NCLB

combined. Title I, Part A’s stated purposes include

meeting “the educational needs of low-achieving

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children in our Nation’s highest-poverty schools,

limited English proficient children, migratory child-

ren, 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 initia-

tive 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 department of education

in consultation with school districts, parents,

teachers, and other personnel. /d. § 6311(a)(1). A

State plan must “demonstrate that the State has

adopted challenging academic content standards

and challenging student academic achievement

standards” against which to measure the academic

achievement of the State’s students. Jd. § 6311

(b) 1A). The standards in the plan must be

uniformly applicable to students in all the State’s

public schools, and must at least cover reading, math,

and science skills. /d. § 6311(b)(1C).

States must also develop, and school districts

must administer, assessments to determine students’

levels of achievement under plan standards. /d.

§ 6311(bX2)(A). These assessments must be able to

show the percentage of students achieving proficiency

among “economically disadvantaged students,” “stu-

lda

dents from major racial and ethnic groups,” “students

with disabilities,” and “students with limited English

proficiency.” Jd. § 6311(b\2)C\Xv)(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, attains proficiency. 34 C.F.R.

§ 200.20(a)(1).

Failure of a school to make AYP triggers other

requirements of Title I, Part A. If a school fails to

make AYP for two consecutive years, it must be iden-

tified 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 must also 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. I/d.

§§ 6316(b)(3 (A)(ii1), (ix).

If a school does not make AYP after two full years

of improvement status, it is “identiflied] . . . for

corrective action.” Jd. § 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. /d.

If after a full year of corrective action a school has

still not made AYP, the district must restructure the

school entirely; options for restructuring include

“[rleopening the school as a public charter school,”

replacing the majority of the staff, or letting the

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State’s department of education run the _ school

directly. Jd. § 6316(b)(8)(B).

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).

NCLB also 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 continue to be responsible for the

majority of the funding for public education and the

funds distributed under Title I should be used only to

implement Title I programming, not as a substitute

to the funds that are already being used for general

programming. '

However, while Plaintiffs recognize that the

majority of the funding for education continues to

come from state and local sources, the Plaintiffs

contend that NCLB does not require them to spend

' Contrary to the dissent’s contention that victory by the

Plaintiffs in this case will result in a fundamental change in this

nation’s funding scheme for education, the 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-those necessary

to comply with NCLB that would not be incurred absent the

State’s attempt at compliance with NCLB.

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the money drawn from state and local sources on the

additional programs created as required by NCLB. At

the heart of this case is § 7907(a), often referred to as

the “Unfunded Mandates Provision,” which Plaintiffs

argue provides that they need not comply with the

Act’s requirements where federal funding does not

cover the additional costs of complying with those

requirements. Section 7907 is entitled “Prohibitions

on Federal government and use of Federal funds,”

and subsection 7907(a) provides 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). Plaintiffs 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.”

(Joint Appendix (“JA”) 21 (quoting Paige statement of

Dec. 2, 2003) (emphasis added). )

B. Procedural History

As mentioned, Plaintiffs-Appellants are school

districts and education associations. The eight school

districts are Pontiac School District, Laredo Indepen-

dent School District, Leicester Town School District,

Neshobe Elementary School District, Otter Valley

Union High School, Pittsford Town School District,

Sudbury Town School District, and Whiting Town

School District. Rutland Northeast Supervisory

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Union, which contains eleven school districts, is also

a Plaintiff-Appellant. The education association

Plaintiffs-Appellants are the National Education As-

sociation (NEA) and ten NEA-affiliate education

associations: the Connecticut Education Association,

the Illinois Education Association, the Michigan Edu-

cation Association, the Ohio Education Association,

the Reading Education Association, the Utah Educa-

tion Association, the Indiana State Teachers Associa-

tion, the Texas State Teachers Association, NEA-New

Hampshire, and the Vermont NEA.

Plaintiffs brought suit in the United States District

Court for the Eastern District of Michigan against

the Secretary, alleging, based on § 7907(a), that the

Act does not require school districts to comply with

NCLB educational requirements if doing so would

require the expenditure of state and local funds to

cover the additional costs of compliance. (See, e.g.,

Plaintiffs Reply Br. 6 (“Plaintiffs’ position is simply

that the Secretary may not require states and school

districts to take actions mandated by the NCLB that

the states and school districts would not undertake

absent the NCLB’s mandates, if doing so would

require the states or school districts ‘to spend any

funds or incur any costs not paid for under [the

NCLB].”) (alteration in original).) The complaint

alleged in the alternative that the Act is ambiguous

regarding whether school districts are required to

spend their own funds, and that imposing such a

requirement would therefore violate the Spending

Clause of the United States Constitution.

Plaintiffs alleged that in the years following the

enactment of NCLB, Congress has not provided

States and schoo] districts with sufficient federal

funds to comply fully with the Act. For example, for

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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 to the effect that “states and school dis-

tricts 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.” (/d.)

The district court dismissed the complaint under

Federal Rule of Civil Procedure 12(b)(6) for failure to

state a claim upon which relief can be granted. The

district 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.

20 U.S.C. § 7907(a) (emphasis added). The court

concluded that “[bly including the words ‘an officer or

employee of,’ Congress clearly meant [merely] to

prohibit federal officers and employees from imposing

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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 (emphasis in original). 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. The district court 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.

II. DISCUSSION

A threshold question is whether this case is

properly before us. Although the parties litigated

standing in the district court, which concluded that

Plaintiffs had standing, neither party has addressed

the issue on appeal. We must, however, address

standing where it is in question, even if the parties

have not raised the issue. Adarand Constructors, Inc.

v. Mineta, 534 U.S. 103, 110 (2001) (“We are obliged

to examine standing sua sponte where standing

has erroneously been assumed below.”). Accordingly,

we first address whether Plaintiffs have standing,

and then—after answering that question in the

affirmative—conclude that they have stated a claim

upon which relief can be granted based on § 7907(a)

in light of the Supreme Court’s Spending Clause juri-

sprudence.

21a

A. Standing

We review de novo the question of standing.

Sandusky County Democratic Party v. Blackwell, 387

F.3d 565, 573 (6th Cir. 2004). “[P]laintiffs, as the

parties now asserting federal jurisdiction,” have the

burden of establishing standing. DaimlerChrysler

Corp. v. Cuno, ___ U.S. __, 126 S. Ct. 1854, 1861 (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 particula-

rized 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

is applicable 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).

Here, because the complaint was dismissed 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 yet more for a decision on the merits.

Lujan, 504 U.S. at 561.

22a

As discussed below, the Plaintiff school districts

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 Plain-

tiffs also have standing. See, e.g., Clinton v. City of

New York, 524 U.S. 417, 431 (1998); Bowsher v. Synar,

478 U.S. 714, 721 (1986). Additionally, we need not

address whether Plaintiff school districts’ 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 would allegedly

occur very soon).

1. Injury in Fact

Plaintiff school districts, and the supervisory

union, allege that they must spend state and local

funds to pay for NCLB compliance:

Because of the multibillion dollar national fund-

ing 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.

23a

(JA 61-62.) The districts also allege that if they do not

comply with all NCLB requirements, including those

whose costs exceed NCLB funding, the districts “face

the withholding [by the Secretary] of federal funds to

which they otherwise are entitled under the NCLB.”

(JA 65.) Additionally, the districts claim that inade-

quate federal funding has caused low rates of student

proficiency on standardized tests.

The current Secretary has consistently maintained

that school districts must comply with NCLB

requirements even if they must spend non-federal

funds to do so. Plaintiffs contend that, based on 20

U.S.C. § 7907(a), NCLB does not require compliance

beyond that for which federal funds will pay. Plaintiff

districts allege that the Secretary’s insistence that

school districts comply fully with NCLB has already

forced Plaintiffs to spend state and local funds on

NCLB requirements and will continue to require

such expenditures in the future. Because this injury

has already occurred and is ongoing, it is concrete

and actual.

Moreover, the alleged ongoing need of Plaintiff

districts to spend non-federal funds to comply with

NCLB requirements is not dependent on the hypo-

thetical 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

24a

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). Thus, the “injury in

this case . . . does not turn on the independent actions

of third parties,” but on NCLB’s funding require-

ments, which dictate the quantum of funding pro-

vided to each school district. Clinton, 524 U.S. at 431

n.19. To the extent the funding received by Plaintiff

districts under NCLB is insufficient to defray the cost

of compliance with NCLB requirements, the districts

have sustained a cognizable injury in fact.

2. Traceability

The requirement that Plaintiff districts spend non-

federal funds to comply with NCLB is also fairly

traceable to the challenged action of the Secretary.

The Secretary has interpreted NCLB to mean that

“lilf a state decides to accept the federal funds |offered

under the NCLB], then it’s required to implement the

law in its entirety.” (JA 21 (quoting Rodney Paige,

Secretary, U. S. Dep’t of Educ., Remarks to National

Urban League (Mar. 25, 2004)) (alterations in origi-

nal).) Thus, the Secretary has not granted waivers of

NCLB educational requirements based on the insuffi-

ciency of federal funding.” Therefore, Plaintiff districts

* Due to the Secretary’s uniform rejection of requests for

waivers, Plaintiffs allege that “it would be futile for the plaintiff

schoo] districts to ask” for a waiver. (JA 22-23.) The Secretary

does not dispute that a request would be futile, and neither

party has addressed the exhaustion of administrative remedies.

See 20 U.S.C. § 1234d (providing an opportunity for an admin-

istrative hearing before the Secretary withholds federal

education funds); Leedom v. Kyne, 358 U.S. 184, 188 (1958)

(providing a narrow exception to the exhaustion requirement);

Spellings, 453 F. Supp. 2d at 485 (requiring that a plaintiff

challenging NCLB exhaust administrative remedies first).

25a

allege, they have spent non-federal funds to comply

with NCLB requirements. If the Secretary were not

enforcing compliance with NCLB requirements even

when federal funds do not pay for compliance, schoo!

districts would either not have to spend these funds

at all, or would be able to spend them on other

educational initiatives they believe are important.

3. Redressability

Finally, Plaintiff districts’ injury must be redressa-

ble 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. This

satisfies the redressability requirement.

B. Plaintiffs Have Stated a Claim That They Are Not

Liable For the Additional Costs of Compliance

With NCLB Requirements

We conclude that Plaintiffs have stated a claim

under NCLB. In support of this conclusion, we first

set forth the Spending Clause landscape governing

this matter, focusing on the requirement that legisla-

tion enacted under the Spending Clause provide clear

notice to the States of their liabilities under that

legislation. We then conclude that NCLB, by its

terms, fails to provide clear notice of the States’ obli-

gation to incur additional costs to comply with the

Act’s requirements. We additionally explain that the

legislative history dues not suggest that this notice

is clear. Finally, we note that even the Defendant

Therefore, we will not address the significance of the failure to

exhaust such remedies at this stage in the litigation.

