A federal appeals court has revived a major legal challenge to the No Child Left Behind Act based on arguments that the law imposes financial obligations on states and school districts without providing enough funding to cover the costs.

The Jan. 7 ruling by a panel of the U.S. Court of Appeals for the 6th Circuit, in Cincinnati, is a victory for the National Education Association and its allies in the suit, which was dismissed in a federal district court in 2005.

A panel of the court ruled 2-1 that the states were not on clear notice of their potential financial obligations when they agreed to accept federal funding under the NCLB law, as legal rulings based on the spending clause in Article I of the U.S. Constitution require.

Central to the case was a provision in the NCLB law that says, “Nothing in this act shall be construed to … mandate a state or any subdivision thereof to spend any funds or incur any costs not paid for under this act.”

The language was first added to several federal education statutes in 1994, including to that year’s reauthorization of the Elementary and Secondary Education Act, of which the NCLB law is the latest version.

In an opinion by U.S. Circuit Judge R. Guy Cole Jr., the appeals court said that because of the unfunded-mandate language, “a state official could plausibly contend that she understood … that her state need not comply with NCLB requirements for which federal funding falls short.”

Writing in dissent, Judge David W. McKeague said the more logical purpose of the unfunded-mandates language was to bar federal education officials from piling additional requirements on states and school districts.

The 6th Circuit covers Kentucky , Michigan , Ohio , and Tennessee .

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Read AASA’s statement on the NCLB ruling: