Amended Complaint, Oakley et al. v. DeVos, No. 4:20-cv-03215 (N.D. Cal.), Doc. 55 (November 6, 2020)

Summary

First Amended Complaint for Declaratory, Injunctive, and Mandamus Relief in Oakley et al. v. DeVos, Case No. 20-cv-3215-YGR, United States District Court for the Northern District of California, filed November 6, 2020 as Document 55. The plaintiffs are Eloy Ortiz Oakley as Chancellor of California Community Colleges, the Board of Governors of the California Community Colleges, and community college districts. They allege that the U.S. Department of Education arbitrarily placed eligibility restrictions on emergency relief funds that Congress intended to help students defray educational costs, in a CARES Act fund of $14 billion (the Higher Education Emergency Relief Fund, HEERF). The complaint states that the court preliminarily enjoined the eligibility requirements and that Congress did not authorize them.

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       Case 4:20-cv-03215-YGR Document 55 Filed 11/06/20 Page 1 of 54



 1   XAVIER BECERRA
     Attorney General of California
 2   CHERYL FEINER
     MICHAEL NEWMAN
 3   Senior Assistant Attorneys General
     CHRISTINE CHUANG
 4   Supervising Deputy Attorney General
     JULIA HARUMI MASS
 5   JASLEEN SINGH
     SHUBHRA SHIVPURI
 6   JOSHUA SONDHEIMER
     LEE I. SHERMAN (SBN 272271)
 7   Deputy Attorneys General
      300 S. Spring St., Suite 1702
 8    Los Angeles, CA 90013
      Telephone: (213) 269-6404
 9    Fax: (213) 897-7605
      E-mail: Lee.Sherman@doj.ca.gov
10   Attorneys for Plaintiffs Eloy Ortiz Oakley and Board of
     Governors of the California Community Colleges
11
     (List of other Plaintiffs’ counsel continued on next page)
12
                              IN THE UNITED STATES DISTRICT COURT
13
                          FOR THE NORTHERN DISTRICT OF CALIFORNIA
14
                                            OAKLAND DIVISION
15

16
     ELOY ORTIZ OAKLEY, in his official                   Civil Case No. 20-cv-3215-YGR
17   capacity as Chancellor of California
     Community Colleges; BOARD OF                         FIRST AMENDED COMPLAINT FOR
18   GOVERNORS OF THE CALIFORNIA                          DECLARATORY, INJUNCTIVE, AND
     COMMUNITY COLLEGES; FOOTHILL-                        MANDAMUS RELIEF
19   DE ANZA COMMUNITY COLLEGE
     DISTRICT; LOS RIOS COMMUNITY                         Judge:        Honorable Yvonne Gonzalez
20   COLLEGE DISTRICT; LOS ANGELES                                      Rogers
     COMMUNITY COLLEGE DISTRICT;                          Trial Date:   None Set
21   STATE CENTER COMMUNITY                               Action Filed: May 11, 2020
     COLLEGE DISTRICT; SAN DIEGO
22   COMMUNITY COLLEGE DISTRICT,

23                                          Plaintiffs,

24                 v.

25
     BETSY DEVOS, in her official capacity as
26   the United States Secretary of Education;
     U.S. DEPARTMENT OF EDUCATION,
27
                                          Defendants.
28

                First. Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YRG)
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 1   JOHN SHUPE
     Lynch and Shupe, LLP
 2     316 Mid Valley Center # 180
       Carmel, CA 93923-8516
 3     Telephone: (650) 579-5950
       Fax: (650) 579-0300
 4     E-mail: jshupe@lynchshupelaw.com
     Attorney for Plaintiff Foothill-De Anza Community College District
 5
     JEFFREY M. PRIETO
 6   General Counsel
     Los Angeles Community College District
 7     770 Wilshire Boulevard
       Los Angeles, CA 90017
 8     Telephone: (213) 891-2188
       Fax: (213) 891-2138
 9     E-mail: prietojm@laccd.edu
     Attorney for Plaintiff Los Angeles Community College District
10
     JACOB KNAPP
11   Acting General Counsel
     Los Rios Community College District
12     1919 Spanos Court
       Sacramento, CA 95825
13     Telephone: (916) 568-3116
       E-mail: knappj@losrios.edu
14   Attorney for Plaintiff Los Rios Community College District
15   MATTHEW T. BESMER
     General Counsel
16   State Center Community College District
       1171 Fulton Street
17     Fresno, CA 93721
       Telephone: (559) 243-7121
18     E-mail: matthew.besmer@scccd.edu
     Attorney for Plaintiff State Center Community College District
19
     LJUBISA KOSTIC
20   Director, Legal Services & EEO
     San Diego Community College District
21    3375 Camino del Rio South, Room 385
      San Diego, CA 92108
22    Telephone: (619) 388-6877
      Fax: (619) 388-6898
23    E-mail: lkostic@sdccd.edu
     Attorney for Plaintiff San Diego Community College District
24

25

26

27

28

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 1          1.      Plaintiffs Chancellor Eloy Ortiz Oakley, the Board of Governors of the California
 2   Community Colleges, Foothill-De Anza Community College District, Los Rios Community
 3   College District, Los Angeles Community College District, State Center Community College
 4   District, and San Diego Community College District (Plaintiffs) have brought this lawsuit to stop
 5   the U.S. Department of Education (DoE) from arbitrarily placing eligibility restrictions on
 6   emergency relief funds that Congress intended to help students defray additional educational
 7   costs resulting from the COVID-19 pandemic. On March 27, 2020, in response to the
 8   unprecedented worldwide pandemic that has disrupted every aspect of the economy and everyday
 9   life, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Pub. L. No. 116-136,
10   134 Stat. 281 (2020) was signed into law. In the CARES Act, Congress created a $14 billion
11   Higher Education Emergency Relief Fund (HEERF) from which the DoE Secretary is required to
12   disburse approximately $12.56 billion, by a precise formula set by Congress, to institutions of
13   higher education to prevent, prepare for, and respond specifically to the coronavirus. Pursuant to
14   the statutory formula, approximately $580 million was allocated to community colleges
15   throughout California.1
16          2.      Congress authorized higher education institutions to use these grants to cover any
17   costs associated with significant changes to the delivery of instruction due to the coronavirus
18   (HEERF Assistance). Congress required that at least half of each institution’s allocation be used
19   to provide emergency relief to students for expenses related to campus disruptions (Student
20   Assistance), with the remaining portion of funds to be used at the institution’s discretion
21   (Institution Assistance). In doing so, for both the HEERF Student and Institution Assistance,
22   Congress provided higher education institutions with unfettered flexibility to distribute the relief
23   to affected students as they deemed appropriate, imposing no eligibility limitations on this
24   emergency relief for students.
25          3.      Indeed, DoE at first recognized Congress’s intent and acknowledged in an April 9,
26          1
              California Community Colleges Allocations for Section 18004(a)(1) of the CARES Act,
27   California Community Colleges (Apr. 9, 2020), https://tinyurl.com/y8lskhzg; see also Allocations
     for Section 18004(a)(1) of the CARES Act, U.S. Dep’t of Educ., https://tinyurl.com/rt8hdze (last
28   visited Nov. 5, 2020).
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 1   2020 letter to colleges and universities that HEERF Assistance is available to all students.
 2   Likewise, in the Recipient’s Funding Certification and Agreement that higher education
 3   institutions were required to sign in order to receive their Student Assistance funding allocations
 4   (Certification), DoE confirmed that HEERF Assistance funds do not constitute financial aid under
 5   Title IV of the Higher Education Act (Title IV). Applying Title IV’s eligibility restrictions would
 6   exclude not only certain categories of residents who are not U.S. citizens from receiving HEERF
 7   Assistance, but also citizens who do not meet other eligibility criteria unrelated to immigration
 8   status.
 9             4.      On or about April 21, 2020, after a number of colleges within the Plaintiff Districts
10   submitted the required Certifications2 acknowledging and certifying that they would comply with
11   the terms and conditions of funding, DoE suddenly and inexplicably changed its position. In
12   guidance documents directed to higher education institutions (April 21 Guidances), DoE said that
13   HEERF Assistance is subject to Title IV’s eligibility limitations, and specifically stated that
14   higher education institutions cannot use these funds for non-citizens who are ineligible to receive
15   aid under Title IV. Under these eligibility restrictions, hundreds of thousands of California
16   community college students who may be most in need of relief would be deprived of assistance
17   during this public health crisis, including non-citizen students who are Deferred Action for
18   Childhood Arrival (DACA) recipients, Temporary Protected Status recipients, and asylum
19   applicants, as well as substantial numbers of U.S. citizens in the California community college
20   system. DoE’s changed position would have likely excluded more than half of all students in the
21   California community college system, including many identified as economically disadvantaged,
22   from eligibility to receive HEERF Assistance.
23             5.      In a May 21 CARES Act Update (May 21 Update)3 on its website and an Interim
24   Final Rule (IFR), 85 Fed. Reg. 36,494 (June 17, 2020), DoE reaffirmed its position that only
25
               2
               The term “Certifications” refers collectively to the Certification for Student Assistance
26   and a similar certification for receipt of the colleges’ Institution Assistance allocations.
             3
27             The May 21 Update is available at
     https://www2.ed.gov/about/offices/list/ope/heerfupdates.html. The May 21 Update, with the
28   April 21 Guidances, are referred to throughout as the HEERF Assistance Guidances.
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 1   students eligible for financial aid under Title IV may receive emergency HEERF Assistance,
 2   while also asserting that students who are ineligible to receive federal public benefits under 8
 3   U.S.C. § 1611 (§ 1611) are precluded from receiving HEERF Assistance.
 4          6.      As this Court held in preliminarily enjoining DoE’s eligibility requirements,
 5   Congress did not authorize the imposition of these requirements. See generally Order Granting
 6   Pls.’ Mot. for Prelim. Inj. at 13-19 (June 17, 2020), ECF No. 44 (PI Order). There is no provision
 7   of the CARES Act that limits the eligibility of students who may receive HEERF Assistance, that
 8   incorporates Title IV’s eligibility requirements into the HEERF, or that confers discretion to the
 9   DoE Secretary to set eligibility requirements. Rather, by not placing any limitations on student
10   eligibility for HEERF Assistance, by leaving to the discretion of each institution how to distribute
11   HEERF Assistance to students, and by requiring that the DoE Secretary allocate HEERF
12   Assistance pursuant to a specific formula that accounts for all students who were not previously
13   enrolled in distance (online) learning before the COVID-19 related shutdowns, Congress
14   restricted DoE’s authority to set eligibility requirements on that funding. Although Congress
15   imposed Title IV limitations and set other eligibility limitations on some funding sources
16   described in the CARES Act, it did not do so with respect to HEERF Assistance. Moreover, as
17   this Court also ruled, § 1611’s general restrictions on who may receive federal public benefits do
18   not apply to “the specific, one-time emergency disbursement of HEERF Assistance in the
19   CARES Act,” and even if they did, HEERF Assistance is not a federal public benefit under
20   § 1611. PI Order at 23-24.
21          7.      Accordingly, DoE’s imposition of eligibility requirements on HEERF Assistance,
22   including through the IFR, violates separation of powers principles, is ultra vires, and is in excess
23   of statutory authority in violation of the Administrative Procedure Act (APA). DoE’s
24   unexplained and inconsistent interpretations, disregard of congressional intent, reliance on
25   unsupported assumptions, flawed costs and benefits analysis, justifications that are contrary to the
26   evidence available to DoE at the time it issued the IFR, and failure to consider significant
27   ramifications of its eligibility limitations (or any of the public comments submitted in response to
28   the IFR) also violate the APA’s prohibition on arbitrary and capricious agency action. Finally,
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 1   DoE’s HEERF eligibility requirements violate the Spending Clause of the U.S. Constitution as
 2   they: (a) are not related to Congress’s purpose for HEERF Assistance; (b) were not
 3   unambiguously imposed by Congress; (c) have not provided recipients with a knowing choice
 4   based on what is required to comply with the conditions; and (d) were imposed by DoE after a
 5   number of colleges in the Plaintiff Districts accepted the terms and conditions of the funding in
 6   the Certifications.
 7          8.       These eligibility requirements would irreparably harm Plaintiffs and their students
 8   at a time when emergency relief is needed immediately. Under HEERF’s formula, Plaintiff
 9   Districts have collectively been allocated approximately $114 million, with at least $57 million of
10   that amount allocated for students. Students at community colleges throughout California have
11   incurred and are continuing to incur increased costs as a result of the sudden and disruptive shift
12   to distance learning systems adopted to keep students, staff, and faculty safe during the pandemic.
13   If Plaintiffs were subject to DoE’s eligibility requirements, Plaintiffs’ already strained resources
14   would further be challenged by the burdens of finding alternative sources of assistance, not
15   subject to DoE’s unlawful preclusions, and distributing much needed assistance to its students
16   consistent with its principles of equity and inclusivity. DoE’s restrictions would only serve to
17   increase the likelihood of student dis-enrollment, which not only would harm Plaintiffs’
18   classrooms in the short term, but also their budgets in the long term—undermining their academic
19   missions.
20          9.       For these reasons, and those discussed below, the Court should declare that DoE’s
21   eligibility requirements set forth in DoE’s HEERF Assistance Guidances and its IFR are unlawful
22   and unconstitutional and permanently enjoin their imposition and enforcement.
23                                      JURISDICTION AND VENUE
24          10.      Jurisdiction is proper in this Court under 28 U.S.C. § 1331 because this case arises
25   under the Constitution and the laws of the United States. The Court also has jurisdiction under 28
26   U.S.C. § 1346 because this is a civil action against the federal government founded upon the U.S.
27   Constitution and acts of Congress. Jurisdiction is proper under the judicial review provisions of
28   the APA, 5 U.S.C. §§ 701-706. An actual controversy exists between the parties within the
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 1   meaning of 28 U.S.C. § 2201(a), and this Court may grant declaratory injunctive, mandamus, and
 2   other relief, pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202 (Declaratory
 3   Judgment Act), the Mandamus Statute, 28 U.S.C. § 1361, and the APA.
 4          11.      Under 28 U.S.C. § 1391(e)(1), venue is proper in the Northern District of
 5   California because Plaintiff Foothill-De Anza Community College District has a business address
 6   at 12345 El Monte Road., Los Altos Hills, CA 94022.
 7                                    INTRADISTRICT ASSIGNMENT
 8          12.      Assignment to the San Francisco or Oakland Divisions of this District is proper
 9   pursuant to Civil Local Rule 3-2(c)-(d) because Defendant DoE maintains an office in the San
10   Francisco Division located at 50 United Nations Plaza, San Francisco, CA 94102.
11                                                   PARTIES
12          13.      The California Community Colleges system is the largest postsecondary education
13   system in the United States, with more than 2.1 million students attending one of 114 college
14   campuses annually, and 1.5 million students who enrolled in the Spring 2020 semester. With low
15   tuition and a longstanding policy of full and open access, California’s community colleges were
16   established around the principle that higher education should be available to everyone. The
17   community colleges are the most common entry point into collegiate degree programs in
18   California; the primary system for delivering career technical education and workforce training; a
19   major provider of adult education, apprenticeship, and English as a Second Language courses;
20   and a source of lifelong learning opportunities for California’s diverse communities.
21          14.      The principle of free public education is enshrined in the Constitution of
22   California, which mandates a system of free public schools. Cal. Const. art. IX, § 5. The
23   California Constitution also sets a minimum funding level for “the moneys to be applied by the
24   state for the support of school districts and community college districts.” Id. art. XVI, § 8(b); see
25   also Cal. Educ. Code § 84750.4 (establishing process for calculating a community college
26   district’s base and supplemental allocations). The California Community Colleges are
27   “postsecondary schools” and are “part of the public school system” of California. Cal. Educ.
28   Code § 66700.
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 1          15.      Further, the California Equity in Higher Education Act establishes the policy of the
 2   State of California to afford all persons equal rights and opportunities in postsecondary
 3   educational institutions, including the California Community Colleges. Id. § 66251.
 4                      Plaintiffs Chancellor Eloy Ortiz Oakley and Board of Governors
 5                                   of the California Community Colleges

 6          16.      The Board of Governors of the California Community Colleges (Board) sets policy

 7   and provides guidance for the 73 districts that constitute the postsecondary education system of

 8   community colleges. Id. § 70900. Board members are appointed by the Governor and formally

 9   interact with state and federal officials, and other state organizations. The Board has

10   legislatively-granted authority to develop and implement standards for classes, student academic

11   requirements, and employment of academic and administrative staff. Id. §§ 70900; 70901(b).

12          17.      The Board appoints a chief executive officer, known as the Chancellor, who

13   exercises the duties and responsibilities that are delegated to him by the Board. Id. § 71090(b).

14   Plaintiff Eloy Ortiz Oakley has served as Chancellor since December 2016.

15          18.      The Chancellor’s Office is responsible for carrying out the policies of the Board,

16   including the development of fiscal plans, a legislative agenda, a budget for the community

17   college system, and the execution of grants to community college districts to carry out statewide

18   programs in furtherance of the Board’s policies. The Chancellor’s delegated authority includes

19   authority to enter into contracts and grants of up to $100,000 and three years duration without

20   Board approval. If there are exigent circumstances, the Chancellor may enter contracts or grants

21   that exceed these limitations without prior Board approval.

22          19.      The Board exercises oversight and fiscal affairs leadership over the California

23   Community Colleges, including: providing general supervision over community college districts;

24   providing representation, advocacy, and accountability for the community colleges before state

25   and national legislative and executive agencies; and administering state and federal support

26   programs. Id. § 70901(b), (b)(4)(A), & (b)(5)(A). The Board is responsible for approving the

27   system’s budget, identifying total revenue needs in order to properly serve the educational

28   system, and identifying expenditures for the state general apportionment and for categorical
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 1   programs, new programs, and budget improvements. Id. § 70901(b)(5)(A)(i)(I). The Board also
 2   advises and assists governing boards of community college districts on the implementation and
 3   interpretation of state and federal laws affecting community colleges. Id. § 70901(b)(14).
 4           20.      The Board’s strategic mission states in part: “All people have the opportunity to
 5   reach their full educational potential . . . . The Colleges embrace diversity in all its forms . . . . All
 6   people have the right to access quality higher education.”4 It is the objective of the California
 7   Community Colleges to “mak[e] sure students from all backgrounds succeed in reaching their
 8   goals and improving their families and communities.”5 In furtherance of these missions, the
 9   Chancellor’s Office has reassured students and colleges that its campuses will remain safe,
10   welcoming places for students of all backgrounds to learn and has defended the right of all
11   students to obtain a higher education in California.
12           21.      Before the Court issued its PI Order, the Board and the Chancellor’s Office had to
13   devote significant time and resources to address the DoE’s imposition of the eligibility
14   requirements on HEERF Assistance. The Chancellor’s Office executive team, research team,
15   Government Relations Division, College Finance and Facilities Planning Division, and
16   Communications Division all were required to respond to the DoE’s actions by analyzing the
17   impact of the DoE’s restrictions; providing technical assistance and guidance to community
18   colleges, policy-makers, and stakeholders; and conducting research and analysis to develop
19   mechanisms to assist the hundreds of thousands of students deprived of the possibility of
20   receiving federal assistance under the DoE’s eligibility restrictions. Staff time was diverted from
21   other organizational responsibilities to develop responses to DoE’s eligibility requirements.
22           22.      The Board and the Chancellor’s Office worked with community college districts to
23   alter their disbursement plans in response to the DoE’s eligibility requirements and to determine
24   alternative funding for emergency student aid for those students deemed ineligible by DoE. As
25   an example, the Chancellor’s Office College Finance and Facilities Planning Division consulted
26           4
                Resolution of the Board of Governors No. 2017-01 (Jan. 2017)
     https://tinyurl.com/yc8bw6z9 (quoting from strategic plan).
27            5
                Vision for Success, California Community Colleges, https://tinyurl.com/y7dqtcnz (last
28   visited Nov. 4, 2020).
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 1   with one college district that was forced, after release of the April 21 Guidances, to divert
 2   portions of its Student Equity and Achievement (SEA) Program funds from other uses in order to
 3   keep commitments it had already made to students based on the text of the CARES Act.
 4          23.      Because the mission and mandate of the California Community Colleges is to
 5   support and provide low-cost postsecondary education to all, many of its students are among the
 6   most financially vulnerable in California. In light of this, the Legislature enacted the SEA
 7   Program, the funding for which the Board administers and distributes. In administering SEA
 8   Program funding, the Board provides local districts with the vast majority of the appropriations to
 9   utilize at their discretion, consistent with the Program’s conditions. The Legislature sets aside
10   five percent of SEA Program funds for discretionary use by the Chancellor’s Office to promote
11   system-wide initiatives to achieve the goals of the California Community Colleges.6 These goals
12   include reducing achievement gaps across various demographics and increasing the percentage of
13   students who succeed in graduating, transferring to four-year colleges, or obtaining certificates.7
14          24.      The purpose of the SEA Program in particular is to ensure funding to eliminate
15   achievement gaps for students from traditionally underrepresented groups to meet the goals set
16   out in California Community Colleges’ Vision for Success. See id.; Cal. Educ. Code
17   § 78222(a)(2). In implementing the SEA Program, the California Community Colleges must:
18   ensure students complete their educational goals and a defined course of study; provide quality
19   curriculum, instruction, and support services to students who enter college deficient in English or
20   math; and provide student matriculation services and assistance in developing an education plan,
21   among other requirements. Id. § 78222(a) & (b). The Legislature’s intent in creating the SEA
22   Program was to prioritize funding for high-need and disadvantaged students enrolled in the
23   California Community College system. Id. § 78222(c).
24
            6
               The California Legislature appropriated $475,220,000 for the SEA Program in 2019.
25   2019 Cal. Legis. Serv. Ch. 53 (S.B. 77) (West). Under California Education Code, section
     78222(c)(5)(A), “[t]he chancellor may allocate up to 5 percent of the total funds appropriated for
26   the purpose of this program for state administrative operations to carry out the intent of this
     section.”
27           7
               See Vision for Success, Foundation for California Community Colleges,
28   https://vision.foundationccc.org/ (last visited Nov. 4, 2020).
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 1          25.      Funding for the SEA Program may be used for emergency student financial
 2   assistance to help eligible students overcome unforeseen financial challenges that would directly
 3   impact students’ ability to persist in their course of study. Id. § 78220(e)(1). Emergency student
 4   financial assistance includes direct aid in the form of emergency grants, as well as housing and
 5   food assistance, textbook grants, and transportation assistance. Id. This assistance is available to
 6   any student who has experienced an unforeseen financial challenge, who is making satisfactory
 7   academic progress (as defined by the college the student attends), and who is at risk of not
 8   persisting in the student’s course of study due to the unforeseen financial challenge. Id.
 9   § 78220(e)(3)(A).
10          26.      If permitted to take effect, DoE’s eligibility restrictions would bar hundreds of
11   thousands of California’s community college students from receiving emergency HEERF
12   Assistance. The Board, as the entity tasked with administering the SEA Program, expects that
13   local districts would need to access SEA Program funds to fill this gap in emergency assistance,
14   resulting in depletion of SEA Program funds and preventing their use for other critical
15   educational and strategic missions. Before the April 21 Guidances, the Chancellor’s Office, with
16   Board approval, had designated these funds toward other priorities, including reducing equity
17   gaps in achievement among traditionally underrepresented student groups, reducing regional
18   achievement gaps among colleges located in regions with the lowest educational attainment of
19   adults, and increasing the percentage of exiting students who are able to find employment in their
20   field of study. Before the issuance of the PI Order, however, the Chancellor’s Office had to
21   assess whether there were set-aside funds available to provide support to community college
22   districts in response to DoE’s eligibility requirements on HEERF Assistance. The Chancellor’s
23   Office Division of Educational Services and Support also evaluated whether to re-scope grants to
24   community college districts to alleviate some of the impacts of college district diversions of SEA
25   and other funds to provide direct emergency aid to non-Title IV or § 1611 eligible students
26   impacted by COVID-19 to cover the gap in funding caused by DoE’s unlawful interpretation of
27   the CARES Act.
28          27.      Since the issuance of the PI Order, community colleges across the State have used
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 1   HEERF Assistance to provide support for students who are facing substantial needs as a result of
 2   the pandemic, without regard to whether those students are eligible under Title IV or § 1611. In
 3   addition to distributing Student Assistance, colleges throughout the State have used their
 4   Institution Assistance to provide both cash and in-kind support for students in the form of laptops,
 5   Chromebooks, WiFi connections, and hotspots to access remote learning, as well as mental health
 6   services. Without an injunction preventing the enforcement of DoE’s eligibility requirements, the
 7   Board, Chancellor’s Office, and community college districts and colleges throughout the State
 8   will be prevented from disbursing HEERF Assistance to students that need it, undermining their
 9   educational mission and requiring diversion of resources to assist excluded students. Even if the
10   Board, Chancellor’s Office, or districts were to use alternative sources of funding, like the SEA
11   Program funds, to provide emergency relief to students not eligible under DoE’s restrictions,
12   including to meet basic housing and food needs that have arisen during this global health
13   pandemic, these funds would not be enough to cover the gap caused by DoE’s HEERF eligibility
14   restrictions. Moreover, use of the SEA Program funds will undermine California Community
15   Colleges’ Vision for Success objectives, which is what prompted the creation of the SEA
16   Program.
17                        Plaintiff Foothill-De Anza Community College District
18          28.      Foothill-De Anza Community College District (FDCCD) has provided education
19   for students in the South Bay area for over 50 years. Each year, approximately 64,000 students
20   are enrolled at FDCCD’s two colleges: Foothill College and De Anza Community College.
21   FDCCD is committed to student success through equity, inclusion, and innovation.
22   Approximately 80 percent of students at FDCCD are non-white, and almost 25 percent of
23   students receive financial aid.
24          29.      Based on the statutory formula, $9.6 million in HEERF Assistance funding was
25   allocated to FDCCD’s colleges, with a minimum allocation of $4.8 million for students.
26   Specifically, $2.4 million in HEERF Assistance funding was allocated to Foothill College, with a
27   minimum allocation of $1.2 million for students; $7.2 million in HEERF Assistance funding was
28   allocated to De Anza College, with a minimum allocation of $3.6 million for students.
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 1           30.        In accordance with the text of the CARES Act, the initial letter guidance issued by
 2   the DoE on April 9, and the Certification that all higher education institutions were required to
 3   complete in order to access Student Assistance funds, Foothill College developed a plan to ensure
 4   that its entire student body was eligible to receive assistance. Foothill College created a short
 5   questionnaire asking students to identify their needs. Foothill College planned to award amounts
 6   based on students’ identified needs.
 7           31.        On April 18, before DoE issued its April 21 Guidances, Foothill College accepted
 8   the Certifications required to access HEERF Assistance funds in reliance of the plain text of the
 9   CARES Act, the representations made in DoE’s April 9 letter, and the language of the
10   Certifications, with the expectation that it would be broadly distributing Student Assistance funds
11   to its students.
12           32.        Once the eligibility restrictions were imposed and before the Court issued its PI
13   Order, Foothill College was limited to providing HEERF Assistance to under 500 students,
14   although it had received over 2,400 questionnaires from students. The eligibility restrictions
15   excluded the majority of students who had completed Foothill College’s simple application, but
16   did not have a Free Application for Student Aid (FAFSA) on file, or because they were strictly
17   enrolled in online classes.
18           33.        Foothill College did not award any HEERF Assistance to students ineligible under
19   DoE’s eligibility requirements before the issuance of the PI Order. After the Court’s issuance of
20   the PI Order, and in reliance thereof, Foothill College was able to distribute Student Assistance to
21   students that were excluded under DoE’s eligibility restrictions, and is expeditiously continuing to
22   do so until it exhausts its Student Assistance funding.
23           34.        Before the issuance of the PI Order, Foothill College used other sources of state
24   funding and fundraising efforts to provide some relief for students excluded by DoE’s eligibility
25   criteria. Foothill College would have to renew those efforts if it was once again subject to DoE’s
26   eligibility restrictions. These alternative funding sources, however, may not be sufficient to meet
27   the needs of excluded students.
28           35.        In accordance with the text of the CARES Act, the initial letter guidance issued by
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 1   the DoE on April 9, and the Certification that all higher education institutions were required to
 2   complete in order to access Student Assistance funds, De Anza College developed a plan to
 3   distribute Student Assistance to all students who were affected by disruption to campus
 4   operations because of the coronavirus. De Anza College created a short application asking
 5   students to identify their needs. De Anza College planned to award amounts based on students’
 6   identified needs.
 7          36.      De Anza College completed the Certifications required of all higher education
 8   institutions to access HEERF Assistance.
 9          37.      Once the eligibility restrictions were imposed and before the Court issued its PI
10   Order, De Anza College was limited to providing Student Assistance to only those students who
11   had submitted an application and had a FAFSA on file. During this time period, De Anza College
12   conducted a manual review of eligibility for all other students who had completed the application.
13   Based on its manual review of applications during this time period, De Anza College estimates
14   that it took staff approximately fifteen minutes to review each application in order to verify all of
15   the information necessary under DoE’s eligibility requirements,
16          38.      De Anza College did not award any HEERF Assistance to students ineligible
17   under DoE’s eligibility requirements before the issuance of the PI Order. After the Court’s
18   issuance of the PI Order, and in reliance thereof, De Anza College was able to distribute Student
19   Assistance to students that were excluded under DoE’s eligibility restrictions, and is expeditiously
20   continuing to do so until it exhausts its Student Assistance funding. De Anza College estimates
21   that it took staff five minutes to review each application without having to verify all of the
22   information necessary under DoE’s eligibility requirements.
23          39.      De Anza College is considering using a portion of its Institution Assistance to
24   provide assistance to students. If it provides Institution Assistance to students, De Anza College
25   plans to do so without regard to whether those students are eligible under Title IV or § 1611.
26          40.      Before the issuance of the PI Order, De Anza College used other sources of state
27   funding and fundraising efforts to provide some relief for students excluded by the DoE’s
28   eligibility criteria. De Anza College would have to renew those efforts if it was once again
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 1   subject to DoE’s eligibility restrictions. These alternative sources of funding, however, would not
 2   be sufficient to meet the needs of excluded students.
 3          41.       Both of FDCCD’s colleges have a continued interest in disbursing HEERF
 4   Assistance equitably among its student body, so that its students may continue their education and
 5   FDCCD may continue to fulfill its academic mission.
 6                            Plaintiff Los Angeles Community College District
 7          42.       Los Angeles Community College District (LACCD) has provided an education to
 8   more than three million students over the past 77 years and is affordable and accessible to all.
 9   LACCD includes nine colleges: Los Angeles Mission College, Pierce College, Los Angeles
10   Valley College, Los Angeles City College, East Los Angeles College, West Los Angeles College,
11   Los Angeles Southwest College, Los Angeles Trade-Technical College, and Los Angeles Harbor
12   College. LACCD welcomes a diverse student population and provides them with the skills,
13   knowledge, and upward mobility to succeed. Over 55 percent of students enrolled in LACCD are
14   Hispanic and nearly 10 percent of students are African American. Eighty percent of LACCD
15   students are from underserved populations. Over half of students enrolled in LACCD are either
16   low income or below the poverty line and a 2016 survey indicated that 55 percent of students are
17   experiencing housing insecurity and 63 percent face food insecurity.
18          43.       Based on the statutory formula, $45.2 million in HEERF Assistance funding was
19   allocated to LACCD’s colleges, with a minimum allocation of $22.6 million for students. In
20   accordance with the text of the CARES Act and the initial letter guidance issued by the DoE on
21   April 9, LACCD developed a plan for its nine colleges to distribute Student Assistance grants to
22   all recipients of the California Promise Grant (CPG) enrollment fee waiver. Cal. Educ. Code
23   § 76300(g).
24          44.       All of LACCD’s colleges completed the Certifications required of all higher
25   education institutions to access HEERF Assistance.
26          45.       Once the eligibility restrictions were imposed and before the Court issued its PI
27   Order, LACCD shifted its eligibility model from CPG recipients to FAFSA-eligible students
28   under Title IV, which reduced the number of low-income students eligible for HEERF Assistance
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 1   by 9,000.
 2          46.      LACCD did not award any HEERF Assistance to students ineligible under DoE’s
 3   eligibility requirements before the issuance of the PI Order. After the Court’s issuance of the PI
 4   Order, and in reliance thereof, LACCD was able to distribute millions in Student Assistance to
 5   students who were previously excluded under DoE’s eligibility restrictions and is expeditiously
 6   continuing to do so until it exhausts its Student Assistance funding.
 7          47.      LACCD’s colleges have used and plan to continue to use their Institution
 8   Assistance to provide assistance to students. For example, LACCD’s colleges have used
 9   Institution Assistance to purchase Chromebooks or laptops for hundreds of students, without
10   regard to whether those students are eligible under Title IV or § 1611.
11          48.      Before the issuance of the PI Order, LACCD and its nine colleges used private
12   fundraising efforts to provide some relief for students excluded by the DoE’s eligibility
13   criteria. LACCD would have to renew those efforts if it was once again subject to DoE’s
14   eligibility restrictions. These alternative funding sources, however, are not predictable revenue
15   streams and would not be sufficient to meet the needs of excluded students.
16          49.      LACCD continues to have an interest in disbursing HEERF Assistance equitably
17   among its student body, so that its students may continue their education and LACCD may
18   continue to fulfill its academic mission.
19                             Plaintiff Los Rios Community College District
