Complaint, State of Michigan et al. v. DeVos, No. 3:20-cv-04478 (N.D. Cal.), Doc. 1 (July 7, 2020)
Summary
Complaint for Declaratory and Injunctive Relief, Civil Case 3:20-cv-04478-SK, Document 1, filed 07/07/20, in the U.S. District Court for the Northern District of California. The plaintiffs are the State of Michigan, the State of California, the District of Columbia, the State of Maine, the State of New Mexico, and the State of Wisconsin. They sue Elisabeth D. DeVos, the United States Secretary of Education, and the United States Department of Education. The introduction states that the plaintiffs challenge a rule that they allege unlawfully and erroneously interprets the CARES Act, and says the CARES Act authorizes the allocation of $30.75 billion for elementary and secondary schools and higher education. Garrett M. Lindsey is listed as counsel for plaintiff State of California.
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“Complaint, State of Michigan et al. v. DeVos, No. 3:20-cv-04478 (N.D. Cal.), Doc. 1 (July 7, 2020).”
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Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 1 of 69
1 XAVIER BECERRA
Attorney General of California
2 MICHAEL NEWMAN
Senior Assistant Attorney General
3 SARAH E. BELTON
Supervising Deputy Attorney General
4 REBEKAH A. FRETZ
JAMES F. ZAHRADKA II
5 GARRETT M. LINDSEY (SBN 293456)
Deputy Attorneys General
6 300 South Spring Street, Suite 1702
Los Angeles, CA 90013
7 Telephone: (213) 269-6402
E-mail: Garrett.Lindsey@doj.ca.gov
8 Attorneys for Plaintiff State of California
9 (List of other Plaintiffs’ counsel continued on next page)
10 IN THE UNITED STATES DISTRICT COURT
11 FOR THE NORTHERN DISTRICT OF CALIFORNIA
12
13
14
STATE OF MICHIGAN, STATE OF Civil Case No.
15 CALIFORNIA, DISTRICT OF
COLUMBIA, STATE OF MAINE, STATE
16 OF NEW MEXICO, and STATE OF
WISCONSIN, COMPLAINT FOR DECLARATORY
17 AND INJUNCTIVE RELIEF
Plaintiffs,
18
v.
19
20 ELISABETH D. DEVOS, in her official
capacity as the United States Secretary of
21 Education, and UNITED STATES
DEPARTMENT OF EDUCATION,
22
Defendants.
23
24
25
26
27
28
Complaint for Declaratory and Injunctive Relief
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1 DANA NESSEL HECTOR BALDERAS
Attorney General of Michigan Attorney General of New Mexico
2 FADWA A. HAMMOUD P. CHOLLA KHOURY
Solicitor General LISA GIANDOMENICO
3 TONI L. HARRIS Assistant Attorneys General
NEIL GIOVANATTI Consumer & Environmental Protection
4 Assistant Attorneys General Division
Michigan Department of Attorney General New Mexico Attorney General’s Office
5 P.O. Box 30758 201 Third Street NW, Suite 300
Lansing, MI 48909 Albuquerque, NM 87102
6 (517) 335-7603 (505) 717-3500
HammoudF1@michigan.gov ckhoury@nmag.gov
7 HarrisT19@michigan.gov lgiandomenico@nmag.gov
GiovanattiN@michigan.gov Attorneys for Plaintiff State of New Mexico
8 Attorneys for Plaintiff State of Michigan
9
10 KARL A. RACINE JOSHUA L. KAUL
Attorney General of the District of Columbia Attorney General of Wisconsin
11 KATHLEEN KONOPKA HANNAH S. JURSS
Deputy Attorney General, Public Advocacy Assistant Attorney General
12 Division Wisconsin Department of Justice
BRENDAN B. DOWNES Post Office Box 7857
13 NICOLE HILL Madison, WI 53707
Assistant Attorneys General, Public (608) 266-8101
14 Advocacy Division jursshs@doj.state.wi.us
Office of the Attorney General for the Attorneys for Plaintiff State of Wisconsin
15 District of Columbia
441 4th St., N.W. Suite 630S
16 Washington, DC 20001
(202) 724-6610
17 Kathleen.Konopka@dc.gov
Attorneys for Plaintiff District of Columbia
18
19 AARON M. FREY
Attorney General of Maine
20 SARAH A. FORSTER
Assistant Attorney General
21 6 State House Station
Augusta, ME 04333-0006
22 (207) 626-8866
sarah.forster@maine.gov
23 Attorneys for Plaintiff State of Maine
24
25
26
27
28
Complaint for Declaratory and Injunctive Relief
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1 INTRODUCTION
2 1. The State of Michigan, the State of California, the District of Columbia, the State of
3 Maine, the State of New Mexico, and the State of Wisconsin (collectively, the Plaintiffs, Plaintiff
4 States, or the States) bring this action to challenge a rule promulgated by Defendants Secretary
5 Elisabeth D. DeVos and the United States Department of Education (the Department)
6 (collectively, Defendants), unlawfully and erroneously interpreting the Coronavirus Aid, Relief,
7 and Economic Security Act (CARES Act), Public Law 116–136, 134 Stat. 281. The
8 Department’s interpretation will deprive low-income and at-risk students, their teachers, and the
9 public schools that serve them of critical resources to meet students’ educational and social-
10 emotional needs during and after pandemic-related school closures. The States will also be
11 harmed by the loss of these critical resources at a time of severe crisis.
12 2. The CARES Act was enacted on March 27, 2020, to address some of the financial
13 challenges faced by Americans as businesses closed, employees lost their jobs, and schools shut
14 down in an unprecedented effort to slow the spread of the virus. The statute authorizes the
15 allocation of $30.75 billion for elementary and secondary schools and higher education in
16 response to the COVID-19 pandemic, including assisting students to transition to distance
17 learning. The statute directs states to distribute CARES Act funds to local educational agencies
18 (LEAs) in proportion to their allocation under part A of Title I of the Elementary and Secondary
19 Education Act of 1965 (ESEA) in the previous fiscal year. Title I-A funds are allocated to LEAs
20 and schools based on the number of children who are economically disadvantaged. These funds
21 benefit many of the vulnerable students whom the States serve, including children with
22 disabilities, migrant children, English language learners, children in residential or day programs
23 for students in the foster care or juvenile justice systems, and homeless children.
24 3. Congress directed LEAs to use a portion of the funds they receive from the CARES
25 Act to provide equitable services to eligible private-school students and teachers in the same
26 manner as provided under Section 1117 of the ESEA. Under Section 1117, LEAs calculate the
27 amount of Title I-A funds reserved for equitable services based on the number of low-income
28 students who attend private schools as a percentage of the total number of low-income students in
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1 public and private schools combined. Once the money is apportioned, the LEA then provides
2 equitable services to private-school students who are academically at-risk.
3 4. Section 1117 is clear that LEAs are to use Title I-A funds to provide services to at-
4 risk private-school students, and neither Section 1117 nor the CARES Act requires the funds at
5 issue to be used to provide equitable services to all students enrolled in private schools. Yet,
6 despite these clear mandates and contrary to the will of Congress, the Department grafted its own
7 allocation and eligibility rules on Congress’s directive.
8 5. The Department first issued its interpretation of how LEAs should apportion the
9 CARES Act moneys and which private-school students were eligible for equitable services on
10 April 30, 2020, through a guidance document (Guidance Document).1 The Guidance
11 Document—which was inconsistent with prior guidance issued by the Department—provided that
12 LEAs must apportion funds for equitable services using the total numbers of private and public-
13 school students rather than only low-income students. If every LEA receiving CARES Act funds
14 in the Plaintiff States were required to apportion CARES Act funds in this manner, millions of
15 dollars in CARES Act funding would be diverted from their public schools to the private schools.
16 In addition, the Guidance Document directed LEAs to provide equitable services to all private-
17 school students, regardless of whether the private-school students were low income, were
18 academically at-risk of failing, or resided in Title I school attendance areas. Neither of these
19 mandates is consistent with Section 1117.
20 6. After widespread pushback regarding the Department’s incorrect and unlawful
21 guidance, the Department doubled-down on its erroneous interpretation of the CARES Act with
22 the publication of an interim final rule entitled Providing Equitable Services to Students and
23 Teachers in Non-public Schools, 85 Fed. Reg. 39,479 (July 1, 2020) (the Equitable Services Rule
24 or Rule).2 The Rule was published as an interim final rule, which is effective upon publication.
25
26 1
The Guidance Document is attached hereto as Exhibit A. The Department took down its
original Guidance Document from its website and now displays an updated version of the
27 Guidance Document, which is available at https://oese.ed.gov/files/2020/06/Providing-Equitable-
Services-under-the-CARES-Act-Programs-Update-6-25-2020.pdf.
28 2
The Rule is attached hereto as Exhibit B.
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1 7. Contrary to the Act, the Department’s Rule requires LEAs to make an untenable
2 choice about how to apportion the CARES Act funds for private-school students, a choice
3 unsupported by the relevant statutes: (1) follow the same interpretation contained in the Guidance
4 Document by apportioning funds for equitable services based on the number of all private school
5 children enrolled, rather than low-income private school children as required by Section 1117; or
6 (2) apportion funds for equitable services based on the number of low-income non-public school
7 children, as required under Section 1117, but then incur strict, poison-pill requirements found
8 nowhere in the CARES Act on how the public-school share of the funds can be used. Under
9 either option, all private-school students would still be eligible to receive equitable services,
10 which negates the eligibility requirements for services in Section 1117.
11 8. The first poison-pill “option” for LEAs prohibits them from using the public-school
12 share of the funds for any non-Title I schools. As a result, depending on the district, numerous
13 schools—which, despite not being designated as Title I schools, serve many low-income and at-
14 risk students—are excluded from receiving any funds. This restriction cannot square with the
15 flexibility Congress provided to LEAs to use the funds for all schools in their districts, not only
16 Title I schools. The second requirement cautions the LEAs from using the funds in a way that
17 would result in other federal funds “supplant[ing],” rather than “supplement[ing],” traditional
18 school funding from state and local sources. In effect, this second requirement prohibits many
19 LEAs from using CARES Act funds for existing expenditures, which is nonsensical since filling
20 the gap created by reduced state and local funding is a key purpose of the CARES Act funding.
21 These two poison pill restrictions on the use of the CARES Act funds penalize LEAs for
22 following the proportional share calculation in Section 1117 (and required by the CARES Act),
23 and push LEAs to apportion funds in accordance with the Department’s Guidance Document—
24 forcing LEAs to grant a higher proportion of funds to private schools, contrary to the CARES
25 Act’s clear mandate. They also undermine the flexibility that Congress intended to grant LEAs
26 when it enacted a broad set of permitted uses for CARES Act funds, which expressly include
27 maintaining continuity of services and continuing to employ existing staff of the local educational
28 agency. See CARES Act §§ 18002(c)(1), 18003(d)(12).
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1 9. The Rule is thus inconsistent with and not in accordance with the law. The
2 discrepancy between the plain language of the CARES Act and the Department’s inaccurate
3 interpretations has led to widespread confusion for State Education Agencies (SEAs), LEAs, and
4 private schools across the Nation. The Rule strips funds Congress specifically directed to public
5 schools to support their response to the COVID-19 pandemic and requires that those funds be
6 reallocated, including to affluent private schools, with consideration neither of the private
7 schools’ needs or available resources nor the harms these reallocations cause to public schools.
8 While Congress intended to provide some assistance to private-school students and teachers
9 through the inclusion of equitable services, it intended that assistance go to vulnerable students
10 and used the Title I-A formula and equitable services requirement applicable to those funds to
11 that end.
12 10. The CARES Act does not expressly delegate to the Department the authority to
13 promulgate administrative rules that interpret, let alone completely re-write, the Act’s allocation
14 requirements for moneys provided to private-school students. Nor does the Department’s general
15 rulemaking authority, see 20 U.S.C. § 1221e-3, allow it to impose these restrictions.
16 11. Because Congress unambiguously directed the allocation of money in accordance
17 with Title I-A, Congress neither explicitly nor implicitly left any gaps in the statute that might
18 justify rulemaking by the Department. The Department’s guidance and the Rule are accordingly
19 entitled to no deference.
20 12. The Rule is arbitrary and capricious in several respects.
21 13. First, as discussed above, the Department failed to articulate how its position
22 comports with the plain text of section 18005 of the CARES Act. Thus, it must be set aside as
23 based on an incorrect legal premise. See Safe Air for Everyone v. U.S. EPA, 488 F.3d 1088, 1101
24 (9th Cir. 2007).
25 14. Second, the Department failed to adequately explain—consistent with the evidence
26 before it—why it was reversing its own guidance regarding how equitable services under Section
27 1117 should be provided. See, e.g., Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.
28 Auto. Ins. Co., 463 U.S. 29, 52 (1983) (requiring agencies to “explain the evidence which is
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1 available, and . . . offer a rational connection between the facts found and the choice made . . .
2 [including] justification for rescinding the regulation”); see also Dep’t of Homeland Sec. v.
3 Regents of the Univ. of Cal., No. 18-587, 2020 WL 3271746, at *14 (U.S. June 18, 2020)
4 (requiring “reasoned analysis to support” rescission of prior policy) (quoting State Farm, 463
5 U.S. at 42).
6 15. Third, the Department ignored important aspects of the problem, see State Farm, 463
7 U.S. at 43, including, among others, the harms to students, States, and LEAs discussed herein.
8 For example, the Department failed to consider that communities with Title I-eligible schools are
9 likely to experience a greater concentration of difficulties relating to COVID-19, and that
10 therefore Congress intended the flexible uses of the CARES Act funds to be concentrated in these
11 communities’ schools.
12 16. Fourth, the Department took into account factors Congress did not intend it to
13 consider. See id. For example, the Department’s prioritization of support for all private-school
14 students, even those not Title I-A eligible, appears to be based on the erroneous premise that
15 Congress intended to direct these funds to affluent, economically secure private-school students
16 on an equal basis as public schools that educate large populations of at-risk and low-income
17 students. Congress unambiguously expressed clear intent to the contrary by using the Title I-A
18 allocation method, which tracks low-income students.
19 17. Fifth, the Department failed to take into account the reliance interests that its former
20 position generated. The States and LEAs have relied on the Department’s prior interpretations,
21 and there is no indication that the Department took this into account when making its decision.
22 “When an agency changes course . . . it must be cognizant that longstanding policies may have
23 engendered serious reliance interests that must be taken into account. It would be arbitrary and
24 capricious to ignore such matters.” Regents, 2020 WL 3271746, at *14 (citations and punctuation
25 omitted).
26 18. Sixth, the Department’s ever-changing position has generated an “[u]nexplained
27 inconsistency,” and the Department has not shown any awareness of its changed position. Nat’l
28 Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005).
