RESPONDENT: Kentucky Department of Education
LOCATION: Elstad's Residence
DOCKET NO.: 83-1798
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Sixth Circuit
CITATION: 470 US 656 (1985)
ARGUED: Jan 08, 1985
DECIDED: Mar 19, 1985
Kenneth Steven Geller - on behalf of the Petitioner
Robert L. Chenoweth - on behalf of the Respondent
Facts of the case
Media for Bennett v. Kentucky Department of Education
Audio Transcription for Oral Argument - January 08, 1985 in Bennett v. Kentucky Department of Education
Warren E. Burger:
Mr. Geller, you may proceed whenever you are ready.
Kenneth Steven Geller:
Thank you, Mr. Chief Justice, and may it please the Court:
Two years ago in Bell v. New Jersey, this court unanimously held that the federal government may recoup misspent grant funds under Title I of the Elementary and Secondary Education Act of 1965.
The two cases that the Court will hear this afternoon involve Court of Appeals decisions announcing erroneous rules of construction that substantially frustrate the exercise of this recoupment remedy.
In this case, the Kentucky case, the Sixth Circuit has held that misspent grant funds may be recovered only when the violation is so plain that the grantee could not reasonably have believed that its expenditures were lawful.
In our view there is no legal basis for this ruling.
Now, as the Court is aware, Congress passed the Title I statute in 1965 for the purpose of expanding and improving programs designed to meet the special educational needs of educationally deprived children in low income areas.
Now, from the outset, the Title I program has been designed to provide supplemental federal educational aid to these educationally deprived children over and above whatever assistance they would be entitled to receive from state and local funds, and in order to ensure that federal monies are used solely for this purpose, the Title I program has always included since 1965 the so-called supplanting prohibition.
Now, this provision expressly states that Title I funds may be used only to supplement the level of funds that would in the absence of Title I be made available from state and local sources for the education of children participating in the Title I program.
In other words, Title I is designed to provide an additional layer of federal benefits for certain educationally deprived children rather than to take the place of any money that the state or local government would otherwise provide for educating these children.
The antisupplanting requirement has always been at the heart of the Title I program, and it has always been an express condition on the receipt of federal funds.
Now, this case involves the way in which Kentucky operated its so-called readiness programs in 1974 under Title I.
These readiness classes were for children who were not prepared to enter the regular first or second grade because of educational difficulties.
And in states other than Kentucky, Title I programs provided children such as these with federally funded supplemental instruction in addition to whatever state-funded instruction they were entitled to receive.
But what Kentucky did was the following: it set up special self-contained full day classes for these educationally deprived children wholly apart from the regular instructional program, and it funded these classes almost exclusively out of federal Title I funds.
In other words, these students received virtually their entire academic instruction for the first and second grade through the Title I program rather than through the regular state-funded school program.
As a result, it is quite obvious that Kentucky was using federal funds to supplant state and local funds that otherwise would have been available for the children in these readiness classes.
And the readiness classes unquestionably took the place of the regular first and second grade classes that these students would have attended in the absence of the Title I program.
And in fact, nearly half of the students in these readiness classes were actually promoted to the second or third grade after they had completed their year of readiness training.
So it is quite clear that at least as to those students, federal funds were being used for regular rather than supplemental instruction.
Now, when federal auditors examined the Kentucky Title I program for 1974, they concluded not surprisingly that a supplanting violation had occurred.
Kentucky challenged this finding before the Education Appeal Board.
Now, Kentucky conceded that virtually no state and local funds had been spent for the basic instructional costs of the Title I children in the readiness classes, but it argued that a supplanting violation nonetheless had not occurred because there had been no decrease in state and local funds for the schools involved.
Now, this argument was rejected by the auditors, by the Education Appeal Board, and by the Secretary of Education, all of whom concluded that the antisupplanting provisions of the statute and regulations were crystal clear in their emphasis on maintaining state and local funds for the particular Title I children rather than simply for particular schools.
But as I mentioned a moment ago, the Sixth Circuit reversed the recoupment order.
The Court of Appeals agreed actually with the Secretary's reading of the antisupplanting provisions.
The Sixth Circuit specifically held that the prohibition against supplanting state and local funds with federal funds could be read to refer to expenditures at the level of the educationally deprived child rather than at the school level, and it therefore held that the Secretary's reasonable interpretation of the supplanting provisions would govern all future Title I grants.
But the Court then went on to say that Kentucky's interpretation of the supplanting prohibition also was reasonable, and in these circumstances the Court held that the Secretary could not recoup the concededly misspent funds because the statutory and regulatory provisions at issue were not sufficiently clear to apprise the state of its responsibilities.
Sandra Day O'Connor:
Mr. Geller, the Congress enacted amendments to Title I in 1978, and some of the legislative reports in connection with that observed that the supplanting regulations lacked sufficient clarity.