Full text
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 1 of 55
UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
STATE OF NEW YORK, STATE OF ARIZONA,
STATE OF CALIFORNIA, STATE OF
DELAWARE, DISTRICT OF COLUMBIA, STATE
OF HAWAI‘I, STATE OF ILLINOIS, STATE OF
MAINE, STATE OF MARYLAND,
COMMONWEALTH OF MASSACHUSETTS, Case No. 25-cv-2990
PEOPLE OF THE STATE OF MICHIGAN, STATE
OF MINNESOTA, STATE OF NEVADA, STATE
OF NEW JERSEY, STATE OF NEW MEXICO,
STATE OF OREGON, and JOSH SHAPIRO, in his
official capacity as Governor of the Commonwealth
of Pennsylvania,
Plaintiffs,
v.
UNITED STATES DEPARTMENT OF
EDUCATION; and LINDA McMAHON, in her
official capacity as Secretary of Education,
Defendants.
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
INTRODUCTION
1. In late 2023 and early 2024, long after the federal government had declared that the
COVID-19 pandemic was over, the United States Department of Education (“ED”) granted
Plaintiffs extensions of time to access hundreds of millions of dollars in funds previously awarded
to them to combat the devastating and ongoing effects that the COVID-19 pandemic has had on
students in grades K through 12 attending both public and private schools. This funding provides
essential support for a wide range of critical education programs and services needed to address,
among other things, the impact of lost instructional time; students’ academic, social, and emotional
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 2 of 55
needs; the safety of school environments; and the disproportionate impact of the coronavirus on
economically disadvantaged students, including homeless children and children in foster care.
2. On Friday, March 28, 2025, at 5:03 pm, with no advance notice or warning, ED and
Education Secretary McMahon abruptly and arbitrarily reversed course, notifying Plaintiffs by
letter that as of 5:00 pm that day, ED had unilaterally rescinded extensions of time to liquidate
grant funds previously approved by ED. The extensions had allowed Plaintiffs to continue
accessing awarded funds—which have already been timely obligated before September 30, 2024,
by Plaintiffs to vendors and programs—through March 2026. But through the rescission letter,
Secretary McMahon and ED suddenly declared that the period for accessing the funds had already
expired.
3. ED’s drastic and abrupt change in position triggered chaos for state education
departments (referred to by ED as “state education agencies” or “SEAs”) and local school districts
(referred to by ED as “local education agencies” or “LEAs”). If the rescission action is not vacated
and the approved extensions are not reinstated, key programs and services that address ongoing
and emerging education needs of Plaintiffs’ students and local school districts to combat the long-
term effects of the pandemic will have to be dissolved or disbanded. State employees and
contractors have been, and will continue to be, dismissed from their roles, along with the
employees of businesses providing academic and other services in schools. The result of ED’s
rescission is a massive, unexpected funding gap that is causing serious harm to the public, cutting
off vital education services, all to the detriment of the students whom Congress intended to benefit.
4. The sole stated basis for Defendants’ change in position on the extension approvals
is that the funding for these grants was appropriated by Congress through a COVID-19 related law.
According to Defendants, the extensions of time for drawing down on these vital funding awards
2
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 3 of 55
must be rescinded, because “the COVID pandemic [has already] ended,” and therefore extending
deadlines for COVID-related grants “is not consistent with the Department’s priorities and thus
not a worthwhile exercise of its discretion.” March 28 Letter from Secretary McMahon to State
Chiefs of Education, attached as Exhibit A (“Rescission Letter”). This bare statement in the
Rescission Letter constituted the sum total of Defendants’ analysis and explanation as to why ED’s
prior position was being abruptly reversed.
5. The Rescission Letter—a final agency action rescinding the prior extension
approvals and deeming the period for Plaintiffs to access their awarded funds to be already
expired—is arbitrary and capricious in violation of the Administrative Procedure Act (“APA”)
because, among other reasons, it: (1) assumes, with no legal or factual support, that all
appropriations in COVID-19 related laws were only intended for use during the declared public
health emergency; (2) fails to provide a reasoned explanation for reversing the agency’s prior
determination that Plaintiffs had submitted sufficient justification and documentation to warrant
granting extensions; (3) ignores the substantial reliance interests of Plaintiffs (and their local
school districts, nonpublic schools, and contractors) and the tremendously harmful impact of
immediately terminating without any advance warning the period within which they could draw
upon hundreds of millions of dollars in congressionally appropriated funds midstream; (4) asserts
that this funding was suddenly unnecessary due to the “end of the pandemic”—an event that
formally occurred almost two years ago on May 11, 2023, well before ED approved Plaintiffs’
extension requests; and (5) misapplies the criteria for considering extension requests.
6. The Rescission Letter also exceeds Defendants’ statutory and regulatory authority
and is therefore contrary to law under the APA. The end of the COVID-19 pandemic is not a lawful
basis to rescind the prior extension approvals. Defendants have never asserted, much less
3
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 4 of 55
demonstrated, any failure by Plaintiffs to satisfy the requirements for obtaining extensions of the
periods for drawing on the funds, nor have they explained why justifications and documents
previously submitted by Plaintiffs and determined by ED to be sufficient are now suddenly
insufficient. Congress did not tie the availability of funds to the period of the public health
emergency. Congress’ clear intent—as expressed in the intended use of the ES funding to, among
other things, help students make up for lost instruction time in the aftermath of the pandemic—
demonstrates that the ES funds were to continue to be available post-pandemic. In contrast, in
other contexts, Congress has taken action to rescind the appropriations when the federal
government declared the pandemic to be over. See, e.g., Fiscal Responsibility of Act of 2023.
Public Law 118-5, Div. B, Title I (rescinding some appropriations after the pandemic was declared
over while keeping others in place, including the funding at issue in this case).
7. Defendants’ abrupt rescission of the previously approved extensions has already
caused substantial confusion and will result in immediate and devastating harm to Plaintiffs (and
their local school districts, nonpublic schools, and contractors), their residents, and the public writ
large. ED’s action deprives Plaintiffs and their local school districts of the period of the approved
extensions (through March 2026) to access hundreds of millions of dollars in critical education
stabilization funding—funds on which Plaintiffs’ and their local school districts’ budgets depend.
If the previously approved extensions are not restored, Plaintiffs will be unable to provide essential
public education services for residents, pay direct student service providers and teachers, satisfy
obligations to public and private partners, and carry on the important business of government to
educate their residents’ children.
8. Accordingly, the State of New York, State of Arizona, State of California, State of
Delaware, District of Columbia, State of Hawai‘i, State of Illinois, State of Maine, State of
4
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 5 of 55
Maryland, Commonwealth of Massachusetts, People of the State of Michigan, State of Minnesota,
State of Nevada, State of New Jersey, State of New Mexico, State of Oregon, and Josh Shapiro, in
his official capacity as Governor of the Commonwealth of Pennsylvania (collectively, “Plaintiffs”)
bring this action against Defendants ED and Education Secretary Linda McMahon seeking to:
declare that the Rescission Letter violates the APA; vacate and set aside the Rescission Letter as
an arbitrary and capricious final agency determination; reinstate ED’s prior approvals of extensions
through March 28, 2026; and preliminarily and permanently enjoin Defendants from implementing
or enforcing the Rescission Letter or otherwise modifying the prior extension approvals or the
criteria under which payment requests were reviewed and approved prior to issuance of the
Rescission Letter.
JURISDICTION AND VENUE
9. This Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1331 because
this action arises under the laws of the United States, including the APA, 5 U.S.C. §§ 701–706.
10. Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b)(2) and (e)(1).
Defendants are United States agencies or officers sued in their official capacities. The State of New
York is a resident of this district, and a substantial part of the events or omissions giving rise to
this Complaint occurred and continues to occur within the Southern District of New York.
PARTIES
A. Plaintiffs
11. The State of New York is a sovereign state in the United States of America. New
York is represented by Attorney General Letitia James, who is the chief law enforcement officer
of New York.
5
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 6 of 55
12. The State of Arizona is a sovereign state in the United States of America. Arizona
is represented by Attorney General Kris Mayes, who is the chief law enforcement officer of
Arizona.
13. The State of California is a sovereign state in the United States of America.
California is represented by Rob Bonta, the Attorney General of California. The Attorney General
acts as the chief legal representative of the state and is authorized by the California state
constitution, article V, section 13, to pursue this action.
14. The State of Delaware is a sovereign state in the United States of America.
Delaware is represented by and through its Attorney General, Kathleen Jennings. The Attorney
General is Delaware’s chief law enforcement officer and is authorized to pursue this action
pursuant to 29 Del. C. § 2504.
15. The District of Columbia is a municipal corporation organized under the
Constitution of the United States. It is empowered to sue and be sued, and it is the local government
for the territory constituting the permanent seat of the federal government. The District is
represented by and through its chief legal officer, the Attorney General for the District of
Columbia, Brian L. Schwalb.
16. The State of Hawai‘i is a sovereign state of the United States of America. Hawai‘i
is represented by Attorney General Anne Lopez, who is the chief law enforcement officer and chief
legal officer of Hawai‘i.
17. The State of Illinois is a sovereign state in the United States of America. Illinois is
represented by Kwame Raoul, the Attorney General of Illinois, who is the chief law enforcement
officer of Illinois and authorized to sue on the State’s behalf. Under Illinois law, the Attorney
6
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 7 of 55
General is authorized to represent the State’s interests by the Illinois Constitution, article V, § 15.
See 15 ILC 205-4.
18. The State of Maine is a sovereign state of the United States of America. Maine is
represented by Aaron M. Frey, the Attorney General of Maine. The Attorney General is authorized
to pursue this action pursuant to 5 Me. Rev. Stat. § 191.
19. The State of Maryland is a sovereign state in the United States of America.
Maryland is represented by and through its chief legal officer, Attorney General Anthony G.
Brown.
20. The Commonwealth of Massachusetts, represented by and through its Attorney
General, is a sovereign state in the United States of America. The Attorney General is the chief
law officer of the Commonwealth and is authorized under Mass. Gen. Laws ch. 12, § 3, to pursue
this action.
21. Plaintiff the People of the State of Michigan is represented by Attorney General
Dana Nessel. The Attorney General is Michigan’s chief law enforcement officer and is authorized
to bring this action on behalf of the People of the State of Michigan pursuant to Mich. Comp. Laws
§ 14.28.
22. The State of Minnesota is a sovereign state in the United States of America.
Minnesota is represented by Keith Ellison, the Attorney General of Minnesota, who is the chief
law enforcement officer of Minnesota and authorized to sue on the State’s behalf.
23. Plaintiff State of Nevada, represented by and through Attorney General Aaron D.
Ford, is a sovereign State within the United States of America. The Attorney General is the chief
law enforcement of the State of Nevada and is authorized to pursue this action under Nev. Rev.
Stat. 228.110 and Nev. Rev. Stat. 228.170.
7
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 8 of 55
24. The State of New Jersey is a sovereign state in the United States of America. New
Jersey is represented by Matthew Platkin, the Attorney General of New Jersey, who is the chief
law enforcement officer of New Jersey and authorized to sue on the State’s behalf.
25. Plaintiff the State of New Mexico is a sovereign state of the United States. New
Mexico is represented by Attorney General Raúl Torrez. The Attorney General is New Mexico’s
chief law enforcement officer and is authorized to pursue this action pursuant to N.M. Stat. Ann.
§ 8-5-2(B).
26. The State of Oregon is a sovereign state in the United States of America. The State
of Oregon is represented by Attorney General Dan Rayfield, who is the chief legal officer of the
State of Oregon. Attorney General Rayfield is authorized by statute to file suit in federal court on
behalf of the State of Oregon to protect the interests of the state. Or. Rev. Stat. § 180.060.
27. Plaintiff Josh Shapiro brings this suit in his official capacity as Governor of the
Commonwealth of Pennsylvania. The Pennsylvania Constitution vests “[t]he supreme executive
power” in the Governor, who “shall take care that the laws be faithfully executed.” Pa. Const. art.
IV, § 2. The Governor oversees all executive agencies in Pennsylvania, including the Pennsylvania
Department of Education.
B. Defendants
28. Defendant the United States Department of Education is a cabinet agency within
the executive branch of the United States government.
29. Defendant Linda McMahon is Secretary of Education, and is the United States
Department of Education’s highest ranking official. She is charged with the supervision and
management of all decisions and actions of that agency. She is sued in her official capacity. 42
U.S.C. § 300u.
8
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 9 of 55
FACTUAL ALLEGATIONS AND LEGAL BACKGROUND
A. During the COVID-19 Pandemic, Congress Appropriated Substantial Funds to
Strengthen Plaintiffs’ Education Programs, Many of Which Were Not Tied to the
Duration of the Public Health Emergency
30. During the COVID-19 pandemic, Congress enacted numerous major disaster relief
laws that appropriated funds to respond to the nationwide health crisis and economic devastation,
place the nation on a path to recovery once the pandemic had ended, and ensure that the nation
was better prepared for future public health threats. Among these appropriations laws were the
American Rescue Plan Act of 2021 (“ARP”), Pub. L. No. 117-2, 135 Stat. 4 (2021), enacted in
March 2021, and the Coronavirus Response and Relief Supplemental Appropriations Act, 2021
(“CRRSA”), Pub. L. No. 116-260 (2020), enacted in December 2020 (collectively education
stabilization (“ES”) funding). 1
31. In addition to directing funds toward amelioration of the immediate effects of the
COVID-19 emergency, these appropriations laws sought to address challenges facing American
society in the wake of COVID-19, including gaps in the country’s education systems following a
loss of in-person instructional time.
32. To that end, these appropriations laws established, and appropriated monies for,
three education-related funds: (i) the Elementary and Secondary School Emergency Relief
(“ESSER”) program initially created in the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act) of 2020; (ii) the Homeless Children and Youth (“HCY”) program; and (iii) the
Emergency Assistance to Nonpublic Schools (“EANS”) program.
1
Michigan’s, Pennsylvania’s, and Maryland’s ES funds in dispute here were appropriated under
both CRRSA and ARP. For the other Plaintiffs, only ARP funds are at issue.
