Com. of Va. Dept. of Educ. v. Riley

Decision Date11 October 1996
Docket NumberNo. 95-2627,95-2627
Parties, 110 Ed. Law Rep. 552, 17 A.D.D. 81 COMMONWEALTH OF VIRGINIA DEPARTMENT OF EDUCATION, Petitioner, v. Richard W. RILEY, United States Secretary of Education; United States Department of Education, Respondents. Virginia School Boards Association, Amicus Curiae.
CourtU.S. Court of Appeals — Fourth Circuit

Luttig, Circuit Judge, filed dissenting opinion.

ARGUED: William Henry Hurd, Deputy Attorney General, Office of the Attorney General, Richmond, Virginia, for Petitioner. Leslie A. Simon, United States Department of Justice, Washington, D.C., for Respondent. ON BRIEF: James S. Gilmore, III, Attorney General, Paul J. Forch, Senior Assistant Attorney General, Joan W. Murphy, Assistant Attorney General, Office of the Attorney General, Richmond, Virginia, for Petitioner. Deval L. Patrick, Assistant Attorney General, Dennis J. Dimsey, United States Department of Justice, Washington, D.C., for Respondent. D. Patrick Lacy, Jr., Kathleen S. Mehfoud, Hazel & Thomas, P.C., Richmond, Virginia, for amicus curiae.

Before MURNAGHAN and LUTTIG, Circuit Judges, and LAY, Senior Circuit Judge of the United States Court of Appeals for the Eighth Circuit, sitting by designation.

Affirmed by published opinion. Judge MURNAGHAN wrote the majority opinion, in which Senior Judge LAY joined. Judge LUTTIG wrote a dissenting opinion.

OPINION

MURNAGHAN, Circuit Judge:

Under Part B of the Individuals with Disabilities Education Act ("IDEA" or "IDEA-B"), federal funds are provided to participating states for the purpose of helping them to educate disabled children. In order to be eligible for the federal assistance, a state must meet numerous requirements prescribed by Congress, one of which is that the state "assure[ ] all children with disabilities the right to a free appropriate public education." After learning that Virginia has a policy under which a disabled child may be deprived of all educational services by way of expulsion or long-term suspension if that child misbehaves in a manner unrelated to his or her disability, the United States Department of Education threatened to withhold all of Virginia's IDEA-B funds unless it amended that policy so that expelled or suspended disabled children could receive educational services in an alternative setting. In Virginia Department of Education v. Riley (Riley I ), 23 F.3d 80 (4th Cir.1994), we ordered the Department to conduct a hearing on the matter. Following that hearing, the Secretary of Education ruled that Virginia's entire allotment of IDEA-B funds could indeed be withheld until the state agreed to amend its disciplinary policies. Virginia has appealed that ruling on numerous grounds. We affirm.

I.
A.

In Part B of the IDEA--formerly known as the Education of the Handicapped Act 1--Congress has directed the Department of Education to provide financial assistance, under prescribed conditions, to state and local education agencies for the education of disabled children. See 20 U.S.C. §§ 1411-20 (1990 & Supp.1996). The IDEA-B program is administered by the Office of Special Education Programs ("OSEP"), housed within the Department of Education's Office of Special Education and Rehabilitative Services ("OSERS"). 20 U.S.C. § 1402(a) (Supp.1996). To receive IDEA-B funds, a state must do two things. First, the state must submit to OSEP a plan covering a period of three fiscal years, describing (among other things) the policies and procedures that will govern the expenditure of the federal funds. See 20 U.S.C. § 1413 (1990 & Supp.1996); 34 C.F.R. § 300.110. Second, the state must meet the eligibility requirements described in the Act. One of those requirements is that the state have "in effect a policy that assures all children with disabilities the right to a free appropriate public education." 2 20 U.S.C. § 1412(1) (Supp.1996); see also 34 C.F.R. § 300.121(a) ("Each State plan must include information that shows that the State has in effect a policy that ensures that all children with disabilities have the right to FAPE [free appropriate public education] within the age ranges and timelines under § 300.122."). If the Secretary of Education determines, after notice and an opportunity for a hearing, that the state has failed substantially to comply with that or other requirements set out in sections 1412 and 1413, he or she "shall, after notifying the State educational agency, withhold any further [IDEA-B] payments to the State." 20 U.S.C. § 1416(a) (Supp.1996).

B.

In August 1992, Virginia submitted to OSEP its IDEA-B plan for fiscal years 1993, 1994, and 1995. The Assistant Secretary of Education for OSERS conditionally approved the plan in October 1992 and permitted Virginia to receive its funds for fiscal year 1993. The Department of Education thereafter discovered that Virginia has a stated policy under which, "[i]f there is no causal connection [between a child's misconduct and his or her disability] and if the child was appropriately placed at the time of the misconduct, the child may be disciplined the same as a non-handicapped child." 3 On December 17, 1993, the Department notified Virginia officials that it would not release Virginia's IDEA-B funds for fiscal years 1994 and 1995 unless Virginia altered that policy. Relying upon the Act's statement that a participating state must have "in effect a policy that assures all children with disabilities the right to a free appropriate public education," as well as upon the Department's prior interpretation of that provision, the Department asserted that "even during a disciplinary removal that exceeds 10 school days, [participating states] may not cease educational services to students with disabilities ... regardless of whether the student's misconduct is determined to be a manifestation of the student's disability."

