Monday, Jun. 01, 2009

Sanford says he won't appeal stimulus decision

Gov. Mark Sanford said he will not put the state in a protracted legal fight over control of $700 million in federal stimulus money on the same day the governor received a legal setback in federal court.

A federal judge ruled Monday two lawsuits asking the state to determine if Sanford or state lawmakers control the disputed money should be decided by the S.C. Supreme Court. Sanford wanted the lawsuits heard in federal court.

He acknowledged Monday its likely he would lose the case in state court.

"We will not attempt to exercise those appeals," Sanford said. "Whatever decision (the S.C. Supreme Court) makes we will live by."

U.S. District Judge Joe Anderson announced his ruling after a hearing in Columbia. Later Monday, Sanford, in a meeting with reporters, said he would not to file appeals in the legal battle. That means the stimulus fight could be settled before a July 1 deadline to request the money. And legal experts think Sanford will have a tough time winning in state court.

The S.C. Supreme Court last week was poised to hear a lawsuit filed by Chapin High School senior Casey Edwards and USC law student Justin Williams but was forced to cancel the Thursday hearing after Sanford, who was allowed by the court to join the suit, requested that it be heard by a federal judge.

Sanford earlier last week moved that the other suit before the Supreme Court, filed by the S.C. Association of School Administrators against Sanford, be transferred to federal court.

The Supreme Court could hear the students’ suit as early as this week. The court, mindful of the deadline, is expected to rule quickly, though the high court isn’t bound by any deadline. A quick ruling would allow Anderson to rule on the federal suit before the deadline.

If the S.C. Supreme Court rules against Sanford, the governor has the right to appeal to the U.S. Supreme Court, though the nation’s top court rejects the vast majority of requests. Sanford also could appeal any unfavorable ruling by Anderson in the federal suit to the U.S. 4th Circuit Court of Appeals. By declaring his intention not to file appeals, Sanford is giving the state a chance to meet its deadline for the money if he loses his legal argument.

State Superintendent of Education Jim Rex, who is a defendant in the school administrators’ suit, has said he is prepared to ask the U.S. Department of Education to extend the deadline, if needed.

Sanford has opposed accepting the approximate $700 million because he said it would put the state in worse financial shape in the long run, and because state lawmakers rejected his proposal that a similar amount be applied to reducing state debt. He contends federal law gives him, not state lawmakers, the final say in whether to accept the money over the next two fiscal years.

About 82 percent of the money is designated under federal law for school districts and higher education. The remaining money must be used for “government services,” such as public safety programs and school repair projects.

State lawmakers approved spending half of the money - as designated by the federal government - for the next fiscal year that starts July 1, and easily overrode Sanford’s veto of the part of the budget that included the funds.

But Sanford ignored a five-day deadline imposed by lawmakers to apply for the approximate $350 million, saying that would violate the federal law, which he contends supersedes any state law. Because the interpretation of the federal law is in dispute, a federal, not a state court, should decide the issue, the governor said in court papers.

The lawsuits by the students and school administrators’ association contend the state Supreme Court should decide the matter because the issue involves a dispute between two branches of state government. Not accepting the stimulus money approved by the General Assembly could result in hundreds of teacher layoffs, officials have warned.

Some legal experts think Sanford faces long odds in state court. The state Supreme Court in 2002, for example, ruled that then-Gov. Jim Hodges violated the separation-of-powers clause in the S.C. Constitution by asking - without legislative approval - certain colleges and universities to return money from a special fund to help balance the budget.

That case and two earlier state Supreme Court rulings supporting the Legislature’s authority to appropriate funds were cited by the justices in an April order involving an initial suit brought by Edwards of Chapin High School. Several legal experts have predicted the justices likely will use the three earlier rulings as a “roadmap” to rule against Sanford in the subsequent suit filed by Edwards and Williams.

Today’s federal court hearing focused mainly on technical and procedural questions. State Attorney General Henry McMaster, who is representing the state in the students’ suit and is a defendant in the federal suit, took the position that the U.S. Constitution prevents Sanford from suing the state in federal court.

“The Attorney General has advised the Governor’s counsel on several occasions in this matter that the State does not consent in federal court in this case,” Deputy Attorney General Robert Cook said in a written motion Friday to move the students’ suit back to state court. “Such a position is entirely consistent with the Attorney General’s longstanding practice to object under the Eleventh Amendment to the federal court’s exercise of power and authority over the State of South Carolina.”

Columbia attorney Dick Harpootlian, who is representing the students; Childs, the lawyer for the school administrators’ association; and Shelly Bezanson Kelly, a state Department of Education attorney representing Rex, each said in court papers Friday that federal law requires the consent of all defendants for a case to be removed to federal court.

Sanford’s attorney, Foster, in court papers Friday contended the state can be sued in federal court because it is a “nominal” defendant and that Rex should be reclassified as a plaintiff in the school administrators’ suit, contending the education superintendent’s position is more aligned with the administrators’.

But Anderson in his ruling today rejected the governor’s arguments.

-- Rick Brundrett and John O'Connor

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