26a

in this matter previously expressed a view of the

contested funding provision that coincides with the

interpretation that Plaintiffs urge here.

1. The Clear-Notice Requirement Under the

Spending Clause

Congress enacted NCLB under the Spending

Clause. U.S. Const. art. I, § 8, cl. 1; see Spellings, 453

F. Supp. 2d at 469. “Congress has broad power to set

the terms on which it disburses federal money to the

States.” Arlington Cent. Sch. Dist. Bd. of Educ. v.

Murphy, __ U.S. _,, 126 S. Ct. 2455, 2459 (2006)

(citing South Dakota v. Dole, 483 U.S. 203, 206-07

(1987)). “(Blut when Congress attaches conditions to

a State’s acceptance of federal funds, the conditions

must be set out ‘unambiguously.” /d. (citing Penn-

hurst 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.” Jd. (quoting Penn-

hurst, 451 U.S. at 17). “States cannot knowingly

accept conditions of which they are ‘unaware’ or

which they are ‘unable to ascertain.” Jd. (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.” Penn-

Aurst, 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.” /d. at 17-18.

27a

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. §§ 6000-6081,

were not required to assume costs of providing

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. Jd. at 11. The DDA also provided a variety

of conditions for the receipt of federal funds, such as

that the States submit a plan to evaluate the services

provided under the DDA to the Secretary of the

Department of Health and Human Services. /d. at 12.

At the heart of the case was the DDA’s “bill of rights”

provision, which provided that mentally disabled citi-

zens “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.” Jd. at 13 (quoting § 6010). 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 these services.

Id.

The Supreme Court held, however, that the fore-

going language in the DDA’s “bill of rights” provision

did not create enforceable obligations on the State.

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.” Jd. at

22-23. The Court also noted that the Act’s “plain

language” supported this view. It stated that “[w]hen

Congress intended to impose conditions on the grant

of federal funds,” as in other sections of the DDA, “it

28a

proved capable of doing so in clear terms,” by, for

example, using the term conditioned. Jd. at 23. This

“bill of rights” section, “in marked contrast, in no way

suggestled| that the grant of federal funds [was]

‘conditioned’ on a State’s funding the rights described

therein.” Jd. The Court further noted that the

Federal Government had no authority under the

DDA to withhold funds from States for failing to

comply with this “bill of rights” section. Jd. Accor-

dingly, that section could “hardly be considered a

‘condition’ of the grant of federal funds.” Jd. The

Court also explained that the funds Congress

provided to Pennsylvania under the DDA were “woe-

fully 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 purpose in

enacting” this provision because Congress “usually

makes a far more substantial contribution to defray

costs” when it “imposel[s] affirmative obligations on

the States.” Jd. “It defies common sense,” the Court

concluded, “to suppose that Congress implicitly

imposed this massive obligation on participating

States.”* 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

* In this case, Plaintiffs do not dispute that Congress did

clearly intend to place a condition on the grant of federal funds.

However, as the dissent notes, “there is no mention of the cost of

compliance anywhere in the text of the NCLB.” Dissenting Op.

at 21. Plaintiffs argue that this silence cannot be taken as a

clear statement that States and local governments would be

required to expend their own funds to cover any shortfall of

federal funds.

29a

whether or not to accept those funds.” Jd. “That

canon,” the Court continued, “applies with greatest

force where, as here, a State’s potential obligations

under the Act are largely indeterminate.” Jd. “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. 7d.

The Court recently applied these principles again

in Arlington, where a similar question arose under

the Individual with Disabilities in Education Act

(“IDEA”), 20 U.S.C. § 1400-1482. The IDEA, enacted

under the Spending Clause, “provides federal funds

to assist state and local agencies in educating child-

ren with disabilities and conditions such funding

upon a State’s compliance with extensive goals and

procedures.” Arlington, 126 S. Ct. at 2458 (internal

quotation marks and citation omitted). Central to the

dispute in Arlington was that the IDEA provided that

a court “may award reasonable attorneys’ fees as

part of the costs” to parents who prevail in an action

brought under the Act. Jd. at 2459 (quoting 20 U.S.C.

§ 1415(i)(3)(B)).

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. Jd. at 2457. The plaintiffs

prevailed in the district court, and the Second Circuit

affirmed. Jd. at 2458. As prevailing parents, the

plaintiffs then sought fees under the aforementioned

30a

provision for the services of an educational consul-

tant who assisted them throughout the IDEA

proceedings. Id.

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 these expert fees. Jd. The Court

reaffirmed Pennhurst’s principle requiring clear notice

to States of their obligations under such legislation,

and the Court further explained how that principle

applies. Jd. at 2459. The Court stated that it “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.” Jd. 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.” Jd.

“In other words,” the Court continued, “we must ask

whether the IDEA furnishes clear notice regarding

the liability at issue in this case.” Jd.

Applying these principles, the Court first consi-

dered the IDEA text. Jd. (“In considering whether the

IDEA provides clear notice, we begin with the text.”).

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. (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 reimburs-

ing prevailing parents for services rendered by

experts.” Jd. Accordingly, the Court rejected the

sla

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. Jd. at 2459-60. The Court explained that

the provision “certainly fails to provide the clear

notice that is required under the Spending Clause.”

Id. at 2460.

The Court then explained that other provisions of

the IDEA supported this view of the text. For exam-

ple, the IDEA had detailed provisions to ensure that

attorneys’ fees were reasonable, but lacked coinpara-

ble provisions regarding expert fees. Jd. Additionally,

the Court concluded that its holding was consistent

with prior cases addressing the definitions of costs

and fees. Id. at 2461-62.

The Court remained unswayed in this conclusion

even in light of evidence that Congress intended

precisely the opposite interpretation—that is, that

States must compensate prevailing parents for expert

fees. The plaintiffs explained that Congress approved

a Conference Report stating that “[t]he conferees

intend[ed] that the term ‘attorneys’ fees as part of the

costs’ include reasonable expenses and fees of expert

witnesses ....” Id. at 2462 (quoting H.R. Conf. Rep.

No. 99-687, at 5) (emphasis added). “No Senator or

Representative voiced any opposition to this state-

ment in the discussion preceding the vote on the

Conference Report-the last vote on the bill before it

was sent to the President.” /d. at 2466 (Breyer, J.,

dissenting) (emphasis in original). The Court explained

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.” 7d. at 2463.

32a

“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. But see id. at 2466 (Breyer, 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.”).

2. NCLB’s Lack of Clear Notice Regarding State

Funding Obligations

a. Text of the Act

Turning to the present case, Arlington instructs

that we must view NCLB from the perspective of a

state official who is engaged in the process of decid-

ing whether the State should accept NCLB funds and

the obligations that accompany those funds. 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 whatever addi-

tional costs of implementing the Act that are not

covered by the federal funding provided for under the

Act. Or, as one might phrase the question, whether

that state official would clearly understand that one

of the State’s obligations under the Act is the obliga-

tion to incur costs not paid for under the Act. Because

§ 7907(a) explicitly provides that “Inlothing 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,” a state official

would not clearly understand that obligation to exist.

To the contrary, based on this text, a state official

could plausibly contend that she understood exactly

33a

the opposite—that her State need not comply with

NCLB requirements for which federal funding falls

short.

That is not to say, however, that the Secretary’s

interpretation of the Act (discussed in more detail

below) is frivolous. Indeed, perhaps the Secretary’s

view of the text is ultimately correct. But the only

relevant question here is whether the Act provides

clear notice to the States of their obligation. See

Arlington, 126 S. Ct. 2463 (“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.”). With this rule in mind,

we turn to the Secretary’s interpretations of the text

and explain why they do not persuade us that the

States’ funding obligations are clear.

b. The Secretary’s Interpretations of the Text

There are essentially two other interpretations of

§ 7907(a) advanced in this case, both of which would

require the States to fully fund in compliance with

NCLB regardless of federal funding. The first, which

the district court adopted, is that this section merely

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 fully

comply with NCLB requirements regardless of

federal funding. As discussed below, neither of these

interpretations is evident.

34a

(1) 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 Actin participating

States arises from the first part of § 7907(a), which

discusses “an officer or employee of the Federal

Government.” This reading, as shown in italics below,

interprets the Act to preclude any such officer or

employee from mandating that a State incur costs not

paid for under (that is, 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).

The district court accepted this interpretation

when dismissing Plaintiffs’ suit for failure to state a

claim. Pontiac, 2005 U.S. Dist. LEXIS 29253, at *12.

As the district court explained, “Defendant 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.” Jd. at *11. The court

further explained that, “[bly 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.” Jd. at *12. In sum, the

35a

court concluded that § 7907 merely prevents rogue

officers from imposing requirements not authorized

by the Act. There are two problems with this

interpretation.

First, even if the Government presented a

convincing argument that Congress intended this

meaning, the requirements of the Spending Clause

still would not have been met as this reading

certainly falls short of being so evident that a State

would clearly understand it to be the interpretation

Congress intended.

Second, it is not evident that the officer or employee

language modifies the final clause discussing States

incurring costs under the Act. In other words, the

officer or employee language is reasonably read to

modify only the middle clause regarding state and

local control over curriculum, 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 alloca-

tion of State or local resources ... .” This reading

leaves the final clause to be modified simply by the

opening clause, as follows: “Nothing in this Act shail

be construed to . . . mandate a State or any subdivi-

sion thereof to spend any funds or incur any costs not

paid for under this Act.” In this way, the Act simply

prevents federal officers from controlling school

curriculum and allocation of local funds, but says

nothing about these officers mandating States to

spend funds or incur costs for unauthorized obligations.

Third, even assuming that the officer or employee

language modifies the final clause, more fundamental

problems emerge. For one, the Secretary’s view that

this section is intended to prevent federal officers

36a

from imposing unauthorized requirements on States

would have us 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, an unusual way of prohi-

biting an officer from forcing 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. Moreover, nothing in

the legislative history (discussed in more detail

below) suggests that this was Congress’s concern. Yet

even if this were what Congress meant, we would be

left with the following tautology: This Act does not

authorize federal officers or employees to require that

States incur costs for anything that the Act does not

authorize. We doubt that Congress intended this

empty meaning.

For these reasons, we find this rogue-officer inter-

pretation unconvincing. In any event, the interpreta-

tion is not so evident that a State would clearly

understand it to be the interpretation Congress

intended, and thus the interpretation cannot save the

Act from violating the Spending Clause.

(2) 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

37a

accept federal funding under NCLB in exchange for

complying with requirements under the Act 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

explains, “as Congress fully understood, a statute

[such as NCLB] that imposes conditions on a receipt

of federal funds is not a ‘mandate.” (Secretary’s Br.

22.) The Secretary here contends that nothing in the

Act is a mandate, but that this section simply

“ensured that States would not be subject to

mandates that formed no part of the conditions set

out in the statute.” (Jd.) The Secretary additionally

notes that the Unfunded Mandates Act (“UMA”), 2

U.S.C. § 658(5)(A)(i)(1), defines “federal intergovern-

mental mandate” to exclude voluntary participation

with federal programs. (/d.)

But Plaintiffs’ contention is not that NCLB as a

whole is an unfunded mandate forced upon the

States; they appear will if to concede that it is a

voluntary program, and their argument focuses on

38a

§ 7907(a), not the UMA.* Plaintiffs argue that, now

that they are participating in NCLB, the Secretary is

imposing (that is, “mandating”) liabilities that they

simply did not bargain for—and that were expressly

excused by § 7907(a)—when they signed on to NCLB.

This view is reasonable, and there are at least three

additional reasons why the Act does not provide clear

notice that § 7907(a) speaks merely to the voluntari-

ness of the program as opposed to relieving the

States of their obligation to comply with unfunded

requirements.

First, based on the plain language of § 7907(a), it is

not apparent that this section speaks to the question

of voluntary participation in NCLB as opposed to

States’ obligations—such as complying with require-

ments where federal funding falls short—after the

States have agreed to participate (whether volunta-

rily or by coercion or otherwise). It would be one

thing if the Act stated that nothing in it shall be con-

strued 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 simply

* A question has been raised, 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 disad-

vantaged” 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

u. United States, 505 U.S. 144, 175 (1992) (noting in another

context that “Congress has crossed the line distinguishing

encouragement from coercion”).

39a

choose not to comply with the Act altogether. Instead,

however, 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 reasonably interpret to relate to its obli-

gations after it has agreed to comply with the Act.

Indeed, Vermont is one such State. It passed a law,

based on this text, 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.” 16 V.S.A. § 165

(emphasis added). 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, 20 U.S.C.

§§ 2301-2471 (1988), shows that the language is not

about voluntary compliance; it is about a State’s

funding obligations under NCLB. 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.” Pennsylvania v. Riley,

84 F.3d 125, 127 (7th Cir. 1996) (citing 20 U.S.C.

§ 2301(1)). Section 2306a of the Perkins Act, entitled

“Prohibitions,” replicates 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, program of instruction, or

allocation of State or local resources, or mandate

40a

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

of the Perkins Act referred to in this final clause

require agencies in States participating in the Act to

spend non-federal funds. See, e.g., 20 U.S.C. § 2413(a)

(Perkins Act § 323) (“Except as provided in subsec-

tion (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.”) (emphasis added). Thus, the

preceding language in § 2306a(a), which mirrors

NCLB § 7907(a), explains that participating States

need not spend their own funds to comply with the

Perkins Act; the final clause—absent in NCLB—

provides the explicit exceptions describing when

participating States do have to expend their own

funds. The common language in these Acts therefore

does not simply reiterate that States may or may not

participate in the federal program.

The dissent is correct in noting that there are

differences between tite Perkins Act and NCLB.

However, the differences in the overall structure of

the statutes do not negate the informative role that

the identical 62-word provision found in both of the

statutes can provide. In the Perkins Act, the 62-word

provision is followed by exceptions to the provision.

In NCLB, the 62-word provision is followed by no

exceptions. The difference between the Perkins Act

4la

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 Con-

gress has intended the States to fund certain

entitlements as a condition of receiving federal funds,

it has proved capable of saying so explicitly.”). The

dissent’s conclusion that these identical 62-word

statutory phrases in the Perkins Act and NCLB have

fundamentally different meanings because the Acts

have “different relationship[s] between requirements

and funding,” Dissenting Op. at 24, would be

anything but clear to a reasonable state official.

Third, comparison of the use of the word “mandate”

in § 7907(a) with the provisions of the UMA shed

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 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); see also Makram B. Jaber,

Comment, Unfunded Feder a! Mandates: An Issue of

Federalism or a “Brilliant Sound Bite”?, 45 Emory

L.J. 281, 288 (1996) (“Read liberally, this definition

lin Section 1555] considers as an ‘unfunded federal

mandate’ any federal statute or regulation that

results in any duties imposed on state or local

governments, even if the state takes on such duties

voluntarily, so long as the resulting costs to these

42a

governments are not directly and fully funded by the

federal government.”).

For all of these reasons, we conclude that if NCLB

requires States to comply with all NCLB require-

ments even where States must incur additional costs

not paid for through federal funds, there is no clear

notice of that obligation. But we pause to emphasize

one final point. There is no real dispute that States

and school districts participating in NCLB must

fulfill the Act’s various educational and accountabil-

ity requirements, such as submitting plans to the

Secretary, effectively tracking student achievement,

and so forth. In that respect, the States are on clear

notice of these obligations. And, as the Secretary

points out, that stands in contrast to PennAurst,

where the hortatory “bill of rights” in the DDA did

not create legal obligations on the State, see

Dissenting Op. at 17, and to Arlington, where the

IDEA’s arguable grant of expert fees to prevailing

parties was not explicit in the text and therefore

created no such obligation on the States. But Plain-

tiffs here do not contend that their obligation to

comply with NCLB’s various educational require-

ments is in any way unclear. See Dissenting Op. at

27. They contend that their obligation to spend

additional funds or incur additional costs for that

compliance is unclear. As Arlington instructs, “we

must ask whether the [NCLB] furnishes clear notice

regarding the liability at issue in this case.” 126 S. Ct.

at 2459 (emphasis added). Faced with § 7907(2),

which provides in a catchall] phrase that “/n/othing in

this Act shall be construed” to require States and

localities to “spend any funds or incur any costs not

paid for under the Act,” we conclude that Plaintiffs’

liability in this respect is anything but clear. Accor-

43a

dingly, the Secretary’s interpretations of § 7907(a)

violate the Spending Clause.

c. Legislative History

Our conclusion that NCLB fails to provide requisite

notice to States of their funding obligations under the

Act rests on the plain meaning of the statutory text,

as discussed above.° We note, moreover, to the extent

that legislative history informs this question, that

legislative history supports our conclusion. In this

way, the Spending Clause violation here is even more

apparent than it was in Arlington, where the Court

found a lack of clear notice of the States’ liabilities

even where Congress explicitly stated that it

intended the States to assume those liabilities. See

Arlington, 126 S. Ct. at 2465.

As mentioned, NCLB was first passed as the

Elementary and Secondary Education Act of 1965.

The language of § 7907(a) was included in three

education statutes that Congress enacted in 1994: (1)

the Goals 2000 Educate America Act, Pub. L. 103-227

(enacted in March 1994 to provide funding for States

to set some of the academic standards that NCLB

ultimately mandated); (2) the School to Work Oppor-

tunities Act, Pub L. 103-229 (enacted in May 1994 to

provide funding for certain work-related educeation

° The dissent apparently disagrees. See Dissenting Op. at 23.

(“[A]ny reasonable state official, reading the NCLB with a clear

eye, would understand that there was no guarantee that federal

funds would match all of the costs controlled and incurred by

states and local school] districts.”) The dissent argues that

fluctuating appropriations and unpredictable costs of compliance

lend support to this conclusion. See Dissenting Op. at 22.

However, this argument does not provide clarity regarding who

bears the cost of a reduced level of federal funding or higher-

than-expected costs of compliance.

44a

programs); and (3) the October 1994 reauthorization

of the ESEA, titled the Improving America Schools

Act (IASA), Pub. L. 103-382. The text of § 7907(a)

was carried over to NCLB without significant change

from these 1994 statutes. The 1993-94 legislative

debates regarding the language are therefore infor-

mative. See W. Pac. R.R. Corp. v. W. Pac. R.R., 345

U.S. 247, 251 (1953) (considering legislative debate

regarding earlier proposal to construe later proposal

regarding the same topic).

Representatives Goodling and Condit introduced

the first part of the language forming the basis of

§ 7907(a) on the floor of the House during the debate

over Goals 2000. Although Goals 2000 lacked NCLB’s

mandatory testing and penalty structure, it required

States to submit plans to the federal government

showing how they would achieve high academic stan-

dards for their students, identify low-performing

schools, and set goals for teacher certification. The

introduced text, equivalent to the first part of

§ 7907(a), provided as follows:

Nothing in this section shall be construed to

authorize an officer or employee of the Federal

Government to mandate, direct, or contro] a

State, local educational agency, or school’s curri-

culum, program of instruction, or allocation of

State and iocal resources.

139 Cong. Rec. H7769 (daily ed. Oct. 13, 1993). Rep.

Goodling explained that the language prohibiting

federal government contro! over the “allocation of

State and local resources” was intended to “put to

rest the concern that we are going to dictate from the

Federal level that somewhere, some way, the local

and State Governments will find money for our

dictates.” 139 Cong. Rec. H7741 (daily ed. Oct 13,

45a

1993). As Rep. Condit explained, “I believe that it is

wrong for us on the Federal level to pass legislation

but shift the costs of implementation and compliance

to our State and local governments.” 139 Cong. Rec.

H7769 (daily ed. Oct 13, 1993).

The final language of this provision in Goals

2000—which would also ultimately appear in

§ 7907(a)—came from the Senate, which incorporated

the Goodling-Condit language above and added the

second phrase: “... or mandate a State or any subdi-

vision thereof to spend any funds or incur any costs

not paid for under this Act.” 140 Cong. Rec. S626

(daily ed. Feb. 2, 1994) (amendment no. 1358, as

modified). As explained by its sponsor Sen. Gregg,

the amendment’s purpose was “to assure that this

bill will not become an unfunded mandate ... to

make it clear that if the Federal Government tells the

State to do something or tells the local community to

do something, the Federal Government will have to

pay for the costs of that mandate.” Jd. The Senate

version of the provision was then accepted and

became the enacted language in the Goals 2000 Act.

H. Conf. Rpt. 107-446 (Mar. 21, 1994). This same

provision was added to the School to Work Oppor-

tunities Act, which was also pending at that time. H.

Conf. Rpt. 103-480 (Apr. 19, 1994).

The provision was then included in the IASA, the

direct predecessor to NCLB. Before the language was

added to the IASA, early debates in the House

included criticisms that the bill “provides all the

mandates, but no money to pay for them. The Federal

Government makes a multitude of new demands, but

it is accountable for none.” 140 Cong. Rec. H807

(daily ed. Feb. 24, 1994) (Rep. Barrett). Sen. Duren-

berger noted instead that the “amendment regarding

46a

unfunded mandates, which is not part of this legisla-

tion, clearly states that if any requirement in this bill

results in an unfunded mandate, affected States and

communities do not have to comply.” 140 Cong. Rec.