9
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 10 of 55
33. The critical education investments implemented through ES funding focused on:
(i) supporting the safe return to in-person instruction and continuity of services; (ii) addressing the
impact of lost instructional time through the implementation of evidence-based interventions, such
as summer learning or summer enrichment, extended day, comprehensive afterschool programs,
and extended school year programs; (iii) ensuring that such interventions respond to students’
academic, social, and emotional needs; (iv) addressing the disproportionate impact of the
coronavirus on economically disadvantaged students, children with disabilities, English learners,
racial and ethnic minorities, migrant students, students experiencing homelessness, and children
and youth in foster care; (v) providing services and assistance to eligible non-public schools
significantly impacted by the pandemic, including those with high percentages of low-income
students; and (vi) addressing the urgent needs of homeless children and youth exacerbated by the
pandemic, among other specific purposes listed in the law.
34. Many of these areas of focus are not tied to the duration of the public health
emergency, including evidence-based interventions (such as summer learning, extended day
programs, and afterschool initiatives) intended to mitigate the long-term effects of learning
disruptions caused by the pandemic; addressing academic, social, emotional, and mental health
needs, especially for marginalized groups like low-income students; and providing educational
technology to enhance learning environments.
35. In contrast, where Congress intended to limit the application of programs or
appropriations in COVID-19 related laws, it did so expressly within COVID-related statutes. See,
e.g., Coronavirus Aid, Relief, and Economic Security Act of § 1109(h) (providing for a separate
program to be administered “until the date on which the national emergency . . . expires”).
10
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 11 of 55
36. ED utilized these appropriations, as Congress intended, to offer wide-ranging
grants to state education departments through the CRRSA and ARP programs, many of which are
the subject of this action.
37. The grants awarded by ED under ARP to Plaintiffs for the ESSER, HCY, and
EANS programs were available to states for obligations incurred through September 30, 2024.
ARP § 2001(a). The ARP statute covered obligations incurred through September 30, 2023, but
this deadline was automatically extended one year under Section 421 of the General Education
Provisions Act (GEPA) (generally referred to as the “Tydings Period”), providing recipients and
subrecipients until September 30, 2024, to obligate all funds. GEPA § 421; ESSER Guidance, E-
3 (2022) (“An SEA or LEA has until September 30, 2024, to obligate the ARP ESSER funds it
receives. This includes the 12-month Tydings Amendment period. Although funds must be
obligated by September 30, 2024, grant activities carried out through a valid obligation of funds
may continue beyond that date.”). Accordingly, funds under the ESSER, HCY and EANS
programs were available for obligations incurred by states and their subrecipients through
September 30, 2024, with grant activities and liquidation continuing beyond that date.
38. The grants awarded by ED under CRRSA followed a different schedule. The
CRRSA statute covered obligations incurred through September 30, 2022, but as with the ARP
programs, this was automatically extended one year under Section 421 of GEPA, providing
recipients and subrecipients until September 30, 2023, to obligate all funds. GEPA § 421.
Accordingly, funds under CRRSA were available for obligations incurred by states and their
subrecipients through September 30, 2023, with grant activities and liquidation continuing beyond
that date.
11
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 12 of 55
39. The ES funding awarded to Plaintiffs falls into two broad categories: programmatic
funds, which flow through Plaintiffs to local school districts and nonpublic schools to be used to
pay for the various projects, facility upgrades, and support services for which Congress specified
the funds were to be used; and administrative funds, which flow to each Plaintiff’s education
agency to be used to cover the cost of managing and distributing the programmatic funds, i.e., to
cover overhead, including the salaries of dedicated support staff, and other expenses necessary to
administer the ES funding programs.
40. Under the applicable regulations, Plaintiffs had 120 days from September 30, 2024,
to draw upon their ARP awards and 120 days from September 30, 2023, to draw upon their CRRSA
awards (the “liquidation period”). See 2 CFR § 200.344(c) (“The recipient must liquidate all
financial obligations incurred under the Federal award no later than 120 calendar days after the
conclusion of the period of performance.”).
41. However, Plaintiffs were invited by ED to request extensions of the liquidation
periods for their ES funding as authorized by regulation and consistent with longstanding ED
precedent and policy. See 2 CFR § 200.344(c) (“When justified, the Federal Agency . . . may
approve extensions for the recipient or subrecipient.”); see also ED Late Liquidation Policy
Memorandum (2007) (citing Appeal of the State of California, 53 Ed. Law Rep. 1390
(ED.O.H.A.), 1987 WL 124128 (Decision of the Secretary of Education, May 6, 1986) (hereafter,
“California Tydings Decision”) (outlining the principles for approving late liquidations of ED
awards).
42. ED has long held that federal awards are timely spent so long as they are fully
obligated within the Tydings Period. See California Tydings Decision:
The Secretary finds the legally relevant question to be when the obligation arose,
not in what account such obligation may have been initially recorded. An obligation
12
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 13 of 55
may be debited to a specific source of funds after the close of the Tydings period
so long as there is clear and unambiguous documentation showing that the
transaction giving rise to the obligation occurred before the relevant Tydings cutoff
date.