20          50.      Los Rios Community College District (LRCCD) is the second-largest community
21   college district in California, serving nearly 75,000 students throughout the Sacramento region.
22   LRCCD consists of American River College, Cosumnes River College, Folsom Lake College,
23   and Sacramento City College. LRCCD offers a wide array of degree, transfer, and certificate
24   programs at its four colleges and six resource centers. Nearly two-thirds of LRCCD’s student
25   body is non-white and qualify as either low income or below the poverty line.
26          51.      Based on the statutory formula, approximately $27 million in HEERF Assistance
27   funding was allocated to LRCCD’s colleges, with a minimum allocation of $13.5 million for
28   students. In accordance with the text of the CARES Act, the initial letter guidance issued by the
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 1   DoE on April 9, and the Certification that all higher education institutions were required to
 2   complete in order to access Student Assistance funds, LRCCD developed an initial plan for its
 3   four colleges to distribute Student Assistance grants to all recipients of the CPG enrollment fee
 4   waiver. This plan was intended to provide support to approximately 58,000 students, about 70
 5   percent of the district’s total student enrollment, and focused on those with demonstrated
 6   financial need. This group of students included undocumented students, DACA recipients, foster
 7   youth, single parents, veterans, and students who were not able to meet academic progress
 8   metrics, among others.
 9          52.      In order to serve these students, following DoE’s direction in the April 9 letter, all
10   of LRCCD’s colleges completed the required Certifications as soon as possible, before DoE
11   issued its April 21 Student Assistance Guidance. Each of the colleges accepted the Certifications
12   required to access HEERF Assistance funds in reliance of the plain text of the CARES Act,
13   representations made in DoE’s April 9 letter and the language of the Certifications, with the
14   expectation that the colleges would follow LRCCD’s plan for broadly distributing HEERF
15   Assistance funds to its students, without regard to Title IV’s or § 1611’s eligibility limitations.
16          53.      Once DoE’s HEERF eligibility restrictions were imposed, and before the Court
17   issued its PI Order, LRCCD shifted its eligibility model from CPG recipients to only FAFSA
18   recipients. Under this model, LRCCD was limited to providing Student Assistance to
19   approximately 21,000 students.
20          54.      LRCCD did not award any HEERF Assistance to students ineligible under DoE’s
21   eligibility requirements before the issuance of the PI Order. After the Court’s issuance of the PI
22   Order, and in reliance thereof, LRCCD was able to distribute Student Assistance to students
23   previously excluded by DoE’s eligibility restrictions and is expeditiously continuing to do so until
24   it exhausts its Student Assistance funding.
25          55.      LRCCD’s colleges have used and plan to continue using their Institution
26   Assistance to provide assistance to students. After the Court’s issuance of the PI Order, and in
27   reliance thereof, LRCCD’s colleges used their Institution Assistance portions to provide
28   thousands of students with internet and laptops to support them in participating in remote
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 1   learning, without regard to whether those students are eligible under Title IV or § 1611.
 2          56.      Before the issuance of the PI Order, LRCCD used other sources of state funding
 3   and philanthropic fundraising efforts to provide some relief for students excluded by the DoE’s
 4   eligibility criteria. LRCCD would have to renew those efforts if it was once again subject to
 5   DoE’s eligibility restrictions. These alternative funding sources, however, would not be sufficient
 6   to meet the needs of excluded students.
 7          57.      LRCCD has a continued interest in disbursing HEERF Assistance equitably
 8   among its student body, so that its students may continue their education and LRCCD may
 9   continue to fulfill its academic mission.
10                           Plaintiff State Center Community College District
11          58.      State Center Community College District (SCCCD) serves more than 5,743 square
12   miles of urban and rural communities, including most of Fresno and Madera counties, and
13   portions of Kings and Tulare counties. SCCCD currently includes four colleges: Fresno City
14   College, Reedley College, Madera Community College, and Clovis Community College. On July
15   20, 2020, Madera Community College was awarded full college status and approved to operate as
16   California’s newest community college. Prior to July 20, Madera Community College had
17   operated as an extension of Reedley College as a community college center. Over 67,000
18   students are enrolled in SCCCD and approximately 78 percent of the SCCCD student population
19   is non-white. Over 59 percent of SCCCD’s student population is Hispanic and 10 percent of the
20   student population is Asian/Pacific Islander. The four counties in SCCCD’s service area include
21   a higher percentage of low income population than statewide. The SCCCD’s mission is to
22   provide safe, inclusive, and supporting learning environments that is accessible to all students
23   within the region. SCCCD is committed to providing an environment that cultivates, embraces,
24   and celebrates diversity.
25          59.      Based on the statutory formula, $18.33 million in HEERF Assistance funding was
26   allocated to SCCCD’s then-three colleges, with a minimum allocation of $9.167 million for
27   students. Specifically, $11.22 million in HEERF Assistance funding was allocated to Fresno City
28   College, with a minimum allocation of $5.61 million for students; $4.24 million in HEERF
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 1   Assistance funding was allocated to Reedley College and Madera Community College, with a
 2   minimum allocation of $2.12 million for students; $2.87 million in HEERF Assistance funding
 3   was allocated to Clovis Community College, with a minimum allocation of $1.435 million for
 4   students.
 5          60.      SCCCD directed its colleges to create their own criteria to administer the Student
 6   Assistance funding. In accordance with the text of the CARES Act, the initial letter guidance
 7   issued by the DoE on April 9, and the Certifications that all higher education institutions were
 8   required to complete in order to access Student Assistance funds, Fresno City College, Reedley
 9   College (including Madera Community College), and Clovis Community College created
10   extensive plans for distributing Student Assistance grants in an equitable manner.
11          61.      Fresno City College initially identified 16,457 students to whom it would provide
12   Student Assistance after conducting extensive research that took into account whether a student
13   received Pell grants or is otherwise Pell-grant eligible, family income, student income, and impact
14   based on zip code. Indeed, Fresno City College prepared reports on how best to distribute funds
15   to the most needful students.
16          62.      On April 14, before DoE issued its April 21 Guidances, Fresno City College
17   accepted the Certifications required to access HEERF Assistance funds in reliance of the plain
18   language in the CARES Act, representations made in DoE’s April 9 letter, and the language of
19   the Certifications, with the expectation that it would follow this plan for broadly distributing
20   HEERF Assistance funds to its students, without regard to Title IV’s or § 1611’s eligibility
21   limitations. Once DoE’s HEERF eligibility restrictions were imposed and before the Court issued
22   its PI Order, Fresno City College was limited to providing Student Assistance to only 8,090
23   students.
24          63.      Fresno City College did not award any HEERF Assistance to students ineligible
25   under DoE’s eligibility requirements before the issuance of the PI Order. After the Court’s
26   issuance of the PI Order, and in reliance thereof, Fresno City College was able to distribute
27   Student Assistance to students that were excluded under DoE’s eligibility restrictions, and is
28   expeditiously continuing to do so until it exhausts its Student Assistance funding.
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 1          64.      Fresno City College has used and plans to continue using its Institution Assistance
 2   to provide assistance to students. After the Court’s issuance of the PI Order, and in reliance
 3   thereof, Fresno City College used a portion of its Institution Assistance to provide hundreds of
 4   students with cash assistance, internet and laptops to support them in participating in remote
 5   learning, without regard to whether those students are eligible under Title IV or § 1611.
 6          65.      Before the issuance of the PI Order, Fresno City College used fundraising efforts
 7   to provide some relief for students excluded by the DoE’s eligibility criteria. Fresno City College
 8   would have to renew those efforts if it was once again subject to DoE’s eligibility restrictions.
 9   These alternative funding sources, however, would not be sufficient to meet the needs of
10   excluded students.
11          66.      Reedley College initially identified 7,100 students attending Reedley College and
12   Madera Community College Center to whom it would provide Student Assistance grants without
13   regard to whether they qualify for Title IV or § 1611. On April 13, before DoE issued its April
14   21 Guidances, Reedley College accepted the Certifications required to access HEERF Assistance
15   funds in reliance of the plain language in the CARES Act, representations made in DoE’s April 9
16   letter, and the language of the Certifications, with the expectation that it would follow this plan
17   for broadly distributing HEERF Assistance funds to its students, without regard to Title IV’s or
18   § 1611’s eligibility limitations.
19          67.      Once the eligibility restrictions were imposed and before the Court issued its PI
20   Order, Reedley College was not only delayed by approximately two weeks in disbursing Student
21   Assistance grants, but was limited to providing Student Assistance to only 3,775 students. It
22   additionally conducted a manual review of all other students for FAFSA-eligibility in an attempt
23   to assist more students, which proved to be time-consuming and resource intensive.
24          68.      Reedley College did not award any HEERF Assistance to students ineligible under
25   DoE’s eligibility requirements before the issuance of the PI Order. After the Court’s issuance of
26   the PI Order, and in reliance thereof, Reedley College was able to distribute Student Assistance to
27   students attending Reedley College that were excluded under DoE’s eligibility restrictions.
28   Reedley College completed its distribution of its portion of Student Assistance as of October
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 1   2020.
 2           69.      Reedley College has used and plans to continue using its Institution Assistance to
 3   provide assistance to students. After the Court’s issuance of the PI Order, and in reliance thereof,
 4   Reedley used a portion of its Institution Assistance to provide hundreds of students with internet
 5   and laptops to support them in participating in remote learning, without regard to whether those
 6   students are eligible under Title IV or § 1611. Additionally, Reedley College intends to set aside
 7   Institutional Assistance to provide cash grants to Reedley College students.
 8           70.      Reedley College used fundraising efforts to provide some relief for students
 9   excluded by the DoE’s eligibility criteria. Reedley College would have to renew those efforts if it
10   was once again subject to DoE’s eligibility restrictions. The alternative funding sources,
11   however, would not be sufficient to meet the needs of excluded students.
12           71.      Because Madera Community College operated as a center and an extension of
13   Reedley College until July of 2020, Reedley College distributed Student Assistance funds to
14   students attending Madera Community College. In reliance upon and in accordance with the
15   terms of the PI Order, Reedley College distributed Student Assistance funds to Madera
16   Community College students who had been excluded under DoE’s eligibility restrictions.
17   Reedley College completed its distribution of Student Assistance to Madera Community College
18   students as of October 2020.
19           72.      In contrast to Student Assistance funds, Institutional Assistance funds were
20   allocated directly to, and distributed by, Madera Community College. After the Court’s issuance
21   of the PI Order, and in reliance thereof, Madera Community College has used a portion of its
22   Institution Assistance to provide hundreds of students with cash assistance, internet, and laptops
23   to support them in participating in remote learning, without regard to whether those students are
24   eligible under Title IV or § 1611. Madera Community College intends to continue using
25   Institutional Assistance to assist students.
26           73.      Clovis Community College initially developed a three-tier plan through which it
27   identified approximately 6,500 students to whom it would provide Student Assistance grants.
28   This plan would have provided support to all students without regard to whether they would
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 1   qualify under Title IV or § 1611.
 2          74.        On April 16, before DoE issued its April 21 Guidances, Clovis Community
 3   College accepted the Certifications required to access HEERF Assistance in reliance of the plain
 4   language in the CARES Act, representations made in DoE’s April 9 letter, and the language of
 5   the Certifications, with the expectation that it would follow this plan for broadly distributing
 6   HEERF Assistance funds to its students, without regard to Title IV’s or § 1611’s eligibility
 7   limitations.
 8          75.        Once DoE’s HEERF eligibility restrictions were imposed and before the Court
 9   issued its PI Order, Clovis Community College was limited to providing Student Assistance to
10   only 1,975 students.
11          76.        Clovis Community College did not award any HEERF Assistance to students
12   ineligible under DoE’s eligibility requirements before the issuance of the PI Order. After the
13   Court’s issuance of the PI Order, and in reliance thereof, Clovis Community College was able to
14   distribute Student Assistance to students that were excluded under DoE’s eligibility restrictions.
15   Clovis completed its distribution of its portion of Student Assistance as of October 2020.
16          77.        Clovis Community College has used and plans to continue using its Institution
17   Assistance to provide assistance to students. After the Court’s issuance of the PI Order, and in
18   reliance thereof, Clovis used a portion of its Institution Assistance to provide students with cash
19   assistance as well as internet and laptops to support them in participating in remote learning,
20   without regard to whether those students are eligible under Title IV or § 1611.
21          78.        Before the issuance of the PI Order, Clovis Community College used fundraising
22   efforts to provide some relief for students excluded by the DoE’s eligibility criteria. Clovis
23   Community College would have to renew those efforts if it was once again subject to DoE’s
24   eligibility restrictions. These alternative funding sources, however, would not be sufficient to
25   meet the needs of excluded students.
26          79.        SCCCD’s colleges have a continued interest in disbursing HEERF Assistance
27   equitably among its student body, so that its students may continue their education and SCCCD
28   may continue to fulfill its academic mission.
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 1                                  San Diego Community College District
 2          80.      San Diego Community College District (SDCCD) serves approximately 100,000
 3   students annually. SDCCD is a multicultural institution committed to access and success for all
 4   students. SDCCD includes three colleges: San Diego City College, Mesa College, and Miramar
 5   College, and has seven campuses that provide Continuing Education. SDCCD offers associate
 6   degrees and career technical certificates, as well as a bachelor’s degree in Health Information
 7   Management. SDCCD and its graduates have a combined economic benefit to its region of $5.5
 8   billion annually and 98 percent of the District’s students remain in the region after completing
 9   their education. Within SDCCD’s colleges, approximately 69 percent of students enrolled in
10   SDCCD are non-white; 39 percent are Latinx. Twenty-eight percent are first generation college
11   students. Over half of SDCCD’s students report income of less than $33,000 a year, with at least
12   17 percent reporting less than $3,000 a year. In the Continuing Education program,
13   approximately 61 percent are non-white; 25 percent identified as Latinx or Mexican; and 34
14   percent have a primary language other than English. Seventy-six percent of Continuing
15   Education students report income less than $33,000, 46 percent report less than $3,000, and 37
16   percent record an income of zero.
17          81.      Based on the statutory formula, $13.7 million in HEERF Assistance funding was
18   allocated to SDCCD’s colleges, with a minimum allocation of $6.87 million for students. In
19   accordance with the text of the CARES Act and the initial letter guidance issued by the DoE on
20   April 9, SDCCD developed a plan for its three colleges and Continuing Education program to
21   distribute Student Assistance grants to a range of students, specifically including students enrolled
22   in no-credit continuing education programs, as well as undocumented and DACA students.
23          82.      After SDCCD decided on an allocation plan for HEERF Assistance, SDCCD
24   became aware of DoE’s April 21 Guidances imposing new eligibility restrictions on students’
25   access to Student Assistance, which caused confusion in the District. As a result of this change
26   and before the Court issued its PI Order, SDCCD colleges were unable to disburse HEERF
27   student emergency assistance to many of its most impacted students.
28          83.      SDCCD’s colleges submitted the Certifications required to obtain their shares of
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 1   HEERF Assistance funds while attempting to understand the impact of DoE’s April 21 Guidances
 2   on their plans for disbursing student emergency assistance.
 3          84.      SDCCD did not award any HEERF Assistance to students ineligible under DoE’s
 4   eligibility requirements before the issuance of the PI Order. After the Court’s issuance of the PI
 5   Order, and in reliance thereof, SDCCD was able to distribute Student Assistance to students that
 6   were excluded under DoE’s eligibility restrictions, and is expeditiously continuing to do so until it
 7   exhausts its Student Assistance funding
 8          85.      SDCCD’s colleges have used and plan to continue using their Institutional
 9   Assistance to provide assistance to students. For example, SDCCD’s colleges have used
10   Institutional Assistance to purchase course materials, docking stations, internet access, web
11   cameras, laptops, and monitors for thousands of students without regard to whether those students
12   are eligible under Title IV or § 1611.
13          86.      Before the issuance of the PI Order, SDCCD and its colleges used fundraising
14   efforts to provide some relief for students excluded by the DoE’s eligibility criteria. SDCCD
15   would have to renew those efforts if it was once again subject to DoE’s eligibility restrictions.
16   These alternative funding sources, however, would not be sufficient to meet the needs of
17   excluded students.
18          87.      Conditions related to the novel coronavirus have negatively impacted students’
19   ability to participate in their courses. SDCCD’s colleges and programs have seen increased
20   withdrawals compared to last year. SDCCD fears that its inability to assist all of its students if
21   subject to DoE’s eligibility requirements would result in more of its students dis-enrolling, which
22   will in turn impact SDCCD’s revenues.
23          88.      SDCCD continues to have an interest in disbursing HEERF Assistance equitably
24   among its student body, so that its students may continue their education and SDCCD may
25   continue to fulfill its academic mission.
26                                                  Defendants
27          89.      Defendant DoE is an executive department of the United States of America
28   pursuant to 5 U.S.C. § 101, a federal agency within the meaning of 28 U.S.C. § 2671, and has
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 1   engaged in agency action within the meaning of 5 U.S.C. § 702. DoE is responsible for
 2   administering the HEERF.
 3          90.      Defendant Betsy DeVos is the Secretary of the Department of Education. She is
 4   sued in her official capacity pursuant to 5 U.S.C. § 702. Secretary DeVos is required to distribute
 5   HEERF Assistance in accordance with the CARES Act.
 6                                       FACTUAL ALLEGATIONS
 7   I.    THE COVID-19 PANDEMIC HAS CAUSED AN IMMEDIATE NEED FOR ADDITIONAL
           FINANCIAL ASSISTANCE FOR THE DISTRICTS’ DIVERSE STUDENT BODIES
 8