S14205 (daily ed. Oct. 5, 1994).

Plaintiffs contend that this legislative history

confirms that under § 7907(a) they need not comply

with NCLB requirements that are not adequately

funded. In light of the statements recounted above,

this is an entirely supportable position. The Secre-

tary argues, however, that these same statements

support her position that § 7907(a) merely empha-

sizes that a State’s decision to participate in NCLB is

entirely voluntary. In other words, she contends that

when Representatives and Senators stated that these

various statutes would not become “unfunded man-

dates,” they meant that, because States remained

free not to accept federal funding under these

statutes, nothing in them was mandated. This is also

a colorable view of the debates (though perhaps with

some exceptions, see, e.g., 139 Cong. Rec. H7769-70

(Rep. Condit) (stating that it was not Congress’s

intent to require States to choose among “tak[ing] the

requirement seriously and end[ing] up with a multi-

million-dollar unfunded Federal mandate .. . or

refus[ing] to participate in the program.”)).°

Thus, this legislative history, to the extent it

informs a reading of NCLB, is at best unclear

regarding the fundamental dispute regarding

§ 7907(a). Indeed, to the extent it supports either

* As noted earlier, little, if any, of the debates involved a

concern about federal officials imposing unauthorized

requirements on the States—the basis of the district court’s

rogue-officer interpretation that the Secretary also advances.

47a

party, it bolsters Plaintiffs’ interpretation.’ Accor-

dingly, it adds no more clarity of notice to the States

regarding their obligations to comply with NCLB

funding requirements than the text itself.

d. The Former Secretary Expressed Plaintiffs’

Interpretation of the Text

We have concluded that a state official would not

be on clear notice that her State, once it opts into

NCLB, would be required to comply with NCLB

requirements that are not paid for under the Act. We

note here that even the Defendant’s former views on

this topic suggest that this conclusion is proper. As

Plaintiffs explain, former Secretary of Education Rod

Paige (since succeeded by current Secretary Margaret

Spellings) stated that the Act “contains language that

says things that are not funded are not required.”

’ The dissent states that because “there was no discussion of

changing the historic funding scheme of our nation’s educational

system, from largely state funds to federal funds,” the

legislative history does not support the Plaintiffs’ argument.

Dissenting Op. at 28. However, the Plaintiffs’ interpretation of

the Act does not require, or even suggest, that such a change

was intended in the Act. Rather, the Plaintiffs’ readine of the

Act and their arguments before this Court request recognition

that when acts of the Legislature are implemented pursuant to

the spending power, the Legislature cannot impose a condition

on federal funds that requires States to spend their own funds

absent a clear statement that such a condition has been placed

on the funds.

The dissent’s further accusation that this opinion’s holding is

“contrary to the way our nation’s education has been operated

and funded for centuries” reads the majority opinion much too

broadly. See Dissenting Op. at 19. We hold only that the

Spending Clause requires a more clear statement from Congress

before States and local educational agencies can be required to

expend their own funds in order to comply with federal

guidelines.

48a

(JA 20 (quoting Paige statement of Sept. 4, 2003)

(emphasis added).) Reiterating this point in a later

speech, Paige reassured that “if it’s not funded, it’s

not required. There is language in the bill that prohi-

bits requiring anything that is not paid for.” (JA 21

(quoting Paige statement of Dec. 2, 2003) (emphasis

added).)

The Secretary does not dispute that her predeces-

sor made these statements; she explained at oral

argument that they were “stray comments.” Stray or

not, the comments leave us to wonder how a state

official would be on clear notice that her State would

have to comply with obligations under the Act that

are not funded when the Secretary of Education cited

to appropriate text in the Act itself to assure States

that there is no such requirement. It comes as no

surprise that many state officials do not have

this understanding in light of § 7907(a). See, e.g.,

Wisc. Atty. Gen. Ltr. Op. at 4 (May 12, 2004) (“The

language in 20 U.S.C. § 7907(a) . . . seems to bear

only one reasonable interpretation: federal agencies

and officials lack authority to require any State, or

State subdivision, to take any action under the ESEA

[which NCLB amended] that is not fully funded by

federal monies.”) (available at http:/;www.nsba.org/

site/docs/33800/33758.pdf) (last visited Dec. 28, 2007);

Nat'l Conf. of State Legislators Mem. (July 7, 2003)

(noting, in a memorandum to State legislative

presiding officers, chairs of education committees,

and legislative education staff, that “[uJnder the basic

rules of statutory construction, the plain meaning of

the statutory language [of $ 7907(a)/ is fairly clear-

states, or local subdivisions, do not have to spend

funds on the costs of the NCLB that are not paid for

by the Act itself.”) (available at www.ncsl.org/statefed/

nclblegal.htm) (last visited Dec. 28, 2007); 46 Conn.

49a

S. Proc. pt. 9, 2003 Sess. 2626, 2632 (May 21, 2003)

(statements of Sen. Sullivan) (noting that Connecti-

cut can “only pray that that one magic phrase

[in] Leave No Child Behind [sic] that says if the feds

don’t fund it, we don’t have to do it, turns out to be

real,” because “if the money ain’t there folks, we can’t

do it.”); 16 V.S.A. § 165 (2003) (“[C]onsistent with

({§ 7907] of the No Child Left Behind Act, neither the

state nor any subdivision thereof shall be required to

spend any funds or incur any costs not paid for under

the Act in order to comply with the provisions of the

Act.”). To be sure, state officials may have their own

interests in reading § 7907(a) to excuse their States’

obligations to comply with unfunded requirements of

NCLB; our point is merely that NCLB does not provide

clear notice that their interpretation (and, apparently,

the former Secretary’s) is somehow misplaced.

Ill. CONCLUSION

The No Child Left Behind Act rests on the most

laudable of goals: to “ensure that all children have a

fair, equal, and significant opportunity to obtain a

high-quality education.” 20 U.S.C. § 6301. Nobody

challenges that aim. But a state official deciding to

participate in NCLB could reasonably read § 7907(a)

to mean that her State need not comply with

requirements that are “not paid for under the Act”

through federal funds. Thus, Gongress has not

“spoke[n] so clearly that we can fairly say that the

State[s] could make an informed choice” to partici-

pate in the Act with the knowledge that they would

have to comply with the Act’s requirements regard-

less of federal funding. See Pennhurst, 451 U.S. at 25.

Of course, if that ultimately is what Congress

intended, the ball is properly left in its court to

make that clear. See Arlington, 126 S. Ct. at 2465

50a

(Ginsburg, J., concurring) (“The ball, I conclude, is

properly left in Congress’ court to provide, if it so

elects, for consultant fees and testing expenses

beyond those IDEA and its implementing regulations

already authorize, along with any specifications,

conditions, or limitations geared to those fees and

expenses Congress may deem appropriate.”) (footnote

omitted). Accordingly, we REVERSE the district

court’s judgment dismissing Plaintiffs’ complaint and

REMAND for further proceedings consistent with

this opinion.

5la

DISSENT

McKEAGUE, Circuit Judge, dissenting. Imagine

the following: there is a service with which State and

local governments have historically provided its citi-

zens. The governments finance the service through

taxes. Local provision, local financing, local control.

But now, imagine that the federal government comes

along and offers a deal associated with that service.

The deal comes with both a carrot (more money) and

a stick (more duties). A reading of the offer sheet

confirms what could be expected: the duties are man-

datory if they choose to participate, but the money,

well, like all money from the federal government, is

subject to change from year-to-year. But, the reading

also confirms that the offer can be accepted in one

period and dropped the next, so the risks are not

open-ended. The State and local officials are thus

faced with a choice: accept the money and assume the

duties, or forgo both and go it alone with less money

but fewer duties.

There is, of course, really no need to imagine such a

world-what I have described is not the Emerald City

in the Land of Oz but rather this country’s primary

and secondary education system. But rather than

wearing green-tinted glasses, I submit that the

inhabitants of this system—State and local school

officials—had a crystal clear vision of what Congress

was offering them by way of the No Child Left

Behind Act of 2001 (the “NCLB”). Many of them

could not bring themselves to pass up the federal

funds, but simply hoped that someone or something

would save them at the end of the road. Today the

majority does exactly that.

While the federal government historically has

always contributed a relatively small amount to the

52a

total funding of local education, increasingly it has

become concerned about the decline in the quality of

children’s education, particularly with respect to the

nation’s most at-risk children. In an attempt to

achieve more accountability in local education,

Congress passed the NCLB, which revised the earlier

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). Although

participation in the NCLB is voluntary, Congress

imposed significant educational reforms for those

states that elect to participate and receive federal

funds. Today the majority holds, in an opinion

contrary to the way our nation’s education has been

operated and funded for centuries, that Congress

could have intended that the federal government now

fund the entire cost of various educational reforms for

our nation’s children. Because there is no support in

the text or context of the NCLB for the proposition

that Congress intended such a monumental and

unprecedented change in our nation’s education

funding, I respectfully dissent.

I

Regardless of whether federal funds defray the

entire cost of compliance, participating States and

school districts must comply with the NCLB’s

educational requirements. Contrary to the majority’s

conclusion, § 7907(a) does not render the NCLB

ambiguous; thus, Congress did not exceed its

authority under the Spending Clause. By creating

ambiguity where none exists, the majority largely

avoids Plaintiffs’ principal argument on appeal,

although it does allude in passing to its inherent

weakness. See Maj. op. at 11 (“indeed, perhaps the

Secretary’s view of the text [of § 7907(a)] is ultimately

53a

correct.”). As I find no ambiguity, I must first address

Plaintiffs’ principal argument.

Plaintiffs contend that a plain reading of 20 U.S.C.

§ 7907(a) leads to the conclusion that notwithstand-

ing States’ acceptance of federal funds intended to

defray a portion of the cost of local education, States

and local school districts need not comply with the

educational requirements set forth in the NCLB if

they deem federal funding to be insufficient to cover

the entire cost of compliance. Section 7907(a) states

in relevant part: “Nothing in this Chapter shall be

construed to... mandate a State or any subdivision

thereof to spend any funds or incur any costs not paid

for under this Chapter.” Plaintiffs argue that

§ 7907(a) means that the “NCLB cannot be imple-

mented in a manner that requires states and school

districts ‘to spend any funds or incur any costs not

paid for under thle NCLB).” Appellants’ Br. at 28-29

(quoting 20 U.S.C. § 7907(a)) (alteration in original).

As explained below, the text, operation, and structure

of the NCLB undermine Plaintiffs’ reading. Bennett

v. Ky. Dep’t of Educ., 470 U.S. 656, 666-67 (1985)

(“[T]he background of the actual operation of Title I”

informs a proper understanding of “the fundamental

nature of the obligations assumed under Title I.”).

Instead, § 7907(a) is properly read to mean that

federal officers who are charged with implementing

and administering the NCLB cannot transform the

statutory scheme from a voluntary program to a

mandatory one. Plaintiffs’ interpretation has the

absurd effect of eviscerating with a single provision

the entire comprehensive scheme of accountability

requirements and financial disbursements set forth

in hundreds of pages of statutory text. Without a

stronger showing that Congress actually intended

54a

that result, | decline to adopt such an untenable

interpretation.

A. NCLB Educational Requirements

The NCLB expressly outlines participating States’

and school districts’ obligations to meet various

educational requirements. If a State accepts money

under a particular part of the NCLB, it must comply

with that part’s requirements. 20 U.S.C. § 6311(a)(1);

see also id. §§ 6363(a)(1), 6396(a)(1), 6842(a)(1).

Conversely, if a State does not seck any funding

under the NCLB, it need not comply with any of the

NCLB’s requirements.

School districts within a participating State face a

more complicated set of obligations. Most of the

NCLB’s funds are allocated to schoo! districts based

on the number of qualifying students in the school

(e.g., low-income students, migrant students, etc.).

School districts without at-risk students will not

receive any funding under particular parts of the

NCLB and therefore will not be required to comply

with some of the NCLB’s requirements.

Yet, districts without at-risk students are not

completely off the regulatory hook. Some require-

ments under Title I, Part A apply across an entire

participating State, rather than just to those “local

educational agenclies)” (i.e., school districts) that

receive federal funds. For example, a participating

State must create statewide academic standards and

all school districts in the state must test their public-

school students under those standards. Jd. § 6311

(b)(1)(B), (3A). The broad reach of § 6311 is made

clear by the limited exception for school districts that

do not receive federal funds: they need not publish

the results of student testing or take certain steps if a

55a

school fails to make AYP. Jd. §§ 6311(b)(2)(A\ii),

6316. Pointedly, Congress did not tell non-funded

school districts that they need not perform any

testing in the first instance.

This example highlights the central defect in Plain-

tiffs’ argument. Congress intended, as expressed in

the text of the NCLB, that a participating State raise

standards of student education across the entire

state, regardless of whether one well-off pocket of the

state does not receive any federal funds. In those

districts that do receive federal] funds, Congress

simply requires even more. When Congress expressly

applies certain requirements to all schoo! districts ir-

respective of funding, that is a clear indication that it

did not intend to tie the cost of complying with the

NCLB’s requirements to the amount of federal

funding, which is inherently subject to change based

on the spending priorities of each particular Congress

and its competing demands for increasingly scarce

federal dollars.

B. NCLB Funding Scheme

Plaintiffs argue that the NCLB’s_ educational

requirements are enforceable only when the federal

government defrays the entire cost of compliance.

The funding structure of the NCLB dictates other-

wise. Most telling is that there is no mention of the

cost of compliance anywhere in the text of the NCLB,

let alone any promise of relief if federal funding is

insufficient to defray the entire cost of compliance.

The NCLB’s silence as to the cost of compliance or to

any explicit relief therefrom if federal dollars fall

short is particularly conspicuous here insofar as

Congress, in structuring the NCLB, was well aware

that our nation’s education system is historically

funded largely by State, not federal dollars. Cf.

56a

Bennett v. New Jersey, 470 U.S. 632, 635 (1985)

(explaining that Title I was enacted by Congress with

“Irlespect(] [for] the deeply rooted tradition of state

and local control over education”).

The NCLB’s funds are distributed to schools and

school districts based on the types of students in

those schools and districts, not on costs. Under Title

I, Part A, for each student from a low-income family

or in institutional care, a school district is “eligible to

receive . . . 40 percent of the average per-pupil

expenditure in the State.” 20 U.S.C. § 6333(a)(1)(B).

Schools with more low-income students will receive

more Title I, Part A funding than schools with fewer

low-income students, and schools with no low-income

students will receive no funds under the main grant

in Title 1, Part A. See id. § 6333(c)(2).

In most cases, schools that receive federal funding

must spend the funds only on the specific students

who count toward the amount of funding the school

receives (low-income, migrant, etc.), not the entire

student-body in general. For example, only where at

least 40% of a school’s students are low-income can

the school use federal funds “to upgrade the entire

educational program of a school,” Jd, § 6314(a\1). For

schools with less than 40% low-income students, the

federal funds must be spent only on those low-income

students. See id. Nevertheless, the latter schools

must still meet all of the NCLB’s requirements,

regardless of federal spending on each particular

student.

Other features of the NCLB’s scheme undercut

Plaintiffs’ position. Congress capped the aggregate

funds authorized under the NCLB without any provi-

sion for the actual costs of compliance. Jd. § 6302(a).

The NCLB also expressly provides for the possibility

57a

that funds available in a given year might be insuffi-

cient to pay all school districts the amounts they are

eligible to receive: “If the sums available .. . are

insufficient to pay the full amounts that all [school

districts] are eligible to receive ... , the Secretary

shall ratabiy reduce” each school district’s funding.

Id. § 6332(b)(1). At no time have the amounts school

districts are eligible to receive come even close to

equaling the cost of compliance. Similar provisions

appear in the programs for high-quality teachers and

migrant children. See, e.g., id. § 6393(c\1)(A). Yet,

there is no provision that excuses a school district’s

compliance with the NCLB’s requirements in the face

of a shortfall in the amounts school districts are

eligible to receive, let alone the total cost of

compliance.

This overview of the NCLB’s funding structure

highlights another important point. It simply defies

commonsense to suggest that Congress intended to

relieve States and school districts from compliance

with the NCLB’s requirements when the cost of

compliance—which Congress does not control—

exceeds appropriations, but not when the amounts

appropriated—over which Congress has total

control—fall below the amounts school districts are

cligible to receive.

Plaintiffs argue that the fact that Congress has

elected not to appropriate all the funding it is autho-

rized to appropriate under Title I, Part A supports

their position that the NCLB is underfunded. This

actually shows just the opposite. Neither Title 1, Part

A nor any other part of the NCLB authorizes

any appropriations beyond 2006-2007. See, e.g., 20

U.S.C. §§ 6302(a), 6553, 6603(a), 6663, 6801(a), 7103.

Continued NCLB funding will require reauthoriza-

58a

tion of appropriations by Congress each year after

2006-2007. Yet, at the same time that it authorized

funds only through 2006-2007, Congress applied the

NCLB’s educational requirements through 2013-

2014. See id. § 6311(b)\(2)(F); 34 C.F.R. § 200.15. Again,

this demonstrates a fundamental and important

disconnect between appropriations and requirements.

More importantly, Plaintiffs ignore the undisputa-

ble fact that even if Congress had “fully funded” the

NCLB each year (i.e., annually appropriated the

entire amount authorized), the funds would still

have fallen far short of the total purported costs

of compliance. This can be seen by comparing the

disparity between actual appropriations and purported

compliance costs versus the disparity between

authorizations and actual appropriations. According

to Plaintiffs’ complaint, federal funding in Ohio

covers less than 16% of costs for test development

and administration. In Illinois, federal funding under

Title I, Part A covers less than 33% of costs to achieve

current AYP rates. In Vermont, Title I, Part A

funding covers only 19% of current costs to achieve

AYP. In the Jordan, Utah and Reading, Pennsylvania

school districts, respectively, federal funding covers

only 27% and 31% of the cost of AYP attainment. By

contrast, actual appropriations have been somewhat

greater than 66% of the authorized amount for the

periods 2001-2002 through 2004-2005; for 2005-2006,

slightly less.’ Thus, even though Congress has

' Congress’s actual appropriations and the appropriations

authorized in Title I, Part A are, respectively: $10.35 billion and

$13.5 billion for 2001-2002; $11.69 billion and $16 billion for

2002-2003; $12.34 billion and $18.5 billion for 2003-2004; $12.74

billion and $20.5 billion for 2004-2005; and $13.34 billion and

$22.75 billion for 2005-2006. 20 U.S.C. § 6302(a); Complaint at 18.

59a

routinely appropriated more than half the amounts

authorized each year, the funds have, according to

Plaintiffs, only covered about a third of the costs of

compliance. In other words, the maximum amount of

money from Congress would still have left the

districts short. Congress’s annual decisions not to

appropriate up to the level authorized just confirms

that it never intended to cover the entire costs of

compliance in the first place.

Plaintiffs’ interpretation of the NCLB not only

disregards its overall statutory scheme, but it also

defies reason and history. The overwhelming burden

of funding education in this country is and always

has been borne by State and local governments. Even

with the NCLB, the federal government provides

only 7% of the total funding for local education. 147

Cong. Rec. $13365, 13373 (2001) (statement of Sen.

Feinstein), The notion that Congress intended to

pay in full for a testing and reporting regime of

indeterminate cost, designed and implemented by

States and school districts, not federal agencies, is

not only nonsensical and fiscally irresponsible, but

also contravenes the traditional recognition of State

and local governments’ primary responsibility for

public education. In short, there is nothing in the

NCLB that suggests Congress intended to federalize

some or all of State and local education.

II

A. Text and Context of § 7907(a)

Alternatively, Plaintiffs argue that, even if

§ 7907(a) does not have the meaning they suggest, it

creates an ambiguous condition on the receipt of

federal funds, in violation of the so-called clear-

60a

statement rule.” Under that rule, “if Congress

intends to impose a condition on the grant of federal

moneys, it must do so unambiguously.” Pennhurst

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

(1981). The majority agrees, concluding that “a state

official who is engaged in the process of deciding

whether the State should accept NCLB funds and the

obligations that go with those funds” would not

understand that if the State “chooses to participate,

lit) will have to pay for whatever additional costs of

implementing the Act are not covered by the federal

funding provided under the Act.” Maj. op. at 11. To

the contrary—any reasonable State official, reading

the NCLB with a clear eye, would understand that

there was no guarantee that federal funds would

match all of the costs controlled and incurred by

States and local school districts. See Bennett, 470

U.S. at 666 (“The requisite clarity in this case is

provided by Title I; States that chose to participate in

the program agreed to abide by the requirements of

Title I as a condition for receiving funds.”).

My statutory analysis consists of two elements:

text and context. Beginning with the text of

§ 7907(a), I, like the majority, focus on the term

“mandate,” but, unlike the majority, I find that its

* The clear-statement rule is one of several general restrictions

on congressional authority under the Spending Clause. In

addition to clearly articulating the condition on federal funds,

the congressional action must be in pursuit of the general

welfare; the conditions must be related to the federal interest

being pursued; the financial incentives must not amount to

coercion; and the conditions must comport with other

constitutional provisions. South Dakota v. Dole, 483 U.S. 203,

207-08 (1987); Cutter v. Wilkinson, 423 F.3d 579, 584-85 (6th

Cir. 2005). Plaintiffs do not argue that the NCLB fails to satisfy

these other restrictions.

