State of Pa. v. Riley, No. 95-3308

CourtU.S. Court of Appeals — Third Circuit
Writing for the CourtLEWIS
Citation84 F.3d 125
Parties109 Ed. Law Rep. 614 STATE OF PENNSYLVANIA, Petitioner, v. Richard W. RILEY, Secretary of the United States Department of Education, Respondent.
Docket NumberNo. 95-3308
Decision Date15 May 1996

Page 125

84 F.3d 125
109 Ed. Law Rep. 614
STATE OF PENNSYLVANIA, Petitioner,
v.
Richard W. RILEY, Secretary of the United States Department
of Education, Respondent.
No. 95-3308.
United States Court of Appeals,
Third Circuit.
Argued Jan. 23, 1996.
Decided May 15, 1996.

Page 127

Michael Brustein, Kristin E. Hazlitt (argued), Brustein & Manasevit, Washington, DC, for Petitioner.

Lynette E. Charboneau (argued), United States Department of Education, Washington, DC, for Respondent.

Before: MANSMANN and LEWIS, Circuit Judges and RESTANI, Judge, Court of International Trade. *

OPINION OF THE COURT

LEWIS, Circuit Judge.

The Commonwealth of Pennsylvania's Department of Education ("PDE") appeals from a final decision of the United States Secretary of Education requiring Pennsylvania to refund $3,082,088.95 to the United States. PDE argues that the Secretary erred in denying PDE an evidentiary hearing, and that the Secretary's decision violates Pennsylvania's sovereign right to interpret its own statutes. For the following reasons, we will affirm the decision of the Secretary.

I.

The underlying facts of this case involve the interplay between federal and state programs which fund vocational education, and the requirements states must meet in order to receive federal funding. Under the Perkins Vocational Education Act, 20 U.S.C. § 2301-2471 (1988) ("Perkins Act"), federal grants are issued to the states to "assist the States to expand, improve, modernize, and develop quality vocational education programs in order to meet the needs of the Nation's existing and future work force for marketable skills and to improve productivity and promote economic growth." 20 U.S.C. § 2301(1). The Perkins Act defines vocational education as:

organized educational programs which are directly related to the preparation of individuals in paid or unpaid employment in such fields as agriculture, business occupations, home economics, health occupations, marketing and distributive occupations, technical and emerging occupations, modern industrial and agriculture arts, and trades and industrial occupations, or for additional preparation for a career in such fields, and in other occupations, requiring other than a baccalaureate or advanced degree and vocational student organization activities as an integral part of the program; and for purposes of this paragraph, the term "organized education program" means only (A) instruction (including career guidance and counseling) related to the occupation or occupations for which the students are in training or instruction necessary for students to benefit from such training, and (B) the acquisition (including leasing), maintenance, and repair of instructional equipment, supplies, and teaching aids; but the terms do not mean the construction, acquisition, or initial equipment

Page 128

of buildings, or the acquisition or rental of land.

20 U.S.C. § 2471(31) (emphasis added).

Funding under the Perkins Act, however, is contingent upon the state maintaining or exceeding its own level of financial support for these programs. According to the Act:

No payments shall be made under this chapter for any fiscal year to a State unless the Secretary determines that the fiscal effort per student or the aggregate expenditures of such State for vocational education for the fiscal year preceding the fiscal year for which the determination is made, equaled or exceeded such effort or expenditures for vocational education for the second preceding year.

20 U.S.C. § 2463(a). This requirement is reflected in the Act's implementing regulations which provide that:

[t]he Secretary may not make a payment under the Act to a State for any fiscal year unless the Secretary determines that the fiscal effort per student, or the aggregate expenditures of that State, from State sources, for vocational education for the fiscal year (or program year) preceding the fiscal year (or program year) for which the determination is made, at least equaled its effort or expenditures for vocational education for the second preceding fiscal year (or program year).

34 C.F.R. § 401.22(a) (1990). Thus, in order to receive federal funding under the Perkins Act, a state must maintain or increase its level of financial support for vocational education within the state to qualify for funding for the next year. As the federal funding is provided to the states before the Secretary determines whether the state qualifies under this section, actions brought by the Secretary take the form of actions for refunds.

The dispute in this case involved whether a particular Pennsylvania program, the Customized Job Training Program ("CJT"), is a vocational education program for the purpose of Perkins Act funding. According to the legislative intent, the CJT was created:

to meet the training needs of the State's new and expanding business by enhancing the skills of workers of this Commonwealth. In so doing, funding shall be dedicated towards training projects which result in net new full-time employment opportunities, significant wage improvements, the retention of otherwise lost jobs or other conditions which would offer substantial economic benefit to this Commonwealth. Recognizing that many regions of the State remain economically distressed, customized job training programs should attempt to meet the special job training needs of these areas.

App. at 54 (emphasis added). During the period at issue, the PDE had the primary responsibility for approving applications and drafting regulations under the CJT. The program, however, was administered by an inter-agency advisory task force comprised of representatives from the Pennsylvania Departments of Labor and Industry, Commerce, Education, and the Economic Development Committee of the Cabinet.

The United States Department of Education concluded that during fiscal years ("FY") 1989 and 1991, Pennsylvania failed to maintain its level of effort on either a per-student or aggregate basis. According to the United States, Pennsylvania's aggregate expenditures declined from $67,322,560 in FY 1987 to $60,436,193 in FY 1988, and its per-student expenditures declined from $283.95 in FY 1987 to $283.04 in FY 1988. App. at 161, 163, 165-66. Pennsylvania's aggregate expenditures also declined from $64,026,598 in FY 1989 to $59,917,439 in FY 1990, and its per-student expenditures declined from $348.41 in FY 1989 to $332.39 in FY 1990. These decreases were discovered during audits conducted ending in FY 1989 and FY 1991, and resulted from Pennsylvania's decision not to include the CJT program in its maintenance of effort after having done so for five years.