43. ED’s invitation came following a report by the Senate Committee on
Appropriations encouraging ED to exercise its authority to “extend the period for liquidating
financial obligations incurred under grants awarded by” ED, to “announce its policy and process
as soon and transparently as possible,” and “ensure that its process . . . minimizes the administrative
burden [on recipients] to the extent practicable, including by not requiring excessive
documentation.” Senate Report 118-84, Committee on Appropriations, at pg. 253, available at
https://perma.cc/BGA9-XFBP.
44. As detailed below, each of the Plaintiffs requested extensions of the applicable
liquidation periods for their ES funding, and did so after the federal government declared in May
2023 that the COVID-19 pandemic was over. 2 Plaintiffs were only allowed to apply for an
extension for expenditures that were properly obligated under federal rules, with a binding written
commitment to spend the funds. See 34 C.F.R. § 75.701. For each extension request, ED
determined that the requesting Plaintiff had provided sufficient justification and documentation
for an extension and granted the request. For ARP awards, ED in each instance granted the
requesting Plaintiffs extensions of their liquidation periods through March 2026. For CRRS
awards, ED in each instance granted the requesting Plaintiffs extensions of their liquidation periods
through March 2025.
2
See https://perma.cc/LVT5-JLJU (“May 11, 2023, marks the end of the federal COVID-19 PHE
declaration.”).
13
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 14 of 55
45. Based on ED granting these extensions, Plaintiffs and their local school districts
understood that they could draw down on their ARP ES funding through March 2026, and on their
CRRSA ES funding through March 2025, and relied on this understanding in their dealings with
counterparties and local school districts, as discussed in the sections that follow.
46. The chart below lists for each Plaintiff the relevant ES funding obtained, when
extensions of the liquidation periods were requested and granted, and the amount remaining for
each ES funding award as of the date of the Rescission Letter. 3
Plaintiff Total ES Funding Awarded Total Unliquidated ES Funding
Remaining as of 3/28/2025
California $15,359,765,795 ~$205,000,000
New York $9,306,650,958 $134,219,838
Pennsylvania $7,410,963,474 $207,107,649.53
Michigan $5,576,954,091 $25,137,629
Illinois $5,091,730,996 $77,248,504
Maryland $2,896,437,632 $245,876,498
New Jersey $2,764,587,703 $84,642,982.10
Arizona $2,655,310,459 TBD
Massachusetts $1,856,223,376 $105,961,603
Minnesota ~$1,400,000,000 $914,868
Oregon $1,157,517,612 $4,368,432.45
New Mexico $1,003,604,375 $17,868,000
Maine $411,429,361 $10,927,286
3
The amounts for Nevada were not available as of the filing of this complaint, and so Nevada is
not included on the chart.
14
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 15 of 55
Plaintiff Total ES Funding Awarded Total Unliquidated ES Funding
Remaining as of 3/28/2025
Delaware $410,861,389 $12,178,115
DC $393,000,000 $33,810,796.21
Hawai‘i $2,701,880 $327,672
B. Plaintiffs Received Billions of Dollars in ES Funding Grants Under the ESSER, HCY,
and EANS Programs and Have Relied on Funds to Provide Critical Services to Their
K through 12 Students
New York
47. New York was awarded a total of $252,458,198 under EANS. New York’s EANS
funds that it has yet to liquidate are earmarked to fund repairs and improvements to school
ventilation systems, as well as educational programs (tutoring, professional development, and
mental health counseling) designed to address the learning loss resulting from the COVID-19
pandemic.
48. New York was awarded a total of $8,995,282,324 under ESSER. The ESSER funds
that New York has yet to liquidate are earmarked to fund critical programs and infrastructure
improvements for New York schools, including construction of additional classroom space;
ventilation installation, upgrades, and repairs; purchase of wheelchair accessible buses; purchase
of standardized testing preparation materials; playground installation and repair; purchase of
library books; and purchase/repair of classroom projectors. All of these expenditures were timely
and properly committed per federal rules through binding written agreements.
49. New York was awarded a total of $58,910,436 under HCY. New York’s HCY
funds it has yet to liquidate are earmarked for critical education and care programs for New York’s
15
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 16 of 55
homeless youth, including food; personal care items; classroom supplies; field trip funding; and
specialized training for teachers who work with homeless youth.
Arizona
50. The ES funding for a school district in Arizona’s Navajo Reservation yet to be
liquidated is earmarked for tutoring services to supplement students’ reading and math instruction,
and to fund critical infrastructure repairs.
California
51. On November 4, 2021, ED awarded California a total of $181,312,003.00 under
EANS. ED communicated this award to California via a Grant Award Notification. As with the
EANS funds awarded to New York and other Plaintiff States, California’s EANS funds are
earmarked to fund, among other things, repairs and improvements to school ventilation systems,
as well as educational programs designed to address learning loss resulting from the COVID-19
pandemic.
52. On November 29, 2021, ED awarded California a total of $15,079,696,097.00
under ESSER. ED communicated this award to California via a Grant Award Notification. Similar
to ESSER funds awarded to New York and other Plaintiff States, California relies on ESSER funds
to address the impact of the COVID-19 pandemic on elementary and secondary schools of its
public education system, such as by providing for the purchase of educational technology and
adaptive equipment that aids in educational interactions between students and their classroom
teachers, including low-income students and children with disabilities. Pursuant to 2 C.F.R. §
200.305 and other governing provisions, California typically distributes its ESSER funds to LEAs
via advancements.
53. In 2021, ED awarded California with a total of $98,757,695.00 under HCY. ED
communicated this award to California via two separate Grant Award Notifications. California
16
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 17 of 55
relies on its HCY funding to, among other things, provide an array of services to children and
youth experiencing homelessness, such as instructional support, tutoring and mentoring services,
and increased access to school and hygiene supplies. Similar to its ESSER funds, California
typically distributes its HCY funds to LEAs via advancements in accordance with 2 C.F.R.
§200.305 and other governing regulations.
Delaware
54. Delaware was awarded a total of $410,861,389 under ESSER. intended to utilize
the liquidation extension of ESSER funds to continue services in the 2024-25 school year to
contribute to the acceleration of academic support for students. These services included
instructional coherence, professional coaching and high-quality reading and mathematics supports;
translation services to directly connect school staff with multilingual learners and families;
therapeutic support for students along with trauma-informed professional learning opportunities
for educators, out of school time providers and community-based organizational partners. This
training assists staff with addressing student mental health concerns that impact learning that were
exacerbated by the COVID-19 pandemic. Delaware’s public schools planned to use the liquidation
extension to continue instructional services in the 2024-25 school year and to complete
improvements to school infrastructure. The instructional services provide tutoring for students,
including intensive tutoring directed at students with the greatest need. The school infrastructure
projects improve air quality and environmental safety to keep classroom learning conditions at the
highest quality.
55. Delaware was awarded a total of $2,691,098 under HCY for education and care
programs for homeless youth.
17
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 18 of 55
District of Columbia
56. The District of Columbia was awarded approximately $386 million in funds under
ESSER, $2.5 million under HCY, and $4.5 million under EANS. The District’s funds that it has
yet to liquidate from these programs are earmarked to fund high-impact tutoring supporting more
than 1,900 in more than 40 schools, reading intervention staff, high-quality instructional materials
in core subjects, career and technical educational programming focusing on business
entrepreneurship, and other programs supporting afterschool tutoring, classroom operations and
assessments, and substitute teachers.
Hawai‘i
57. Hawai‘i was awarded a total of $2,701,880 under HCY. Hawaii’s HCY funds it has
yet to liquidate would have been used to address challenges felt by students in unstable housing,
including programs to expand those students’ access to early learning, provide them with additional
school transportation options, help them meet graduation requirements, support their transition to
college, and connect them and their families with housing, employment, and health resources.
Illinois
58. Illinois was awarded a total of $5,058,601,934.00 under ARP ESSER. Illinois’s
ARP ESSER funds that it has yet to liquidate are earmarked to fund expenses that promote student
learning that was lost during the COVID-19 pandemic; including everything from the physical
maintenance and improvement of school infrastructure to the acceleration of academic success for
students. For example, these funds are earmarked for teacher mentoring, statewide instructional
coaching, new principal mentoring, trauma response initiatives, the creation of social emotional
learning hubs, and contracts for technology infrastructure upgrades, among other necessary
programs.
18
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 19 of 55
59. Illinois was awarded a total of $33,129,062.00 under ARP HCY. Illinois’s ARP
HCY funds it has yet to liquidate are earmarked for trauma informed instructional training, and the
transportation of students experiencing homelessness.
Maine
60. Maine was awarded a total of $411,429,361.00 under ESSER. Maine’s ESSER
funds that it has yet to liquidate ($10,927,286.32) are earmarked for statewide projects that provide
educators with training and support using research-based methodologies to address post-COVID
student learning loss and accelerating learning, and local projects to improve ventilation systems
in school buildings.
Maryland
61. Maryland was awarded a total of $75,127,302 under EANS. Maryland’s EANS
funds that it has yet to liquidate were spent by the State to purchase educational items and services
on behalf of nonpublic schools (for CRRSA) or earmarked for tutoring support and other resources
(for ARP).
62. Maryland was awarded a total of $2,821,310,330 under ESSER. Maryland’s
ESSER funds that it has yet to liquidate are earmarked for local projects such as support for the
science of reading, high-quality school day tutoring, and staff support and retention (for CRRSA),
as well as tech devices, curricular materials, classroom furniture, HVAC repairs, student mental
health services, tutoring, and after school programming (for ARP). For example, Baltimore City
Public Schools—one of Maryland’s 24 local education agencies—has relied on the extended
liquidation period for ARP-ESSER funds to continue afterschool academic programs for more than
3,000 students and to fund critical school infrastructure projects targeted to improve health and
safety in school buildings, such as health suite renovations, bathroom updates, and HVAC repairs
and maintenance.