6la

meaning is unambiguous. As the Supreme Court has

explained, “where words are employed in a statute

which had at the time a well-known meaning at

common law or in the law of this country they are

presumed to have been used in that sense unless the

context compels to the contrary.” Lorillard v. Pons,

434 U.S. 575, 583 (1978) (quoting Standard Oil v.

United States, 221 U.S. 1, 59 (1911)) (alteration in

original) (internal quotations omitted).

In 1995, Congress enacted the Unfunded Mandates

Reform Act of 1995 (“UMA”), which provides the

following definition:

(5) Federal intergovernmental mandate. The term

“Federal intergovernmental mandate” means—

(A) any provision in legislation, statute, or

regulation that—

(I) would impose an enforceable duty upon

State, local, or tribal governments, except—

(I) a condition of Federal assistance; or

(II) a duty arising from participation in a

voluntary Federal program ....

2 U.S.C. § 658(5)(A) (emphasis added). Applying the

UMA definition of mandate from § 658(5)(A), the

§ 7907(a) provision at issue means that a State is free

to decide whether or not to participate in the NCLB,

with its funding as well as its educational require-

ments; and, a State can forgo participation in the

NCLB if it decides that such participation is not

beneficial to its educational system. However, if a

State chooses to participate, it must take all of the

“bad”—the federal requirements—with the “good”

the federal money. This interpretation is consistent

with the NCLB’s educational requirements, funding

provisions, and overall statutory scheme and avoids

sweeping aside the main provisions of the scheme.

62a

The majority points out that the UMA also

provides a second definition of mandate, according to

which “the term ‘Federal mandate’ means any provi-

sion in statute or regulation or any Federal court

ruling that imposes an enforceable duty upon State,

local, or tribal governments including a condition of

Federal assistance or a duty arising from participa-

tion in a voluntary Federal program.” 2 U.S.C.

§ 1555; Maj. op. at 14. However, this broader definition

of mandate applies only to the collection of informa-

tion, and not to the measures actually designed to

limit mandates by Congress and federal agencies.

Specifically, § 1555 applies only to provisions of the

UMA which require that “the Advisory Commission

on Intergovernmental! Relations . . . shall complete a

study to examine the measurement and definition

issues involved in calculating the total costs and

benefits to State, local, and tribal governments of

compliance with Federal law.” 2 U.S.C. § 1551(a).

The primary definition found at § 658(5)(A) applies

instead to all provisions designed “to end the imposi-

tion, in the absence of full consideration by Congress,

of Federal mandates on State, local, and tribal

governments without adequate Federal funding, in a

manner that may displace other essential State,

local, and tribal governmental priorities.” I/d.

§ 1501(2). The text of § 7907(a), and Plaintiffs’

arguments based on § 7907(a), are consistent with

the purpose to which the definition in § 658(5)(A)

applies: namely, to prevent Congress from compelling

the expenditure of State funds. Both in § 658(5)(A) of

the UMA, and in § 7907(a) of the NCLB, as I believe

it properly understood, Congress indicated that it

was not concerned with preventing the expenditure of

State funds when States are able to avoid the

63a

expenditure by ceasing their “participation in a vol-

untary Federal program.” 2 U.S.C. § 658(5)A)(i)(1).

The majority also relies on a provision of the

Perkins Vocational Education Act (“Perkins Act”) to

argue that § 7907(a) promises that States can receive

funding under the NCLB but can also refuse to

comply with its requirements to the extent that the

cost of compliance exceeds the amount of federal

funds. Maj. op. at 13-14. As the majority notes, the

relevant provision of the Perkins Act reads, as does

§ 7907(a), that “[nJothing in this Chapter shall be

construed to... mandate a State or any subdivision

thereof to spend any funds or incur any costs not paid

for under this Chapter,” but the Perkins Act also

adds, “except as required under [20 U.S.C. §§ 2322(b),

2391(b), and 2413].” 20 U.S.C. § 2306a(a). In light of

the different statutory schemes, however, this

distinction makes sense.

The respective funding structures of the Perkins

Act and the NCLB suggest that, even if Congress

intended to fully fund the Perkins Act, the same

cannot be said for the NCLB. The Perkins Act allots

funds to States based on the number of residents of

the state in particular age groups, with the greatest

amount of funding allotted based on the portion of

the population between ages fifteen and nineteen,

followed respectively by the population between

twenty and twenty-four, and between twenty-five and

sixty-five. Jd. § 2321(a)(2). This reflects the Perkins

Act’s purpose which is a general, statewide one: to

“develop more fully the academic and career and

technical skills of secondary education students and

postsecondary education students who elect to enroll

in career and technical education programs.” Id.

64a

§ 2301. Needless to say, all States have significant

numbers of residents within these age categories.

By contrast, the purpose of the NCLB is to “meet|]

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.” Jd. § 6301(2). It is specifically targeted to

reach the poor and disadvantaged, ard funding under

Title I, Part A is consequently available to States and

school districts only if, and insofar as, they have low-

income students or students in one of the other

mentioned categories. Jd. § 6333(c)(2). Nonetheless,

the educational requirements of Title I, Part A spe-

cifically apply to all participating schools and school

districts, not only to those students for whom the

school districts will receive federal funding. See id.

§ 6311(b)(1)(B).

Indeed, the NCLB’s funding scheme suggests that

there is no correlation between the amount of federal

funds a State or school district will receive and the

cost of compliance with its educational requirements.

In light of the different relationship between

requirements and funding in the Perkins Act and the

NCLB, it is unreasonable for the majority to rely on

the Perkins Act to interpret § 7907(a).

In statutory analysis, context also matters. In

determining whether the clear-statement rule is

satisfied, a court must not let itself focus myopically

on one phrase or provision. Pennhurst, 451 U.S. at 18

(cautioning courts against “beling] guided by a single

sentence or member of a sentence”). Rather, in

addition to the “plain language” of the provision, id.

at 23, the court must also consider the general and

65a

specific purposes and objectives of the legislation and

the policies being pursued, id. at 18. The court must

further “look to the provisions of the whole law.” Jd.

at 18 (quoting Philbrook v. Glodgett, 421 U.S. 707,

713 (1975)). Specifically, the court must not divorce

one section from the remaining provisions in the

statute, but rather read the entire statute as a whole:

In determining whether Congress has specifi-

cally addressed the question at issue, a reviewing

court should not confine itself to examining a

particular statutory provision in isolation. The

meaning—or ambiguity—of certain words or

phrases may only become evident when placed in

context. See Brown v. Gardner, 513 U.S. 115,

118, 115 S. Ct. 552, 1380 L. Ed.2d 462 (1994)

(“Ambiguity is a creature not of definitional

possibilities but of statutory context”). It is a

“fundamental canon of statutory construction

that the words of a statute must be read in their

context and with a view to their place in the

overall statutory scheme.” Davis v. Michigan

Dept. of Treasury, 489 U.S. 803, 809, 109 S. Ct.

1500, 103 L. Ed.2d 891 (1989). A court must

therefore interpret the statute “as a symmetrical

and coherent regulatory scheme,” Gustafson v.

Alloyd Co., 513 U.S. 561, 569, 115 S. Ct. 1061,

131 L. Ed.2d 1 (1995), and “fit, if possible, all

parts into an harmonious whole,” FTC v. Mandel

Brothers, Inc., 359 U.S. 385, 389, 79 S. Ct. 818,

3 L. Ed.2d 893 (1959).

FDA v. Brown & Williamson Tobacco Corp., 529 U.S.

120, 132-33 (2000).

Here, if the language in § 7907(a) that “[njothing in

this Chapter shall be construed to . . . mandate a

State or any subdivision thereof to spend any funds

66a

or incur any costs not paid for under this Chapter”

meant what Plaintiffs suggest, § 7907(a) would

contradict the NCLB’s other requirements that

States and schools districts maintain fiscal efforts to

fund schools that receive the NCLB funds as well as

those that do not. In particular, the NCLB requires

that a school district “may receive funds under [Title

I, Part A] only if State and local funds will be used in

schools served under this part to provide services

that, taken as a whole, are at least comparable to

services in schools that are not receiving funds under

this part,” 20 U.S.C. § 6321(c)(1)(A); that “either the

combined fiscal effort per student or the aggregate

expenditures of the agency and the State with respect

to the provision of free public education by the

agency” must not be “less than 90 percent of the

combined fiscal effort or aggregate expenditures” for

the preceding year, id. § 7901(a); and that States and

school districts “shall use Federal funds received

under [Title I, Part A] only to supplement the funds

that would, in the absence of such Federal funds, be

made available from non-Federal sources for the edu-

cation of pupils participating in programs assisted

under [Title I, Part A], and not to supplant such

funds,” id. § 6321(b)(1).

Plaintiffs’ interpretation of Section 7907(a) evisce-

rates States’ and school districts’ obligations under

§ 6321(b\1), § 63 21 (ch 1)(A), and § 7901(a). Alterna-

tively, if “mandate” is read with the meaning I have

suggested above, § 7907(a) does not contradict other

provisions of the NCLB, nor does it cause the unrea-

sonable results created by Plaintiffs’ interpretation.

See Helvering v. Credit Alliance Corp., 316 U.S. 107,

112 (1942) (stating “|wJe should, of course, read...

two sections [of a single statute] as consistent rather

than conflicting, if that be possible”); see also Bennett

67a

uv. Spear, 520 U.S. 154, 173 (1997) (stating a “cardinal

principle ... is our duty to give effect, if possible, to

every clause and word of a statute rather than to

emasculate an entire section”).

B. Pennhurst and Arlington

To reach its conclusion that the NCLB did not

provide clear notice to the States regarding their

obligation to incur additional costs to comply with the

NCLB’s requirements, the majority also relies on the

Supreme Court’s decisions in Pennhurst and Arling-

ton. As for the legal holdings of those two decisions,

neither supports the majority. This court has inter-

preted the Pennhurst holding (which Arlington

applies) as requiring “(nJothing more” than “clear

notice’ to the states that funding is conditioned upon

compliance with certain standards.” Cutter, 423 F.3d

at 586 (citing Pennhurst, 451 U.S. at 25). As explained

supra, the NCLB met that standard of notice. As for

the factual circumstances in those two cases, neither

is particularly helpful here.

