Court Opinion

ID: 9429955
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:28:25.383388+00
Date Added: 2024-06-11T17:23:22.314268
License: Public Domain

Justice Stevens,
with whom Justice Marshall joins,
dissenting.
The Elementary and Secondary Education Act of 1965, 79 Stat. 27, was a part of the broader program that President *647Johnson characterized as the “war on poverty.”1 Title I of the Act authorized the expenditure of large sums of federal money to improve the education of children in low-income areas. The statute, however, did not contain a specific definition of the schools that would qualify for assistance under the program. It merely stated that “payments under this subchapter will be used for programs and projects . . . (A) which are designed to meet the special educational needs of educationally deprived children in school attendance areas having high concentrations of children from low-income families_” 20 U. S. C. §241e(a)(l) (1976 ed.).
As the case comes to us, the underlying issue is whether 10 of the public schools in Newark, New Jersey,2 that received federal assistance in the 1971-1972 school year were located “in school attendance areas having high concentrations of children from low-income families” within the meaning of the Act as it was enacted and as it was clarified by subsequent amendments. If funds were incorrectly allocated to those schools, the total federal grant was not increased; instead, the consequence was a lower distribution to other Newark schools that admittedly qualified for federal aid.3 There is *648no dispute about the fact that the money that was allocated to these schools — like that allotted to over 60 other schools in Newark — was used in programs and projects properly designed to meet the special educational needs of educationally deprived children.4 The only “misuse” of federal funds that is at issue is the suggestion that the money should have been spent in different school-attendance areas. The remedy for this misuse is not a redistribution to the more needy areas, but is a recapture of the funds by the Federal Government.
The Court agrees that the areas in dispute would have qualified for federal assistance under the statute as amended in 1978, and under the Secretary’s regulations that are now in effect. Ante, at 645. I think the Court would also agree that the Secretary had authority under the original Act to issue the regulations that are in effect today; indeed, in 1976 the Secretary did issue regulations that would have qualified seven of the attendance areas that are now in dispute.5 As the case comes to us it is also clear that we must assume that none of the disputed areas qualified under the Secretary’s regulations that were in effect in 1971-1972.6 Thus, the *649question for decision is whether the legal standard that should govern the disposition of this controversy is to be derived from the Secretary’s regulations in effect during the 1971-1972 school year — which admittedly were violated — or from the statutory language, which plainly was broad enough to authorize these expenditures when the statute was first enacted in 1965 as well as after its amendment in 1978. The Court holds that the now repudiated regulations must be strictly enforced. I agree with the Court’s view that the fact that its holding produces an inequitable outcome does not authorize a reviewing court to depart from the controlling legal standard,7 but I am convinced that the Court has seriously misread the intent of Congress.
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In order to understand the impact of the regulations that must be strictly enforced under the Court’s holding — and which I submit Congress later repudiated — it is useful to set forth the relevant facts concerning one of the school-attendance areas where federal money was allegedly “misused.” The federal auditors disallowed expenditures of $104,842 for special programs at Newark’s South 17th Street Elementary School. The disallowance was based on a determination that only 33.5% of the 1,549 children in the school were from low-income families.8 Because the average percentage of children from low-income families in the entire *650Newark School District was slightly higher — 33.9%—the South 17th Street Elementary School did not satisfy one of the eligibility criteria in the Secretary’s regulations.9 Under those regulations, unless the entire Newark School District qualified for assistance, only those school-attendance areas in which the percentage exceeded the districtwide average could qualify. Thus, even though South 17th Street’s percentage of 33.5 would have qualified for federal aid in any other school district in New Jersey and, indeed, in almost any school district in the entire United States,10 it did not meet the Secretary’s rigid standard.
*651When the anomalous consequences of this regulation came to the attention of Congress during its consideration of amendments to the Act in 1974, the House Committee on Labor and Education issued a Report that expressed the opinion that “it was never intended by the Act to render any school with a 30% concentration ineligible.”11 Presumably it was that Report that prompted the Secretary to modify the regulations in 1976 to permit school-attendance areas with more than 30% of the children from low-income families to qualify even though the districtwide percentage was even higher.12 Regardless of whether that is a correct explanation *652of the regulatory change in 1976, it is significant that the Secretary then interpreted the 1965 Act as allowing a school in a 30% area to qualify even though its attendance area had a lower percentage than the districtwide average.