19
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 20 of 55
63. Maryland was awarded a total of $12,787,274 under HCY. Maryland’s HCY funds
that it has yet to liquidate are earmarked for projects to support academic summer enrichment,
student counseling, wraparound services for students, and direct college access and transition
services.
Massachusetts
64. Massachusetts was awarded a total of $24,826,386 under EANS. Massachusetts’
EANS funds that it has yet to liquidate are earmarked to support efforts in schools to address
learning loss resulting from the COVID-19 pandemic, among other matters.
65. Massachusetts was awarded a total of $1,831,396,990 under ESSER.
Massachusetts’ ESSER funds that it has yet to liquidate are earmarked to fund multiple
infrastructure improvements for Massachusetts schools, including HVAC installation, among
other matters.
Michigan
66. Michigan was awarded a total of $5,378,786,544 under ESSER through CRRSA
and ARP. Michigan’s ESSER funds that it has yet to liquidate are earmarked to fund critical
programs and infrastructure improvements for Michigan schools that are already in process,
including construction of additional classroom space; heating, ventilation, and air conditioning
installation, upgrades, and repairs; purchase of curriculum and instructional materials; purchase of
library books and equipment; and purchase/repair of educational technology.
67. Michigan was awarded a total of $24,378,753 under HCY through the ARP.
Michigan’s HCY funds it has yet to liquidate are earmarked for critical education and care
programs for Michigan’s children and youth experiencing homelessness, including wraparound
support services that include home visits, cross-agency service coordination, and needed school
and personal items to positively affect student attendance and full participation in school,
20
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 21 of 55
coordinated transportation costs in a rural area of Michigan to support attendance, outreach
activities to support identification for programming, and professional learning for educators to
support trauma-informed school practices.
68. Michigan was awarded a total of $173,788,794 under EANS through CRRSA and
ARP.
Minnesota
69. Minnesota was awarded approximately $1.4 billion in funds through the American
Rescue Plan Act. Of those funds, the Minnesota Department of Education (MDE)’s expenses
accounted for approximately $19,376,746.32.
70. Per the terms of the application extension, these funds were earmarked for contracts
with external software vendors that (1) support MDE’s implementation of the American Rescue
Plan Act through grant administration and data analysis, and (2) modernizes the State’s data
collection with school districts and student information systems.
Nevada
71. Upon information and belief, in January 2021, Nevada was awarded $477,322,438
in ESSER II funds under the Coronavirus Response and Relief Supplemental Appropriations
(CRRSA) Act. No application was required for these funds. The funds could be used for pre-
award costs dating back to March 13, 2020, and available for obligation by State educational
agencies and subrecipients through September 30, 2022. 4
72. Upon information and belief, Nevada was awarded $1,071,998,392 in ARP ESSER
in funds under the American Rescue Plan (ARP) Act. The funds could be used for pre-award costs
4
There was a discrepancy in the data with one source identifying the year as 2022 and another
source identifying it as 2023. At the time of filing, the discrepancy had not been clarified.
21
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 22 of 55
dating back to March 13, 2020, and available for obligation by State educational agencies and
subrecipients through September 30, 2023.
73. Upon information and belief, in January 2021, Nevada was awarded $31,385,542
in GREER funds under the CRRSA Act to help mitigate the impact of COVID-19 on all students
and families, including those who choose private schools.
74. From the award in the preceding paragraph, the amount of $19,375,550 was
reserved for Emergency Assistance to Non-Public Schools (EANS). The balance of $12,009,992
was the GEER II award. The funds could be used for pre-award costs dating back to March 13,
2020, and available for obligation by Governors and subrecipients through September 30, 2023.
New Jersey
75. New Jersey was awarded $2,764,587,703 under the ARP ESSER program, 90% of
which was allocated to local school districts. Twenty-one local school districts in New Jersey
received late liquidation approval for approximately $85,514,318.15 of ARP ESSER funds. These
funds are earmarked for critical infrastructure projects for school buildings, including fire alarm
and security system upgrades and other electrical repairs.
76. New Jersey’s State Department of Education was approved, as part of its Tydings
Waiver, to extend the period of availability for $2,744,450.15 of its total ARP ESSER III reserve
of $10,455,804.00, and for $470,632.91 of its total ARP HCY reserve of $2,526,592. These funds
are consolidated under section 8201 of the Elementary and Secondary Educational Act of 1965
(ESEA) and therefore available for any allowable use pursuant to the ESEA. NJDOE has budgeted
these funds for staff salaries, a homeless case management system, supports for students who were
disproportionately impacted by the pandemic, and improved student level data collection systems.
22
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 23 of 55
New Mexico
77. New Mexico was awarded a total of $ 17,425,938 under EANS, and as of March
28, 2025, the unliquidated amount remaining was approximately $4.79 million.
