well welcome to the war circuit city in lexington i hope it didn't cause you any disruption and we have the first case of south carolina department of education versus on a duncan which is to follow his statutory obligations to deal fairly with the state of south carolina with regard to self reliance funding under the individuals with disabilities education act the secretary of education reduced south drive i believe funding by thirty six point two million dollars the eligibility determination section which is section twenty u s c fourteen twelve d two that section says that the secretary cannot make a final determination that the state is not eligible for a  so that's that's a goal discuss those because we don't have to reach them and i think you would not have jurisdiction if we brought the case directly to you as a review of the waiver decision or directly if we had appealed from the prospect of the secretary miller's decision directly to this court i believe that would be an improper we we were going through the hearing process to get to the sec not we agree that there is not a direct appeal from a to the administer the first level decision to deny the waiver we actually are seeking that appeal that review through the ministry of process so we could build a record and have if so it seems to me in order for you to get the route took you have to come under or sixteen with general if you're sixteen which says if any state is dissatisfied with the secretary's action of education that court's decision is then a reviewable by the secretary of education and then from there the sectaries decision is directly appealed to th hundred one seventy nine through one eighty four of those here in procedure so you would have now it would be we would have notice that the hearing would take place we would have an opportunity for vet present evidence on that that's what we don't have your we have a we did have a discussions beforehand with staff at the u s part of education to establish what the deficit was we never had an opportunity to really get into the issues gappah and the administrative law for it within the u s department that think apis and i mean the u s court sent it back to the secretary and frankly for months we didn't hear any any word about what what they were doing with our there has to be some under this under idea and again we believe under geffen's where there has to be some there is a right to present the case as the administrative level that was not was not allow under the eligibility section the  state is eligible for assistance under the idea yeah if it meets each of twenty five conditions and one of those conditions is the maintenance of effort we have as a state all states have to submit an application to the sector of other nothing to argue here today the eligibility just because there is a sort of statutory penalty for the eligibility requirements doesn't mean that it's not subject to review they still made a determination that we were not believe it is and we believe it's consistent with this works decisions and other cases in the preventive versus riley case we looked at as a similar similar case where virginia was was told that they didn't have a right to appeal because they did not have an approved plan here the state department station has an approved plan but we're not in total hearings so the standards in both cases the it would be almost impossible to ever get to a decision or any kind of a minister of review under eligibility note that have the u s department of education not granted any of the way for us to stay south carolina could have lost of two hundred hundred eleven million sector will present it to you if you like a copy that will end the purpose the compatible penalty so at the time this case was heard thirty six million dollars reduction was a perpetual reduction our funds would never be currently in fact in effect until the president signs the bill that funding is forever reduced so thirty six million dollars in perpetuity or funds would have been reduced had just as a  hypothetical have this the court i'm sorry had the secretary not granted any of the waivers the sec of the state could have lost two thirds of its funding in perfect now the state of south carolina  to go into effect so we're not looking at the perpetual six million dollars the thirty six million dollars was reduced out of the current budget year so our state received thirty six million dollars last about  reduced by one point two billion dollars so those are the funding was cut across the board the impact of the funding ended up with a special ed funding was reduced as a result of that those across the us is two thousand and nine two thousand and ten right two thousand and nine two thousand and x y actually what's before you is the the decision by the secretary in may two thousand and twelve it says the state does not have a right to a hearing thirtieth and it would impact this year's funding in the funds that were this our state did use other state funds to make up for the difference those funds were taken from other activities in the schools which you know we now move funds from general education to special ed and how would they be restored if all we're deciding on is whether you're entitled to a hearing or not you can still have to go through the hearing process yes herman if the decision was correct or not to remain and and to in order to address that motion do we have to take a look see at the merits i do have a lease or because you can i mean automatically just giving you a hearing why should we stay the act was not a record that they actually reduced funding that we were entitled to our state was entitled to based on a decision that that was premature that we should've gotten a hearing a final decision should have been rendered if that remedy will still be available today if they if we have a hearing very smart given as i gather is that if you're right is a risk on the department of education's level and if the case is her next fall and the secretary through the hearing process could make the same finding and then we would have the funds reduced next year i mean a least a client of the federal government just step back a bit since i know this there are some technical issues in terms of the relationship between jurisdiction and the hearing issue and i'm focusing on that the i d e a language to the language of the here in a slightly different it may be the same thing but i gather we should treat the same in other words if we find jurisdiction that's how we read it i  i recognize the difference but i think just it makes sense to be a go there and has the same point and i'm going to remain focused on the i d e a language because as we've explained in our braves the general education provisions act that's  a tool an arsenal that the department can use if it chooses but it was not the basis for the action taken here and so that those provisions really don't have anything to do with the action taken here so in order here there are two arguments that the state is making in service that claim that it should have an l j type hearing and both of those are based on the language of the i d e a and i just want to flag though that the jurisdiction overlaps for one but not the other so the argument that this was a denial of eligibility if they were correct there would also be jurisdiction the argument that this reduction w withholding within the meaning of the i d e a that's fourteen sixteen that's not the type of action that's subject to direct review in this court so i'm going to again i'll stay focused as counsel for south carolina did on the is that if you look at fourteen twelve and a a state is eligible for assistance under the sub part this is part b i d yes a for fiscal year if a state submit a plan suggest i agree is that if so i say that they just explain where the year to year came from does it used to be a three year period the state is eligible for assistance under this you know this for these grants for a fiscal year if the state i mean it this is the way it works and under other education programs do it just if you submit a plan and your plan you know checks all the required assurances you're making promises and therefore you get a letter that says you are eligible and they got such a let you're suggesting that the only thing the only condition that can result from a lack of eligibility is no funds at all but the statute doesn't say that the statute suggests that you're entitle to reduce the grant which is that's what the state puts into its grant application ok we assure you secretary of education that we will provide a free appropriate public education for all it's an assurance that the state meet its not just the promise that the state state has in effect policy and procedures to ensure but even as under any spending program you can have an effect policy and procedures to assure but still fail to do what you promised to do and then the question is compliance and  sorts of compliance actions and those have never been regarded as a determination to really truly nation that it's an assurance that the state meets each of these conditions you know you get it you see that last part  said you would do in your plan is not complying x and then you get credit when you see the last part of the sentence you choose to more which says the state meets each of the well known conditions and the conditions relates  and you're saying well they didn't need it because they got an initial determination of eligibility but here we come a few years later and that condition fails they don't satisfy that condition and you say ok hundred thousand they submitted their grant application it made assurances that they had in effect policies and create procedures to ensure that the state meets all of the twenty five conditions including me after they got their full grant for that year it wasn't until later that the state came to the department education and said we did not in fact retain effort for that year at that point the question is what's the consequence you know and it will first question is what is the conduct and the conduct is the failure of a condition but it is just it did not render them ineligible for fines in the year in which they did not comply thirty six months you know that thirty six million have to it says the secretary shall pay those sums out and the only way you can get that amount we do is by going through some process like this where they fail on the condition and the but actually to be clear the amount set out are authorizations and there are all sorts of stuff provisions bloodletters you're supposed to pay it out let me look at it and it says for example if appropriations are lower than the last then the states up allotment shall be reduced just this is not just submit the piece of paper it makes all the assurances you get your full grant you have it they spent it it was says you keep talking about the fact that once the assurance is made the eligibility determination ends and that's isolated but on the money i understand but the problem is is as you go warm there are continuing conditions they have to meet that condition each year to be eligible for the funds and with respect to the year nine it really makes no sense to say they were not eligible in a year in which they were declared eligible and got their full of grant it was we're now years later so just imagine some other type of condition you have to read the statute and you're  arguing some kind of logic as the way you function but congress basically said to me these conditions and the question is if you fail to meet these conditions what are the conditions the conditions are clearly in the withholding provisions of the i d e a it said you can withhold money from the state for failing to do what it promised to do now congress did not say that means it's ineligible for fines these are different terms they're different remedies with different procedures when they say they had no hearing they have no l j type hearing if the court looks at their reconsideration request to page one fifteen to one twenty six and they were told you may seek reconsideration that's in the administrative record at seventy seventy one to seventy three they did in fact seek reconsideration they briefed that there were no limits placed on the arguments they could make there was no restriction on the evidence that they were able to submit to his or their innocent action with them when the says hearing that this is an informal adjudication that was not at a l j type hearing is normally used for things like cross examining witnesses when there are factual disputes here in this type of situation where it's just a question of whether as a requirements as far as anyone knows there's never been an a type hearing on request to waive maintenance of africa wire so the first part is they had every opportunity to submit data and made argument this was considered are you know there aren't that many states so maybe this wouldn't come up that but there are tons of school districts that request waivers of maintenance of africa acquirements