In its consideration of the 1978 Amendments, Congress plainly expressed its disapproval of the kind of interpretation of the 1965 Act that is reflected in the regulations involved in this case. One example, described in the hearings before the Subcommittee on Elementary, Secondary and Vocational Education, provides a precise analogue to this case:
“In Baltimore City any school district which has less than 30.3% Title I children was not eligible to receive Title I funds. This minimum is higher than the maximum incidence in schools receiving Title I funds in 11 other counties. This means there are schools in relatively affluent counties receiving Title I assistance with no more than 5% Title I children while schools in Baltimore City with 25-30% Title I children are excluded from the program.”13
In response to testimony of that kind, Congress amended the statute to make it clear that a local school district could designate any attendance area with a 25% incidence of poverty as eligible for Title I funds. The House Report explained the purpose of the change (which originally proposed a reduction to 20%):
“[C]urrent OE regulations [45 CFR § 116a — 20(b)(2)] provide that any school attendance area with 30 percent *653or more children from low-income families (based on eligibility for free lunch) may be designated a target area. . . . The Committee bill reduces this minimum to 20 percent out of a concern that inflexible targeting requirement could force some school districts with very high incidences of poverty to declare schools] with 20 percent low-income enrollment ineligible, while schools with only 10 percent low-income enrollment or less might be eligible in wealthier neighboring districts.”14
When Congress amended the Act in 1978 to provide that any school-attendance area would be eligible for federal assistance if at least 25% of its children were from low-income families, it did not change the basic eligibility standard that had been adopted in 1965. Thus, the statute as amended in 1978, like the statute prior to those Amendments, provides that a “local educational agency shall use funds received under this subchapter in school attendance areas having high concentrations of children from low-income families (hereinafter referred to as ‘eligible school attendance areas’).” 92 Stat. 2161, 20 U. S. C. § 2732(a)(1). In adding the specific provision that a local educational agency may designate any school-attendance area in which at least 25% of the children are from low-income families, Congress did not broaden that standard, but merely ensured that the Secretary would not improperly narrow it. Thus, the only practical effect of the 1978 Amendments was to deny the Secretary the legal authority to promulgate the kind of rigid regulation that is being strictly enforced today.
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In my opinion this is plainly a case for application of the normal rule that a reviewing court must apply the law in effect at the time of its decision. As Justice White correctly noted when this litigation was before the Court two Terms ago:
*654“A federal court or administrative agency must ‘apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary.’ Bradley v. Richmond School Board, 416 U. S. 696, 711 (1974). Accord, Gulf Offshore Co. v. Mobil Oil Corp., 453 U. S. 473, 486, n. 16 (1981). Here, nothing in the 1978 Amendments or the legislative history suggests that the Amendments were not intended to be applied retroactively, and their application to this case would not result in manifest injustice.” Bell v. New Jersey, 461 U. S. 773, 793-794 (1983).
In my view, it is the Court’s holding, rather than an application of the 1978 Amendments to this case, that results in manifest injustice.
Ever since the statute was enacted in 1965 Congress has expressed a strong preference for allowing broad discretion to local governmental units in the administration of these federally funded programs.15 We should therefore adopt a strong presumption supportive of a local school board’s decision concerning the proper allocation of money among different school-attendance areas subject to its jurisdiction.16 Finally, it is appropriate to note that, just as the 1978 Amend*655ments themselves protected local school districts from overly prescriptive federal regulations, Congress in 1981 again identified the same interest in further amendatory legislation. Thus, the Education Consolidation and Improvement Act in 1981 directed that federal assistance be provided “in a manner which will eliminate burdensome, unnecessary and unproductive paperwork and free the schools of unnecessary federal supervision, direction and control,” 95 Stat. 464, and specifically indicated that federal assistance of the kind involved in this case would be most effective “if educational officials, principals, teachers,, and supporting personnel are freed from overly prescriptive regulations and administrative burdens which are not necessary for fiscal accountability and make no contribution to the instructional program.” Ibid.17
In sum, I simply cannot understand how the Court reaches the conclusion that its disposition of this case accords with the intent of Congress.
Accordingly, I respectfully dissent.

