In the case of Bennett, Secretary of Education v. Kentucky Department of Education (1984), the U.S Supreme Court ruled that states could not be retroactively penalized for misusing federal education funds if they had been given approval by the U.S. Commissioner of Education to use those funds in a particular way at the time. The court held that it was unfair and against due process to change rules after actions have already taken place based on previous guidelines, even if those actions were later found to be incorrect under new interpretations or regulations. This decision reinforced principles regarding fair notice and clarified how administrative agencies should apply their rules retrospectively.

The dissenting opinion in the case of Bennett, Secretary of Education v. Kentucky Department of Education argued that the majority's decision was inconsistent with both congressional intent and previous court rulings. The dissenters believed that Congress intended for states to be reimbursed for their "reasonable" costs associated with federal programs, not just those explicitly approved by the Secretary of Education. They also pointed out that this interpretation had been upheld by several lower courts before being overturned by the Supreme Court. Furthermore, they contended that requiring explicit approval from the Secretary would place an undue burden on state educational agencies and could potentially disrupt important educational services. Finally, they expressed concern about how this ruling might affect other federal-state cooperative programs beyond education.