Pursuant to the Perkins Act, the auditors questioned the total amount of federal vocational education funds expended during FY 1989 ($41,827,000) and FY 1991 ($39,603,000). App. at 154, 159. After reviewing further information provided by Pennsylvania, the Assistant Secretary sustained the finding that Pennsylvania failed to maintain its level of fiscal effort in FY's 1989 and 1991, but

Page 129

only demanded a refund of the amounts Pennsylvania failed to maintain on a per-student basis, totaling $3,082,088.95. Pennsylvania appealed to the Office of Administrative Law Judges.

Before the ALJ, Pennsylvania presented evidence, consisting of nineteen exhibits including affidavits, and legal arguments in seeking to establish that it had complied with the maintenance of effort requirement for FY's 1989 and 1991. Pennsylvania's theory was that the CJT costs should not have been included in the calculations as state funds spent on vocational education because: (1) it was within the sole discretion of the state to determine whether the CJT program was a vocational education program for the purposes of determining its maintenance of effort; and (2) the CJT program did not fall under the definition of "vocational education" as set forth in the Perkins Act. 20 U.S.C. § 2471(31).

Pennsylvania...

To continue reading

Request your trial
14 practice notes
  • School Dist., Pontiac v. Secretary, Us. Dept. Educ., No. 05-2708.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • October 16, 2009
    ...existing and future work force for marketable skills and to improve productivity and promote economic growth.'" Pennsylvania v. Riley, 84 F.3d 125, 127 (3d Cir.1996) (quoting 20 U.S.C. § 2301(1)). Section 2306a of the Perkins Act, entitled "Prohibitions," mirrors NCLB's § 7907(a), but adds ......
  • Women's Medical Professional Corp. v. Baird, No. 03-4249.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • February 17, 2006
    ...97 S.Ct. 1723, 52 L.Ed.2d 172 (1977); Elsenety v. Health Care Fin. Admin., 85 Fed.Appx. 405, 409 (6th Cir.2003); Pennsylvania v. Riley, 84 F.3d 125, 130 (3d Cir.1996); Puerto Rico Aqueduct and Sewer Auth. v. EPA, 35 F.3d 600, 606 (1st Cir.1994); Moreau v. FERC, 982 F.2d 556 (D.C.Cir.1993); ......
  • Kirkendall v. Department of Army, No. 05-3077.
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • March 7, 2007
    ...to agency rules requiring a party who seeks a hearing to "tender[ ] evidence suggesting the need for a hearing"); State of Pa. v. Riley, 84 F.3d 125, 130 (3d Cir.1996) (administrative hearing not required absent a disputed material issue of fact); 32 Charles Alan Wright & Charles H. Koch, J......
  • School District, Pontiac v. Secretary Dept. Educ., No. 05-2708.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • January 7, 2008
    ...existing and future work force for marketable skills and to improve productivity and promote economic growth." Pennsylvania v. Riley, 84 F.3d 125, 127 (3rd Cir.1996) (citing 20 U.S.C. § 2301(1)). Section 2306a of the Perkins Act, entitled "Prohibitions," replicates NCLB's § 7907(a), but add......
  • Request a trial to view additional results
13 cases
  • School Dist., Pontiac v. Secretary, Us. Dept. Educ., No. 05-2708.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • October 16, 2009
    ...existing and future work force for marketable skills and to improve productivity and promote economic growth.'" Pennsylvania v. Riley, 84 F.3d 125, 127 (3d Cir.1996) (quoting 20 U.S.C. § 2301(1)). Section 2306a of the Perkins Act, entitled "Prohibitions," mirrors NCLB's § 7907(a), but adds ......
  • Women's Medical Professional Corp. v. Baird, No. 03-4249.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • February 17, 2006
    ...97 S.Ct. 1723, 52 L.Ed.2d 172 (1977); Elsenety v. Health Care Fin. Admin., 85 Fed.Appx. 405, 409 (6th Cir.2003); Pennsylvania v. Riley, 84 F.3d 125, 130 (3d Cir.1996); Puerto Rico Aqueduct and Sewer Auth. v. EPA, 35 F.3d 600, 606 (1st Cir.1994); Moreau v. FERC, 982 F.2d 556 (D.C.Cir.1993); ......
  • Kirkendall v. Department of Army, No. 05-3077.
    • United States
    • United States Courts of Appeals. United States Court of Appeals for the Federal Circuit
    • March 7, 2007
    ...to agency rules requiring a party who seeks a hearing to "tender[ ] evidence suggesting the need for a hearing"); State of Pa. v. Riley, 84 F.3d 125, 130 (3d Cir.1996) (administrative hearing not required absent a disputed material issue of fact); 32 Charles Alan Wright & Charles H. Koch, J......
  • School District, Pontiac v. Secretary Dept. Educ., No. 05-2708.
    • United States
    • U.S. Court of Appeals — Sixth Circuit
    • January 7, 2008
    ...existing and future work force for marketable skills and to improve productivity and promote economic growth." Pennsylvania v. Riley, 84 F.3d 125, 127 (3rd Cir.1996) (citing 20 U.S.C. § 2301(1)). Section 2306a of the Perkins Act, entitled "Prohibitions," replicates NCLB's § 7907(a), but add......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT