T. H. BELL, SECRETARY OF EDUCATION, PETITIONER V. STATE OF NEW
JERSEY

   No. 83-2064

   In the Supreme Court of the United States

   October Term, 1984

   On Writ of Certiorari to the United States Court of Appeals for the
Third Circuit

   Reply Brief for the Petitioner

   1. Respondent devotes the major portion of its brief (Br. 21-41) to
the proposition that the Title I school attendance area eligibility
standards in effect from 1967 through 1976, 45 C.F.R. 116.17(d)
(1972), were "out of harmony" (Br. 34-35) with the goals of the Title
I program and "of dubious legal validity" (Br. 35).  Does respondent,
then, urge this Court to declare that those regulations were invalid?
It does not and cannot.

   As respondent itself points out (Br. 15-17 nn. 12 & 13), if the
court of appeals had agreed with its argument that the regulations
governing this case were invalid, then respondent would have been
absolved of all liability.  Under the judgment below, however,
respondent concedes it is liable to repay at least $249,607 in
misspent funds (ibid.).  Respondent did not file a cross-petition for
a writ of certiorari, and thus is not free in this Court to argue that
the 1967-1976 regulations were invalid;  such an argument would
provide respondent greater relief than did the decision below.  Strunk
v. United States, 412 U.S. 434, 435-437 (1973);  NLRB v. International
Van Lines, 409 U.S. 48, 52 n.4 (1972).  /1/

   For purposes of this case, therefore, the Court must assume that
the regulations respondent violated were valid and enforceable.
Respondent's criticisms of the regulations are simply irrelevant to
the actual issue in the case, which is whether statutory changes in
subsequent Title I grants should be held to apply retroactively to
grants made and administered under the prior, valid, standards.  When
respondent finally turns to that issue (Br. 41-49), it offers nothing
to cast doubt upon the correctness of the analysis presented in our
opening brief.

   2. Respondent contends (Br. 47 n.20) that the general savings
statute, 1 U.S.C. 109, does not apply to liabilities incurred under
subsequently repealed or amended regulations, as opposed to statutes.
This contention is unfounded.  The plain language of the savings
statute indicates that it applies to any liabilities "incurred under
such statute" (emphasis added);  this extends to any liabilities
incurred pursuant to the authority of the statute.  De La Rama
Steamship Co. v. United States, 344 U.S. 386 (1953).  Indeed, this
Court has expressly stated:

         The precise object of the general savings statute is to
      prevent the expiration of a temporary statute from cutting off
      appropriate measures to enforce the expired statute in relation
      to violations of it, or of regulations issued under it,
      occurring before its expiration.

Allen v. Grand Central Aircraft Co., 347 U.S. 535, 554-555 (1954)
(emphasis added).  /2/

   The Court has not hesitated to apply the general savings clause to
preserve liabilities incurred under regulations issued pursuant to
statutes that subsequently expired or were repealed.  See United
States v. Palletz, 330 U.S. 812 (1947) (summarily reversing, on
authority (inter alia) of general savings clause, then Rev. Stat.
Section 13 (1878 ed.), judgments dismissing prosecutions for
violations of regulations issued under Emergency Price Control Act of
1942, after expiration thereof);  United States v. Wheelbarger, 331
U.S. 791 (1947) (same).

   Respondent's reliance on Rodgers v. United States, 158 F.2d 835
(6th Cir.), rev'd in part on other grounds, 332 U.S. 371 (1947), and
United States v. Hark, 49 F. Supp. 95 (D. Mass. 1943), rev'd, 320 U.S.
531 (1944), is rather surprising.  In Hark, this Court squarely held
"that revocation of (a) regulation did not prevent indictment and
conviction for violation of its provisions at a time when it remained
in force" (320 U.S. at 536).  This is because the common law rule
barring criminal prosecutions for offenses subsequently repealed does
not apply to changes in regulations.  "Revocation of the regulation
does not repeal the statute;  and though the regulation calls the
statutory penalties into play, the statute, not the regulation,
creates the offense and imposes punishment for its violation" (ibid.
(footnote omitted)).  Rodgers is to similar effect.  Thus, if the
general savings statute does not apply to changes in regulations, it
is because a savings clause is unnecessary -- not because a contrary
result is intended.

   It therefore does not matter whether this case is viewed as
involving a regulatory change (due to the 1976 regulatory revision) or
a statutory change (due to the 1978 Act).  In either case, liabilities
incurred under the regulations, valid at the time, are not released or
extinguished by subsequent developments.

   3. Respondent's final contention is that the court of appeals in
this case "did what courts of equity historically do" (Br. 20);  that,
"(g)iven its imperative to justly resolve disputes presented to it, in
equity, it could do no less" (Br. 49).  However, the role of the
courts in judicial review of the Secretary's determinations under the
Act is to judge whether the Secretary has acted in compliance with
law.  Cf. Fedorenko v. United States, 449 U.S. 490, 516-517 (1981).
The role for equity and forgiveness in this scheme is played by
Congress and the Secretary, not by the courts.  Congress expressly
considered whether to forgive liabilities for Title I funds misspent
prior to 1978 -- including New Jersey's -- and rejected the proposal.
See 127 Cong. Rec. S5430 (daily ed. May 21, 1981).  Upon completion of
this litigation, the Secretary will have authority, subject to
statutory standards, to return up to 75% of the recovery to the State.
 See Pet. Br. 48-49.  The court of appeals erred in relieving
respondent of its obligation to repay funds misspent under regulations
in effect at the time, merely because Congress and the agency
subsequently decided to change program requirements in later years.
/3/

   For these reasons and those stated in our opening brief, the
judgment of the court of appeals should be reversed.

   Respectfully submitted.

   REX E. LEE

      Solicitor General

   DECEMBER 1984

   /1/ Nor do respondent's arguments on this score have any merit.
The congressional intention that Title I funds be used in "areas which
have the highest proportions of children from low-income families" (S.
Rep. 95-856, 95th Cong., 2d Sess. 7 (1978);  H.R. Rep. 95-1137, 95th
Cong., 2d Sess. 5 (1978)) is obviously served by a rule requiring that
school districts confine Title I programs to areas where the
concentration levels are at or above the average for the district as a
whole.  Our opening brief (at 27-32) contains an extended discussion
of the point.  Whether one agrees with this rule as a matter of
policy, it is plainly neither arbitrary nor irrational.  See 20 U.S.C.
(1976 ed.) 241e(a), 242(b) (explicit delegation of rulemaking
authority to grantmaking agency);  Chevron U.S.A., Inc. v. NRDC, No.
82-1005 (June 25, 1984), slip op. 5-6;  Schweiker v. Gray Panthers,
453 U.S. 34, 44 (1981).

   /2/ Although the Court's statement in Allen refers directly to the
second sentence of 1 U.S.C. 109 (concerning the expiration of
temporary statutes), it applies with equal force to the first sentence
of the Section (dealing with repealed statutes).  The two sentences
are in every other respect identical.

   /3/ We call the Court's attention to an additional authority
supporting our position that subsequent changes in federal grant
provisions should not be applied to grants made and administered under
prior law.  National Wildlife Federation v. Marsh, 747 F.2d 616 (11th
Cir. 1984).