 9          91.      The COVID-19 pandemic is a public health emergency that has disrupted nearly
10   every facet of daily American life. Our country’s educational institutions have had to respond
11   urgently to the crisis and take far-reaching measures to protect the health and safety of their
12   students and staff. Many colleges and universities throughout the country, including in
13   California, closed their campuses and shifted primarily to remote learning. As of May 2020,
14   more than 4,000 institutions of higher education nationwide were impacted and over 25 million
15   students affected by COVID-19.8
16          92.      Like other educational institutions, all of the California community colleges
17   transitioned to online instruction and implemented social distancing and other safety protocols for
18   necessary in-person services. The Chancellor’s Office and the community colleges have made
19   significant efforts to address the severe disruptions experienced by students to enable them to
20   meaningfully participate in online instruction. For instance, the Chancellor’s Office has worked
21   with the telecommunications industry to provide internet services at no, or reduced, cost and
22   computers for students who need them. Unmet technology needs remain, however.
23          93.      The uncertainty and economic stress caused by COVID-19 has impacted
24   California’s community college students particularly acutely. Because of the California
25   Community College system’s commitment to free and low cost tuition, many of its students do
26   not have adequate resources to adapt to the changes the crisis has wrought. Pandemic-induced
27          8
               COVID-19: Higher Education Resource Center, Entangled Solutions,
28   https://tinyurl.com/y8wazqw2 (last visited Nov. 2, 2020).
                                                         23
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 1   conditions hinder students’ efforts to continue their education and put them at higher risk for dis-
 2   enrollment.
 3          94.       Because of campus closures, students find themselves in remote learning
 4   environments that are overcrowded or otherwise not conducive to attending class, such as shared
 5   bedrooms or family kitchens. The shift to remote learning also presents additional costs,
 6   beginning with access to robust internet connections and laptop computers, and extending to day-
 7   to-day costs resulting from increased time at home.
 8          95.       Away from their college communities, students are struggling to receive the
 9   instructional support they need to learn while also grappling with significant economic struggles.
10   Negotiating these challenges can be overwhelming for students.
11          96.       The sudden closures separated students from their communities—friends, faculty,
12   and advisors who have been part of their support network. These experiences compound the
13   already difficult circumstances faced by low-income students as they lose access to mental health
14   resources they might have had on their campuses, without access to extra finances to afford
15   outside mental health treatment.
16          97.       If not for the Court’s preliminary injunction, DoE’s actions would have prevented
17   students in dire need from accessing funds that help them bridge the gap of unforeseen expenses
18   caused by the pandemic so that they may continue their education despite significant obstacles. If
19   California’s community colleges were once again subject to DoE’s eligibility requirements,
20   community college students in the State who could not bridge the gap themselves would have to
21   withdraw or dis-enroll from college altogether. These students (and their families) have invested
22   effort and financial resources into building their lives and potential futures. Without emergency
23   HEERF Assistance, they would be forced into momentous and premature decisions about their
24   educational and professional paths that would have a lasting effect on their lives.
25   II.   CONGRESS CREATED THE HEERF IN THE CARES ACT AS A FORMULA GRANT FOR
           HIGHER EDUCATION INSTITUTIONS TO ASSIST STUDENTS WITH EMERGENCY COSTS
26         INCURRED DURING THIS PUBLIC HEALTH CRISIS
27          98.       To respond to these needs, Congress appropriated $30.75 billion in the CARES
28   Act toward the Education Stabilization Fund “to prevent, prepare for, and respond to coronavirus,
                                                          24
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 1   domestically or internationally.” 134 Stat. at 564. These funds were designated as “emergency
 2   requirement[s]” under section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit
 3   Control Act of 1985. Id.
 4          99.       Within the Education Stabilization Fund, Congress created a new program: the
 5   Higher Education Emergency Relief Fund (HEERF). Congress reserved 90 percent of HEERF,
 6   approximately $12.56 billion, to be allocated to colleges and universities in accordance with a
 7   specific funding formula. Id. at 564, § 18001 & 567, § 18004(a)(1). The HEERF Assistance
 8   funding formula requires the Secretary to allocate funds to each higher education institution as
 9   follows: 75 percent based on its relative share of the full-time equivalent (FTE) enrollment of
10   Federal Pell Grant recipients and 25 percent based on its relative share of FTE enrollment of all
11   other students, excluding in both categories students enrolled only in distance learning before the
12   coronavirus emergency. Id. at 567, § 18004(a)(1). Thus, the latter part of the formula accounts
13   for all students not previously enrolled in online learning, including those students who are not
14   eligible for financial aid under Title IV of the Higher Education Act or § 1611. Congress directed
15   that the DoE Secretary “shall allocate” this $12.56 billion to “each institution of higher education
16   to prevent, prepare for, and respond to coronavirus” based on this formula. Id. at 567,
17   § 18004(a)(1).
18          100.      The CARES Act broadly allows higher education institutions to use HEERF
19   Assistance “to cover any costs associated with significant changes to the delivery of instruction
20   due to the coronavirus.” Id. at 568, § 18004(c) (emphasis added). As Senator Lamar Alexander
21   (R-TN) explained, the funding in the CARES Act for higher education institutions is structured in
22   the form of a “block grant.” 166 Cong. Rec. S1895 (Mar. 22, 2020). This “permits the states to
23   administer the program[] with minimal federal involvement and few procedural requirements.”
24   Rural Alaska Cmty. Action Program v. Smith, 847 F.2d 535, 536 (9th Cir. 1988).
25          101.      The CARES Act subjects higher education institution recipients of HEERF
26   Assistance to only two conditions. First, the funds cannot be used for “payment to contractors for
27   the provision of pre-enrollment recruitment activities; endowments; or capital outlays associated
28   with facilities related to athletics, sectarian instruction, or religious worship.” 134 Stat. at 564,
                                                          25
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 1   § 18004(c). Second, at least 50 percent of the funds must be used “to provide emergency
 2   financial aid grants to students for expenses related to the disruption of campus operations due to
 3   coronavirus (including eligible expenses under a student’s cost of attendance, such as food,
 4   housing, course materials, technology, health care, and child care)”—referred to here as Student
 5   Assistance. Id. A higher education institution may use the remaining funds for any purpose
 6   associated with the “significant changes to the delivery of instruction due to the coronavirus,”
 7   which could include reimbursement for expenses incurred by the institution or additional
 8   assistance to students—referred to here as Institution Assistance. Id.
 9          102.      Other than those provisions, the CARES Act does not set out any requirements on
10   how each institution must allocate HEERF Assistance funds. Congress spoke clearly when it
11   intended to set eligibility criteria for other programs in the CARES Act. See, e.g., id. at 335,
12   § 6428(d) (excluding “nonresident alien[s]” and other enumerated individuals from receiving
13   rebates). In contrast, no provision of the CARES Act limits the eligibility of students who may
14   receive HEERF Assistance, including with respect to immigration status or Title IV financial aid
15   eligibility. The only HEERF provision mentioning Title IV refers just to utilization of DoE’s
16   existing grant management system to distribute aid. Id. at 567, § 18004(b). Moreover, Congress
17   treated Student Assistance differently from other student financial aid funding sources in the
18   CARES Act, which are subject to Title IV’s eligibility requirements. See id. at 396-97, § 3504
19   (permitting the use of an institution’s allotment under Title IV to issue emergency financial aid
20   grants to students); see also id. at 397, § 3505 (authorizing higher education institutions to use
21   Title IV funds to make payments to affected work-study students).
22   III. DOE ISSUED CONFLICTING INTERPRETATIONS ON HEERF ASSISTANCE
          ELIGIBILITY, AND ULTIMATELY RESTRICTED ELIGIBILITY IN A MANNER NOT
23        INTENDED BY CONGRESS
24          103.      At first, after the CARES Act became law, DoE implemented the HEERF
25   consistent with Congress’s intent. On April 9, 2020, DoE announced the availability of $12.56
26   billion in HEERF Assistance funds, including $6.28 billion for Student Assistance formula
27