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1 19. In addition, the Department flouted the procedural steps required under the
2 Administrative Procedure Act (APA) for the promulgation of the Rule, as the Department did not
3 have good cause for issuing the Rule as an interim final rule. 5 U.S.C. § 553(b)(B); see, e.g.,
4 California v. Azar, 911 F.3d 558, 576 (9th Cir. 2018) (“[A]n agency’s desire to eliminate more
5 quickly legal and regulatory uncertainty is not by itself good cause.”).
6 20. The Rule also violates core separation of powers principles in the Constitution.
7 “[W]here previously appropriated money is available for an agency to perform a statutorily
8 mandated activity,” separation of powers principles and the Spending Clause prevent agencies
9 from “ignor[ing] statutory mandates or prohibitions.” In re Aiken County, 725 F.3d 255, 260
10 (D.C. Cir. 2013); see also City & Cty. of San Francisco v. Trump, 897 F.3d 1225, 1232 (9th Cir.
11 2018) (agencies are without “[the] unilateral authority” to “thwart congressional will by canceling
12 appropriations passed by Congress”) (internal quotation marks and citations omitted). Congress
13 intended to deliver LEAs “need[ed] funding flexibility due to the disruption in the academic year
14 from COVID-19.” 166 Cong. Rec. H1856 (Mar. 27, 2020) (statement of Rep. Underwood).
15 Congress intended that LEAs have this funding to “help alleviate the challenges educators,
16 students and families are struggling with in light of school closures” particularly those “students
17 with disabilities, English language learners, and students experiencing homeless.” 166 Cong.
18 Rec. E340 (Mar. 31, 2020) (statement of Rep. Jayapal).
19 21. Relatedly, the Rule violates the Spending Clause: (1) it is contrary to Congress’s
20 plainly expressed intent in the CARES Act; (2) Congress has not “unambiguously” imposed the
21 requirements of the Rule, South Dakota v. Dole, 483 U.S. 203, 207 (1987) (internal citations
22 omitted, brackets in original); and (3) it is an improper “post acceptance” restriction on the States’
23 and LEAs’ use of the funds, Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 25 (1981).
24 22. Further, the additional funding requirements on schools that the Department would
25 impose under one of the so-called “choices” provided in the Rule violates the plain language of
26 the CARES Act requiring that funds be allocated in the same manner as required in Section 1117
27 of the ESEA and specifying that funds could be used to maintain existing operations and retain
28 existing personnel. The Department’s allocation scheme will dilute the per-pupil amount
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1 available to all public schools by directing Title I-A funds to support private-school students not
2 eligible for equitable services.
3 23. To avert irreparable injury to the Plaintiff States and the students, teachers, and
4 schools within their states, the Plaintiff States bring this suit to declare unlawful and enjoin the
5 Department’s Guidance Document and the Rule.
6 JURISDICTION AND VENUE
7 24. This action arises under the APA, 5 U.S.C. §§ 553, 701-06, and the U.S. Constitution.
8 This Court has subject matter jurisdiction under 28 U.S.C. §§ 1331 and 1346.
9 25. This Court has the authority to issue declaratory relief, injunctive relief, and other
10 relief pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201-02, and the APA, 5 U.S.C. §§
11 702, 705-06.
12 26. This is a civil action in which Defendants are agencies of the United States or officers
13 of such an agency. Venue is proper in this Court because a substantial part of the events giving
14 rise to this action occurred in this district. See 28 U.S.C. § 1391(e)(1).
15 PLAINTIFFS
16 27. Plaintiff State of Michigan is a sovereign state of the United States of America. This
17 action is being brought on behalf of the State by Attorney General Dana Nessel pursuant to her
18 statutory authority. Mich. Comp. Laws § 14.28.
19 28. Plaintiff State of California is a sovereign state of the United States of America. This
20 action is being brought on behalf of the State by California Attorney General Xavier Becerra, the
21 State’s chief law officer, Cal. Const., art. V, § 13, who has the duty to see that the laws of the
22 State are uniformly and adequately enforced, and Governor Gavin Newsom, the State’s chief
23 executive officer, who is responsible for overseeing the operations of the State and ensuring that
24 its laws are faithfully executed, Cal. Const., art. V, § 1.
25 29. Plaintiff District of Columbia is a sovereign municipal corporation organized under
26 the Constitution of the United States. It is empowered to sue and be sued, and it is the local
27 government for the territory constituting the permanent seat of the federal government. The
28 District is represented by and through its chief legal officer, the Attorney General for the District
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1 of Columbia, Karl A. Racine. The Attorney General has general charge and conduct of all legal
2 business of the District and all suits initiated by and against the District and is responsible for
3 upholding the public interest. D.C. Code § 1-301.81.
4 30. Plaintiff State of Maine is a sovereign state of the United States of America. The
5 Attorney General of Maine, Aaron M. Frey, is a constitutional officer with the authority to
6 represent the State of Maine in all matters and serves as its chief legal officer with general charge,
7 supervision, and direction of the State’s legal business. Me. Const. art. IX, § 11; Me. Rev. Stat.,
8 tit. 5, §§ 191 et seq. The Attorney General’s powers and duties include acting on behalf of the
9 State and the people of Maine in the federal courts on matters of public interest. The Attorney
10 General has the authority to file suit to challenge action by the federal government that threatens
11 the public interest and welfare of Maine residents as a matter of constitutional, statutory, and
12 common-law authority.
13 31. Plaintiff State of New Mexico is a sovereign state of the United States of America.
14 New Mexico is represented by its Attorney General, Hector Balderas, who is authorized to assert
15 the state’s interests in state and federal courts.
16 32. Plaintiff State of Wisconsin is a sovereign state of the United States of America and
17 brings this action by and through its Attorney General, Joshua L. Kaul, who is the chief legal
18 officer of the State of Wisconsin and has the authority to file civil actions to protect Wisconsin’s
19 rights and interests. See Wis. Stat. § 165.25(1m). The Attorney General’s powers and duties
20 include appearing for and representing the State, on the governor’s request, “in any court or
21 before any officer, any cause or matter, civil or criminal, in which the state or the people of this
22 state may be interested.” Id.
23 33. In filing this action, Plaintiff States seek to redress harms to their interests as
24 recipients of CARES Act emergency relief funding. Plaintiff States are affected by the
25 Department’s interpretation of the CARES Act through the Rule and Guidance Document, are
26 directly injured by them, and the relief requested will redress their injuries.
27
28
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1 DEFENDANTS
2 34. Defendant Elisabeth D. DeVos is Secretary of the United States Department of
3 Education and is sued in her official capacity pursuant to 5 U.S.C. § 702. Her principal address is
4 400 Maryland Avenue, S.W., Washington, D.C. 20202.
5 35. Defendant the United States Department of Education is an executive agency of the
6 United States of America pursuant to 5 U.S.C. § 101, and a federal agency within the meaning of
7 28 U.S.C. § 2671. As such, it engages in agency action and is named as a defendant in this action
8 pursuant to 5 U.S.C. § 702. Its principal address is 400 Maryland Avenue, S.W., Washington,
9 D.C. 20202.
10 36. Secretary DeVos is responsible for carrying out the duties of the Department of
11 Education under the Constitution of the United States of America and relevant statutes, including
12 the CARES Act and the ESEA.
13 FACTUAL ALLEGATIONS
14 I. COVID-19 PANDEMIC
15 37. COVID-19 is a public health emergency that has caused and continues to have
16 devastating impacts on countless individuals, families, communities, businesses, and
17 governments. Our Nation’s educational agencies and school systems have had to respond
18 urgently to the crisis and take drastic measures to protect the health and safety of their students
19 and staff.
20 38. The Plaintiff States’ educational agencies and school districts have been forced to
21 transition to remote delivery of instruction, implement new health and safety guidelines, and meet
22 the novel and challenging needs of their students arising from the pandemic, including supports
23 for their vulnerable populations beyond the provision of core educational services. These efforts
24 include, but are not limited to, serving meals to qualifying students and families; providing
25 special education and related services to students with disabilities remotely; enabling English
26 learners and migrant students to access remote learning by providing accessible technology,
27 online instruction and translations; and offering computing devices and connectivity to low-
28 income students at no cost.
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1 39. Compounding the programmatic challenges in serving students during the pandemic
2 is the uncertainty and economic stress caused by COVID-19 on the Plaintiff States, their SEAs,
3 and their LEAs. Public education largely depends on state funding. State budgets have been hit
4 hard by dramatic reductions in revenues from state sales and income taxes caused by the COVID-
5 19 pandemic, as well as increased expenditures necessary for the public health response. This
6 revenue decline inevitably impacts the amount of state aid available to school districts. And yet,
7 school districts have incurred and continue to incur significant costs related to the pandemic,
8 including paying for deep-cleaning campuses, obtaining personal protective equipment for
9 employees, purchasing distance learning materials as well as new software and hardware, and
10 preparing and delivering meals to students and families.
11 II. THE CARES ACT
12 40. In late March 2020, the United States Congress acted to address the fiscal impact of
13 the COVID-19 outbreak. It passed legislation, signed by the President, including appropriations
14 to federal agencies with explicit direction for distributing the funding.
15 41. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Pub. L. No.
16 116–136, 134 Stat. 281, enacted on March 27, 2020, appropriated funds for K-12 and higher
17 education in response to the economic impact of the COVID-19 pandemic.
18 42. Specifically, Congress created the Education Stabilization Fund to help educational
19 entities across the country “prevent, prepare for, and respond to coronavirus,” and appropriated
20 $30.75 billion for the Fund. CARES Act § 18001.
21 43. Congress tasked the Department with allocating the moneys appropriated to the
22 Education Stabilization Fund through the CARES Act. The vast majority of the moneys in the
23 Education Stabilization Fund are divided into three separate funds, each with its own rules for
24 distribution and use: the Governor’s Emergency Education Relief Fund (GEER), the Elementary
25 and Secondary School Emergency Relief Fund (ESSER), and the Higher Education Emergency
26 Relief Fund. Id. §§ 18002-18004. The funds are allocated as follows: 9.8% for GEER; 43.9% for
27 ESSER; and 46.3% for the Higher Education Emergency Relief Fund. Id. §§ 18001(b)(1)-(3).
28
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1 44. According to the Department’s website, $2,953,230,000 was allocated for the GEER
2 Fund and $13,229,265,000 for the ESSER Fund.3
3 A. The Governor’s Emergency Education Relief (GEER) Fund
4 45. The CARES Act directs the Department to provide emergency grants from the GEER
5 Fund to state governors. CARES Act § 18002(a).
6 46. The Department must allocate the GEER Fund moneys to governors as follows: (1)
7 60% based on the “relative population of individuals aged 5 through 24” in each state, and (2)
8 40% based on the state’s “relative number of children counted under section 1124(c) of the
9 [ESEA].” Id. § 18002(b). Section 1124(c) of the ESEA describes the children to be counted for
10 purposes of distributing funds under Part A, Title I of the ESEA, commonly referred to as Title I-
11 A funds. Children to be counted in this section include children 5 to 17 who are “from families
12 below the poverty level,” “in institutions for neglected and delinquent children . . . or being
13 supported in foster homes with public funds,” and “from families above the poverty level” but
14 who receive payments under the Social Security Act, Title IV, Part A (Temporary Assistance for
15 Needy Families). 20 U.S.C. §§ 6333(c)(1)(A)-(C), (c)(4)(A).
16 47. Governors, along with SEAs, may use GEER funds for three purposes:
17 (1) To provide emergency support through grants to local educational agencies
that the State educational agency deems have been most significantly impacted by
18 coronavirus to support the ability of such local educational agencies to continue to
provide educational services to their students and to support the on-going
19 functionality of the local educational agency;
20 (2) To provide emergency support through grants to institutions of higher
education serving students within the State that the Governor determines have been
21 most significantly impacted by coronavirus to support the ability of such institutions
to continue to provide educational services and support the ongoing functionality of
22 the institution; and
23 (3) To provide support to any other institution of higher education, local
educational agency, or education-related entity within the State that the Governor
24 deems essential for carrying out emergency educational services to students for
authorized activities . . . the provision of child care and early childhood education,
25 social and emotional support, and the protection of education-related jobs.
26
3
U.S. Dep’t of Educ., Governor’s Emergency Education Relief Fund, State Allocation
27 Table, available at https://oese.ed.gov/files/2020/04/GEER-Fund-State-Allocations-Table.pdf;
U.S. Dep’t of Educ., Elementary and Secondary School Emergency Relief Fund, State Allocation
28 Table, available at https://oese.ed.gov/files/2020/04/ESSER-Fund-State-Allocations-Table.pdf.
11
Complaint for Declaratory and Injunctive Relief
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1 CARES Act §§ 18002(c)(1)-(3).
2 48. While they are directed per the above criteria to focus the GEER funds on the most
3 significantly impacted districts, governors may allocate moneys from the GEER Fund to any
4 LEA, regardless of whether the LEA or its public schools receive Title I-A funds. Moreover,
5 there are no federal restrictions on the use of funds by the LEAs and any other restrictions on the
6 use of funds is left to the discretion of each state. The CARES Act provides broad flexibility to
7 the LEAs to use the moneys “to provide educational services to their students and to support the
8 on-going functionality of the local educational agency.” Id. §§ 18002(c)(1), (3).
9 49. The Plaintiff States expect to receive the following amounts from the GEER Fund:4
10 a. Michigan: $89,432,673;
11 b. California: $355,227,235;
12 c. District of Columbia: $5,807,678;
13 d. Maine: $9,273,552;
14 e. New Mexico: $22,262,663; and
15 f. Wisconsin: $46,550,411.
16 B. Elementary and Secondary School Emergency Relief (ESSER) Fund
17 50. Through the CARES Act, Congress also directed the Department to provide
18 emergency grants from the ESSER Fund to SEAs. CARES Act § 18003(a).
19 51. The Department is required to allocate the ESSER Fund moneys to SEAs “in the
20 same proportion as each State received under [Title I-A] in the most recent fiscal year.” Id. §
21 18003(b). Allocation of Title I-A funds to States is governed by the formulas included in 20
22 U.S.C. §§ 6332-39, and is based primarily on the numbers of children from low-income families
23 and foster children in each state’s LEAs.
24 52. The CARES Act requires at least 90 percent of the moneys received by the SEAs
25 from the ESSER Fund to be sub-granted to LEAs within the state. Id. § 18003(c). Like the
26 Department’s allocation to the states, the SEAs are to sub-grant the funds to LEAs “in proportion
27
4
U.S. Dep’t of Educ., Governor’s Emergency Education Relief Fund, State Allocation
28 Table, available at https://oese.ed.gov/files/2020/04/GEER-Fund-State-Allocations-Table.pdf.
12
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1 to the amount of funds such local educational agencies and charter schools that are local
2 educational agencies received under [Title I-A] in the most recent fiscal year.” Id.
