In the case of Bell, Secretary of Education v. New Jersey et al., 1982, the U.S. Supreme Court ruled on a dispute involving federal funding for state education programs. The Department of Health, Education and Welfare (HEW) had determined that several states misused funds granted under Title I of the Elementary and Secondary Education Act of 1965 and sought to recover those funds. The states argued that HEW lacked authority to enforce such recovery because it did not issue an express regulation permitting this action until after the alleged misuse occurred; they also contended due process was violated by retroactive application of regulations allowing fund recovery without providing fair notice or opportunity for hearing before termination. The court held in favor of HEW (now known as Department Of Education), ruling that it possessed implied statutory authority to recover misused federal funds even prior to issuing explicit regulations authorizing such actions. Furthermore, it found no violation in due process rights since there were sufficient procedural safeguards provided by administrative hearings at both state and federal levels before final determination regarding fund recovery.

In the dissenting opinion for Bell, Secretary of Education v. New Jersey et al., Justice Thurgood Marshall argued that the majority's decision was inconsistent with both statutory language and legislative intent. He contended that Congress intended to allow states a reasonable period of time to correct any misused funds before being required to repay them in full. The majority's interpretation, he believed, would lead to an unfair result where states could be penalized even if they acted in good faith and promptly corrected their mistakes upon notification. Furthermore, he disagreed with the majority’s view on administrative procedure act (APA), arguing that it should apply because Department of Health Education and Welfare (HEW) actions were indeed sanctions which fall under APA purview. Finally, Justice Marshall expressed concern about federalism implications as this ruling gave too much power to federal agencies at expense of state rights.