28
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 1   grants.9 DoE announced that the formula allocations were based on data from the Integrated
 2   Postsecondary Education System (IPEDS) and Federal Student Aid (FSA).10 In determining
 3   allocations pursuant to the portion of the formula involving non-Federal Pell Grant recipients,
 4   DoE correctly utilized enrollment data that did not exclude students who are ineligible for Title
 5   IV financial aid or federal public benefits under § 1611.11
 6          104.      On that same day, the DoE Secretary wrote a letter to colleges and universities
 7   explaining that the institutions have “significant discretion” on how to allocate the Student
 8   Assistance to students, and that “each institution may develop its own system and process for
 9   determining how to allocate these funds, which may include distributing the funds to all students
10   or only to students who demonstrate significant need.”12 Relying directly on the text of the
11   CARES Act, the Secretary stated that “[t]he only statutory requirement is that the funds be used
12   to cover expenses related to the disruption of campus operations due to coronavirus (including
13   eligible expenses under a student’s cost of attendance, such as food, housing, course materials,
14   technology, health care, and child care).” Id.
15          105.      According to the letter, in order to access both the Student and Institution
16   Assistance funds, each higher education institution would be required to sign and return
17   Certifications acknowledging and certifying that the institution will comply with the terms and
18   conditions of funding. Id. The Certifications also made available on April 9, 2020, provide that
19   recipient institutions must allocate the funding in a manner “consistent with all applicable laws”
20   and also may be subject to penalties for failure to comply with the CARES Act “or any other
21          9
                Secretary DeVos Rapidly Delivers More Than $6 Billion in Emergency Cash Grants for
22   College Students Impacted by Coronavirus Outbreak, U.S. Dep’t of Educ. (Apr. 9, 2020),
     https://tinyurl.com/y73bnxd4.
23            10
                 Id.; see also Allocations for Section 18004(a)(1) of the CARES Act, U.S. Dep’t of
     Educ., https://tinyurl.com/rt8hdze (last visited Nov. 2, 2020).
24            11
                 See Methodology for Calculating Allocations per Section 18004(a)(1) of the CARES
25   Act, U.S. Dep’t of Educ., https://tinyurl.com/ybvxuzu8 (identifying use of data from Integrated
     Postsecondary Education Data System (IPEDS) system) (last visited Nov. 2, 2020); IPEDS Data
26   Explorer, Nat’l Ctr. for Educ. Statistics, https://tinyurl.com/yaonr6cq (aggregate IPEDS data,
     including category for “nonresident alien” students) (last visited Nov. 2, 2020).
27            12
                 Secretary DeVos Letter to College and University Presidents, U.S. Dep’t of Educ. (Apr.
     9, 2020), https://tinyurl.com/y7f9tlrk (emphasis added).
28
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 1   applicable law.”13 The Certification for Student Assistance additionally and explicitly states,
 2   consistent with Congress’s intent and the Secretary’s April 9 letter, that the “Secretary does not
 3   consider these individual emergency financial aid grants to constitute Federal financial aid under
 4   Title IV of the HEA.” Id. By distinguishing Student Assistance from regular federal financial
 5   aid, the Certification indicates that requirements under Title IV are inapplicable to Student
 6   Assistance.
 7          106.      On or about April 21, 2020, DoE drastically changed its interpretation of the
 8   CARES Act without acknowledging its prior position. DoE published a Frequently Asked
 9   Questions document on HEERF Student Assistance Guidance.14 This April 21 Student
10   Assistance Guidance imposes a limitation on eligibility for Student Assistance, stating, “[o]nly
11   students who are or could be eligible to participate in programs under Section 484 in Title IV of
12   the Higher Education Act of 1965, as amended (HEA), may receive emergency financial aid
13   grants.” Id. at 4. The April 21 Student Assistance Guidance expressly mentions that only U.S.
14   citizens or “eligible noncitizens” may receive funding. Id. A similar guidance for the Institution
15   Assistance funds issued on or about the same date (April 21 Institution Assistance Guidance, with
16   April 21 Student Assistance Guidance, the April 21 Guidances defined supra at 2), contains the
17   same limitations on eligibility for emergency financial assistance grants to students.15
18          107.      DoE reaffirmed this new position after April 21. A spokesperson for DoE insisted
19   that “the CARES Act makes clear that this taxpayer funded relief should be targeted to U.S.
20   citizens.”16 On April 27, the DoE Secretary said that DACA recipients are not eligible for
21          13
                 Recipient’s Funding Certification and Agreement: Emergency Financial Aid Grants to
22   Students under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, U.S. Dep’t of
     Educ., https://tinyurl.com/y8j7m8t3 (last visited Nov. 2, 2020).
23            14
                 Higher Education Emergency Relief Fund, Frequently Asked Questions about the
     Emergency Financial Aid Grants to Students under Section 18004 of the Coronavirus Aid, Relief,
24   and Economic Security (CARES) Act, U.S. Dep’t of Educ., https://tinyurl.com/yajnjpr2 (last
     visited Nov. 2, 2020).
25            15
                 Higher Education Emergency Relief Fund, Frequently Asked Questions about the
26   Institutional Portion of the Higher Education Emergency Relief Funds under Section 18004(a)(1)
     and 18004(c) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, U.S. Dep’t of
27   Educ., https://tinyurl.com/ya25f2k7 (last visited Nov. 2, 2020).
              16
                 Brendan Cole, Who Is Eligible for the Emergency Financial Aid Grant From the
28
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 1   Student Assistance because they are not eligible for financial aid under Title IV.17
 2          108.      On or about May 21, 2020, after Plaintiffs filed the instant action and their motion
 3   for preliminary injunction, DoE published an “updated statement” on its website about its
 4   eligibility requirements (May 21 Update).18 Although DoE claimed in that statement that it “will
 5   not initiate any enforcement action based solely” on the statements in the April 21 HEERF
 6   Guidances, it also “reiterate[d]” its position that Student Assistance “may only” be given to
 7   students eligible under Title IV, and that “the underlying statutory terms in the CARES Act are
 8   legally binding.” Id.
 9          109.      Moreover, in the May 21 Update, DoE asserted, for the first time, that § 1611 was
10   applicable law as to HEERF Assistance and that its restrictions apply. Section 1611 provides that
11   certain non-citizens are “not eligible for any Federal public benefit,” subject to exceptions.
12          110.      On June 17, 2020, DoE issued the IFR that confirmed the imposition of the
13   Title IV and § 1611 eligibility requirements on HEERF Assistance.19 While the May 21 Update
14   indicated that Title IV’s eligibility requirements do not apply to the Institution Assistance portion
15   of the funds, no such distinction was made in the IFR. At no point since May 21 has DoE
16   indicated that § 1611’s eligibility restrictions only apply to Student Assistance. During the course
17   of briefing and oral arguments in this litigation, DoE has indicated that it takes the position that
18   § 1611’s restrictions apply to all HEERF Assistance.
19          111.      DoE issued the IFR without first publishing a proposed rule for public comment,
20   and made it effective immediately upon issuance. 85 Fed. Reg. at 36,495. The IFR asserts that
21   DoE had “good cause” for issuing the IFR without public comments due to the “urgent economic
22   challenges facing many students as a result of the crisis.” Id. at 36,498. The IFR invited the
23   public to submit comments in response, which were due on July 17, 2020. See id. at 36,494.
24   Department of Education?, Newsweek (Apr. 24, 2020), https://tinyurl.com/y86qn83j.
            17
25             Education Secretary Betsy DeVos says CARES Act funding will go to students, Full
     Court Press (Apr. 27, 2020), https://tinyurl.com/yaaawjtz.
26          18
               May 21, 2020 CARES Act: Higher Education Emergency Relief Fund Updated
     Statement, U.S. Dep’t of Educ., https://tinyurl.com/y4mnboee (last visited Nov. 2, 2020).
27          19
               Defendants presented the IFR to this Court on June 11, 2020, before it was published in
28   the Federal Registrar, and it was considered as part of this Court’s PI Order.
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 1          112.      DoE’s eligibility requirements, as communicated through DoE’s HEERF
 2   Assistance Guidances, public representations, the IFR, and its representations during this
 3   litigation, cannot be reconciled with, among other things: (a) the prior DoE April 9 letter guidance
 4   stating that higher education institutions had the discretion to distribute HEERF Assistance to all
 5   students, (b) the Certification regarding Student Assistance; (c) DoE’s HEERF formula
 6   methodology; or (d) congressional intent reflected in the CARES Act.
 7          113.      By seeking to impose Title IV’s and § 1611’s eligibility requirements, DoE would
 8   exclude, among other non-citizens, students who are DACA recipients, Temporary Protected
 9   Status recipients, and asylum applicants. See 20 U.S.C. § 1091 (Title IV’s eligibility
10   requirements); 8 U.S.C. §§ 1611(a), 1641(b) (describing the only non-citizens who are eligible for
11   receipt of “Federal public benefits”). DoE’s eligibility requirements would also exclude, among
12   others, students who are citizens or non-citizens who otherwise would be eligible for assistance,
13   but who: (a) are still completing high school (dual-enrollment); (b) do not have a high school
14   diploma, General Educational Development (GED) certification or recognized equivalent or
15   exception; (c) already have a bachelor’s degree; (d) are enrolled exclusively as non-credit
16   students; (e) do not meet academic progress standards; or (f) are in default on a federal student
17   loan or owe any refund relating to a federal student grant.
18          114.      These limitations would likely have excluded from HEERF Assistance eligibility
19   over 800,000 of the 1.5 million California Community College students enrolled when the
20   pandemic struck, and similarly, would likely exclude more than half (over 750,000) of the
21   approximately 1.4 million students enrolled in the current Fall 2020 semester. These would
22   include many students identified as economically disadvantaged, almost 40 percent of the
23   colleges’ students with disabilities, half of those students who are veterans or training to be first
24   responders, and over 40 percent of those students training for health services careers. In numbers,
25   for the Fall 2020 semester, the California Community College students that DoE would render
26   ineligible are estimated to include: more than 115,000 economically disadvantaged students;
27   more than 25,000 students with disabilities; over 11,000 veterans—and nearly 2,000 active duty
28   service members; approximately 107,000 students training for essential work in health services;
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 1   and an estimated 80,000 students training to be first responders.
 2   IV.   DOE’S IMPOSITION OF THE ELIGIBILITY RESTRICTIONS THROUGH THE IFR
           COMPOUNDS THE AGENCY’S UNLAWFUL CONDUCT
 3

 4          115.      On June 17, 2020, this Court preliminarily enjoined the imposition and
 5   enforcement of DoE’s Title IV and § 1611 eligibility requirements on HEERF Assistance for
 6   community colleges throughout California. PI Order at 28. In that Order, the Court determined
 7   that Plaintiffs were likely to succeed on their claims that DoE’s eligibility requirements violate
 8   separation of powers principles, the Spending Clause, and the APA. Id. at 18-19, 24. The
 9   preliminary injunction enjoined the enforcement of the requirements in the April 21 Guidances,
10   the May 21 Update, and the IFR.
11          116.      As this Court already ruled, the IFR fails to establish that DoE possesses the
12   statutory authority to impose the eligibility restrictions. Separately, the policy justifications for
13   the eligibility restrictions in the IFR are based on unsupported assumptions and a flawed cost-
14   benefit analysis, and reflect a failure to consider important aspects of the problem and evidence
15   before the agency at the time the IFR was issued, all in violation of the APA’s prohibition on
16   arbitrary and capricious conduct. DoE has compounded its APA violation by failing to consider
17   approximately 4,150 public comments that were submitted in response to DoE’s call for
18   comments, which predominantly opposed the IFR.
19         A.      The IFR Provides No Persuasive Justification for Imposing the Eligibility
                   Restrictions on HEERF Assistance
20

21          117.      The IFR’s contention that the eligibility restrictions are statutorily authorized is
22   predicated on two incorrect legal premises: that the DoE Secretary possesses the statutory
23   authority to promulgate a rule imposing eligibility restrictions on HEERF Assistance and that the
24   term “students” in the CARES Act is ambiguous. 85 Fed. Reg. at 36,495-96. First, the IFR does
25   not identify any delegation from Congress to issue rules arising from the CARES Act itself.
26   Instead, the IFR invokes the DoE Secretary’s general statutory authority to issue rules in
27   connection with her functions. Id. at 36,495-96 (citing 20 U.S.C. §§ 1221e-3, 3474). Such
28   authority for regulating administrative functions, however, does not authorize the imposition of
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 1   substantive requirements or funding conditions. See Gonzalez v. Oregon, 565 U.S. 243, 259,
 2   264-65 (2006); City of Chicago v. Sessions, 888 F.3d 272, 287 (7th Cir. 2018) (imposing grant
 3   conditions “is a tremendous power of widespread impact” and “not the type of authority that
 4   would be hidden in a clause without explanation, and without any reference or acknowledgement
 5   of that authority in the statute that actually contains the grant itself”).
 6           118.      Second, the term students is not ambiguous. “[T]he statutory formula expressly
 7   provides for the inclusion of [full time enrollment] students who were not Federal Pell Grant
 8   recipients, i.e., students who would be ineligible for title IV aid.” PI Order at 17-18. Defendants’
 9   interpretation of the CARES Act would give two different meanings to the term “students” within
10   § 18004, where subsection (a), governing the formula, would include students not eligible under
11   Title IV or § 1611, but subsection (c), governing the distribution of HEERF Student Assistance,
12   would exclude students not eligible under Title IV or § 1611. This Court already concluded that
13   “[s]uch an interpretation makes little sense and violates fundamental tenants of statutory
14   interpretation.” Id. at 18 (citing City of Los Angeles v. Barr, 941 F.3d 931, 941 (9th Cir. 2019)).
15           119.      The IFR, additionally, makes a critical concession that dooms the Title IV
16   eligibility restrictions. The IFR acknowledges that the “emergency financial aid grants” that are a
17   part of HEERF Assistance “by definition, do not constitute Federal financial student aid under the
18   HEA, including title IV of the HEA.” 85 Fed. Reg. at 36,496. This necessarily means that
19   HEERF Assistance cannot be subject to Title IV’s restrictions because Title IV’s restrictions only
20   apply to grants “under [Title IV].” 20 U.S.C. § 1091(a) (emphasis added). The IFR’s discussion
21   that grants authorized by 20 U.S.C. § 1138(d) are subject to Title IV’s eligibility restrictions only
22   further underscores that Title IV’s restrictions do not apply to HEERF. 85 Fed. Reg. at 36,496.
23   Congress explicitly incorporated Title IV’s eligibility requirements in 20 U.S.C. § 1138(d) by
24   providing that “students who do not meet the requirements of section 1091(a) of this title” are
25   ineligible for that funding source. No such language appears in § 18004 of the CARES Act.
26           120.      The IFR discusses instances in which the CARES Act incorporates certain
27   elements of Title IV, but the IFR fails to identify—nor can it—where Congress incorporated Title
28   IV’s eligibility requirements into the provisions surrounding HEERF Assistance. 85 Fed. Reg. at
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 1   36,496-97. Congress’s incorporation of some elements of Title IV with “surgical precision,” but
 2   not Title IV’s eligibility requirements, demonstrates that Congress consciously declined to adopt
 3   such requirements for HEERF Assistance. Navajo Nation v. HHS, 325 F.3d 1133, 1139-40 (9th
 4   Cir. 2003).
 5          121.      Finally, the IFR provides only a cursory explanation for the § 1611 eligibility
 6   restrictions. 85 Fed. Reg. at 36,496. The IFR reflects no consideration of the legal analysis
 7   relevant to this Court’s conclusion that HEERF Assistance is not a federal public benefit, the
 8   CARES Act’s more specific provisions govern over the general prohibition in § 1611, and
 9   § 1611’s purposes are not furthered by application of that statute to HEERF Assistance. PI Order
10   at 22-24.
11         B.      The IFR Demonstrates that DoE’s Eligibility Restrictions on HEERF
                   Assistance Violate the APA
12

13          122.      Even if DoE was statutorily permitted to impose the eligibility restrictions, the IFR
14   confirms that they were imposed in an arbitrary and capricious manner because: (1) the IFR does
15   not resolve the DoE’s internal inconsistencies; (2) the IFR’s policy justifications are premised on
16   flawed assumptions; (3) the IFR altogether fails to consider important aspects of the problem; and
17   (4) the DoE does not consider any of the public comments it solicited as part of the IFR.
18          123.      The IFR does not resolve the internal inconsistencies with the DoE’s imposition of
19   the eligibility requirements discussed supra at 26-30. Moreover, while the IFR contends that its
20   restrictive definition of “students” would provide “the most efficient, effective, and expedient
21   way possible” to award HEERF Assistance, it simultaneously suggests that institutions of higher
22   education develop an alternative system to determine Title IV eligibility for those students who
23   have not submitted a FAFSA. 85 Fed. Reg. at 36,497, 36,500-01. Such a process defeats any
24   efficiency purportedly gained by the IFR. The IFR also ignores the obvious, more efficient
25   alternative: if no eligibility restrictions were imposed, higher education institutions would not
26   have to “wade through a litany of specific questions,” as the institutions would only have to
27   determine whether the grant to a particular student cover “expenses related to the disruption of
28   campus operations due to coronavirus,” as directed in the statute and originally contemplated by
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 1   the agency. Id. at 36,497; 134 Stat. at 568, § 18004(c).20
 2          124.      Furthermore, the IFR’s policy justification rests on three defective assumptions.
 3   First, it claims that the eligibility requirements are necessary because “the potential for waste,
 4   fraud, and abuse is significant when institutions of higher education are given the opportunity to
 5   quickly make cash awards to students,” which DoE posits will incentivize institutions “to further
 6   their bottom lines” and increase enrollment. 85 Fed. Reg. at 36,497-98. But the IFR does not
 7   explain how limiting HEERF Assistance to Title IV and § 1611 eligible students prevents “waste,
 8   fraud, and abuse.” To support DoE’s concern about fraud, DoE cites to one report claiming that
 9   “[a] group of international fraudsters” have used information obtained from cyber hacks to file
10   unemployment claims about U.S. citizens. Id. at 36,497.21 These allegations are unrelated to the
11   HEERF eligibility restrictions, and rather than support the restriction, they show that claims on
12   behalf of individuals who are eligible for financial aid under Title IV, such as U.S. citizens, are as
13   or more likely to be susceptible to fraud than claims made on behalf of individuals who are in-
14   eligible under Title IV.
15          125.      Relatedly, DoE provides no support for the speculative assumption that without
16   the eligibility restrictions, “unscrupulous institutions could create cheap classes and programming
17   that provides little or no educational value and then use the HEERF grant funding to incentivize
18   individuals not qualified under Title IV to enroll as paying students in those classes and
19   programs, thereby qualifying for a grant.” 85 Fed. Reg. at 36,498. Conversely, the agency failed
20   to consider how the eligibility restrictions hinder the ability of higher education institutions “to
21   ensure that their currently enrolled students have the resources they need to continue their
22   studies” at a time when institutions face dwindling resources to address their students’ increased
23   needs as a result of the pandemic.22 While the eligibility restrictions in no way guard against
24          20
               See also Secretary DeVos Letter to College and University Presidents, U.S. Dep’t of
     Educ. (April 9, 2020), https://tinyurl.com/y7f9tlrk (“The only statutory requirement is that the
25   funds be used to cover expenses related to the disruption of campus operations due to
     coronavirus.”).
26          21
               Citing Mike Baker, Feds Suspect Vast Fraud Network Is Targeting U.S. Unemployment
27   Systems, New York Times (May 16, 2020), https://tinyurl.com/ycshl3kr.
            22
               California Community Colleges, Comment on Interim Final Rule Eligibility of Students
28
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 1   waste, fraud, and abuse, they undermine the very purpose of the CARES Act, which, as DoE
 2   previously acknowledged, was to “provide[] institutions with significant discretion” on allocating
 3   funds to students “as quickly as possible.”23
 4          126.        Second, the cost-benefit analysis conducted by the agency in the IFR is
 5   fundamentally flawed. The IFR “evaluate[d] the costs and benefits of the IFR compared to a pre-
 6   statutory baseline,” i.e., the situation that existed before the CARES Act was enacted. 85 Fed.
 7   Reg. at 36,499. Contrary to the IFR’s assertion, this baseline is not “[i]n accordance with OMB
 8   Circular A-4,” id., which directs that the “baseline should be the best assessment of the way the
 9   world would look absent the proposed action.”24 Without the IFR, DoE would still be required by
10   the CARES Act to allocate funds to higher education institutions. Instead, the correct baseline is
11   to compare the costs and benefits of imposing the eligibility requirements against not imposing
12   them, as that is the “best assessment of the way the world would look absent the proposed
13   action.” Id. By relying on a flawed baseline, DoE inappropriately takes credit for the funding
14   that was appropriated by Congress, while neglecting to consider the costs associated with
15   restricting 4.6 million students from receiving this emergency assistance. See 85 Fed. Reg. at
16   36,498-502; see also Nat’l Ass’n of Home Builders v. EPA, 682 F.3d 1032, 1040 (D.C. Cir. 2012)
17   (“[W]hen an agency decides to rely on a cost-benefit analysis as part of its rulemaking, a serious
18   flaw undermining that analysis can render the rule unreasonable.”).
19          127.      Third, the agency relies on grossly inaccurate estimates of the burden on higher
20   education institutions and students to comply with these eligibility restrictions. 85 Fed. Reg. at
21   36,503. The IFR asserts, without support, that each higher education institution which receives a
22