3 53. The Department’s May 8, 2020 guidance discussing the ESSER allocations and
4 LEAs’ eligibility acknowledged that LEAs are only eligible for the ESSER funding to the extent
5 they participate in the Title I-A program.5 In other words, moneys from the ESSER Fund are
6 designated, through the SEAs, for LEAs that receive Title I-A funds, which in turn support those
7 public schools with populations of economically-disadvantaged children in each state. LEAs that
8 do not receive Title I-A funds (generally, LEAs without significant numbers of low-income
9 students) are not eligible for the ESSER Funds.
10 54. LEAs may use the moneys from the ESSER Fund for twelve broad purposes, as
11 described in the CARES Act. See CARES Act § 18003(d). Like the GEER Fund, there are no
12 restrictions in the statutory language on which schools within the eligible LEAs may receive the
13 funds, regardless of whether the public school receives Title I-A funds. These funds can be used
14 for expressly broad purposes, including “[o]ther activities that are necessary to maintain the
15 operation of and continuity of services in [LEAs] and continuing to employ existing staff of the
16 [LEA],” i.e., to support any operation, service, or staff existing prior to the pandemic. Id. §
17 18003(d)(12).
18 55. For the SEAs to receive the ESSER funds from the Department, the Plaintiff States’
19 SEAs were required to complete and submit a Certification and Agreement form.6
20 56. Within the Certification and Agreement form, the Plaintiff SEAs are required to:
21 [A]cknowledge and agree that the failure to comply with all Assurances and
Certifications in this Agreement, all relevant provisions and requirements of the
22
CARES Act, Pub. L. No. 116-136 (March 27, 2020), or any other applicable law or
23 regulation may result in liability under the False Claims Act, 31 U.S.C. § 3729, et
seq.; OMB Guidelines to Agencies on Governmentwide Debarment and Suspension
24
25 5
U.S. Dep’t of Educ., Frequently Asked Questions about the Elementary and Secondary
School Emergency Relief Fund (ESSER), May 5, 2020, available at
26 https://oese.ed.gov/files/2020/05/ESSER-Fund-Frequently-Asked-Questions.pdf.
6
U.S. Dep’t of Educ., Certification and Agreement for Funding under the Education
27 Stabilization Fund Program Elementary and Secondary School Emergency Relief Fund (ESSER
Fund), CFDA Number 84.425D, April 24, 2020, available at
28 https://oese.ed.gov/files/2020/04/ESSERF-Certification-and-Agreement-2.pdf.
13
Complaint for Declaratory and Injunctive Relief
Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 16 of 69
1 (Nonprocurement) in 2 CFR part 180, as adopted and amended as regulations of the
Department in 2 CFR part 3485; and 18 USC § 1001, as appropriate.
2
Certification and Agreement at 1.
3
57. Within the specific assurances and certifications, the SEAs are required to ensure
4
that:
5
[] LEAs receiving ESSER funds will provide equitable services to students and
6 teachers in non-public schools as required under 18005 of Division B of the CARES
Act.
7
[] [A]n LEA receiving ESSER funds will provide equitable services to students and
8 teachers in non-public schools located within the LEA in the same manner as
provided under section 1117 of the ESEA, as determined through timely and
9 meaningful consultation with representatives of non-public schools.
10 Id. at 2.
11 58. Each of the Plaintiff States’ SEAs submitted a Certification and Agreement to the
12 Department to secure the ESSER Funds for their states.
13 59. The Department also requires SEAs to submit quarterly reporting regarding how the
14 SEA and the LEAs used the ESSER funds. Id. at 3; see also CARES Act § 15011(b)(2).
15 60. From the ESSER Fund, the Plaintiff States each received the following amounts:7
16 a. Michigan: $389,796,984;
17 b. California: $1,647,306,127;
18 c. District of Columbia: $42,006,354;
19 d. Maine: $43,793,319;
20 e. New Mexico: $108,574,786; and
21 f. Wisconsin: $174,777,774.
22 C. Equitable Services for Private-School Students and Teachers Required by
the CARES Act.
23
61. The CARES Act requires that LEAs that receive moneys from the GEER Fund and/or
24
ESSER Fund must allocate some of the moneys to provide “equitable services” to students and
25
teachers at private schools. CARES Act § 18005(a). Crucial to this action, the CARES Act
26
27 7
U.S. Dep’t of Educ., Elementary and Secondary School Emergency Relief Fund, State
Allocation Table, available at https://oese.ed.gov/files/2020/04/ESSER-Fund-State-Allocations-
28 Table.pdf.
14
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1 specifies that each LEA “shall provide equitable services in the same manner as provided under
2 Section 1117 of the ESEA of 1965 to students and teachers in non-public schools.” Id. (emphasis
3 added).
4 62. Section 1117 of the ESEA, 20 U.S.C. § 6320, requires LEAs to allocate a portion of
5 their Title I-A funds to provide equitable services to eligible students and teachers at private
6 schools. Section 1117 calculates the proportionate share of funds to be used for equitable
7 services “based on the number of children from low-income families who attend private schools”
8 and reside in the “participating school attendance areas” (i.e., the geographic area in which
9 children are normally served by a Title I-A school). 20 U.S.C. § 6320(a)(4)(A); see also 20
10 U.S.C. § 6313(a)(2) (defining “school attendance area”). Services are then provided to those
11 private-school students identified “as failing, or most at risk of failing, to meet State academic
12 standards.” 20 U.S.C. § 6320(a) (incorporating the definition of “eligible children” from 20
13 U.S.C. § 6315(c)). In other words, the LEAs must provide equitable services only to low-
14 achieving children who attend private schools and reside in a Title I-A school attendance area.
15 Id. §§ 6315(c), 6320(a).
16 63. The Department’s Title I-A guidance for providing equitable services under Section
17 1117 to private-school students—issued under the current administration less than a year ago—
18 confirms that equitable services should only be provided to at-risk students who reside in Title I
19 public school attendance areas. As stated in that document: “to be eligible for Title I services, a
20 private school child must reside in a participating Title I public school attendance area and must
21 be identified by the LEA as low achieving on the basis of multiple, educationally related,
22 objective criteria.”8
23 64. While services are based on low-achievement and residence in a Title I-A school
24 attendance area, the amount of money LEAs are required to set-aside under Section 1117 of the
25
26 8
U.S. Dep’t of Educ., Title I, Part A of the Elementary and Secondary Education Act of
1965, as amended by the Every Student Succeeds Act: Providing Equitable Services to Eligible
27 Private School Children, Teachers, and Families Updated Non-Regulatory Guidance, October 7,
2019, p. 30, available at https://www2.ed.gov/about/inits/ed/non-public-education/files/equitable-
28 services-guidance-100419.pdf.
15
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1 ESEA is based on the number of economically disadvantaged students attending private schools
2 who reside in the LEA’s attendance area. 20 U.S.C. § 6320(c).
3 65. Again, it has been the Department’s own position that, under Section 1117 of the
4 ESEA, funding for equitable services should be based on the number of children in private
5 schools who are economically disadvantaged or in foster care—the LEAs should “determine an
6 accurate count of children from low-income families who attend public and private schools and
7 reside in participating Title I public school attendance areas in order to allocate the proportional
8 share.”9
9 66. Notably, the CARES Act does not require that LEAs provide equitable services in the
10 same manner as Section 8501 of the ESEA, a general provision that measures equitable services
11 based on proportional total enrollments. 20 U.S.C. § 7881(b). Rather, the CARES Act
12 specifically references Section 1117. By referencing Section 1117, Congress explicitly and
13 clearly directed LEAs to provide equitable services only based on the number of low-income
14 private-school students, not all private-school students, as would have been required had the
15 CARES Act instead referenced Section 8501.
16 III. THE DEPARTMENT’S APRIL 30, 2020 GUIDANCE DOCUMENT
17 67. On April 30, 2020, the Department issued the Guidance Document, titled Providing
18 Equitable Services to Students and Teachers in Non-Public Schools Under the CARES Act
19 Programs. See Guidance Document, Ex. A.
20 68. The Guidance Document advises LEAs to (i) determine the allocation of funds for
21 equitable services based on all students enrolled in non-public schools, rather than only
22 economically disadvantaged students, and (ii) ignore Section 1117’s eligibility requirements for
23 private-school students to receive services, including residence in a Title I-A school attendance
24 area and low-achievement.
25
26
27
28 9
Id. at 19.
16
Complaint for Declaratory and Injunctive Relief
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1 A. Determining the Proportional Share of Funds to Be Reserved for Equitable
Services
2
69. In section 10 of the Guidance Document, the Department incorrectly states that an
3
LEA must calculate the proportional share available for equitable services from the comparative
4
enrollments of all students in public and private schools in the district, rather than the
5
comparative enrollments of low-income students, as required by Section 1117(a)(4)(A)(i).
6
Guidance Document, Ex. A at 6-7; see also 20 U.S.C. § 6320(a)(4)(A)(i).
7
70. Essentially, the guidance rejects the calculation of the proportionate share under
8
Section 1117 that Congress specified in the CARES Act and instead adopts the calculation in
9
Section 8501, which drastically inflates the amount of CARES Act funds required to be allocated
10
for services for private-school students.
11
71. Under the Department’s Guidance Document, the share of funds diverted from public
12
schools to private schools in many LEAs is substantial.
13
B. Eligibility Requirements for Private-School Students to Receive CARES
14 Act Equitable Services
15 72. In section 9 of the Guidance Document, the Department erroneously determines that
16 “[a]ll students and teachers in a non-public school are eligible for equitable services under the
17 CARES Act programs.” Guidance Document, Ex. A at 5.
18 73. The Department cites no section of the CARES Act that requires—or even suggests—
19 that all students and teachers at non-public schools are eligible for equitable services.
20 74. The plain language of the CARES Act makes clear that LEAs that receive GEER or
21 ESSER funds must provide equitable services “in the same manner as provided under section
22 1117 of the ESEA.” CARES Act § 18005(a) (emphasis added). And Section 1117 of the ESEA
23 requires LEAs to provide equitable services for eligible, at-risk children enrolled in non-public
24 schools who reside in attendance areas where public schools qualify for Title I-A funding, rather
25 than all students enrolled. 20 U.S.C. § 6320(a)(1).
26 75. Section 7 of the Guidance Document misinterprets the requirement under § 18005(a)
27 of the CARES Act that equitable services be provided “in the same manner as provided under
28 section 1117 of the ESEA.” See Guidance Document, Ex. A at 3-5. Contrary to the Act, this
17
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1 section of the Guidance Document states that this requirement in the CARES Act “necessitates
2 that the Department interpret how the requirements of section 1117 apply to the CARES Act
3 programs” because “an LEA under the CARES Act programs may serve all non-public-school
4 students and teachers without regard to family income, residency, or eligibility based on low
5 achievement.” Id. at 3. But Section 18005(a) of the CARES Act does not necessitate any
6 interpretation by the Department. Instead, the plain language of the Act makes clear that, while
7 LEAs have discretion in spending money for public schools, Congress intended that the LEAs
8 should provide equitable services to private schools under the CARES Act “in the same manner”
9 as they do for at-risk students under Title I-A.
10 76. Also, in section 7 of the Guidance Document, the Department purports to
11 “reconcile[]” various subsections of Section 1117 of the ESEA using an erroneous and
12 incongruous interpretation of the Act. Guidance Document, Ex. A at 3. For example, after noting
13 that Section 1117(a)(1) of the ESEA requires LEAs to “provide equitable services to low-
14 achieving students,” the Department nevertheless states that “an LEA may provide equitable
15 services . . . to any students and teachers in non-public schools.” Id. The Department provides no
16 explanation or basis for this distinction.
17 77. The Guidance Document’s conclusion that the non-public proportion must be
18 calculated based on total enrollments, rather than enrollment of low-income students, and its
19 interpretation of the requirements for equitable services under § 18005(a) of the CARES Act are
20 arbitrary and capricious, misstate and misapply the law as written, and exceed the Department’s
21 authority.
22 C. Reaction to the Department’s Guidance Document
23 78. The Guidance Document faced immediate backlash by Congressional leaders, SEAs,
24 and national education groups due to its incorrect interpretation of the CARES Act.
25 79. On May 5, 2020, the Council of Chief State School Officers (CCSSO), a nationwide
26 organization of public officials who head SEAs, wrote a letter to urge Secretary DeVos to clarify
27
28
18
Complaint for Declaratory and Injunctive Relief
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1 the Guidance Document to align it with the CARES Act’s requirements for equitable services.10
2 The CCSSO’s letter specifically requested that the Department issue new guidance to “advise
3 LEAs to look at the percentage of FY2019 Title I-A funds they set aside for equitable services
4 and apply that percentage to ESSER Funds.”11 Secretary DeVos responded to CCSSO’s letter on
5 May 22, 2020, rejecting its request to clarify the Guidance Document in accordance with the plain
6 text of the CARES Act.12 Secretary DeVos stated that if LEAs “insist on acting contrary to the
7 Department’s stated position, they should, at a minimum, put into an escrow account the
8 difference between the amount generated by the proportional-student enrollment formula and the
9 Title I, Part A formula.”13 The instruction to put funds in escrow is nonsensical given the crisis,
10 and clearly inconsistent with the intent of the CARES Act, which is to provide funding
11 expeditiously to LEAs to address their immediate needs in light of the COVID-19 pandemic.
12 80. Additionally, multiple SEAs published memoranda and guidance to their LEAs
13 instructing the LEAs to follow the plain text of the CARES Act and not the Department’s
14 Guidance Document.14 For example, on May 12, 2020, the Indiana Department of Education
15 published a memorandum for its LEAs, instructing the LEAs to disregard the Department’s
16 10
Letter from Carissa Moffat Miller, CCSSO, to Betsy DeVos, U.S. Sec’y of Educ., (May
5, 2020), available at https://ccsso.org/sites/default/files/2020-05/DeVosESLetter050520.pdf.
17 11
Id.
12
Letter from Betsy DeVos, U.S. Sec’y of Educ., to Carissa Moffat Miller, CCSSO (May
18 22, 2020), available at https://ccsso.org/sites/default/files/2020-
06/Secretary%20DeVos%20Response%20to%20Carrisa%20Moffat%20Miller%205%2022%202
19 0.pdf.
13
Id.
