School District, Pontiac v. Secretary Dept. Educ.

512 F.3d 252

SCHOOL DISTRICT OF the CITY OF PONTIAC, et al., Plaintiffs-Appellants, v. SECRETARY OF the UNITED STATES DEPARTMENT OF EDUCATION, Defendant-Appellee.

No. 05-2708.

United States Court of Appeals, Sixth Circuit.

Argued: November 28, 2006.

Decided and Filed: January 7, 2008.

ARGUED:

Robert H. Chanin, Bredhoff & Kaiser, Washington, D.C., for Appellants.

Alisa B. Klein, United States Department of Justice, Washington, 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, Michigan, for Appellants. Alisa B. Klein, Mark B. Stern, United States Department of Justice, Washington, D.C., for Appellee. Joseph M. Miller, Pennsylvania Department of Education, Harrisburg, Pennsylvania, Kari Krogseng, James C. Harrison, Remcho, Johansen & Purcell, San Leandro, California, Gene C. Lange, Luman, Lange, Thomas & McMullen, Washington, D.C., Richard Blumenthal, Attorney General of the State of Connecticut, Hartford, Connecticut, for Amici Curiae.

Before: COLE and McKEAGUE, Circuit Judges; BREEN, District Judge.^*

COLE, J., delivered the opinion of the court, in which BREEN, D.J., joined. McKEAGUE, J. (pp. ___ _ ___), 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 "[n]othing in this Act shall be construed to . . . mandate a State or any subdivision thereof to spend any funds or incur any costs not paid for under this Act," 20 U.S.C. § 7907(a), Plaintiffs filed suit in district court against the Secretary of Education seeking, among other relief, a judgment declaring that they need not comply with the Act's requirements 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 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. 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 compliance, 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 controversial, educational reform—amended the Elementary and Secondary Education Act of 1965 ("ESEA"), Pub.L. No. 89-10, 79 Stat. 27 (codified as amended at 20 U.S.C. §§ 6301-7941 (2003)). See Connecticut v. Spellings, 453 F.Supp.2d 459, 468 (D.Conn. 2006). The ESEA targeted funding to students in low-income schools, and its purposes included overcoming "any effects of past racial discrimination." George v. O'Kelly, 448 F.2d 148, 151 (5th Cir.1971); accord Barrera v. Wheeler, 475 F.2d 1338, 1340 (8th Cir.1973); United States v. Jefferson County Bd. of Educ., 372 F.2d 836, 851 (5th Cir.1966). The ESEA was periodically reauthorized and amended over the next few decades.

In contrast to prior ESEA iterations, NCLB "provides increased flexibility of funds, accountability for student achievement and more options for parents." 147 Cong. Rec. S13365, 13366 (2001) (statement of Sen. Bunning). The Act focuses federal funding more narrowly on the poorest students and demands accountability from schools, with serious consequences for schools that fail to meet academic-achievement requirements. Id. at 13366, 13372 (statements of Sens. Bunning, Landrieu, and Kennedy). States may choose not to participate in NCLB and 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 educational 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 children in our Nation's highest-poverty schools, limited English proficient children, migratory children, children with disabilities, Indian children, neglected or delinquent children, and young children in need of reading assistance." 20 U.S.C. § 6301(2).

In addition to Title I, Part A, NCLB establishes numerous other programs, including a literacy initiative for young children and poor families (Title I, Part B); special services for the education of children of migrant workers (Title I, Part C); requirements that all teachers be "highly qualified" (Title II, Part A); and instruction in English for children with limited English ability (Title III). Plaintiffs' complaint focuses on the educational requirements and funding provisions of Title I, Part A.

To qualify for federal funding under Title I, Part A, States must first submit to the Secretary a "State plan," developed by the state department of education in consultation with school districts, parents, teachers, and other personnel. Id. § 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. Id. § 6311(b)(1)(A). 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. Id. § 6311(b)(1)(C).

States must also develop, and school districts must administer, assessments to determine students' levels of achievement under plan standards. Id. § 6311(b)(2)(A). These assessments must be able to show the percentage of students achieving proficiency among "economically disadvantaged students," "students from major racial and ethnic groups," "students with disabilities," and "students with limited English proficiency." Id. § 6311(b)(2)(C)(v)(II). Schools and districts are responsible for making "adequate yearly progress" ("AYP") on these assessments, meaning that a minimum percentage of students, both overall and in each subgroup, 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 identified by the local educational agency for school improvement. 20 U.S.C. § 6316(b)(1)(A). Among other things, a school in improvement status must inform all of its students, including those who have been assessed as proficient, that they are permitted to transfer to any school within the district that has not been identified for school improvement. Id. § 6316(b)(1)(E)(i). The school 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. Id. §§ 6316(b)(3)(A)(iii), (ix).

If a school does not make AYP after two full years of improvement status, it is "identif[ied] ... for corrective action." Id. § 6316(b)(7)(C)(iv). Corrective action involves significant changes, such as replacing teachers who are "relevant to the failure to make [AYP]," or instituting an entirely new curriculum. Id. 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 "[r]eopening the school as a public charter school," replacing the majority of the staff, or letting the State's department of education run the school directly. Id. § 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...