 Cf. S. Rep. No. 146, 89th Cong., 1st Sess., 4 (1965) (‘“Poverty will no longer be a bar to learning, and learning shall offer an escape from poverty. We will neither dissipate the skills of our people, nor deny them the fullness of a life informed by knowledge. And we will liberate each young mind — in every part of this land — to reach the furthest limits of thought and imagination’ ”) (statement of President Johnson).

 The original dispute between the parties involved 10 elementary schools and 3 high schools. If the Court of Appeals’ disposition were accepted, the determination of ineligibility for two elementary schools and for one high school would no longer be at issue. See State of New Jersey, Dept. of Education v. Hufstedler, 724 F. 2d 34 (CA3 1983); Brief for Respondent 15-16, n. 12 (acknowledging that, under the Third Circuit’s decision, it would have to repay “to the Secretary a minimum of $249,607”); id., at 16-17, n. 13.

 The Title I funds allotted to the New Jersey State Department of Education for the 3-year period between September 1, 1970, and August 31, 1973, aggregated $156,166,574. Of this total, $28,709,198 was suballotted to the Newark School District. There was no question about the total *648amount of money that either New Jersey or Newark was entitled to receive. The only question at issue in this case is whether Newark distributed some of that money to the wrong schools. Ante, at 636; Brief for Petitioner 4, n. 1 (“[T]he Newark school district received its correct allocation of Title I funds”); Brief for Respondent 5; App. 14.

 Brief for Petitioner 9 (“[T]he principal issue in the audit was the method of calculating eligibility of school attendance areas in 1971-1972”).

 The “low-income percentage” as determined by the federal auditors for the 10 disputed school-attendance areas ranged from a low of 27.9% to a high of 33.5%. In seven of these areas the figure was in excess of 30%. The auditors also disqualified two elementary-school-attendance areas with percentages of 22.9% and 20.6% and one high-school-attendance area with a percentage of 13%. App. 23-24. The determinations for those three areas would apparently no longer be in dispute if the Court of Appeals’ decision were affirmed. See Brief for Respondent 15-16, n. 12, 16-17, n. 13. See also n. 3, supra.

 New Jersey argued that, if the children who were not attending school and those who were attending special schools in the area were counted, the *649correct percentage of the low-income children in most of the attendance areas would be increased. Thus, for example, in the attendance area ' of the South 17th Street Elementary School, the low-income percentage would be 40.3%. See App. to Pet. for Cert. 53a; for purposes of decision, I assume that argument was correctly rejected by the auditors. However, I note that New Jersey has represented that the poverty level in the attendance area of the South 17th Street Elementary School had risen to 73.91% in 1984-1985. See Brief for Respondent 8, n. 5.

 Ante, at 646; cf. Trans World Airlines, Inc. v. Franklin Mint Corp., 466 U. S. 243, 277 (1984) (Stevens, J., dissenting).

 App. 23, 25.

 Title 45 CFR § 116.17(d) (1972) then provided:
“A school attendance area for either a public elementary or a public secondary school may be designated as a project area if the estimated percentage of children from low-income families residing in that attendance area is as high as the percentage of such children residing in the whole of the school district, or if the estimated number of children from low-income families residing in that attendance area is as large as the average number of such children residing in the several school attendance areas in the school district. In certain cases, the whole of a school district may be regarded as an area having a high concentration of such children and be approved as a project area, but only if there are no wide variances in the concentrations of such children among the several school attendance areas in the school district.”