20 14
See, e.g., Pennsylvania Department of Education, Letter from Pedro Rivera, Sec’y of
Educ., to Frank Brogan, Asst. Sec’y. for Elementary and Secondary Educ., (May 7, 2020),
21 available at https://www.education.pa.gov/Documents/K-
12/Safe%20Schools/COVID/CARESAct/Letter%20to%20Secretary%20Brogan.pdf;
22 Memorandum from New Mexico Public Education Department, Funds available under
Coronavirus Aid, Relief and Economic Security (CARES) Act through the Elementary and
23 Secondary School Education Relief Fund (ESSER), Index 24301 (May 14, 2020), available at
https://webnew.ped.state.nm.us/wp-content/uploads/2020/05/CARES-Act-memo-ESSER-Funds-
24 2020-05-14-Final.pdf; Mississippi Department of Education, CARES Act Equitable Service,
EdUpdate (May 21, 2020), available at https://msachieves.mdek12.org/cares-act-equitable-
25 services/; Maine Department of Education, Priority Notice, CARES Act: Frequently Asked
Questions (May 27, 2020), available at https://mailchi.mp/maine/cu5lemq6y0-1321452;
26 Memorandum from Illinois State Board of Education (March 31, 2020), available at
https://www.isbe.net/Documents/CARES-Act-District-Info-3-31-20.pdf; Memorandum from
27 Connecticut State Board of Education, (June 8, 2020), available at https://portal.ct.gov/-
/media/SDE/Digest/2019-20/Equitable-services-under-ESSERF-CARES-Act-06082020.pdf.
28
19
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1 Guidance Document and “enact[] the CARES Act as written in the law . . . including the
2 provision to administer equitable services according to Sec. 1117 of the [ESEA].”15 The
3 memorandum described its decision as “ensur[ing] the funds are distributed according to
4 Congressional intent and a plain reading of the law, which prioritizes communities and schools
5 with high-poverty who are at most risk and in need of additional funds.”16
6 81. On May 20, 2020, Chairman Bobby Scott of the House Committee on Education and
7 Labor; Chairwoman Rosa DeLauro of the House Subcommittee on Labor, Health, Human
8 Services, and Related Agencies; and Ranking Member Patty Murray of the Senate Committee on
9 Health, Education, Labor, and Pensions wrote to Secretary DeVos, to urge the Department to
10 “immediately revise your April 30 guidance, including Question 10 of the guidance document to
11 come into compliance with the CARES Act and section 1117 of ESEA.”17 The bicameral letter
12 also requested the Department’s internal records related to the development of “its interpretation
13 of the equitable services provision and its inconsistency with long-standing requirements related
14 to equitable services.”18
15 82. On May 21, 2020, Senator Lamar Alexander, Chair of the Senate Committee on
16 Health, Education, Labor, and Pensions, was quoted as disagreeing with the Department’s
17 Guidance Document: “My sense was that the money should have been distributed in the same
18 way we distributed Title I money. . . . I think that’s what most of Congress was expecting.”19
19 83. On June 4, 2020, fifty national education organizations, including the CCSSO, wrote
20 to United States Senate and House leaders, asking for Congress to “pass[] legislation rescinding
21
15
Memorandum from Indiana Department of Education, Final Language for Equitable
22 Share of CARES Act Funds (May 12, 2020), available at
https://www.doe.in.gov/sites/default/files/news/final-language-equitable-share-cares-act-
23 funds.pdf.
16
Id.
24 17
Letter from Robert C. “Bobby” Scott, Chair, Committee on Education and Labor, U.S.
House of Representatives, et al., to Betsy DeVos, U.S. Sec’y of Educ. (May 20, 2020), available
25 at https://edlabor.house.gov/imo/media/doc/2020-5-
20%20Ltr%20to%20DeVos%20re%20Equitable%20Services.pdf.
26 18
Id.
19
Nicole Gaudiano, Alexander, DeVos split on stimulus support for private school kids,
27 Politico, May 22, 2020, available at https://www.politico.com/newsletters/morning-
education/2020/05/22/alexander-devos-split-on-stimulus-support-for-private-school-kids-787837.
28
20
Complaint for Declaratory and Injunctive Relief
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1 the equitable services [G]uidance [Document], preempting any future notice from [the
2 Department] that is contrary to the legislation, and further clarifying the allocation requirements
3 for equitable services for nonpublic schools consistent with Title I.”20
4 IV. THE RULE
5 84. On June 25, 2020, the Department published an unofficial version of the Rule on its
6 website. The Rule was officially published in the Federal Register on July 1, 2020. 85 Fed. Reg.
7 39,479.
8 85. The Rule was published as an interim final rule and became effective when published.
9 A. The Rule Conflicts with the Plain Language of the CARES Act.
10 86. Like the Department’s Guidance Document, the Rule effectively rewrites both (1) the
11 proportional share calculation that Congress established for LEAs to determine the amount of
12 funds to be used for equitable services for private-school students, and (2) the eligibility criteria
13 that Congress mandated to determine which private-school students are entitled to equitable
14 services under the CARES Act.
15 87. Neither the proportional share nor eligibility mandates in the Rule comport with the
16 plain text of the CARES Act.
17 88. The Rule will divert millions of dollars to private schools and away from public
18 schools in direct contradiction of Congress’s intent.
19 89. For the proportional share calculation, the Rule provides two options to LEAs:
20 Option #1 (Title I-Only Schools Option):
An LEA using all its funds under a CARES Act program to serve only students and
21 teachers in public schools participating under Title I, Part A of the ESEA may
22 calculate the proportional share in accordance with paragraph (c)(1)(ii) of this section
or by using—
23
(A) The proportional share of Title I, Part A funds it calculated under section
24 1117(a)(4)(A) of the ESEA for the 2019-2020 school year; or
25 (B) The number of children, ages 5 through 17, who attend each non-public school in
the LEA that will participate under a CARES Act program and are from low-income
26 families compared to the total number of children, ages 5 through 17, who are from
27 20
Letter from national education organizations to congressional leadership (June 4, 2020),
available at https://ccsso.org/sites/default/files/2020-
28 06/Equitable%20Services%20Funding%20Letter%20-%20FINAL.pdf.
21
Complaint for Declaratory and Injunctive Relief
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1 low-income families in both Title I schools and participating non-public elementary
and secondary schools in the LEA.
2
34 C.F.R. § 76.665(c)(1)(i).
3
90. Functionally, this option is most similar to the ESEA, Section 1117 proportional share
4
calculation. See 20 U.S.C. § 6320(a)(4)(A); see also id. § 6320(c)(1). The two sub-options allow
5
the LEA to use the proportional share figures used for the 2019-2020 Title I-A distribution (34
6
C.F.R. § 76.665(c)(1)(i)(A)) or updated figures based on the current proportion of low-income
7
students who attend private schools in the LEA (34 C.F.R. § 76.665(c)(1)(i)(B)). By adopting the
8
ESEA, Section 1117 proportional share calculation, Option #1 similarly adopts the proportional
9
share calculation required by the CARES Act, as the funds would then be apportioned “in the
10
same manner” as Section 1117. See CARES Act § 18005(a). However, this option includes two
11
unsupported “poison pill” limitations on LEAs who choose this option, as discussed below.
12
Option #2 (Private School Enrollment Option):
13 Any other LEA must calculate the proportional share based on enrollment in
participating non-public elementary and secondary schools in the LEA compared to
14 the total enrollment in both public and participating non-public elementary and
15 secondary schools in the LEA.
34 C.F.R. § 76.665(c)(1)(ii).
16
91. This option incorporates the Department’s erroneous proportional share calculation
17
set forth in the Guidance Document, requiring LEAs to consider all private-school students when
18
they apportion funds, similar to the calculation used to determine funds for equitable services
19
under Section 8501 of the ESEA, which Congress did not adopt for CARES Act funds. See 34
20
C.F.R. § 76.665(c)(1)(ii). This option has no basis in the CARES Act and would allow the
21
Department to divert hundreds of millions of dollars of CARES Act funds intended for public
22
schools to private schools.
23
92. As mentioned above, the Department included two poison pill requirements for using
24
Option #1 (Title I-Only Schools Option) to calculate the proportional share, with the obvious
25
effect of pushing LEAs to use Option #2.
26
93. The poison pill restrictions would force the LEAs using Option #1 to calculate the
27
proportional share to (1) use the CARES Act funds reserved for public schools for Title I schools
28
22
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1 only, and (2) use the CARES Act only for limited, supplemental costs to avoid a Title I
2 supplanting violation. 34 C.F.R. §§ 76.665(c)(1), (c)(3); 20 U.S.C. § 6321(b)(1) (Section 1118 of
3 ESEA). This would effectively prohibit many LEAs from using CARES Act funds, for example,
4 to retain existing staff in Title I schools while using state and local dollars for the same purpose in
5 non-Title I schools. This requires LEAs to treat CARES Act funds not as stimulus monies but as
6 additional funds, forcing them to choose between a less beneficial methodology or a requirement
7 that limits their ability to spend CARES Act dollars to most effectively meet their needs.
8 94. Neither of these restrictions is found anywhere in the CARES Act. Rather, they are
9 both contrivances of the Department, seemingly intended to force LEAs to use Option #2 for
10 apportioning the CARES Act funds. The restrictions effectively punish LEAs that attempt to
11 apportion the CARES Act funds as Congress intended.
12 95. The Department has acknowledged “Congress . . . intended that grantees have
13 substantial flexibility in the use of these [CARES Act] dollars.”21 Yet, the Department arbitrarily
14 imposes these restrictions on LEAs, significantly limiting their flexibility to use the funds.
15 96. These poison pill requirements are contradicted by the plain language of the CARES
16 Act, which specifies how the public schools’ share of the funds should be used.
17 97. The CARES Act grants LEAs that receive CARES Act funds flexibility to use the
18 funds for all schools in the district, not only Title I schools. See CARES Act §§ 18002(c)(1), (3),
19 18003(d)(1)-(12).
20 98. For the ESSER funds, the CARES Act specifies the twelve “[u]ses of [f]unds” for the
21 LEAs, including such broad uses as “[p]roviding principals and other school leaders with the
22 resources necessary to address the needs of their individual schools” and “[o]ther activities that
23 are necessary to maintain the operation of and continuity of services in [LEAs] and continuing to
24 employ existing staff of the [LEA].” CARES Act §§ 18003(d)(3), (12); see also id. §§
25 18003(d)(1)-(12). Likewise, LEAs can broadly use the GEER funds granted to LEAs at the
26 21
Letter from Mitchell M. Zais, Ph.D., Deputy Sec’y, U.S. Dep’t of Educ. to Gene
Dodaro, Comptroller Gen., U.S. Gov’t Accountability Office (June 12, 2020), at p. 3 (available as
27 pp. 375-389 of the U.S. Gov’t Accountability Office, COVID-19 Opportunities to Improve
Federal Response and Recovery Efforts, GAO-20-625, June 2020, available at
28 https://www.gao.gov/products/GAO-20-659T).
23
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1 Governor’s discretion “to continue to provide educational services to their students and support
2 on-going functionality of the [LEA].” Id. § 18002(c)(1); see also id. § 18002(c)(3). These broad
3 uses of the ESSER and GEER funds as specified by Congress explicitly allow the LEAs and
4 public schools to use the funds to “supplant” state and local funding that may have been lost due
5 to the pandemic. The Rule impermissibly exceeds the scope of the CARES Act by requiring
6 LEAs to choose between two options that are contrary to the CARES Act’s requirements and
7 prohibiting LEAs from using funds consistent with those purposes if they use Option #1.
8 99. Whether calculated under Option #1 (Title I-only schools Option) or Option #2
9 (Private school enrollment Option), CARES Act funds will be diverted from their intended
10 recipients.
11 100. Under Option #1, due to the poison pill restrictions, public-school students at non-
12 Title I schools (many of whom are low-income or otherwise at-risk) will receive no funding
13 whatsoever. The ESSER funds and part of the GEER funds were specifically designed to assist
14 all public schools in LEAs that receive CARES Act funds—not just the Title I schools within
15 these LEAs. And, even for the public-school students at Title I schools, the funds could only be
16 used for supplemental costs or else risk a Title I supplanting violation. Thus, the LEA would be
17 prohibited from using the CARES Act funds for general educational expenses in Title I schools,
18 such as teacher salaries, books, or general sanitation, among other uses. This erroneous
19 restriction is directly contradicted by many of the listed “Uses of Funds” for moneys from the
20 ESSER Fund in the CARES Act. See CARES Act §§ 18003(d)(2)-(11). In addition, at-risk
21 private-school students, who are eligible for equitable services under Section 1117, will receive
22 fewer funds per student, and the funds reserved for private-school students will be used to provide
23 services for all private-school students (both at-risk and not at-risk), diluting funding that
24 Congress intended for vulnerable students.
25 101. Under Option #2, private-school students will receive a significantly greater
26 proportion of the funds than they are entitled to under the CARES Act, as all private-school
27 students will be considered when apportioning the funds. In turn, public schools will lose funding
28 diverted to the private schools. In addition, the money set aside for private-school students will
24
Complaint for Declaratory and Injunctive Relief
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1 be used to provide services to all private-school students, reducing the amount of money per
2 student for the at-risk private-school students who are eligible for services under Section 1117.
3 102. Under either proportional share option, the Rule—like the Guidance Document—
4 requires LEAs to provide equitable services to all private-school students. 34 C.F.R. §
5 76.665(d)(2). This requirement does not comport with the plain text of the CARES Act, which
6 adopts the Section 1117 eligibility requirements, limiting equitable services to at-risk private-
7 school students. See CARES Act § 18005(a); 20 U.S.C. § 6320(a) (incorporating the definition of
8 “eligible children” from 20 U.S.C. § 6315(c)).
9 B. The Department Lacks Authority to Issue the Rule and Failed to Follow
the Procedural Requirements of the APA.
10
103. The Rule cites 20 U.S.C. § 1221e-3 and 20 U.S.C. § 3474 as authority for rulemaking
11
related to the CARES Act. Neither of these statutes authorizes the Department to issue the Rule.
12
104. Congress gave no authority to the Department to issue rules interpreting the CARES
13
Act either generally, with regard to the GEER and ESSER Funds, or in particular to the
14
distribution of appropriated funds for equitable services for private-school students.
15
105. Nor did Congress authorize the Department to issue rules related to the provision of
16
equitable services for private-school students without compliance with the notice and comment
17
procedures of the APA.
18
106. The Department issued the Rule as an interim final rule without demonstrating good
19
cause that the notice and public procedures were impracticable, unnecessary, or contrary to the
20
public interest.
21
107. Because the Department cannot satisfy the requirements for issuing the Rule as an
22
interim final rule, the Rule does not comply with the Administrative Procedure Act’s procedural
23
requirements.
24
V. THE RULE WILL CAUSE IMMEDIATE AND IRREPARABLE HARM TO PLAINTIFF
25 STATES, SCHOOLS, AND STUDENTS.
26 108. The Rule and Guidance Document will cause immediate, irreparable harm to the
27 interests of the States, LEAs, and the vulnerable students whom Congress meant to assist through
28 the CARES Act.