23   at Institutions of Higher Education for Funds Under the Coronavirus Aid, Relief, and Economic
     Security (CARES) Act, 85 Fed. Reg. 36,494 (June 17, 2020), RIN: 1840-ZA04 (hereinafter
24   Comment on IFR), ID No. ED-2020-OPE-0078-2928 (Attachment 1), 13, (July 17, 2020)
     (California Community Colleges Comment); see also State Attorneys General, Comment on IFR,
25   ID No. ED-2020-OPE-0078-2873 (Attachment 1), 11-13 (July 17, 2020) (State AGs Comment)
     (noting projected $765 billion cuts to state budgets over the next 3 years).
26            23
                 Secretary DeVos Letter to College and University Presidents, U.S. Dep’t of Educ. (Apr.
     9, 2020), https://tinyurl.com/y7f9tlrk.
27            24
                 Office of Mgmt. & Budget, Circular A-4 (Sept. 17, 2003),
28   https://tinyurl.com/y3v8wzjp.
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 1   HEERF Assistance allocation will only require five hours to implement these eligibility
 2   requirements, which the IFR describes as consisting of “set[ting] up any new form for students to
 3   complete” and “establish[ing] review and recordkeeping procedures.” Id. Even if that estimate
 4   was accurate for those particular tasks—which higher education institutions in California and
 5   across the country represent it is not—the IFR does not account for the numerous other tasks that
 6   are implicated by the eligibility requirements such as: (1) manually reviewing each application
 7   and verifying that the student is eligible under each of the criteria for receipt of financial aid
 8   under Title IV; (2) following up with students for additional information required under the
 9   eligibility requirements; (3) handling appeals associated with the eligibility requirements; and (4)
10   instructing students seeking to establish Title IV eligibility on how to complete the FAFSA or any
11   alternative application form that an institution may create to determine eligibility.25
12          128.      The IFR’s estimate that it would take students twenty minutes to complete the
13   request for assistance under DoE’s eligibility requirements is also inaccurate and contrary to the
14   evidence before the agency at the time of the IFR. 85 Fed. Reg. at 36,503. The IFR cites claims
15   that one of the benefits of the Title IV eligibility requirement is that it allows for the “leveraging
16   [of] existing processes and procedures,” so “students who currently do not receive title IV aid
17   [could] submit the [FAFSA] in order to determine title IV eligibility.” Id. at 36,497. The IFR
18   acknowledges, though, that students “may lack the necessary information or familiarity with the
19   financial aid process” to submit the FAFSA. Id. at 36,500. The IFR continues that the
20   “complexity” of FAFSA and “lack of counseling” pose “particular[] challenge[es] for low-
21   income, minority, and first-generation students.” Id. According to DoE’s own data, nearly three
22   million undergraduates did not fill out a FAFSA in 2015-16, including hundreds of thousands of
23   Black students, Latino students, and low-income veteran students.26
24          25
               California Community Colleges Comment at 13-15; State AGs Comment at 10-11; San
25   Jose State University, Comment on IFR, ID No. ED-2020-OPE-0078-2868 (Attachment 1), 6-7,
     (July 17, 2020) (San Jose State Comment); National Association of Student Financial Aid
26   Administrators, Comment on IFR, ID No. ED-2020-OPE-0078-2990 (Attachment 1), 4, (July 17,
     2020) (NASFAA Comment).
27          26
               The Institute for College Access & Success, Comment on IFR, ID No. ED-2020-OPE-
     0078-2608 (Attachment 1), 2-3 (July 8, 2020) (ICAS Comment) (compiling DoE data).
28
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 1          129.      In fact, the FAFSA form itself estimates that it will take students an average of 1.5
 2   hours to complete the form, far exceeding the twenty minute estimate in the IFR.27 The IFR’s
 3   alternative suggestion for higher education institutions to create a separate form and procedure for
 4   students not willing or able to submit a FAFSA to attest to their Title IV eligibility under penalty
 5   of perjury, is no alternative at all. 85 Fed. Reg. at 36,500. Students would still have to
 6   familiarize themselves with the “complex” financial process before undertaking the serious step
 7   of verifying eligibility under penalty of perjury, a process that will take more than twenty
 8   minutes.28 Because of the burden and the prospect of making an unnecessary certification, many
 9   students who are eligible for financial aid under Title IV will likely not apply for this emergency
10   assistance, an outcome that the IFR fails to consider.29
11          130.      In addition to the above, the IFR fails entirely to consider other significant
12   problems:
13                   The groups of students who are excluded from receiving HEERF Assistance by
14                    DoE’s eligibility requirements are suffering the disproportionate health and
15                    economic effects as a result of the pandemic, while also being less likely to have
16                    access to health insurance, and thus, would likely benefit most from HEERF
17                    Assistance;30
18                   The eligibility restrictions will exacerbate already existing gaps in equity and
19
            27
               FAFSA, Free Application for Federal Student Aid, July 1, 2020 – June 30, 2021 2, U.S.
20   Dep’t of Educ., https://tinyurl.com/y6z5u2lm (last visited Nov. 2, 2020).
            28
21             NASFAA Comment at 4; San Jose State Comment at 5; The Century Foundation
     Comment on IFR, ID No. ED-2020-OPE-0078-2927 (Attachment 1), 1 (July 17, 2020) (Century
22   Foundation Comment).
            29
               San Jose State Comment at 4-5; Coalition for Humane Immigrant Rights, Comment on
23   IFR, ID No. ED-2020-OPE-0078-0055 (Attachment 1), 7-10 (July 17, 2020) (CHIRLA
     Comment); Student Veterans of America, Comment on IFR, ID No. ED-2020-OPE-0078-2874
24   (Attachment 1), 3-4 (July 17, 2020) (SVA Comment); Leadership Conference on Civil and
     Human Rights, Comment on IFR, ID No. ED-2020-OPE-0078-2907 (Attachment 1), 2-3 (July
25   17, 2020) (LCCHR Comment).
            30
26             E.g., CHIRLA Comment at 2-7; ICAS Comment at 3-4; San Jose State Comment at 2-
     3; LCCHR Comment at 1-2; County of Los Angeles, Comment on IFR, ID No. ED-2020-OPE-
27   0078-2549, 10 (July 17, 2020) (LA County Comment); University of California, Comment on
     IFR, ID ED-2020-OPE-00078-1091 (Attachment 1), 2 (July 17, 2020) (UC Comment).
28
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                   First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)
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 1                    achievement, making it more likely that traditionally underrepresented student
 2                    groups will dis-enroll;31
 3                   The eligibility restrictions, and the dis-enrollment of ineligible students that would
 4                    likely follow, will deprive higher education institutions of valuable members of
 5                    their communities, undermine the institutions’ missions of promoting diversity,
 6                    and hinder institutions’ efforts to prepare all students for a diverse workforce and
 7                    society;32 and
 8                   The dis-enrollment of ineligible students that would likely follow the eligibility
 9                    restrictions will have a devastating effect on national and local economies,
10                    significantly diminishing productivity capacity, decreasing the eligible tax base,
11                    and harming the country’s international competitiveness at a time when a highly
12                    skilled workforce is needed to support an economic recovery.33
13          131.      Finally, DoE violates the APA for another independent reason. There were a total
14   of approximately 4,150 public comments, which overwhelmingly opposed the IFR. Although
15   DoE invited public comments and represented that it would “consider these comments in
16   determining whether to revise the rule,” 85 Fed. Reg. at 36,495, DoE failed to consider any of the
17   public comments that were submitted in response to the IFR, evident by their exclusion from the
18   administrative record, see ECF No. 52-3.
19   V.    DOE’S UNLAWFUL RESTRICTIONS ON HEERF ASSISTANCE ELIGIBILITY WOULD
           IRREPARABLY HARM PLAINTIFFS AND STUDENTS ATTENDING COMMUNITY
20         COLLEGES THROUGHOUT CALIFORNIA
21          132.      DoE’s unlawful eligibility requirements would unfairly and erroneously limit
22   which students may receive emergency assistance during a global pandemic, inflicting irreparable
23   harm on Plaintiffs and their students by damaging students’ access to education, with
24          31
               E.g., California Community Colleges Comment at 5; San Jose State Comment at 8;
25   State AGs Comment at 16.
            32
               E.g., California Community Colleges Comment at 13; CHIRLA Comment at 11-12;
26   San Jose State Comment at 7-8; State AGs Comment at 16.
            33
27             E.g., California Community Colleges Comment at 5; LA County Comment at 11-13;
     Century Foundation Comment at 1; SEIU, Comment on IFR, ID No. ED-2020-OPE-0078-0723
28   (Attachment 1) (SEIU Comment)
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 1   consequential effects on their well-being and futures. To mitigate this damage, Plaintiffs would
 2   be required to identify immediate additional resources to determine how to disburse funding to
 3   the many students rendered ineligible for HEERF Assistance, depleting Plaintiffs’ resources
 4   intended for other programs and services. DoE’s limitations would also serve to place students
 5   already in need at a higher risk of dis-enrolling, which would threaten Plaintiffs’ budgets and
 6   revenues, and undermine their academic missions and the character and diversity of their student
 7   bodies. Failure to follow DoE’s eligibility requirements conveyed most recently in its IFR would
 8   subject Plaintiff Districts to the threat of suspension or debarment, and the attendant loss of
 9   unrelated federal funding.
10          133.      The DoE’s confusing and conflicting guidances regarding student eligibility placed
11   a significant administrative burden on Plaintiff Districts’ financial aid offices at a time when staff
12   were working remotely and without access to resources available in their offices—a burden that
13   would re-emerge if Plaintiffs were once again subject to DoE’s eligibility requirements. Before
14   the Court issued its PI Order, Plaintiff Districts had to re-direct staff or revise plans to disburse
15   HEERF Assistance in as equitable and expedient a manner as possible despite DoE’s eligibility
16   restrictions, which entailed long hours and substantial resources. Imposing the same
17   requirements as federal student aid entails the consideration of a long list of conditions, from not
18   having defaulted on student loan payments to making sufficient satisfactory academic progress.
19   While the FAFSA application contains information regarding Title IV eligibility, many students,
20   including low-income students, have not filled out a FAFSA. That means a manual review of
21   each student’s records is the only way to ensure that assistance is distributed to the greatest
22   number of students possible while complying with DoE’s restrictive eligibility requirements.
23   Many colleges do not have the time and resources to undertake this review. This extra burden
24   would come at a time when Plaintiffs are already devoting considerable resources to support their
25   students’ needs during this crisis, including increased demand for academic counseling, mental
26   health services, and food services.
27          134.      Because the HEERF Assistance eligibility restrictions imposed by DoE would
28   leave thousands of students enrolled in Plaintiff Districts’ institutions without relief, Plaintiffs
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 1   would be required, absent an injunction, to consider re-directing funds from other grants or
 2   programs (such as the SEA Program, discussed supra at 8-10) to cover the costs. These
 3   alternative sources, however, would not provide enough funds to bridge the gap caused by DoE’s
 4   HEERF eligibility requirements, and would decrease the amount of funding available to Plaintiffs
 5   for educational programs and services overall.
 6           135.      DoE’s eligibility restrictions would also increase the risk of student dis-enrollment
 7   that Plaintiffs face as a result of the COVID-19 pandemic. And dis-enrollment has both short and
 8   long term deleterious effects. The immediate impact of dis-enrollment would be felt in
 9   allocations of funds to community college districts for categorical programs, which total hundreds
10   of millions of dollars and are apportioned based solely upon fulltime equivalent attendance
11   (FTE). General apportionment funding is based upon a recently-enacted funding formula that
12   includes FTE and other metrics of success. Dis-enrollments would adversely impact college
13   district revenues under this formula by decreasing three-year average attendance figures and
14   lowering college success metrics which are weighted toward vulnerable student populations who
15   are most likely in need of the CARES Act emergency relief to stay enrolled. Student drop-outs
16   also affect the diversity of the student population, the robustness and quality of classroom
17   participation, and the overall academic climate.
18           136.      Because Plaintiff Districts’ budgets are determined, in large part, by the number of
19   students enrolled, decreases in enrollment have a significant effect on the types of academic
20   courses Plaintiffs are able to provide, the staff they are able to hire, and the educational programs
21   and services they are able to offer. It also affects the level of financial assistance Plaintiff
22   Districts are able to provide students in the future.
23           137.      Before the April 21 Guidances, the four colleges in Plaintiff LRCCD, Clovis,
24   Reedley, and Fresno City Colleges in Plaintiff SCCCD, and Foothill College in FDCCD executed
25   the required Certifications agreeing to comply with all terms and conditions of funding, in
26   reliance on the plain text of the CARES Act, the representations made in DoE’s April 9 letter, and
27   the language of the Certifications. These colleges signed the Certifications with the intention and
28   plan of using HEERF Assistance to be available across their entire student population, without
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                    First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)
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 1   regard to Title IV’s eligibility requirements. None of these colleges had any knowledge that they
 2   would be required to exclude HEERF Assistance from non-Title IV eligible students when they
 3   executed the Certifications.
 4             138.      If DoE’s eligibility requirements do not remain enjoined, all of the Plaintiff
 5   Districts would risk prospective penalties and liabilities if they were to continue implementing
 6   their HEERF Assistance distribution plans. The Certifications that all educational institutions
 7   were required to sign as a condition of receiving CARES Act funding incorporate federal
 8   regulations concerning suspension and debarment, among other legal authorities. These
 9   regulations threaten the recipient with loss of not just DoE funding, but all federal funding, if they
10   are found to have willfully failed to comply with the terms of the Certifications. 2 C.F.R.
11   § 180.800. Thus, Plaintiff Districts, if subject to the eligibility requirements, would be faced with
12   an impossible choice: deny thousands of students needed assistance in order to comply with
13   eligibility requirements (requirements that were imposed after some of their colleges signed the
14   Certifications), or risk their federal funding in its entirety.
15                                           FIRST CLAIM FOR RELIEF
16                       VIOLATION OF SEPARATION OF POWERS PRINCIPLES
17             139.      Plaintiffs incorporate the allegations of the preceding paragraphs by reference.
18             140.      Article I, Section I of the U.S. Constitution enumerates that “[a]ll legislative
19   Powers here granted shall be vested in [the] Congress.”
20             141.      Article I, Section VIII of the U.S. Constitution vests exclusively in Congress the
21   spending power to “provide for . . . the general Welfare of the United States.”
22             142.      The executive branch’s authority to act “must stem either from an act of Congress
23   or from the Constitution itself.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 585
24   (1952).
25             143.      By imposing eligibility requirements on HEERF Assistance despite Congress
26   delegating no authority for Defendants to impose such restrictions on these funds, Defendants
27   have violated constitutional separation of powers principles. “Absent congressional
28   authorization, the Administration may not redistribute or withhold properly appropriated funds in
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 1   order to effectuate its own policy goals.” See City & Cty. of San Francisco v. Trump, 897 F.3d
 2   1225, 1235 (9th Cir. 2018). Nor may it impose conditions on funds appropriated by Congress
 3   without authorization by Congress. See id. at 1233-34.
 4          144.      For the reasons stated herein, Plaintiffs are entitled to: (a) a declaration that the
 5   Title IV and § 1611 eligibility requirements set forth in DoE’s HEERF Assistance Guidances and
 6   IFR are unconstitutional, and thus, should be set aside under 28 U.S.C. § 2201; and (b) a
 7   permanent injunction prohibiting the imposition and enforcement of those eligibility
 8   requirements. Additionally, the Plaintiff Districts are entitled to a writ of mandate under 28
 9   U.S.C. § 1361 to compel Defendants to issue HEERF Assistance funds to the Plaintiff Districts
10   without such funds being subject to the eligibility requirements set forth in the HEERF Assistance
11   Guidances and IFR.
12                                      SECOND CLAIM FOR RELIEF
13                                                ULTRA VIRES
14          145.      Plaintiffs incorporate the allegations of the preceding paragraphs by reference.
15          146.      An agency acts ultra vires when it exceeds its statutory authority conferred by
16   Congress.
17          147.      There is no provision of the CARES Act that imposes eligibility requirements on
18   the students who may receive HEERF Assistance. Further, Congress has not delegated to
19   Defendants the authority to impose such eligibility requirements.
20          148.      No provision in the CARES Act imposes Title IV’s or § 1611’s limitations on
21   HEERF Assistance. Moreover, Congress did explicitly limit eligibility for other forms of
22   assistance in the CARES Act, while not doing the same for HEERF Assistance.
23          149.      The CARES Act requires Defendants to issue HEERF Assistance funds to Plaintiff
24   Districts based on a funding formula and without conditioning funding on Plaintiffs’ agreement to
25   impose Title IV or § 1611 eligibility requirements. Indeed, the formula described in subsection
26   (a) of § 18004 of the CARES Act encompasses those “students” “who were not Federal Pell
27   Grant recipients,” therefore including students who are not eligible to receive financial aid under
28   Title IV or eligible to receive federal public benefits under § 1611. Subsection (c) of § 18004
                                                          42
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 1   then authorizes institutions to use HEERF Assistance to cover the costs of instruction associated
 2   with the coronavirus and mandates that institutions “shall use no less than 50 percent” of the
 3   funds “for emergency financial aid grants to students” for eligible expenses related to the
 4   coronavirus.
 5          150.      DoE’s exclusion of students who are ineligible under Title IV or § 1611 from
 6   receiving the emergency assistance provided under subsection (c) would give two different
 7   meanings to the term “students” found in subsections (a) and (c), leading to illogical and
 8   unintended results. See Los Angeles, 941 F.3d at 941 (“Under the normal rule of statutory
 9   construction, we presume that identical words used in different parts of the same act are intended
10   to have the same meaning.”) (internal quotation marks omitted).
11          151.      Section 1611’s general restrictions on the receipt of federal public benefits also do
12   not apply to the specific one-time emergency funding disbursement in the CARES Act. The
13   formula’s inclusion of students, irrespective of § 1611’s restrictions, is strong evidence that
14   Congress intended that § 1611’s restrictions not apply to HEERF Assistance. Section 1611’s
15   objectives to “remove the incentive for illegal immigration provided by the availability of public
16   benefits,” 8 U.S.C. § 1601(6) and “limit[] lifetime welfare benefits,” H.R. Rep. No. 104-651 at 3
17   (1996), is not furthered by its application to HEERF Assistance. HEERF Assistance is also not a
18   federal public benefit under § 1611, which is particularly evident from a review of the Institution
19   Assistance, because § 1611 does not encompass “block grants” or funding sources that are
20   “generally targeted to communities.” 63 Fed. Reg. 41,658, 41,659 (Aug. 4, 1998).
21          152.      For the reasons stated herein, Plaintiffs are entitled to: (a) a declaration that the
22   Title IV and § 1611 eligibility requirements set forth in DOE’s HEERF Assistance Guidances and
23   IFR are ultra vires under the CARES Act, and thus, should be set aside under 28 U.S.C. § 2201;
24   and (b) a permanent injunction prohibiting the imposition and enforcement of those eligibility
25   requirements. Additionally, the Plaintiff Districts are entitled to a writ of mandate under 28
26   U.S.C. § 1361 to compel Defendants to issue HEERF Assistance funds to the Plaintiff Districts
27   without such funds being subject to the eligibility requirements set forth in the HEERF Assistance
28   Guidances and IFR.
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 1                                         THIRD CLAIM FOR RELIEF
 2                                              SPENDING CLAUSE
 3           153.       Plaintiffs incorporate the allegations of the preceding paragraphs by reference.
 4           154.       The Constitution affords the spending power to Congress. U.S. Const., art. I, § 8,
 5   cl. 1. Congress’s spending power is not unlimited. When “Congress desires to condition the
 6   States’ receipt of federal funds, it ‘must do so unambiguously . . ., enabl[ing] the States to
 7   exercise their choice knowingly, cognizant of the consequences of their participation,” and by
 8   placing conditions that are related ‘“to the federal interest in particular national projects or
 9   programs.”’ South Dakota v. Dole, 483 U.S. 203, 207 (1987) (internal citations omitted, brackets
10   in original).
11           155.       To the extent that Congress delegated its authority to DoE to impose its own
12   eligibility conditions on HEERF Assistance (which it has not), the eligibility requirements set
13   forth in the DoE’s HEERF Assistance Guidances and IFR violate the Spending Clause of the U.S.
14   Constitution.
15           156.       The eligibility requirements set in DoE’s HEERF Assistance Guidances and the
16   IFR violate the relatedness requirement under the Spending Clause because they are contrary to
17   Congress’s intent in the CARES Act to confer maximum flexibility on higher education
18   institutions to provide financial assistance in the manner that best serves each of their respective
19   student populations during this public health crisis.
20           157.       The eligibility requirements set forth in DoE’s HEERF Assistance Guidances and
21   the IFR, and the required Certifications, violate the unambiguous requirement under the Spending
22   Clause for three reasons. First, Congress has not “unambiguously” imposed the eligibility
23   requirements. Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17 (1981). Second,
24   DoE’s conflicting interpretations fail to provide the Districts with the requisite notice enabling
25   them to “knowingly decide” how to use HEERF Assistance funds. Id. at 24. Third, as to at least
26   eight colleges in Plaintiff Districts, Defendants have surprised them with “post acceptance . . .
27   conditions” by imposing the Title IV eligibility requirements after those colleges executed the
28   required Certifications. Id. at 25.
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 1          158.      For the reasons stated herein, Plaintiffs are entitled to: (a) a declaration that the
 2   Title IV and § 1611 eligibility requirements set forth in DOE’s HEERF Assistance Guidances and
 3   IFR violate the Spending Clause, and thus, should be set aside under 28 U.S.C. § 2201; and (b) a
 4   permanent injunction prohibiting the imposition and enforcement of those eligibility
 5   requirements. Additionally, the Plaintiff Districts are entitled to a writ of mandate under 28
 6   U.S.C. § 1361 to compel Defendants to issue HEERF Assistance funds to the Plaintiff Districts
 7   without such funds being subject to the eligibility requirements set forth in the HEERF Assistance
 8   Guidances and IFR.
 9                                      FOURTH CLAIM FOR RELIEF
10                      VIOLATION OF ADMINISTRATIVE PROCEDURE ACT
11                     (Constitutional Violations and Excess of Statutory Authority)
12          159.      Plaintiffs incorporate the allegations of the preceding paragraphs by reference.
13          160.      Defendant DoE is an “agency” under the APA, 5 U.S.C. § 551(1), and the HEERF
14   Assistance Guidances, the IFR, and the imposition of HEERF eligibility requirements set forth
15   therein are “agency action[s]” under the APA, id. § 551(13).
16          161.      The imposition of the eligibility requirements in the HEERF Assistance Guidances
17   and the IFR constitute “[a]gency action[s] made reviewable by statute and final agency action for
18   which there is no other adequate remedy in a court.” Id. § 704.
19          162.      The APA requires that a court “hold unlawful and set aside agency action,
20   findings, and conclusion found to be . . . contrary to constitutional right, power, privilege, or
21   immunity,” or “in excess of statutory jurisdiction, authority, or limitation, or short of statutory
22   right.” Id. § 706(2)(B)-(C).
23          163.      As explained above, the eligibility requirements set in the HEERF Assistance
24   Guidances and IFR: (a) are unconstitutional because Defendants overstepped their powers by
25   imposing funding conditions without any authority to do so; (b) are in excess of statutory
26   authority under the CARES Act; and (c) violate the Spending Clause because they are unrelated
27   to the federal purpose of the CARES Act and/or fail the Clause’s unambiguous requirement.
28          164.      For the reasons stated herein, because Defendants acted in excess of their statutory
                                                          45
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 1   authority and unconstitutionally, Plaintiffs are entitled to: (a) a declaration that the Title IV and
 2   § 1611 eligibility requirements set forth in DOE’s HEERF Assistance Guidances and IFR are
 3   unlawful, and thus, should be set aside under 5 U.S.C. § 706; and (b) a permanent injunction
 4   prohibiting the imposition and enforcement of those eligibility requirements. Additionally, the
 5   Plaintiff Districts are entitled to a writ of mandamus under 28 U.S.C. § 1361 to compel
 6   Defendants to issue HEERF Assistance funds to the Plaintiff Districts without such funds being
 7   subject to the eligibility requirements set forth in the HEERF Assistance Guidances and IFR.
 8                                        FIFTH CAUSE OF ACTION
 9                      VIOLATION OF ADMINISTRATIVE PROCEDURE ACT
10                                         (Arbitrary and Capricious)
11          165.      Plaintiffs incorporate the allegations of the preceding paragraphs by reference.
12          166.      Defendant DoE is an “agency” under the APA, 5 U.S.C. § 551(1), and the HEERF
13   Assistance Guidances, the IFR, and the imposition of HEERF eligibility requirements set forth
14   therein are “agency action[s]” under the APA, id. § 551(13).
15          167.      The imposition of eligibility requirements in the HEERF Assistance Guidances
16   and the IFR constitute “[a]gency action[s] made reviewable by statute and final agency action for
17   which there is no other adequate remedy in a court.” Id. § 704.
18          168.      The APA requires that a court “hold unlawful and set aside agency action,
19   findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or
20   otherwise not in accordance with law.” Id. § 706(2)(A).
21          169.      The eligibility requirements set forth in the HEERF Assistance Guidances are
22   arbitrary and capricious and an abuse of discretion. As discussed supra, Defendants have acted in
23   an arbitrary and capricious manner by relying on factors that Congress did not intend, failing to
24   consider important aspects of the problem, and failing to provide an explanation for the April 21
25   HEERF Assistance Guidances that is consistent with the evidence that is before the agency. See
26   Motor Vehicle Mfrs. Ass’n of the U.S. v. State Farm. Mut. Auto Ins. Co., 463 U.S. 29, 43 (1983).
27          170.      Defendants have engaged in “[u]nexplained inconsistency” in first stating that
28   HEERF Assistance is available to all students, to only change their view without showing any
                                                          46
                   First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)
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 1   awareness of its changed position. Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs.,
 2   545 U.S. 967, 981 (2005).
 3          171.      The IFR is arbitrary and capricious because it is premised on speculative claims of
 4   fraud and an unsupported assessment of burden on higher education institutions that is contrary to
 5   the evidence before the agency. See State Farm., 463 U.S. at 43 (“[T]he agency must examine
 6   the relevant data and articulate a satisfactory explanation for its action.”); Nat’l Lifetime Ass’n v.
 7   FCC, 921 F.3d 1102, 1115 (D.C. Cir. 2019) (agency action premised on “speculative”
 8   conclusions is arbitrary and capricious).
 9          172.      The cost-benefit analysis in the IFR is arbitrary and capricious for this reason and
10   because it is predicated on flawed assumptions, including an incorrect baseline in which it fails to
11   consider the costs of imposing the eligibility requirements compared to not imposing the
12   eligibility requirements. See Nat’l Ass’n of Home Builders, 682 F.3d at 1039-40.
13          173.      The IFR is also arbitrary and capricious because it fails to consider the harms of
14   the eligibility requirements, both monetary and non-monetary, to: (a) students not eligible under
15   Title IV or § 1611; (b) higher education institutions’ academic missions of equity and diversity;
16   and (c) national, state, and local economies due to the reduction in productivity that would likely
17   follow as a result of the eligibility restrictions’ impact on college graduation rates. See, e.g., State
18   Farm, 463 U.S. at 43; E. Bay Sanctuary Covenant v. Barr, 964 F.3d 832, 854 (9th Cir. 2020).
19          174.      For the reasons stated herein, Plaintiffs are entitled to: (a) a declaration that the
20   Title IV and § 1611 eligibility requirements set forth in DOE’s HEERF Assistance Guidances and
21   IFR are unlawful, and thus, should be set aside under 5 U.S.C. § 706; and (b) a permanent
22   injunction prohibiting the imposition and enforcement of those eligibility requirements.
23   Additionally, the Plaintiff Districts are entitled to a writ of mandamus under 28 U.S.C. § 1361 to
24   compel Defendants to issue HEERF Assistance funds to the Plaintiff Districts without such funds
25   being subject to the eligibility requirements set forth in the HEERF Assistance Guidances and
26   IFR.
27   ///
28   ///
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                   First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)
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 1                                        SIXTH CAUSE OF ACTION
 2                      VIOLATION OF ADMINISTRATIVE PROCEDURE ACT
 3      (Arbitrary and Capricious and Without Observance of Procedure Required by Law –
 4                                   Failure to Consider Public Comments)
 5          175.      Plaintiffs incorporate the allegations of the preceding paragraphs by reference.
 6          176.      Defendant DoE is an “agency” under the APA, 5 U.S.C. § 551(1), and the HEERF
 7   Assistance Guidances, the IFR, and the imposition of HEERF eligibility requirements set forth
 8   therein are “agency action[s]” under the APA, id. § 551(13).
 9          177.      The imposition of eligibility requirements in the HEERF Assistance Guidances
10   and the IFR constitute “[a]gency action[s] made reviewable by statute and final agency action for
11   which there is no other adequate remedy in a court.” Id. § 704.
12          178.      The APA requires that a court “hold unlawful and set aside agency action,
13   findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or
14   otherwise not in accordance with law.” Id. § 706(2)(A). “The requirement that agency action not
15   be arbitrary or capricious includes a requirement that the agency adequately . . . respond to
16   ‘relevant’ and ‘significant’ public comments.” Public Citizen, Inc. v. FAA, 988 F.2d 186, 197
17   (D.C. Cir. 1993) (quoting Home Box Office, Inc. v. FCC, 567 F.2d 9, 35 & n.58 (D.C. Cir. 1977)).
18          179.      The APA also requires that a court set aside agency actions that are done “without
19   observance of procedure required by law.” 5 U.S.C. § 706(2)(D). Even if an agency possesses
20   “good cause” to promulgate an interim final rule that is effective before the consideration of
21   public comments, the agency is not excused from ultimately completing the rulemaking process
22   before the rule is “chiseled into bureaucratic stone.” Am. Fed. of Gov’t Employees, AFL-CIO v.
23   Block, 655 F.2d 1153, 1157 (D.C. Cir. 1981). “[I]t is crucial that the comprehensive permanent
24   regulations which follow emerge as a result of the promulgation of the congressionally-mandated
25   policy of affording public participation that is embodied in [the APA].” Id. at 1158.
26          180.      The DoE requested that the public comment on the IFR. There were
27   approximately 4,150 public comments that were submitted in response to the IFR, which
28   overwhelming opposed the IFR. The agency has shown no consideration of any of these public
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 1   comments.
 2          181.      The deadline for submission of the public comments was July 17, 2020. Although
 3   over three and a half months have passed since the deadline, the agency has taken no action to
 4   consider the validity of the IFR in light of the public comments.
 5          182.      For the reasons stated herein, Plaintiffs are entitled to: (a) a declaration that the
 6   Title IV and § 1611 eligibility requirements set forth in the IFR, which have been imposed
 7   without consideration of any of the public comments that were submitted in response to the IFR’s
 8   solicitation of those comments, are unlawful, and thus, should be set aside under 5 U.S.C. § 706;
 9   and (b) a permanent injunction prohibiting the imposition and enforcement of those eligibility
10   requirements. Additionally, the Plaintiff Districts are entitled to a writ of mandamus under 28
11   U.S.C. § 1361 to compel Defendants to issue HEERF Assistance funds to the Plaintiff Districts
12   without such funds being subject to the eligibility requirements set forth in the IFR.
13                                           PRAYER FOR RELIEF
14          WHEREFORE, Plaintiffs respectfully request that this Court enter judgment in their
15   favor, and grant the following relief:
16          1.        Issue a declaration that the Title IV and § 1611 eligibility requirements set forth in
17   DOE’s HEERF Assistance Guidances and IFR are unlawful and/or unconstitutional because they:
18   (a) violate the separation of powers; (b) exceed congressional authority conferred to the executive
19   branch and is ultra vires; (c) violate the Spending Clause; and (d) violate the APA;
20          2.        Set aside the Title IV and § 1611 eligibility requirements set forth in the HEERF
21   Assistance Guidances and IFR under 28 U.S.C. § 2201 and 5 U.S.C. § 706;
22          3.        Permanently enjoin Defendants from imposing and enforcing the Title IV and
23   § 1611 eligibility requirements set forth in the HEERF Assistance Guidances and IFR, or
24   otherwise restricting eligibility for HEERF Assistance to only those who are eligible under Title
25   IV of the Higher Education Act of 1965 or § 1611;
26          4.        Permanently enjoin Defendants from penalizing Plaintiff Districts for distributing
27   assistance to students who are not eligible under Title IV of the Higher Education Act of 1965 or
28   § 1611;
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                   First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)
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 1          5.      Issue a writ of mandate compelling Defendants to issue the Plaintiff Districts’
 2   HEERF Assistance funds without such funds being subject to the Title IV or § 1611 eligibility
 3   requirements set forth in the HEERF Assistance Guidances or IFR; and
 4          6.      Grant such other relief as the Court may deem just and proper.
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                 First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)
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 1   Dated: November 6, 2020                                  Respectfully submitted,