 It is undisputed that Newark’s poverty level was one of the highest in the Nation. New Jersey offers the following description:
“The Newark School District for the years 1970 through 1973, the period covered by the federal audit before this Court, could readily be characterized as the prototypic Title I district. The application for Title I funds for the year 1971-72 school year, the primary focus of the audit, showed that 33.9% of the children in the Newark School District were from low-income families (J. A. 108). The narrative portion of this application clearly demonstrated that Newark was uniformly disadvantaged in other ways. Statistics showed a jobless rate in 1970 of 14%; a rate which was double that needed to qualify under the Economic Development Act. Another 35,000 residents were earning $3,000 per year or less. In 1971, the Model Cities program in Newark was expanded to include the entire city. At the time the 1971-72 application was submitted, Newark had a black population of 54.2% with another 11% of its population of hispanic background. The City also had the highest percentage of slum housing in the nation, the *651highest incidence of crime per 10,000 population, the highest population density, a high rate of maternal mortality and the second highest birth rate. Of particular significance to the Title I program, and exacerbating the inherent difficulties of obtaining precise statistics for Newark’s low-income population, was the fact that in 1970-71 Newark had the highest population turnover in the nation. Indeed, Model Cities data indicated that mobility rates reached as high as 80% for schools in the Title I area (J. A. 113 to J. A. 114; J. A. 69).” Brief for Respondent 3-4 (footnote omitted).

 The quoted statement appears in the following paragraph from H. R. Rep. No. 93-805, p. 17 (1974):
“As originally conceived and as extended, Title I authority is basically centered in the local educational agency (the school district). The special needs of the educationally disadvantaged child and programs to meet those needs must be locally devised. This is consistent with the Congress’ historical concern that local communities should, not in conflict with constitutional and legal prescriptions, formulate educational policy. . . . This is not consistent with strict Federal administration regulations which so narrowly define ‘target school’ that a school in one local educational agency with 10% of its enrollment of ‘educationally deprived’ is an eligible ‘target school,’ whereas a school in another local educational agency with 30% or more is not eligible as a target school. While it is clearly the expressed objective to serve children in schools with high concentrations, it was never intended by the Act to render any school with a 30% concentration ineligible.”

 See 45 CFR § 116a.20(b)(2) (1977), which stated, in pertinent part:
“An attendance area may be designated under paragraph (b)(1) on a percentage basis if the percentage of children from low-income families in that attendance area is at least as high as the percentage of such children *652residing in the whole of the school district. In addition, upon specific request by the local educational agency, the State educational agency may approve the designation of attendance areas in which at least 30 percent of the children are from low-income families.”

 Education Amendments of 1977: Hearings on H. R. 15 before the Subcommittee on Elementary, Secondary and Vocational Education of the House Committee on Education and Labor, 95th Cong., 1st Sess., pt. 12, p. 392 (1978) (testimony of Ruth Mancuso, vice president of the National Association of State Boards of Education).

 H. R. Rep. No. 95-1137, p. 22 (1978).

 See, e. g., S. Rep. No. 146, 89th Cong., 1st Sess., 9 (1965), which stated:
“It is the intention of the proposed legislation not to prescribe the specific type of programs or projects that will be required in school districts. Rather such matters are left to the discretion and judgment of the local public educational agencies. . . . What may be an acceptable and effective program in a school district serving a rural area may be entirely inappropriate for a school district serving an urban area, and vice versa. There may be circumstances where a school system is basically a low-income area and the best approach in meeting the needs of educationally deprived children would be to upgrade the regular program. On the other hand, in many areas the needs of educationally deprived children will not be satisfied by such an approach.”

 There is, of course, an important distinction between the broad 'power of Congress to control certain actions of state governmental units, see, *655e. g., EEOC v. Wyoming, 460 U. S. 226, 244-248 (1983) (Stevens, J., concurring), and the proper interpretation of congressional action which presumptively should accord state governmental units the broadest measure of respect. See, e. g., New York Telephone Co. v. New York Dept. of Labor, 440 U. S. 519, 539-540, 545-546 (1979) (opinion of STEVENS, J.).

 This thought was echoed in a recent study, which noted that one “Title I administrator compared the current federal Title I role to ‘the people who hide in the mountains until the war is over and then come down to kill the dead.’ ” L. McDonnell & M. McLaughlin, Education Policy and the Role of the States 105 (1982).