25
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1 109. Plaintiff States, themselves and through their publicly administered educational
2 institutions, are directly regulated by the Rule and will suffer direct harm because of the Rule.
3 110. Each of the Plaintiff States is constitutionally required to administer a system of K-12
4 public education funded primarily by state moneys:
5 a. Michigan: The Michigan Constitution charges the Michigan Legislature with
6 “maintain[ing] and support[ing] a system of free public elementary and
secondary schools as defined by law.” Mich. Const. art. VIII, § 2. The State
7
Board of Education is vested with “[l]eadership and general supervision over
8
all public education . . . .” Id. § 3. The State Board of Education further
9 “serve[s] as the general planning and coordinating body for all public
10 education . . . and shall advise the legislature as to the financial requirements
11 in connection therewith.” Id. Separate from any federal funding, Michigan
12 provides more than $13 billion each year to its approximately 831 LEAs and
56 intermediate school districts. The 3,400 school buildings in these districts
13
educate almost 1.5 million students each year. While the school districts
14
exercise primary responsibility over budgetary and other decisions within
15
their respective districts, the Michigan Department of Education (MDE)
16 implements federal and state legislative mandates in education and carries out
17 the policies of the State Board of Education. See Mich. Comp. Laws §
18 388.1009.
b. California: The State of California is the legal and political entity with plenary
19
responsibility for educating all California public-school students. California
20
has the constitutional responsibility to establish and maintain the system of
21
common schools and a free education. Cal. Const. art. IX, § 5. California
22 funds and oversees the operation of the largest common system of public
23 schools in the nation, which serves nearly 6.8 million children in more than
24 10,500 schools. In 2018–2019, California provided about $56.1 billion in
25 General Funds to its 1,037 school districts and over 1,200 charter schools.
Under the California Constitution, “[t]he State itself has broad responsibility
26
to ensure basic educational equality.” Butt v. State of California, 4 Cal. 4th
27
668, 681 (1992). Emergency conditions causing inequitable conditions may
28
26
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1 create a duty for the State to intervene and provide supplementary support.
2 See id. at 688. The California State Board of Education makes education
3 policy determinations, and adopts rules and regulations for the government of
elementary and secondary schools. Cal. Educ. Code §§ 33000, 33030-33031.
4
The California State Board of Education is responsible for applying for
5
federal funds made available to state education agencies under federal law, is
6 responsible for directing the allocation and apportionment of those federal
7 funds to public schools, and is responsible for adopting implementing rules
8 and regulations governing those federal funds. Cal. Educ. Code §§ 12000-
9 12001. The California Superintendent of Public Instruction oversees the
schools within the state and is the executive officer of the California State
10
Board of Education and the California Department of Education. Cal. Educ.
11
Code §§ 33112, 33301(b), 33302-33303. The California Department of
12
Education is a state administrative agency responsible for administering and
13 enforcing laws related to education throughout California. Cal. Educ. Code
14 §§ 33300, 33301, 33306, 33308.
15 c. District of Columbia: The Office of the State Superintendent of Education
(OSSE) is the state education agency for the District of Columbia charged
16
with raising the quality of education for all DC residents. OSSE serves as the
17
District’s liaison to the Department and works closely with the District’s
18
traditional and public charter schools to achieve its key functions. D.C. Code
19 § 38-2601. District of Columbia public schools received more than $902
20 million in state funding last year while charter schools in the District received
21 more than $904 million. 95,820 students attend either a public or charter
22 school in the District.
d. Maine: Maine’s state policy on public education is that “[i]t is the intent of the
23
Legislature that every person within the age limitations prescribed by state
24
statute shall be provided an opportunity to receive the benefits of a free public
25 education.” Me. Rev. Stat. tit, 20-A, § 2(1). The Maine Department of
26 Education is charged with “[s]upervis[ing], guid[ing] and plan[ning] for a
27 coordinated system of public education for all citizens of the State . . . .” Me.
28 Rev. Stat., tit. 20-A, § 201(1). The Commissioner of Education is responsible
27
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1 for “[p]roviding educational public leadership for the State” and “[e]nforcing
2 applicable regulatory requirements for school administrative units.” Me. Rev.
3 Stat., tit. 20-A, § 251-A(1), (3). The Commissioner determines the amount of
state funding for Maine’s school administrative units through the Essential
4
Programs and Services Funding Act, Me. Rev. Stat., tit. 20-A, § 15670 et seq.
5
The Commissioner is responsible for the distribution of funds and the
6 oversight of the federal grants that the Department receives. Separate from
7 any federal funding, Maine provides more than $ 1.2 billion each year to its
8 265 school administrative units (including public charter schools) and two
9 state magnet schools. The 599 school buildings in these school administrative
units educate approximately 175,600 students each year.
10
e. New Mexico: The New Mexico Constitution promises to establish and
11
maintain a uniform, free public-school system “sufficient for the education of,
12
and open to, all the children of school age.” N.M. Const. Art. 12, § 1. In
13 2020, legislators appropriated $3.468 billion in state funds for public
14 education from prekindergarten through secondary schools, or 45.5 percent of
15 total recurring appropriations. In 2019, the definition of “school-age” was
revised to include students through age 22. The Fiscal Year 2021 budget
16
increased recurring appropriations by $216 million, or 6.6 percent, with
17
significant additional funding to increase educator compensation, provide
18
additional services to at-risk students, and provide professional development
19 and mentorship support for early career teachers.
20 f. Wisconsin: The Wisconsin Constitution requires the Wisconsin Legislature to
21 establish district schools which are to be “as nearly uniform as practicable”
22 and “free and without charge for tuition to all children.” Wis. Const. art. X, §
3. The supervision of public instruction is vested in the Superintendent of
23
Public Instruction (State Superintendent). The State Superintendent is
24
charged with the general supervision of public instruction and leads the
25 Department of Public Instruction (DPI) in implementing policies and
26 promulgating administrative rules. Wis. Stat. § 15.37; see also, e.g., Wis.
27 Stat. §§ 115.28(1), (3), (7). Her responsibilities also include accepting and
28 administering federal funds. Wis. Stat. §§ 115.28(9) and (19). Wisconsin
28
Complaint for Declaratory and Injunctive Relief
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1 school district funding comes from state and federal aids, property taxes, and
2 local revenue. Wisconsin provides state aids to 443 LEAs, with a combined
3 total student enrollment of 854,959. In the 2019-2020 school year, DPI
administered approximately $6.1 billion in state support for K-12 public
4
schools.
5
111. The CARES Act appropriates funds for the Plaintiff States and their LEAs to support
6
public K-12 schools through the COVID-19 pandemic. Plaintiff States are facing severe
7
budgetary cuts due to the economic impact of the pandemic—cuts that the ESSER and GEER
8
Fund moneys were designed to mitigate. Under the Department’s Rule and the Guidance
9
Document, public schools in the Plaintiff States will lose a significant portion of the ESSER and
10
GEER moneys that will be diverted to private schools. This result is inconsistent with the clear
11
language of the CARES Act, and inequitable because public schools do not qualify for other
12
CARES Act funding available to private schools. Accordingly, LEAs will look to States to
13
bridge the gaps in their respective public-school budgets that the ESSER and GEER moneys were
14
intended to fill.
15
112. If LEAs in the Plaintiff States follow the Rule’s Option #1 (Title I-schools only
16
Option) when apportioning CARES Act funds, non-Title I schools across the Plaintiff States
17
stand to lose significant emergency funding to support their schools, and LEAs stand to lose the
18
ability to use the funds to maintain operations that are funded on an LEA-wide basis. In addition,
19
while Title I schools in the Plaintiff States will receive some CARES Act funds under Option #1,
20
the Rule improperly limits how they can use the funds by effectively prohibiting them from using
21
such funds for existing costs. Thus, for both Title I and non-Title I schools in the LEAs that
22
receive CARES Act funds, the effect of the Rule is to stymie the States and LEAs from using the
23
funds for their intended purpose—to “support and prevent, prepare for, and respond to
24
coronavirus.” CARES Act § 18001. As a result, the Plaintiff States will be required to allocate
25
moneys to help these schools weather the budgetary storm created by the pandemic.
26
113. If LEAs in the Plaintiff States follow the Rule’s Option #2 (Private school enrollment
27
Option) when apportioning CARES Act funds, the Plaintiff States’ LEAs and public schools will
28
29
Complaint for Declaratory and Injunctive Relief
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1 lose out on significant amounts of ESSER and GEER moneys, which will be diverted to private
2 schools for students who would not otherwise qualify for Title I-A equitable services.
3 a. Michigan: If Michigan’s LEAs are forced to follow Option #2 in the Rule for
4 apportioning CARES Act funds, an estimated $21,604,648.63 in ESSER
moneys would be diverted from public schools in order to provide equitable
5
services to all private-school students. If Michigan LEAs distribute the
6
ESSER moneys in the same manner that Title I-A funds are usually
7
distributed for equitable services based on low-income private-school
8 students, as the plain language of the CARES Act requires, then only an
9 estimated $5,107,921 will be distributed for equitable services to eligible
10 private-school students. Thus, if the Department’s Rule stands and LEAs
11 used Option #2 to apportion their CARES Act funds, an estimated total of
$16,496,727.63 in ESSER moneys will be diverted from low-income public
12
schools to private-school students who are not qualified for Title I-A funds—
13
7% of the total ESSER moneys that Michigan received. This would amount
14 to $2,251,130.61 less for Detroit Public School Community District students;
15 $2,643,213.87 less for Grand Rapids Public Schools students, and
16 $1,474,676.48 less for Flint Community Schools students.
17 b. California: If California’s LEAs are forced to follow Option #2 in the Rule for
apportioning CARES Act funds, millions in ESSER and GEER moneys would
18
be diverted from public schools in order to provide equitable services to all
19
private-school students. If California’s LEAs distribute the ESSER and
20 GEER moneys in the same manner that Title I-A funds are usually distributed
21 for equitable services based on low-income private-school students, as the
22 plain language of the CARES Act requires, then a considerably smaller
23 portion of the ESSER and GEER moneys will be distributed for equitable
services to eligible private-school students. Thus, if the Department’s Rule
24
stands and LEAs used Option #2 to apportion their CARES Act funds,
25
millions in ESSER and GEER moneys will be diverted from low-income
26
public schools to private-school students who are not qualified for Title I-A
27 funds.
28
30
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1 c. District of Columbia: If the District of Columbia Public Schools (DCPS) is
2 forced to follow Option #2 in the Rule for apportioning CARES Act funds,
3 approximately $5,404,710.77 in ESSER and GEER moneys would be diverted
from public school funds in order to provide equitable services to all private-
4
school students. If DCPS distributes the ESSER and GEER moneys in the
5
same manner that Title I-A funds are usually distributed for equitable services
6 based on low-income private-school students, as the plain language of the
7 CARES Act requires, then only $1,550,917 will be distributed for equitable
8 services to eligible private-school students. Thus, if the Department’s Rule
9 stands and LEAs used Option #2 to proportion their CARES Act funds, a total
of $3,853,793.77 in ESSER and GEER moneys will be diverted from low-
10
income public schools to private-school students that are not qualified for
11
Title I-A funds—8.06% of the total ESSER/GEER moneys that DC received.
12
d. Maine: If Maine’s LEAs are forced to follow the Department’s Rule and
13 Guidance, the Maine Department of Education (MDOE) estimates that $2.1
14 million in ESSER money would be apportioned to provide equitable services
15 to private-school students. If Maine’s LEAs distribute the ESSER money in
the same manner that Title I-A funds are usually distributed for equitable
16
services based on low-income private-school students, as the plain language
17
of the CARES Act requires, then only $248,000 will be distributed for
18
equitable services to eligible private-school students. Thus, if the
19 Department’s Rule stands, a total of $1,852,000 in ESSER money will
20 potentially be diverted from low-income public schools to private-school
21 students that are not qualified for Title I-A funds—4.25% of the total ESSER
22 money that Maine received.
e. New Mexico: If New Mexico’s LEAs are forced to follow Option #2 in the
23
Rule for apportioning CARES Act funds, millions in ESSER and GEER
24
moneys would be diverted from public school funds in order to provide
25 equitable services to all private-school students. If New Mexico’s LEAs
26 distribute the ESSER and GEER moneys in the same manner that Title I-A
27 funds are usually distributed for equitable services based on low-income
28 private-school students, as the plain language of the CARES Act requires,
31
Complaint for Declaratory and Injunctive Relief
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1 then a considerably smaller portion of the ESSER and GEER moneys will be
2 distributed for equitable services to eligible private-school students. Thus, if
3 the Department’s Rule stands and LEAs used Option #2 to apportion their
CARES Act funds, millions in ESSER and GEER moneys will be diverted
4
from low-income public schools to private-school students that are not
5
qualified for Title I-A funds.
6 f. Wisconsin: If Wisconsin’s LEAs are forced to follow Option #2 in the Rule
7 for apportioning CARES Act funds, $28,429,916.56 in ESSER and GEER
8 moneys would be diverted from public school funds in order to provide
9 equitable services to all private-school students. If Wisconsin LEAs distribute
the ESSER and GEER moneys in the same manner that Title I-A funds are
10
usually distributed for equitable services based on low-income private-school
11
students, as the plain language of the CARES Act requires, then only
12
$24,245,400.92 will be distributed for equitable services to eligible private-
13 school students. Thus, if the Department’s Rule stands and LEAs used Option
14 #2 to apportion their CARES Act funds, a total of $4,184,515.64 in ESSER
15 and GEER moneys will be diverted from low-income public schools to
private-school students that are not qualified for Title I-A funds—
16
approximately 2% of the total ESSER/GEER moneys that Wisconsin will
17
distribute to LEAs.
18
114. In total, if every LEA receiving CARES Act funds in the Plaintiff States uses Option
19
#2 to apportion CARES Act funds, the Plaintiff States will be required to divert tens of millions
20
of dollars in CARES Act funding to provide services to private-school students. The States’
21
public schools were expecting to receive these ESSER and/or GEER moneys.
22
115. Many LEAs may also have to rework their methodologies for allocating State and
23
local funds to public schools to accommodate the new funds and ensure that CARES Act dollars
24
do not result in a violation of the Title I-A supplement, not supplant requirement. This is a result
25
that was not contemplated by Congress and an administrative cost not taken into account in the
26
Rule.
27
28
32
Complaint for Declaratory and Injunctive Relief
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1 116. On top of the additional funding that each Plaintiff State will be required to expend in
2 lieu of the CARES Act funds diverted to private school services, the Department’s Guidance
3 Document and Rule impose significant administrative burdens on SEAs, which have fielded and
4 will continue to field numerous questions from LEAs about how ESSER and/or GEER Fund
5 moneys should be apportioned in light of the Department’s Rule, which is particularly confusing
6 given its clear inconsistency with the CARES Act.