 2                                                            XAVIER BECERRA
                                                              Attorney General of California
 3                                                            CHERYL FEINER
                                                              MICHAEL NEWMAN
 4                                                            Senior Assistant Attorneys General
                                                              CHRISTINE CHUANG
 5                                                            Supervising Deputy Attorney General
                                                              JULIA HARUMI MASS
 6                                                            JASLEEN SINGH
                                                              SHUBHRA SHIVPURI
 7                                                            JOSHUA SONDHEIMER

 8                                                            /s/ Lee I. Sherman

 9                                                            LEE I. SHERMAN
                                                              Deputy Attorneys General
10                                                            Attorneys for Plaintiffs Eloy Ortiz Oakley
                                                              and Board of Governors of the California
11                                                            Community Colleges

12                                                           /s/ JP Sherry
     /s/ John Shupe
13                                                           JP SHERRY
     JOHN SHUPE
14   Lynch and Shupe, LLP                                    General Counsel
     Attorney for Plaintiff Foothill-De Anza                 Attorney for Plaintiff Los Rios
15   Community College District                              Community College District

16   /s/ Jeffrey M. Prieto                                   /s/ Matthew T. Besmer
17   JEFFREY M. PRIETO                                       MATTHEW T. BESMER
18   General Counsel                                         General Counsel
     Attorney for Plaintiff Los Angeles                      Attorney for Plaintiff State Center
19   Community College District                              Community College District

20
     /s/ Ljubisa Kostic
21
     LJUBISA KOSTIC
22   Director, Legal Services & EEO
     Attorney for Plaintiff San Diego
23   Community College District

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 1                                  ATTESTATION OF SIGNATURES
 2          I, Lee I. Sherman, hereby attest, pursuant to Local Civil Rule 5-1(i)(3) of the Northern
 3   District of California that concurrence in the filing of this document has been obtained from each
 4   signatory hereto.
 5
                                                                      /s/ Lee I. Sherman
 6
                                                                      LEE I. SHERMAN
 7                                                                    Deputy Attorney General
                                                                      Attorney for Plaintiffs Eloy Ortiz
 8                                                                    Oakley and Board of Governors of
                                                                      the California Community Colleges
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                 First Am. Compl. for Declaratory, Injunctive, and Mandamus Relief (20-cv-3215-YGR)


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