Virginia refused to amend its policy, insisting that, if a child's misbehavior is unrelated to his or her disability, IDEA-B does not strip school officials of their right to deprive the student of all educational services by expelling him or her or by suspending him or her for an extended period of time. After the Department refused to grant it a hearing on the matter, Virginia petitioned this court for interlocutory relief, seeking the release of its $50.2 million IDEA-B allotment for fiscal year 1994. We granted Virginia the relief it requested, holding that, under 20 U.S.C. § 1416(a), Virginia could not be deprived of its IDEA-B funds without reasonable notice and an opportunity for a hearing. Riley I, 23 F.3d at 84-87. The Secretary complied with that ruling, releasing the funds for fiscal year 1994 and ordering that a hearing be held concerning the disposition of the funds for fiscal year 1995.

In October 1994, a hearing was indeed held. The Hearing Officer found (1) that "IDEA-B requires states to assure that eligible students with disabilities suspended long-term or expelled for conduct unrelated to their disabilities continue to receive special education services;" (2) that the Department's policy on the matter had been articulated in the form of "an interpretive rule not subject to the notice and comment provisions" of the Administrative Procedure Act ("APA"); (3) that the Department's demand that Virginia amend its policy "did not amount to imposing [on Virginia] an impermissible new condition;" and (4) that the Secretary was acting within the scope of his lawful discretion when he proposed that Virginia's entire allotment of IDEA-B funds for fiscal year 1995, as well as all future IDEA-B funds, be withheld if Virginia refused to amend its policies in the manner demanded by the Department.

Pursuant to 34 C.F.R. § 300.585, the Secretary reviewed the Hearing Officer's findings, then issued his final decision on July 3, 1995. The Secretary largely concurred with the Hearing Officer's conclusions, finding (1) "that the IDEA-B, its interpretive guidance, and the case law require the continuation of education services to eligible disabled school children who are suspended long-term or expelled from their current school setting when their misconduct is unrelated to their disability;" (2) that "the Department's interpretation of IDEA-Part B is an interpretive rule not subject to the notice and comment provisions of the APA;" (3) that concerns we expressed in Riley I regarding whether the Department was imposing an impermissible new condition on Virginia were cured when Virginia was given the opportunity to present its arguments to the Hearing Officer; (4) that the Department was, in fact, not imposing such an impermissible new condition; (5) that Congress had given the Secretary the authority to withhold all of a state's IDEA-B funds if the state refuses to comply with the Act's requirements; and (6) that, despite those findings, Virginia would have access to its 1995 funds pending its appeal of the Secretary's decision.

Virginia has appealed, contending that Congress must clearly demonstrate its intent to override local authority concerning school disciplinary policies before the federal government may intrude in such matters, and that no such intent has been evinced here. Virginia also argues that the position taken by the Department in the instant case violates the "equal access" purpose of IDEA-B, that the Department is unlawfully coercing Virginia by threatening to withhold its entire IDEA-B allotment, and that the Department's policies cannot be imposed on Virginia because they were not promulgated in compliance with the APA.

C.

We must regard the Secretary's findings of fact as conclusive if they are supported by substantial evidence. 20 U.S.C. § 1416(b)(2). As we explain below, we find the pertinent statutory provisions unambiguous and therefore review the Secretary's conclusions of law de novo. 4 See Chevron U.S.A. v. Natural Resources...

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  • U.S. v. McCormack
    • United States
    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
    • November 25, 1998
    ...id. (citing Commonwealth of Virginia Dep't of Educ. v. Riley, 106 F.3d 559, 570-72(4th Cir.1997)(en banc)(plurality opinion),rev'g 86 F.3d 1337(4th Cir.1996)). Professor Brown notes that section 666 does not require this form of compliance or necessarily apply directly to the recipient gove......
  • Com. of Va., Dept. of Educ. v. Riley, 95-2627
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
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    ...of this court affirmed the Department of Education's construction of the IDEA and administrative ruling. See Commonwealth of Virginia v. Riley, 86 F.3d 1337 (4th Cir.1996). Judge Luttig dissented. See id. at 1347-58. On October 11, 1996, the court granted Virginia's petition for rehearing e......
  • Magyar v. Tucson Unified School Dist., Civ. No. 96-448 TUC RMB.
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. District of Arizona
    • March 14, 1997
    ...The Fourth Circuit affirmed the Department of Education's construction of the IDEA and the Secretary's ruling. See Virginia v. Riley, 86 F.3d 1337 (4th Cir.1996) ("Riley II"). Judge Luttig dissented. Id. at 1347-58. On October 11, 1996, the court granted Virginia's petition for rehearing en......
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    • June 23, 2000
    ...Petitioners, this is a critical factor in determining whether a rule is legislative or interpretive, citing Virginia Department of Education v. Riley, 86 F.3d 1337, 1347 (4th Cir.), vacated en banc, 106 F.3d 559 (4th Cir. 1997) and Chief Probation Officers v. Shalala, 118 F.3d 1327, 1333 (9......
1 books & journal articles
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    • United States
    • Stanford Law Review Vol. 53 No. 5, May 2001
    • May 1, 2001
    ...efforts to impose conditions under a different federal spending program were unconstitutional. Virginia Dep't of Educ. v. Riley, 86 F.3d 1337, 1348 (4th Cir. 1996) (Luttig, J., dissenting), rev'd en banc, 106 F.3d 559 (1997) (per curiam). There, the federal government had withheld from the ......

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