7 117. The confusion caused by the Department has required the SEAs to divert resources to
8 drafting and issuing memoranda, letters, and other technical assistance to assist LEAs in
9 apportioning the moneys.
10 118. While facing numerous remote learning-related challenges in the throes of the
11 pandemic, the SEAs are now forced to redirect resources to assist LEAs in addressing the
12 conflicting requirements generated by the Department’s Rule that misinterprets the Act.
13 119. In addition, the Department’s Rule imposes strict restrictions on LEAs using Option
14 #1 to apportion the funds, which will increase costs incurred by the SEAs and LEAs to administer
15 equitable services and provide necessary oversight and control over funding, as required under
16 CARES Act Section 18005(b).
17 120. The additional time and work caused by the Department’s confusing and erroneous
18 interpretation of Section 18005 of the CARES Act will create a substantial burden on the SEAs.
19 Since the COVID-19 pandemic enveloped the nation, SEAs, LEAs, and schools in the Plaintiff
20 States have been working tirelessly to transition to remote learning; secure computers and other
21 electronic devices to facilitate students’ continued learning; create health and safety plans for
22 returning to school; and plan for the 2020-2021 school year. The time, money, and effort SEAs
23 have diverted to assisting LEAs with how to apportion ESSER/GEER moneys for equitable
24 services for private-school students are directly caused by the Department’s Guidance Document
25 and the Rule. The Department’s estimate of administrative burden does not adequately capture
26 the amount of administrative time that will be needed to implement this new Rule.
27
28
33
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1 121. The Department’s inconsistent interpretations in the Guidance Document and the
2 Rule have also caused a delay in distributing funds to students and teachers—the intended
3 beneficiaries of these funds—which is contrary to the purpose of the CARES Act funding.
4 122. Moreover, the Plaintiff States’ SEAs are required to certify in their ESSER Fund
5 applications that the SEAs and the LEAs will comply with the equitable service provision of the
6 CARES Act (§ 18005) and “any other applicable law or regulation.”22
7 123. Because the Department’s Rule contradicts the CARES Act’s requirements, SEAs
8 (and LEAs) cannot certify that they will comply both with the CARES Act and the Rule.
9 124. The Department’s Rule places the SEAs in a position where they would be in breach
10 of the certification in the Certification and Agreement, subjecting the SEAs to “liability under the
11 False Claims Act . . . [and the] OMB Guidelines to Agencies on Governmentwide Debarment and
12 Suspension (Non-procurement).”23 Accordingly, SEAs may face potential legal consequences as
13 a direct result of the Department’s Rule.
14 125. The Plaintiff States incurred, and will continue to incur, these financial, legal, and
15 other harms vis-a-vis their SEAs, and the other state-supported K-12 educational institutions in
16 the Plaintiff States.
17 126. The Plaintiff States also have an interest in protecting the health, safety, education,
18 and well-being of their residents. The Department’s interpretation severely impacts the use of the
19 emergency ESSER/GEER funds for public-school students affected by the COVID-19 pandemic.
20 It therefore jeopardizes the education of the Plaintiff States’ nearly ten million public-school
21 students.
22 127. Indeed, above and beyond their state constitutional obligations to educate school-aged
23 children, as set forth above, the States have made it a priority to ensure that vulnerable students
24 like those who are served by Title I-A receive robust educational opportunities. See, e.g., Cal.
25 Educ. Code §§ 8801 (Healthy Start Support Services for Children Act), 42920 (educational
26 22
U.S. Dep’t of Educ., Certification and Agreement for Funding under the Education
Stabilization Fund Program Elementary and Secondary School Emergency Relief Fund (ESSER
27 Fund), CFDA Number 84.425D (April 24, 2020), available at
https://oese.ed.gov/files/2020/04/ESSERF-Certification-and-Agreement-2.pdf.
28 23
Id.
34
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1 services for foster youth); Wis. Stat. §§ 118.43-44 (Achievement Gap Reduction Program),
2 121.136 (state aid for high-poverty school districts), 115.28(23) & 115.43-44 (Wisconsin
3 Educational Opportunity Program). The Rule undermines and frustrates these State policies.
4 128. Option #2 (Private school enrollment Option) of the Rule harms the States’ interest in
5 providing educational opportunities for their most vulnerable students by requiring LEAs to
6 divert moneys away from their public schools to private-school students who are not at-risk and
7 therefore would not be eligible for equitable services under Title I-A.
8 129. Even if LEAs in Plaintiff States calculate the proportional share of CARES Act funds
9 for private-school students under Option #1 in the Rule, public schools in the Plaintiff States that
10 were intended to receive money under the CARES Act will lose access to these funds. Non-Title
11 I schools will receive no funds. And Title I schools will not be able to use the CARES Acts to
12 cover existing, ongoing costs, even if related to the pandemic, as such allocation would lead to a
13 violation of the LEA’s Title I-A supplanting prohibition.
14 130. Public school systems depend on state moneys. The CARES Act education
15 stabilization funding is intended to assist public school systems, including both Title I and non-
16 Title I schools, to address the numerous issues created by the pandemic. Private-school interests
17 are addressed through eligibility for other stimulus funding within the CARES Act.
18 131. Protecting and maintaining public-school education in the Plaintiff States is
19 imperative to ensuring the long-term success of students. The loss of federal funding for public
20 schools will have significant, adverse impacts on public-school students. The States have an
21 interest in ensuring that funds are not diverted from other vital state priorities and programs
22 providing long-term assistance to public-school students who would otherwise have had access to
23 a free and quality public education absent the Rule.
24 132. The Rule will injure the States’ interests by causing significant harm to their
25 residents, including children and other students who attend K-12 public-school educational
26 institutions within the States.
27
28
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Complaint for Declaratory and Injunctive Relief
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1 CAUSES OF ACTION
2 COUNT I
Violation of Separation of Powers Principles
3
4 133. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if set
5 forth herein.
6 134. Article I, Section 1 of the U.S. Constitution enumerates that “[a]ll legislative Powers
7 herein granted shall be vested in . . . Congress.”
8 135. Article I, Section 8 of the U.S. Constitution vests exclusively in Congress the
9 spending power to “provide for . . . the general Welfare of the United States.”
10 136. The executive branch’s authority to act “must stem either from an act of Congress or
11 from the Constitution itself.” Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579, 585
12 (1952); see also Clinton v. City of New York, 524 U.S. 417, 438 (1998) (“[N]o provision in the
13 Constitution . . . authorizes the President to enact, to amend, or to repeal statutes.”).
14 137. This principle is particularly strong in the spending context, because “[w]hen it comes
15 to spending, the President has none of his own constitutional powers to rely upon.” California v.
16 Trump, No. 19-16299, 2020 WL 3480841, at *16 (9th Cir. June 26, 2020) (quoting San
17 Francisco, 897 F.3d at 1233–34). Thus, “[a]bsent congressional authorization, the
18 Administration may not redistribute or withhold properly appropriated funds in order to effectuate
19 its own policy goals.” See San Francisco, 897 F.3d at 1235. Nor may it impose conditions on
20 funds appropriated by Congress without congressional authorization. See id. at 1233–34.
21 138. The Department’s Rule and Guidance Document require LEAs to allocate or use
22 GEER and ESSER funds in a manner that is contrary to the plain language of Section 18005 of
23 the CARES Act, thereby violating constitutional separation of powers principles by requiring
24 distribution of funds based on conditions not provided for in the CARES Act. Defendants did not
25 have inherent authority to change the manner in which LEAs distribute the GEER and ESSER
26 funds. Nor did Congress afford Defendants any discretion or authority to issue rules governing
27 the LEAs’ allocation or use of these funds through the CARES Act.
28
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Complaint for Declaratory and Injunctive Relief
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1 139. By unilaterally imposing its interpretation of Section 18005 of the CARES Act, the
2 Department abrogated the significant discretion given to the SEAs and LEAs in the CARES Act
3 and usurped Congress’ power to legislate in violation of the principles of separation of powers.
4 140. Absent injunctive and declaratory relief suspending and vacating the Rule and the
5 Guidance Document, Plaintiff States and their residents will be immediately, continuously, and
6 irreparably harmed by Defendants’ illegal actions.
7 COUNT II
Ultra Vires Action
8
9 141. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if set
10 forth herein.
11 142. An agency acts ultra vires when it exceeds its statutory authority conferred by
12 Congress.
13 143. There is no provision in the CARES Act that imposes the proportional share
14 calculations, use restrictions, or eligibility requirements in the Rule for CARES Act funds.
15 Further, Congress has not delegated to Defendants the authority to impose such requirements.
16 144. Nothing in the CARES Act requires LEAs to calculate the private-school student
17 share of CARES Act funds using the Section 8501 calculation; prohibits non-Title I schools from
18 receiving funds; prohibits Title I schools from using CARES Act funds on any of the permissible
19 uses in the statute; or requires LEAs to provide equitable services to all private-school students.
20 Moreover, Congress explicitly required that LEAs follow Section 1117 when apportioning
21 CARES Act funds for equitable services and determining which private students were eligible for
22 such services. Congress also explicitly listed permitted uses for the CARES Act funds and
23 permitted both Title I and non-Title I schools to receive and use CARES Act funds.
24 145. Through the CARES Act, Congress required the Department to issue ESSER funds to
25 Plaintiff States’ SEAs without conditioning the receipt of funds on Plaintiffs’ agreement to
26 require LEAs to calculate the proportional share for equitable services with the improper Section
27 8501 formula, prohibit non-Title I schools from receiving funds, prohibit Title I schools from
28
37
Complaint for Declaratory and Injunctive Relief
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1 using CARES Acts on any of the permissible uses in the statute, or require LEAs to provide
2 equitable services to all private-school students.
3 146. Absent injunctive and declaratory relief suspending and vacating the Rule and the
4 Guidance Document, Plaintiff States and their residents will be immediately, continuously, and
5 irreparably harmed by Defendants’ illegal actions.
6 COUNT III
Spending Clause
7
8 147. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if set
9 forth herein.
10 148. Article I, Section 8, Clause 1 of the United States Constitution, also known as the
11 Spending Clause, states that “Congress shall have Power to lay and collect Taxes, Duties, Imposts
12 and Excises, to pay the Debts and provide for the common Defense and general Welfare of the
13 United States[.]”
14 149. Under the Spending Clause, conditions may not be placed on federal funds that are
15 (1) so coercive that they compel (rather than encourage) recipients to comply, (2) ambiguous, (3)
16 retroactive, or (4) unrelated to the federal interest in a particular program. Nat’l Fed’n of Indep.
17 Bus. v. Sebelius (NFIB), 567 U.S. 519, 575–78 (2012); South Dakota, 483 U.S. at 206–08.
18 150. To the extent that Congress delegated its authority to the Department to impose its
19 own requirements on the allocation and use of GEER and ESSER funds (which it has not), the
20 Department’s Rule and Guidance Document violate the Spending Clause of the U.S. Constitution.
21 151. The Department’s interpretation of Section 18005 of the CARES Act in the Rule and
22 Guidance Document violates the relatedness requirement under the Spending Clause because it is
23 contrary to Congress’s plainly expressed intent in the CARES Act to require SEAs and LEAs to
24 follow Section 1117 when apportioning CARES Act funds for equitable services and determining
25 which private-school students were eligible for such services, and to permit specific uses for the
26 CARES Act funds by both Title I and non-Title I schools.
27
28
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Complaint for Declaratory and Injunctive Relief
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1 152. The Department’s Rule and Guidance Document also violate the “unambiguous”
2 requirement under the Spending Clause. Congress has not “unambiguously” imposed the
3 requirement that LEAs calculate and set aside their GEER and ESSER Funds for equitable
4 services to all private-school students and teachers, provide equitable services to all private-
5 school students, limit their uses of funds, and limit their distribution of funds to Title I schools
6 only. See Pennhurst, 451 U.S. at 17 (“[I]f Congress intends to impose a condition on the grant of
7 federal moneys, it must do so unambiguously.”).
8 153. In addition, the Department’s interpretation was an improper “post-acceptance”
9 restriction. Id. at 17, 25. States “cannot knowingly accept conditions of which they are
10 ‘unaware’ or which they are ‘unable to ascertain.’” Arlington Cent. Sch. Dist. Bd. of Educ. v.
11 Murphy, 548 U.S. 291, 296 (2006) (quoting Pennhurst, 451 U.S. at 17). Accordingly, the
12 Spending Clause does not permit what the Department has improperly done here through
13 unauthorized rulemaking: “surprising participating States with post acceptance or ‘retroactive’
14 conditions” on congressionally appropriated funds. Pennhurst, 451 U.S. at 25; see also NFIB,
15 567 U.S. at 519.
16 154. Plaintiff States did not know of the Department’s interpretation at the time they
17 applied for and received emergency financial aid grants from the GEER and ESSER funds.
18 Therefore, they were unable to exercise their choice knowingly, cognizant of the consequences of
19 their participation, and they were surprised with post acceptance or retroactive conditions.
20 155. Absent injunctive and declaratory relief suspending and vacating the Rule and the
21 Guidance Document, Plaintiff States and their residents will be immediately, continuously, and
22 irreparably harmed by Defendants’ illegal actions.
23
24
25
26
27
28
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Complaint for Declaratory and Injunctive Relief
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1 COUNT IV
Violation of the Administrative Procedure Act
2 (Agency Action in Excess of Statutory Authority, Short of Statutory Right, or Not in
3 Accordance with Law)
4 156. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if set
5 forth herein.
6 157. The APA requires that a court hold unlawful and set aside agency action, findings,
7 and conclusions found to be in excess of statutory authority, short of statutory right, or not in
8 accordance with law. 5 U.S.C. § 706(2)(A), (C).
9 158. Congress did not grant the Department authority to interpret or make rules regarding
10 Section 18005 of the CARES Act. The Department’s Rule and the Guidance Document are
11 unauthorized by and contrary to Section 18005 of the CARES Act. They therefore are in excess
12 of statutory authority, short of statutory right, and not in accordance with law.
13 159. To the extent the Department claims that its Guidance Document is merely an
14 interpretation contained in a policy statement, agency manual, or enforcement guideline that lacks
15 the force of law, the Department’s interpretation is entitled to no or only limited deference. The
16 Guidance Document is not persuasive, nor does it reflect thorough consideration, and is contrary
17 to the plain language of the statute it purports to interpret. Congress’s intent in the CARES Act is
18 clear that equitable services are to be provided by LEAs to private-school students and teachers in
19 the same manner as required under Section 1117 of the ESEA.
20 160. Absent injunctive and declaratory relief suspending and vacating the Rule and the
21 Guidance Document, Plaintiff States and their residents will be immediately, continuously, and
22 irreparably harmed by Defendants’ illegal actions.