and so the idea was that i think that you would then have to have a hearing in connection with all of these and this is just not really at the height this is not the type of decision and also  there are others i'm talking about other provisions working world but it limited strikes no but i'm just explaining globally why in all of history the to overweight a request for a waiver of a maintenance of effort requirement under the statute or any other statute we're not aware of any precedent for an l j style hearing it doesn't mean that you don't present your evidence that you don't make the argument so you're heard but it's not a cross examination which is the type of proceeding that usually isn't enough actual there's no there's never been one but where is there language in the statute that you can point to that says they are not entitled to a hearing before their legs million is taken what there is is there's language that congress specified when a hearing is required and  virginia's entire idea grant was denied because it was determined you were ineligible because your plan does and provide for the education of children with disabilities who were expelled for reasons unrelated to their disabilities and so in that way ask a hypothetical with respect to that if they did provide it in the initial application and got the grant and then two years later they all been there but just changed their plan or did different things or didn't comply with the plan as approved that's exactly the dichotomy that i'm trying to you don't want to go if it's the whole plans at risk you're considering eligibility to be one the whole plan is that and the state of south carolina is suggesting that the failure of a condition would cause in them sixty thirty six million dollars is an eligibility reduction and a sanction whatever it is but the the question i suppose is where do we get your definition of  you don't need to provide special education teacher to students who are expelled for reasons unrelated to their disabilities and was overrode that that's in the first paragraph of the eligibility conditions but then also congress was using the term eligibility the way this court was using at which is and the way the department had used it in connection with virginia you didn't put it your plan was wrong your plan didn't make the assurances they are for you cannot get any money and that is the ordinary understanding of you are not eligible for a grant under a spending program it means you don't get any money there may be a whole host of lesser consequences if you are eligible but don't comply and that's the i'm glad you're asked the question he connects to the continuing resolution this argument only underscores how strange it would be to characterize this type of decision as a fine given eligibility if the department says you're ineligible at the risk of getting into this congress did two important things yesterday the president hasn't signed yet but this is the legislation that prevents a government shutdown so there's every expectation this will be signed very soon  what one thing congress did is very helpful to south carolina and it's in reaction to south carolina just tell me what the relevance of this appears to the request of the state ok the thing that's not helpful to south carolina is congress said the department shall distribute this money the fines that were reduced from south carolina i thought of kansas they're not mean but those are the two states that are affected and redistribute it to other states everything was so and i we don't want to get into a battle with congress right and i'm not saying this is not human and it's i just want to like make that part aware of when the timing would be as a practical matter for the department to comply with this so it's the it's that provided for there that the secretary shall distribute to all other states the amount by which a state allocation was reduced pursuant to this you know where maintenance of effort failure reduction as a practical matter the department would need to know by mid september in order to make that a reality to have time to run the formula and distribute the money to other states i believe south carolina for its own state funding purposes is asking for a decision even sooner than that and highlight the need for the firm resolution that i think congress realized what had happened here but there is such the penalty was so great knowing that we never would have any right to actually land and it's approved based on the promise because it meets the twenty one and this one later you don't fulfill one of those conditions their position is that it is  so the argument that has the department something prevents cation just checked oh yeah they're addressing my point you're sort of going to the procedure that you would follow and i'm trying to see if there's a distinction between a promise to a compliance on the one or the failure of a condition which was also a promise but the but the condition is independently required to sustain knowledge ability and if you don't meet the condition regardless of what you place how you good your promises you have to meet the condition in your argument i suppose has to be is that eligibility ongoing eligibility depends on compliance with the conditions it does and if there's a  and what we're get where do you get that that's under on fourteen and sixteen there is under the withholding section there is a right to a hearing now the hearing is that the at the level is the same here in fourteen twelve apply except that it does not specifically state that the appeal would go on to the court of appeals secretary's final decision on withholding is not specifically referenced that that would g think that the due process difference perhaps is under eligibility because we're looking at whether the states all go for funding which does impact future funding and in this case until yesterday we were talking about the impact of future funding for south carolina in perpetuity that that the under both provisions so there was a at least a right to administrative hearing and the mystery of hearing was it's not for over here it is but is there is there are procedures that spell out that there is opportunity present information evidence south consummated a request to reconsider frankly because they had received any response at all from the  and it was not notified that that reconsideration was under advisement the section that outlines the requirements for appearing which there's specified and where you have a red light o