In Pennhurst, the plaintiffs claimed that States

receiving federal funding under the former version of

the Developmentally Disabled Assistance and Bill of

Rights Act affirmatively were required to provide the

rights which the statute’s “Bill of Rights” provision

described as “the rights of persons with developmen-

tal disabilities.” Pennhurst, 451 U.S. at 13 (quoting

Act of Oct. 4, 1975, § 111, 89 Stat. 486, 502 (1975)

(provision repealed 1984)). These included “a right to

appropriate treatment, services, and habilitation for

such disabilities .. . in the setting that is least

restrictive of the person’s personal liberty.” 7d.

(quoting Act, § 111(1), (2), 89 Stat. at 502).

68a

The Pennhurst Court held that the statute’s Bill of

Rights “represent|s] general statements of federal

policy, not newly created legal duties.” Jd. at 23. The

Court noted that the act’s Bill of Rights was intro-

duced as a set of congressional “findings respecting

the rights of persons with developmental disabili-

ties.” Jd. at 13 (quoting Act, § 111, 89 Stat. at 502).

It also pointed out that other portions of the statute,

unlike the Bill of Rights provision, contained

language that expressly conditioned the receipt of

federal funds on compliance. Jd. at 23. By contrast,

the Bill of Rights section provides that “(t]he treat-

ment, services, and habilitation for a person with

developmental disabilities . . . should be provided in

the setting that is least restrictive.” Jd. at 13 (quoting

Act, § 111(2), 89 Stat. at 502) (emphasis added). The

Court also noted that the statute did not empower

the Department of Health and Human Services to

withhold funds for failure to comply with the Bill of

Rights, as it did for failure to comply with other

portions of the statute. Jd. at 23.

Pennhurst is not controlling because none of the

Court’s bases for finding the Bill of Rights provision

to be “hortatory, not mandatory” are present here.

The requirements of Title I, Part A are set forth in

imperative, not hortatory language. Compare 20

U.S.C. § 6316 (“Each local educational agency

receiving funds under [Title I, Part A] shall... .”)

with 89 Stat. at 502 (“treatment .. . should be

provided”). The NCLB’s educational requirements are

not introduced as mere congressional findings or

voluntary goals, as was largely the case prior to the

NCLB. Here, the Secretary of Education is statutorily

empowered to withhold funding from States that

refuse to comply with the NCLB’s_ educational

requirements. 20 U.S.C. § 6311(g)(2) (applying to the

69a

requirement to create state standards and testing

instruments); id. §§ 1234c, 1221(c)(1) (applying to all

of the NCLB).

Moreover, the holding of the Supreme Court in

Pennhurst was not that the duties created by the

statute were too ambiguous to be preconditions for

the receipt of federal funds, but that they were not

requirements on the states at all. The Court

explained in dicta that its conclusion was simply

“buttressed by the rule of statutory construction .. .

that Congress must express clearly its intent to

impose conditions on the grant of federal funds.”

Pennhurst, 451 U.S. at 24. For all of these reasons,

Pennhurst is factually distinguishable from the

present case.

In Arlington Central School District Board of

Education v. Murphy, the Supreme Court recently

held that the Individuals with Disabilities in Educa-

tion Act (“IDEA”) does not require school districts to

pay the expert witness fees incurred by parents who

sue the schoo: district to enforce compliance with

the statute. 126 S. Ct. 2455, 2458 (2006). The Court

reiterated that “courts must presume that a legisla-

ture says in a statute what it means and means in a

statute what it says there,” and held that the IDEA

provision that the court may award prevailing par-

ents “reasonable attorneys’ fees as part of the costs’

... does not even hint that acceptance of IDEA funds

makes a State responsible for reimbursing prevailing

parents for services rendered by experts.” Jd. at 2459

(quoting Conn. Nat'l Bank v. Germain, 503 U.S. 249,

253-54 (1992); 20 U.S.C. § 1415(iX3)(B)).

Like Pennhurst, Arlington is not controlling here.

Title I, Part A does not merely hint that acceptance of

the NCLB’s funds makes States and school districts

70a

responsible to fulfill the statute’s educational re-

quirements: it says so explicitly. None of the NCLB’s

educational requirements suggest, let alone state,

that compliance is contingent on full federal funding.

Moreover, States and school districts were aware that

the NCLB’s educational requirements applied even

without federal funding to pay for them, because

funds under Title I, Part A are available only in

proportion to the number of low-income students in a

school. “There was no ambiguity with respect to thle]

condition[s]” upon which States and school districts

received federal funds under the NCLB and enforcing

the statute’s requirements does not violate the

Spending Clause. Bennett, 470 U.S. at 666.

Unlike in Pennhurst and Arlington, we are faced

with a sufficiently clear statutory text which sets

forth compulsory requirements on _ participating

States and school districts, not merely goals or

statements of intent. While the NCLB is long and, at

times, complex, such length and complexity does not

render it ambiguous as to whether Congress meant to

impose a condition on the grant of federal money.

C. Legislative History

Finally, Plaintiffs argue that the legislative history

of § 7907(a) supports their interpretation of the

provision, or at least indicates that the NCLB is

ambiguous for Spending-Clause purposes. The

majority concludes that the legislative history

supports the latter contention, that § 7907(a) renders

the NCLB ambiguous. I disagree.

Initially, and most importantly, there is no need to

look at the legislative history of the NCLB. Courts

may “resort to legislative history only when neces-

sary to interpret ambiguous statutory text.” BedRoc

Tla

Ltd., LLC v. United States, 541 U.S. 176, 187 n.8

(2004). It is not appropriate to use legislative history

to “render[{] what is plain ambiguous.” Zedner uv.

United States, 126 S. Ct. 1976, 1991 (2006) (Scalia, J.,

concurring). As explained above, no ambiguity exists

in § 7907(a), especially when considered as part of

the larger statutory scheme of the NCLB.

Even if it were appropriate to look to the legislative

history, we should be focusing on the specific history

of the NCLB. As the majority notes, § 7907(a) was

first adopted as a provision of the 1994 reauthoriza-

tion of the ESEA, also known as “Goals 2000.”

Maj. op. at 15-16; see Improving America’s Schools

Act of 1994, § 14512, 108 Stat. 3518, 3906 (originally

codified at ZO U.S.C. § 8902). However, Goals 2000

was significantly different from the NCLB. As the

Secretary aptly summarizes, “Goals 2000 set national

goals for education improvement and_ provided

funds to the States to aid them in developing state

standards for improving education,” but “these

standards were intended to be voluntary.” Appellee’s

Br. at 23-24. Unlike Goals 2000, the NCLB created

compulsory educational requirements and serious

consequences for failure to comply with its require-

ments for States that willfully volunteer to partici-

pate; in short, it is an entirely different statute. In

situations like this, the Supreme Court has often

cautioned against relying on the legislative history of

one statute in interpreting another. See, e.g., Doe v.

Chao, 540 U. S. 614, 626-27 (2004) (“Those of us who

look to legislative history have been wary about

expecting to find reliabl« interpretive help outside

the record of the statute being construed.”); Dir.,

Office of Workers’ Comp. Programs v. Perini N. River

Assocs., 459 U.S. 297, 320 n.29 (1983) (“Although the

term ‘maritime’ occurs both in 28 U.S.C. § 1333(1)

72a

and in § 2(3) of the Act, these are two different

statutes ‘each with different legislative histories and

jurisprudential interpretations over the course of

decades.””) (quoting Boudreaux v. Am. Workover, Inc.,

680 F.2d 1034, 1050 (5th Cir. 1982)); N. Haven Bd. of

Educ. v. Bell, 456 U.S. 512, 530 n. 21 (1982) (criti-

cizing the dissent for “usling] the legislative history-

of a different statute-to rewrite Title IX so as to

restrict its reach”).

A review of some of the legislators’ comments about

the proposed NCLB (not Goals 2000, not the Perkins

Act) confirms that Congress did not intend for

§ 7907(a) to protect participating States from having

to spend their own funds to comply with the NCLB’s

educational requirements. Senator Leahy noted that

“the funds are far less than what will be necessary,

leaving Vermont and other states with large financial

gaps to fill.” 147 Cong. Rec. $13365, 13378 (2001).

Senator Wellstone asked, “Where are the resources to

make sure that all the children in America have the

same chance to do well? .. . Not in this bill. When you

start talking about we have increased funding for

title I, no, not in real dollar terms.” Jd. at 13368.

Senator Feinstein defended the bill, but expressed

the same understanding of its funding structure,

explaining, “The Federal Government provides only

7 percent of total education funding, but the strength

of this bill is that it tries to leverage the Federal

share to prod States and school districts to make

schools responsible for real results.” Jd. at 13373.°

* It should be noted that Senator Kennedy stated, “In this

legislation we are committing with a trigger that says, if the

resources are not there, these provisions do not apply.” 147

Cong. Rec. S13365, 13372 (2001). However, it is not clear, even

in the context of his full remarks, to what he was referring.

73a

The bill’s opponents in the House expressed similar

concerns to those voiced in the Senate. See 147 Cong.

Rec. H2396, 2403-04 (2001). Significantly, there was

no discussion of changing the historic funding scheme

of our nation’s educational system, from largely State

funds to federal funds. Thus, assuming arguendo that

the NCLB’s legislative history is even relevant in

this case, it lends little or no support to Plaintiffs’

argument,

Il]

In conclusion, let’s consider the road that Plaintiffs

waiit to take us down. A State decides to accept

NCLB funding. State and local school officials design

and implement the education programs required

under the NCLB. They decide how federal dollars are

to be allocated between various programs. They also

apparently get to determine whether one of their

education programs is “fully funded” with federal

dollars. So, consistent with Plaintiffs’ reasoning, if

they find their students failing in one program,

rather than redoubling their efforts, trying something

different, or asking the State or local citizenry for

more funding, they can simply divert federal funds

away from the program, declare the program “under

funded,” and wipe their hands (but not pay back the

federal dollars). Voila, problem solved, at least for the

State and local officials, if not for the struggling

students.

This, of course, is exactly the opposite of what

Congress intended to accomplish with the NCLB. 20

U.S.C. § 6301(4) (stating that one purpose of the

NCLB is “holding schools, [school districts], and States

accountable for improving the academic achievement

of all students”). No green-tinted glasses can alter

this fact.

74a

To its credit, the majority does not accept outright

Plaintiffs’ interpretation of the NCLB. Yet, in finding

§ 7907(a) ambiguous, it concludes that Congress might

have meant what Plaintiffs’ say it did. I cannot agree.

Contrary to the majority’s opinion, I would hold

that the NCLB’s requirements apply to participating

States and the schools and school districts within

those states, regardless of whether federal funding is

sufficient to defray the entire cost of compliance. |

would further hold that States’ and school districts’

obligations are consistent with § 7907(a), which

simply prevents federal officers from transforming

the NCLB from a voluntary program into a manda-

tory one.