23 COUNT V
Violation of the Administrative Procedure Act
24
(Arbitrary and Capricious Agency Action)
25 161. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if set
26 forth herein.
27
28
40
Complaint for Declaratory and Injunctive Relief
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1 162. The APA requires that a court hold unlawful and set aside agency action, findings,
2 and conclusions found to be arbitrary, capricious, or an abuse of discretion. 5 U.S.C.
3 § 706(2)(A).
4 163. A rule is arbitrary and capricious if the agency has “relied on factors which Congress
5 has not intended it to consider, entirely failed to consider an important aspect of the problem,
6 offered an explanation for its decision that runs counter to the evidence before the agency, or is so
7 implausible that it could not be ascribed to a difference in view or the product of agency
8 expertise.” State Farm, 463 U.S. at 43.
9 164. The Department’s interpretation of Section 18005 of the CARES Act in the Rule and
10 the Guidance Document is arbitrary and capricious agency action because, among other reasons,
11 the Department failed to articulate how its position comports with the plain text of Section 18005
12 of the CARES Act and why it was reversing its own guidance regarding how equitable services
13 under Section 1117 should be provided, generating an unexplained inconsistency in the
14 Department’s position of which it appears to be unaware. Further, the Department ignores
15 important aspects of the problem, and its decision to enact the Rule runs counter to the evidence
16 before the Department. The Department also took into account factors Congress did not intend it
17 to consider. Finally, the Department failed to take into account the reliance interests that its
18 former position generated.
19 165. Absent injunctive and declaratory relief suspending and vacating the Rule and the
20 Guidance Document, Plaintiff States and their residents will be immediately, continuously, and
21 irreparably harmed by Defendants’ illegal actions.
22 COUNT VI
Violation of the Administrative Procedure Act
23 (Agency Action Without Observance of Procedure Required by Law)
24
166. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if set
25
forth herein.
26
27
28
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Complaint for Declaratory and Injunctive Relief
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1 167. The APA requires that a court hold unlawful and set aside agency action, findings,
2 and conclusions found to be without observance of procedure required by law. 5 U.S.C.
3 § 706(2)(D).
4 168. The agency must publish a “[g]eneral notice of proposed rulemaking” in the Federal
5 Register. 5 U.S.C. § 553(b). That notice must describe “either the terms or substance of the
6 proposed rule or a description of the subjects and issues involved.” 5 U.S.C. § 553(b)(3).
7 169. The agency must further provide “interested persons” an “opportunity to participate
8 in the rule making through submission of written data, views, or arguments with or without
9 opportunity for oral presentation.” 5 U.S.C. § 553(c).
10 170. The Rule is a legislative rule adopted without complying with the notice and
11 comment requirements of the APA.
12 171. The Rule was issued on an interim final basis without good cause.
13 172. The Department failed to establish good cause to waive the notice and public
14 procedures required under the APA due to these procedural requirements being impracticable,
15 unnecessary, or contrary to the public interest. 5 U.S.C. § 553(b).
16 173. Absent injunctive and declaratory relief suspending and vacating the Rule and the
17 Guidance Document, Plaintiff States and their residents will be immediately, continuously, and
18 irreparably harmed by Defendants’ illegal actions.
19 PRAYER FOR RELIEF
20 WHEREFORE, Plaintiff States request that this Court enter judgment in their favor and
21 grant the following relief:
22 a. Declare the Rule and all versions of the Guidance Document unlawful within the
23 meaning of 5 U.S.C. § 706(2)(A), (C), & (D);
24 b. Preliminarily and permanently enjoin the Department and its officers, employees, and
25 agents from applying and enforcing the Rule or all versions of the Guidance Document;
26 c. Vacate and set aside the Rule and all versions of the Guidance Document;
27 d. Award Plaintiffs reasonable costs and expenses, including attorneys’ fees; and
28 e. Grant such other and further relief as the Court deems just and proper.
42
Complaint for Declaratory and Injunctive Relief
Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 45 of 69
1
2 Dated: July 7, 2020 Respectfully Submitted,
3
4
5 DANA NESSEL XAVIER BECERRA
Attorney General of Michigan Attorney General of California
6 MICHAEL NEWMAN
/s/ Toni L. Harris Senior Assistant Attorney General
7 SARAH E. BELTON
FADWA A. HAMMOUD Supervising Deputy Attorney General
8 Solicitor General JAMES F. ZAHRADKA II
TONI L. HARRIS REBEKAH A. FRETZ
9 NEIL GIOVANATTI
Assistant Attorneys General /s/ Garrett M. Lindsey
10 Attorneys for Plaintiff State of Michigan
Appearing pro hac vice (application GARRETT M. LINDSEY
11 forthcoming) Deputy Attorneys General
Attorneys for Plaintiff State of California
12
13
HECTOR BALDERAS
14 KARL A. RACINE New Mexico Attorney General
Attorney General of District of Columbia
15 /s/ Cholla Khoury
/s/ Kathleen Konopka
16 P. CHOLLA KHOURY
KATHLEEN KONOPKA LISA GIANDOMENICO
17 Deputy Attorney General, Public Advocacy Assistant Attorneys General
Division Attorneys for Plaintiff State of New Mexico
18 Attorneys for Plaintiff District of Columbia Appearing pro hac vice (application
Appearing pro hac vice (application forthcoming)
19 forthcoming)
20
21 AARON M. FREY JOSHUA L. KAUL
Attorney General of Maine Attorney General of Wisconsin
22
/s/ Sarah A. Forster /s/ Hannah S. Jurss
23
SARAH A. FORSTER HANNAH S. JURSS
24 Assistant Attorney General Assistant Attorney General
Attorneys for Plaintiff State of Maine Attorneys for Plaintiff State of Wisconsin
25 Appearing pro hac vice (application Appearing pro hac vice (application
forthcoming) forthcoming)
26
27
28
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Complaint for Declaratory and Injunctive Relief
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1 ATTESTATION OF SIGNATURES
2
I, Garrett M. Lindsey, 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
6 Dated: July 7, 2020 /s/ Garrett M. Lindsey
7 GARRETT M. LINDSEY
Deputy Attorney General
8 Attorney for State of California
9
10
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Complaint for Declaratory and Injunctive Relief
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Exhibit A
Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 48 of 69
PROVIDING EQUITABLE SERVICES TO
STUDENTS AND TEACHERS IN NON-PUBLIC SCHOOLS
UNDER THE CARES ACT PROGRAMS
U.S. Department of Education
Washington, D.C. 20202
April 30, 2020
Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 49 of 69
Purpose of this Document
The purpose of this document is to provide information about equitable services for
students and teachers in non-public schools under the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act), Public Law 116-136, 134 Stat. 281 (Mar. 27, 2020).
The CARES Act authorized the Education Stabilization Fund (ESF), which is a new
appropriation of approximately $30.75 billion that creates funding streams for several
distinct education programs that address the impact of the Novel Coronavirus Disease
2019 (COVID-19) on educational services across the Nation. Under these programs, the
U.S. Department of Education (Department) will make awards to Governors, State
educational agencies (SEAs), and institutions of higher education (IHEs) to help States to
prevent, prepare for, and respond to the devastating effects of COVID-19. The provisions
of the CARES Act relevant to the ESF and other Department programs are available on the
Department’s website at https://oese.ed.gov/offices/education-stabilization-fund/.
Two programs in the ESF require a local educational agency (LEA) that receives funds to
provide equitable services to students and teachers in non-public schools:
• The Governor’s Emergency Education Relief Fund (GEER Fund) totaling
$2,953,230,000 (Section 18002 of the CARES Act).
• The Elementary and Secondary School Emergency Relief Fund (ESSER Fund)
totaling $13,229,265,000 (Section 18003 of the CARES Act).
Other than statutory and regulatory requirements included in the document, such as those
pursuant to the authorizing statute and other applicable laws and regulations, the contents
of the guidance do not have the force and effect of law and are not meant to bind the public
in any way. This document is intended only to provide clarity to the public regarding
existing requirements under the law or agency policies. In addition, it does not create or
confer any rights for or on any person.
The Department will provide additional or updated information as necessary on the
Department’s COVID-19 webpage: https://www.ed.gov/coronavirus. If you have questions
that are not answered in this document, please e-mail COVID-19@ed.gov.
ii
Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 50 of 69
Table of Contents
1. Does the requirement to provide equitable services to students and teachers in non-
public schools apply to any programs under the CARES Act? .........................................1
2. What is a “non-public school” under the CARES Act programs? .................................1
3. Is a for-profit non-public school eligible to receive equitable services for its students
and teachers under the CARES Act programs? .................................................................1
4. Which LEA is responsible for providing equitable services to non-public school
students and teachers under the CARES Act programs? ...................................................1
5. Must an LEA or another public agency maintain control of CARES Act funds used to
provide equitable services? ................................................................................................2
6. Who is responsible for initiating the consultation process and how should it begin? ...2
7. How does an LEA that receives funds under the CARES Act programs provide
equitable services “in the same manner as provided under section 1117 of the ESEA”? .3
8. Must an LEA offer to provide equitable services under the CARES Act programs to
students and teachers in all non-public schools located in the LEA, even if a non-public
school has not previously participated in equitable services under Title I, Part A or Title
VIII of the ESEA? ..............................................................................................................5
9. Are all students and teachers in a non-public school eligible to receive equitable
services under the CARES Act programs? ........................................................................5
10. How does an LEA determine the proportional share of funds that must be reserved to
provide equitable services to non-public school students and teachers under the CARES
Act programs? ....................................................................................................................6
A. What is the base amount on which the proportional share is determined? .............6
B. What data does an LEA use to determine the proportional share?..........................6
C. How does an LEA calculate the proportional share? ..............................................6
11. After an LEA has determined the proportional share of funds for equitable services
under each CARES Act program, how does it then determine the amount of funds
available for services to students and teachers in individual non-public schools? ............7
12. Do the requirements in 34 C.F.R. § 200.66 apply to equitable services under the
CARES Act programs? ......................................................................................................7
13. Is a non-public school whose students and teachers receive equitable services under
the CARES Act programs a “recipient of Federal financial assistance”? ..........................8
14. What services and benefits under the CARES Act programs are available to non-
public school students and teachers?..................................................................................8
iii
Case 3:20-cv-04478-SK Document 1 Filed 07/07/20 Page 51 of 69
Providing Equitable Services to Students and Teachers
in Non-Public Schools under the CARES Act Programs
1. Does the requirement to provide equitable services to students and teachers in non-
public schools apply to any programs under the CARES Act?
Yes. The CARES Act establishes two new funds to which equitable services requirements
apply. Specifically, a local educational agency (LEA) that receives funds under either the
Governor’s Emergency Education Relief Fund (GEER Fund) (section 18002 of the
CARES Act) or the Elementary and Secondary School Emergency Relief Fund (ESSER
Fund) (section 18003 of the CARES Act) (“CARES Act programs” for purposes of this
document) to provide equitable services to students and teachers in non-public schools in
the same manner as provided under section 1117 of the Elementary and Secondary
Education Act of 1965 (ESEA). (Section 18005(a) of the CARES Act).
An institution of higher education or education-related entity that receives funds under the
GEER Fund is not required to provide equitable services to students and teachers in non-
public schools.
2. What is a “non-public school” under the CARES Act programs?
A “non-public school” means a non-public elementary or secondary school that (A) is
accredited, licensed, or otherwise operates in accordance with State law; and (B) was in
existence prior to the date of the qualifying emergency for the CARES Act programs. For
purposes of this definition, the date of the qualifying emergency is March 13, 2020.
(Section 18007(6) of the CARES Act).
3. Is a for-profit non-public school eligible to receive equitable services for its
students and teachers under the CARES Act programs?
No. A for-profit non-public school is not eligible to receive equitable services for its
students and teachers under the CARES Act programs. Section 18007(6) of the CARES
Act defines a “non-public school” as a non-public elementary or secondary school. Section
18007(8) of the CARES Act incorporates the definitions in ESEA section 8101 for any
terms not defined in the CARES Act. ESEA section 8101(19) and (45) defines “elementary
school” and “secondary school,” respectively, and specifies that they must be non-profit.
4. Which LEA is responsible for providing equitable services to non-public school
students and teachers under the CARES Act programs?
The Department has determined that, under the CARES Act programs, the LEA in which a
non-public school is located is responsible for providing equitable services to students and
teachers in the school, as it is under most ESEA programs that require an LEA to provide
equitable services. Outside of Title I, Part A, the responsibility typically falls on the LEA
in which a non-public school is located because equitable services are generally available
1
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to all students or teachers in the non-public school in the LEA and the LEA in which the
school is located is closest and best able to meet the needs of students and teachers.
Title I, Part A of the ESEA is different; ESEA section 1117 sets forth a student residency
requirement, rather than a school location requirement, for receipt of equitable services
under Title I, Part A. Only low-achieving students who live in a participating Title I public
school attendance area are eligible for services and, therefore, the LEA where students
reside is responsible for providing equitable services. The CARES Act programs have no
such residency requirement for eligibility for services. Rather, the CARES Act programs
provide LEAs full discretion, unless funds are targeted for a specific purpose or population
of public and non-public school students by the Governor under the GEER Fund or by an
SEA through the SEA reserve under the ESSER Fund (see section 18003(e) of the CARES
Act), to use CARES Act funds to provide educational services to students in public and
non-public schools in the LEA through a broad range of allowable activities. Thus,
providing equitable services with CARES Act funds is similar to other ESEA programs
where equitable services are provided by the LEA in which a non-public school is located.
5. Must an LEA or another public agency maintain control of CARES Act funds used
to provide equitable services?
Yes. Control of funds for services and assistance provided to non-public school students
and teachers under the CARES Act programs, and title to materials, equipment and
property purchased with such funds, must be in a public agency, and a public agency must
administer such funds, materials, equipment, and property. In other words, no funds may
go directly to a non-public school. In addition, services for non-public school students and
teachers must be provided by a public agency directly or through contract with another
public or private entity. (Section 18005(b) of the CARES Act).
6. Who is responsible for initiating the consultation process and how should it begin?
Similar to how an LEA provides equitable services under the ESEA, an LEA is responsible
for initiating the consultation process. It must contact officials in all non-public schools in
the LEA to notify them of the opportunity for their students and teachers to obtain
equitable services under the CARES Act programs. Through this initial contact, the LEA
can explain the services available under the CARES Act programs and how non-public
school students and teachers can participate. If non-public school officials have not been
contacted, they may contact the LEA or the State ombudsman to inquire about equitable
services under the CARES Act programs.
If non-public school officials want equitable services for their students and teachers, the
LEA must consult with those officials during the design and development of the LEA’s
programs and before the LEA makes any decision that affects the opportunity of non-
public school students and teachers to participate in the activities funded under the CARES
Act programs. If a non-public school declines to participate in the CARES Act programs or
does not respond to an LEA’s good-faith effort to make contact, the LEA has no further
responsibility to provide equitable services to students or teachers in that school. The LEA,
however, must be able to demonstrate that it made a good faith effort to contact all the non-
public schools in the LEA.
2
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7. How does an LEA that receives funds under the CARES Act programs provide
equitable services “in the same manner as provided under section 1117 of the
ESEA”?
An LEA that receives funds under the CARES Act programs must provide equitable
services to students and teachers in a non-public school in the same manner as provided
under section 1117 of the ESEA, as determined in consultation with representatives of
non-public schools. (Section 18005(a) of the CARES Act). This requirement, on its face,
necessitates that the Department interpret how the requirements of section 1117 apply to
the CARES Act programs, given that an LEA under the CARES Act programs may serve
all non-public school students and teachers without regard to family income, residency, or
eligibility based on low achievement. Unless the requirements of section 1117 would limit
equitable services under the CARES Act programs, we conclude they apply as outlined
below.
We have interpreted “in the same manner as under section 1117” in light of the
significantly broader eligibility and uses of funds authorized under the CARES Act as
compared to Title I, Part A, reasonably reconciling differences. In doing so, we gave
meaning to section 1117(a)(3), which requires educational services and other benefits for
students in non-public schools to be equitable in comparison to those for public school
students. The services that an LEA may provide under the CARES Act programs are
clearly available to all public school students and teachers, not only low-achieving students
and their teachers as under Title I, Part A. Similarly, there is no limitation on residence in a
participating Title I public school attendance area for services provided in public schools
under the CARES Act programs. For CARES Act services to be equitable in comparison to
public school students and teachers, it follows that the same principles must apply in
providing equitable services to non-public school students and teachers.
The following describes how the provisions of ESEA section 1117 apply, reconciled, when
necessary, to meet the purposes of the CARES Act programs:
• 1117(a)(1) – Under Title I, Part A, an LEA must provide equitable services to low-
achieving students as defined in ESEA section 1115(c) who reside in a
participating Title I public school attendance area and attend a non-public school
and their teachers. Under the CARES Act programs, an LEA may provide equitable
services with CARES Act funds to any students and teachers in non-public schools,
unless limited by a Governor under section 18002 of the CARES Act or an SEA
through the SEA’s reserve under section 18003(e) of the CARES Act. (See
Questions #8 and #9).
• 1117(a)(2) – Under both Title I, Part A and the CARES Act programs, an LEA
must provide equitable services and other benefits, including materials and
equipment, that are secular, neutral, and nonideological.
• 1117(a)(3)(A) – Under both Title I, Part A and the CARES Act programs, an LEA
must provide services and other benefits for non-public school students and
teachers in a timely manner that are equitable in comparison to the services and
benefits provided for public school students and teachers.
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• 1117(a)(3)(B) – Under Title I, Part A, an SEA must designate an ombudsman to
monitor and enforce the equitable services requirements. An SEA must use the
ombudsman also to monitor and enforce the requirements of the CARES Act
programs that an LEA provide equitable services to students and teachers in non-
public schools.
• 1117(a)(4)(A) – Under both Title I, Part A and the CARES Act programs, an LEA
must determine the proportional share available to provide equitable services to
students and teachers in non-public schools based on the total amount of funds an
LEA receives prior to any allowable expenditures or transfers. Under the CARES
Act programs, the LEA calculates the proportional share based on the number of
children enrolled in each non-public school whose students or teachers participate
in the CARES Act programs compared to the number of students enrolled in public
schools in the LEA. The LEA makes this determination under each CARES Act
program separately. (See Question #10).
• 1117(a)(4)(B) – Under Title I, Part A, an LEA must obligate funds available for
equitable services in the fiscal year for which the funds are received by the LEA.
An LEA must obligate CARES Act funds for equitable services in the fiscal years
for which those funds are intended for services to address the impact of COVID-19.
• 1117(a)(4)(C) – Under both Title I, Part A and the CARES Act programs, an SEA
must provide notice in a timely manner to appropriate non-public school officials in
the State of the allocation of funds for educational services and other benefits that
each LEA has determined are available for non-public school students and teachers.
• 1117(b)(1) – Under both Title I, Part A and the CARES Act programs, an LEA
must consult with appropriate non-public school officials during the design and
development of the LEA’s activities on relevant issues such as those contained in
this section of Title I, Part A. The LEA and non-public school officials shall both
have the goal of reaching agreement on how to provide equitable and effective
services and the LEA must transmit the results of that agreement to the
ombudsman.
• 1117(b)(2) – Under both Title I, Part A and the CARES Act programs, if an LEA
disagrees with the views of non-public school officials during consultation, the
LEA must provide in writing to the non-public school officials the reasons why the
LEA disagrees.
• 1117(b)(3) – Under both Title I, Part A and the CARES Act programs, consultation
must occur before an LEA makes any decision that affects the opportunities of non-
public students and teachers to receive equitable services. Meetings between the
LEA and non-public school officials need not occur in person if they cannot be
conducted due to closed schools or social distancing rules. In this case, the
Department recommends LEAs and non-public school officials consult remotely.
• 1117(b)(4) – Under both Title I, Part A and the CARES Act programs, consultation
must include discussion of service delivery mechanisms an LEA may use to
provide equitable services.
• 1117(b)(5) – Under both Title I, Part A and the CARES Act programs, an LEA
must maintain and provide to the SEA written affirmation signed by non-public
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school officials that timely and meaningful consultation has occurred and, if non-
public school officials do not provide such affirmation, the LEA must forward to
the SEA the documentation that such consultation has, or attempts at such
consultation have, taken place.
• 1117(b)(6) – Under both Title I, Part A and the CARES Act programs, non-public
school officials have a right to file a complaint with the SEA; the SEA must
provide services directly or through contracts if requested to do so by non-public
school officials and the SEA determines that the LEA did not meet applicable
requirements.
• 1117(c)(1) – Under Title I, Part A, to determine the proportional share, an LEA
must calculate the number of children, ages 5 through 17, who are from low-
income families and reside in a participating Title I public school attendance area.
Because an LEA determines the proportional share based on enrollment in public
and non-public schools under the CARES Act programs, the LEA need not collect
poverty data from non-public schools (see Question #10 for information on
determining the proportional share of CARES Act funds the LEA must reserve to
provide equitable services to non-public school students and teachers).
• 1117(c)(2) – Under Title I, Part A, non-public school officials may file a complaint
with the SEA if they dispute the count of children from low-income families.
Because an LEA need not collect poverty data to determine the proportional share
available for equitable services under the CARES Act programs, there would be no
reason for non-public school officials to file a complaint regarding poverty data
with the SEA.
• 1117(d) – Under Title I, Part A, control of funds and title to materials, equipment,
and property must be in public agency. With respect to the CARES Act programs,
this provision is superseded by section 18005(b) of the CARES Act, which also
requires public control of funds. (See Question #5).
8. Must an LEA offer to provide equitable services under the CARES Act programs
to students and teachers in all non-public schools located in the LEA, even if a non-
public school has not previously participated in equitable services under Title I, Part
A or Title VIII of the ESEA?
Yes. An LEA must offer to provide equitable services under the CARES Act programs to
students and teachers in all non-public schools located in the LEA, even if a non-public
school has not previously participated under Title I, Part A or Title VIII of the ESEA.
9. Are all students and teachers in a non-public school eligible to receive equitable
services under the CARES Act programs?
Yes. All students and teachers in a non-public school are eligible to receive equitable
services under the CARES Act programs, unless a Governor (under the GEER Fund) or an
SEA (through the SEA reserve under the ESSER Fund) targets funds for a specific purpose
or population of public and non-public school students. Unlike Title I, Part A, equitable
services under the CARES Act programs are not based on residence in a participating Title
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I public school attendance area and are also not limited only to low-achieving students and
their teachers.
10. How does an LEA determine the proportional share of funds that must be
reserved to provide equitable services to non-public school students and teachers
under the CARES Act programs?
A. What is the base amount on which the proportional share is determined?
Under ESEA section 1117(a)(4)(A)(ii), an LEA must determine the proportional
share available for equitable services from the total amount of Title I, Part A funds
it receives prior to reserving funds for allowable expenditures such as
administrative costs or districtwide expenditures, and before making allocations to
participating public schools. Because section 18005(a) of the CARES Act requires
an LEA to provide equitable services under the CARES Act programs “in the same
manner as provided under section 1117,” an LEA must use the total allocation it
receives under each CARES Act program to determine the proportional share
available for equitable services before reserving funds for other purposes.
B. What data does an LEA use to determine the proportional share?
An LEA uses enrollment data in non-public schools whose students and teachers
will participate under the CARES Act programs compared to enrollment in public
schools in the LEA to determine the proportional share. Under the CARES Act
programs, services are available for all students—public and non-public—without
regard to poverty, low achievement, or residence in a participating Title I public
school attendance area. An LEA that receives CARES Act funds uses those funds
to provide educational services to students in both public and non-public schools
through a broad range of allowable activities. Using enrollment to determine the
proportional share from which to provide equitable services will contribute to the
equitable treatment of children and teachers within the statutory universe of
permissible uses for CARES Act dollars by allowing all students and teachers in a
non-public school to receive services that are equitable compared to those available
to all public school students and teachers. (See ESEA section 1117(a)(3)).
C. How does an LEA calculate the proportional share?
To calculate the proportional share for equitable services under the CARES Act
programs, an LEA determines the overall number of children who are enrolled in
public schools and non-public schools in the LEA that wish to participate under one
or both CARES Act programs. Using the proportion of students who are enrolled in
participating non-public schools, the LEA determines the amount of funds available
for equitable services based on that proportional share of the LEA’s total allocation
under each CARES Act program separately. For example, an LEA receiving
$100,000 under the GEER Fund and $900,000 under the ESSER Fund, and with
1,350 public school students and 150 non-public school students, would determine
the proportional share as follows:
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EXAMPLE – DETERMINING THE PROPORTIONAL SHARE
Public Non-Public* Total
Enrollment 1,350 150 1,500
Proportion 90% 10% 100%
Proportional Share $90,000 $10,000 $100,000
GEER Fund
Proportional Share $810,000 $90,000 $900,000
ESSER Fund
*Non-public schools participating under the CARES Act programs.
11. After an LEA has determined the proportional share of funds for equitable
services under each CARES Act program, how does it then determine the amount of
funds available for services to students and teachers in individual non-public schools?
For consultation purposes, in order to determine what equitable services to provide to
students and teachers in a given non-public school, an LEA, after reserving funds that are
reasonable and necessary for administering equitable services under the CARES Act
programs, would divide the remainder of the proportional share of funds available for
equitable services by the total enrollment in non-public schools whose students and
teachers will participate in each of the CARES Act programs to obtain a per-pupil amount.
The LEA would then multiply that per-pupil amount by the enrollment in an individual
non-public school to determine the amount of services the LEA can provide to students
and teachers in that school. With agreement between the LEA and appropriate non-public
school officials, the LEA may pool funds among a group of non-public schools and
provide equitable services to students and teachers in non-public schools within the pool
based on need without regard to how the funds were generated. (See ESEA section
1117(b)(1)(J)(i)).
12. Do the requirements in 34 C.F.R. § 200.66 apply to equitable services under the
CARES Act programs?
No. The requirements in 34 C.F.R. § 200.66 do not apply to equitable services under the
CARES Act programs. 34 C.F.R. § 200.66 is a Title I, Part A regulation that requires an
LEA to provide Title I, Part A services that (1) supplement, and in no case supplant, the
services that would, in the absence of Title I, Part A services, be available to participating
non-public school students; and (2) only meet the needs of participating non-public school
students and not the needs of the non-public school or the general needs of children in the
non-public school. These provisions are necessary in the Title I, Part A context because
equitable services must be supplemental to what non-public students otherwise receive and
may only be provided to low-achieving students who reside in a participating Title I public
school attendance area and attend a non-public school.
Equitable services under the CARES Act programs are much broader than under Title I,
Part A. Equitable services under the CARES Act programs, by definition, may benefit a
non-public school, such as purchasing supplies to sanitize and clean the facility, or all
students in a non-public school, such as any activity authorized under the ESEA. Unlike
Title I, they are not based on residence in a participating Title I public school attendance
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area or limited only to low-achieving students. Moreover, the CARES Act does not have a
supplement not supplant requirement.
13. Is a non-public school whose students and teachers receive equitable services
under the CARES Act programs a “recipient of Federal financial assistance”?
No. A non-public school whose students and teachers receive equitable services under the
CARES Act programs is not a “recipient of Federal financial assistance.” A public agency
must control and administer the CARES Act funds; in other words, no funds may go
directly to a non-public school. (See Question #5). Thus, a non-public school is not a
recipient of Federal financial assistance by virtue of its students and teachers receiving
equitable services from an LEA under a CARES Act program. As a result, certain Federal
requirements that apply to a recipient of Federal financial assistance are not directly
applicable to a non-public school whose students or teachers receive equitable services
under the CARES Act programs, unless the school otherwise receives Federal financial
assistance for other purposes.
14. What services and benefits under the CARES Act programs are available to non-
public school students and teachers?
In general, the services and benefits available to non-public school students and teachers
are the same as those available to public school students and teachers. Specifically, the
ESSER funds that flow to LEAs by formula may be used for a broad range of allowable
activities. (See section 18003(d) of the CARES Act). The ESSER funds that an SEA may
reserve for State purposes may also be used for a broad range of activities to address issues
responding to COVID-19, unless the SEA decides to target them for a specific purpose or
population of public and non-public school students. For example, an SEA could target the
SEA reserve to provide technology to support distance learning for public and non-public
school students from low-income families. (See section 18003(e) of the CARES Act).
Similarly, a Governor may target GEER funds that it makes available to an LEA for a
specific purpose or population of public and non-public school students. (See section
18002(c)(1) or (3) of the CARES Act).
In sum, equitable services permitted under sections 18002(c)(1) or (3), as applicable, and
18003(d) of the CARES Act must be available to best meet the needs of non-public school
students and teachers, as determined through timely and meaningful consultation and
consistent with any specific purposes established by a Governor under the GEER Fund or
SEA through the SEA reserve under the ESSER Fund, regardless of the specific uses
determined by the LEA to meet its own students’ and teachers’ particular needs.
As noted in Question #5, the control of any services or assistance provided to students and
teachers in a non-public school, and title to materials, equipment, and property purchased
with CARES Act funds, must be in a public agency and a public agency must administer
those funds, materials, equipment, and property. A public entity must provide those
services either directly or through a contract with a public or private entity.
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Exhibit B
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