My reading of § 7907(a) is supported by the plain

text of the NCLB as well as its overall structure.

Under the NCLB, participating States and the school

districts within them must comply with extensive

educational requirements if the States choose to

accept federal] funding. The NCLB’s funding amount

for a school district is dependent on congressional

appropriation decisions and the proportion of at-risk

students in the school district, not on the cost of com-

pliance with the NCLB’s educational requirements.

My reading also recognizes State and local govern-

ments’ long-standing responsibility for largely admi-

nistrating and funding our children’s education, and

it properly charges Congress and State officials with

knowledge of that fact. Because the NCLB’s require-

ments are sufficiently clear, I would hold that

requiring compliance with them is an appropriate ex-

ercise of congressional authority under the Spending

Clause.

For all of these reasons, I respectfully dissent.

75a

APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

{Filed 05/01/2008]

No. 05-2708

SCHOOL DISTRICT OF THE CITY OF PONTIAC, et al.,

Plaintiff-Appellant,

Ve

SECRETARY OF U.S. DEPARTMENT OF EDUCATION,

Defendant-Appellee.

BEFORE: BOGGS, Chief Judge; MARTIN, BAT-

CHELDER, DAUGHTREY, MOORE, COLE, CLAY,

GILMAN, GIBBONS, ROGERS, SUTTON, COOK,

McKEAGUE, and GRIFFIN, Circuit Judges.

A majority of the Judges of this Court in regular

active service have voted for rehearing of this case en

banc. Sixth Circuit Rule 35(a) provides as follows:

“The effect of the granting of a hearing en banc

shall be to vacate the previous opinion and

judgment of this court, to stay the mandate and

to restore the case on the docket sheet as a

pending appeal.”

Accordingly, it is ORDERED, that the previous

decision and judgment of this court is vacated, the

mandate is stayed and this case is restored to the

docket as a pending appeal.

ENTERED BY ORDER OF THE COURT

/s/ Leonard Green

Leonard Green, Clerk

76a

APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

LEONARD GREEN TELEPHONE

CLERK (513) 564-7000

540 Potter Stewart U.S. Courthouse Building

CINCINNATI, OHIO 45202-3988

January 20, 2009

SENT VIA E-MAIL

Counsel of Record

Re: No. 05-2708

Pontiac School District v. Secretary,

U.S. Department of Education

Dear Counsel:

The court has asked that you file supplemental

briefs in the appeal noted above, addressing the

following questions:

1. Are these claims justiciable—specifically, are

they ripe for review, see Abbott Labs. v. Gardner,

387 U.S. 1386 (1967)—have plaintiffs exhausted

all administrative remedies, see Thunder Basin

Coal Co. v. Reich, 510 U.S. 200 (1994), and can

the court properly resolve this case without the

presence of the relevant States (Michigan, Texas,

and Vermont) as parties or at least without

knowing the views of the States on the issues

presented?

2. 20 U.S.C. § 6575, “Prohibition against

Federal mandates, direction, or control,” as

contained in Title I, Part I of the No Child Left

Behind Act of 2001, shares language similar to

77a

that found in the first part of 20 U.S.C. §

7907(a), “Prohibitions on Federal government

and use of Federal funds,” but lacks language

similar to that found in the second part of §

7907(a), the so-called “ unfunded mandate

provision ( “. . . or mandate a State or any

subdivision thereof to spend any funds or incur

any costs not paid for under this [Act].” Address

what effect—if any— § 6575 has on § 7907(a).

Your supplemental briefs are not to exceed 20

pages, and are to be filed with this office not later

than February 10, 2009. You may e-mail the briefs to

Mr. Roy Ford of this office at roy_ford@ca6.us

courts.gov, or you may fax them to him at (513) 564-

7097.

Thanking you for your attention to this request, |

am

Very truly yours,

/s/ Leonard Green

Leonard Green, Clerk

78a

APPENDIX E

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 05-2708

SCHOOL DISTRICT OF THE CITY OF PONTIAC, et al.,

Plaintiffs-Appellants,

Vv.

SECRETARY OF THE UNITED STATES

DEPARTMENT OF EDUCATION,

Defendant-Appellee.

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.

ORDER

This case was heard by the en banc court on

December 10, 2008. The court, for the reasons more

fully set forth in the opinions issued herewith, divided

evenly, with eight judges voting to affirm the judg-

ment of the district court and eight voting to reverse

that judgment. Consequently, the judgment of the

district court is AFFIRMED. See Goodwin v. Chee,

79a

330 F.3d 446 (6th Cir. 2003), and Stupak-Thrall v.

United States, 89 F.3d 1269 (6th Cir. 1996).

IT IS SO ORDERED.

ENTERED BY ORDER OF THE COURT

/s/ Leonard Green

Leonard Green

Clerk

80a

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 05-2708

SCHOOL DISTRICT OF THE CITY OF PONTIAC, e¢ al.,

Plaintiffs-Appellants,

Vv.

SECRETARY OF THE UNITED STATES

DEPARTMENT OF EDUCATION,

Defendant-Appellee.

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.

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

8la

BRIEF: Robert H. Chanin, Jeremiah A. Collins,

BREDHOFF & KAISER, P.L.L.C., Washington, D.C.,

Dennis R. Pollard, THRUM LAW FIRM, P.C., Bloom-

field Hills, Michigan, Alice Margaret O’Brien, CAL-

IFORNIA TEACHERS ASSOCIATION, Burlingame,

California, Philip A. Hostak, OFFICE OF GENERAL

COUNSEL, NATIONAL EDUCATION ASSOCIA-

TION, 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

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.

OPINION

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

82a

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 interpreta-

tion: 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 edu-

cation associations (collectively, “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 “(nJothing in this Act shall be construed

' Plaintiffs consist of nine school districts from three different

States (Michigan, Texas, and Vermont) and ten education asso-

ciations from ten different States (Connecticut, [linois, Indiana,

Michigan, New Hampshire, Ohio, Pennsylvania, Texas, Utah,

and Vermont). The school districts are Pontiac School District,

Laredo Independent School District, Leicester Town School Dis-

trict, Neshobe Elementary School District, Otter Valley Union

High School, Pittsford Town School District, Rutland Northeast

Supervisory Union (which itself contains eleven schoo!) districts),

Sudbury Town School District, and Whiting Town School Dis-

trict (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 Associa-

tion, the Reading Education Association, the Utah Education

Association, the Indiana State Teachers Association, the Texas

State Teachers Association, NEA-New Hampshire, and the Ver-

mont NEA (collectively, the “education association Plaintiffs”).

83a

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 “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 cov-

ered by federal funds. The district court concluded

that Plaintiffs must comply with the Act’s require-

ments 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 comprehen-

sive 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. Spel-

lings, 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

84a

achievement and more options for parents.” 147 Cong.

Rec. 813365, 13366 (2001) (statement of Sen. Bun-

ning). 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... .”)

(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 par-

ticipating States and schoo! 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 appropria-

tions 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

85a

educational needs of low-achieving children in our

Nation’s highest-poverty schools, limited English pro-

ficient children, migratory children, children with

disabilities, Indian children, neglected or delinquent

children, and young children in need of reading assis-

tance.” 20 U.S.C. § 6301(2).

In addition to Title I, Part A, NCLB establishes

numerous other programs, including a literacy initia-

tive 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 provi-

sions 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 educa-

tion in consultation with school districts, parents,

teachers, and other administrators. 20 U.S.C.

§ 6311(aX1). A State plan must “demonstrate that

the State has adopted challenging academic content

standards and challenging student academic achieve-

ment standards” against which to measure the

academic achievement of the State’s students. 7d.

§ 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 read-

ing or language arts; math; and, by the fourth grade,

science skills. /d. § 6311(b)(1)(C).

States also must develop, and school districts must

administer, assessments to determine students’

levels of achievement under plan standards. /d.

§ 6311(bxX2)(A). These assessments must show the

86a

percentage of students achieving “proficiency” among

”n «

“economically disadvantaged students,” “students from

major racial and ethnic groups,” “students with

disabilities,” and “students with limited English pro-

ficiency.” Id. § 6311(bX2\CXv)UI). Schools and dis-

tricts 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 con-

secutive 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 schoo] 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. 7d. § 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 in-

struction. Jd. §§ 6316(b)(3 (A)(iii), (ix).

If a school does not achieve AYP after two years

of improvement status, it is “identiflied]) . . . 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. Jd.

§ 63816(b)(7(C)iiv\1). If, after a year of corrective

action, a school still has not reached AYP, the district

must restructure the school entirely; options for re-

87a

structuring include “[rleopening 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. 7d. § 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.’

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 “Prohibi-

tions 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

? 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 in-

curred absent the State’s attempt at NCLB compliance.

88a

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 require-

ments. 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.’ Comp). for Declaratory and

Injunctive Relief (“Compl.”) 12; Joint Appendix (“JA”)

21 (quoting Paige statement of Dec. 2, 2003).)

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 expendi-

ture 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

89a

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.” (/d.)

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.

20 U.S.C. § 7907(a) (emphasis added). The court con-

cluded 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

90a

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. /d. 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.

Il. DISCUSSION

A. Justiciability

A threshold question is whether this case is prop-

erly 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

Sla

F.3d 521, 525 (6th Cir. 2008) (en banc). This contro-

versy 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.2 (2006). To satisfy the constitu-

tional 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).

Here, because the district court dismissed the com-

plaint 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

92a

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 Plain-

tiff 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 fund-

ing 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 priori-

ties, such as programs for gifted and talented

students, courses in foreign languages, art,

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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 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 dis-

trict Plaintiffs to spend non-federal funds to comply

with NCLB requirements is not dependent on the

hypothetical actions of “decisions made by the appro-

priate [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 fed-

94a

eral 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 “in-

jury 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

schoo! district Plaintiffs under NCLB is insufficient

to defray the cost of compliance with NCLB require-

ments, 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 “lilf a state

decides to accept the federal funds [offered 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 origi-

nal).) And, the Secretary has not granted waivers of

NCLB educational requirements based on the insuffi-

ciency of federal funding.*® Therefore, school district

Plaintiffs alleged that the spending of non-federal

° 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 Secre-

tary 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

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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 hard-

ship to the parties of withholding court con-

sideration?” Warshak, 532 F.3d at 525 (quoting

Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967))

(alternations in original),

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

96a

“[rlipeness becomes an issue when a case is anchored

in future events that may not occur as anticipated, or

at all.” Jd. (citations omitted). These concerns are not

present here. The question before this Court is nei-

ther abstract nor hypothetical. Plaintiffs present a

straightforward, concrete question of statutory inter-

pretation, 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 dif-

ferent settings” lack fitness for review). In short,

unless we decide this matter, school district Plaintiffs

will be forced to continue expending li

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