78. New Mexico was awarded a total of $979,761,933 under ESSER, and as of March
28, 2025, the unliquidated amount remaining was approximately $12.3 million.
79. New Mexico was awarded a total of $6,416,504 under HYC, and as of March 28,
2025, the unliquidated amount remaining was approximately $778,000.
Oregon
80. Oregon was awarded a total of $1,121,814,984 under ESSER. Oregon’s ESSER
funds that it has yet to liquidate are dedicated to the creation of comprehensive teaching
frameworks intended to address statewide COVID-related declines in literacy and mathematics.
The ESSER funds are also intended to fund communications, regional summits, and educator
professional learning networks that are necessary to support the dissemination and implementation
of the frameworks throughout the state. In addition, administrative funds were dedicated to
finalizing the administration and reporting of pandemic fund activities.
81. Oregon was awarded a total of $7,346,860 under HCY. Oregon’s EANS funds that
it has yet to liquidate were part of consolidated federal administrative funds supporting technical
assistance and training to districts providing services to students, including those experiencing
housing instability.
82. Oregon was awarded a total of $28,355,768 under EANS. Oregon’s EANS funds
that it has yet to liquidate were used to finalize payments to vendors providing services and
supplies to nonpublic schools and to support Oregon's system of assessment resources, including
formative resources and interim tests, and related reporting processes, in order to understand
student achievement levels.
23
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 24 of 55
Pennsylvania
83. Pennsylvania was awarded a total of $152,741,404 under EANS. Pennsylvania’s
EANS funds that it has yet to liquidate are earmarked to fund to address learning gaps and provide
mental health counseling programs, and to provide repairs and improvements to school ventilation
systems—repairs and improvements which may take many years to complete.
84. Pennsylvania was awarded $7,225,473,414 under ESSER. Pennsylvania’s ESSER
funds that it has yet to liquidate are earmarked to fund critical programs and infrastructure
improvements for Pennsylvania schools, including HVAC investments, audio improvements, and
school construction projects to enhance student health and safety.
85. Pennsylvania was awarded a total of $32,748,656 under HYC. Pennsylvania’s HCY
funds it has yet to liquidate are earmarked for critical education and care programs for
Pennsylvania’s homeless youth.
C. ED Granted Plaintiffs Extensions of the Liquidation Periods
86. ED supplied Plaintiffs with a form to fill out when seeking an extension of time to
liquidated ES funding, in which the Plaintiffs were required to provide detailed information about
the unliquidated grant amounts, what subrecipients (i.e., particular schools or contractors) they
would fund, ways in which the funds would be spent, and the substantive reason(s) why each
subrecipient required an extension. Such justifications were required to contain information
explaining the circumstances preventing grantees and their subgrantees from liquidating
expenditures within the existing liquidation period.
New York
87. On August 19, 2024—15 months after the federal government declared the
COVID-19 pandemic to be over—New York submitted a request for additional time to liquidate
$203,217,132 in EANS funds.
24
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 25 of 55
88. On September 24, 2024, ED approved New York’s request and extended the
applicable liquidation period for the remaining EANS funds through March 28, 2026, finding
“[a]fter careful review, . . . that New York’s request provides sufficient justification and
documentation for an extension” in accordance with 2 C.F.R. § 200.344.
89. On December 5, 2024, New York submitted a request for additional time to
liquidate $1,741,854 in HCY funds and $158,239,995 in ESSER funds.
90. On January 7, 2025, ED approved New York’s HCY extension request and
extended the applicable liquidation period for the remaining HCY funds through March 28, 2026,
finding, “[a]fter careful review, . . . that New York’s request provides sufficient justification and
documentation for an extension” in accordance with 2 C.F.R. § 200.344.
91. On January 13, 2025, ED approved New York’s ESSER extension request and
extended the applicable liquidation period for the remaining ESSER funds through March 28,
2026, finding, “[a]fter careful review, . . . that New York’s request provides sufficient justification
and documentation for an extension” in accordance with 2 C.F.R. § 200.344.
92. As of March 28, 2025, New York had a total of $134,219,838 in unliquidated ES
funding.
Arizona
93. ED granted Arizona an extension of the time to liquidate its ESSER funds through
February 28, 2026, for its local education agencies and March 28, 2026, for its state education
agency.
California
94. On January 9, 2024, ED invited the California Department of Education (CDE) to
apply for a liquidation extension of its EANS funds. On April 4, 2024, CDE submitted a request
to ED for an extension for late liquidation of EANS funds in the amount of $99,720,924.66. On
25
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 26 of 55
June 3, 2024, ED approved CDE’s request. With this decision, California’s liquidation period for
EANS was extended through December 31, 2025.
95. As with its invitation for CDE to apply for a liquidation extension of its EANS
funds, on January 9, 2024, ED invited CDE to apply for a liquidation extension of its ESSER
funds. On December 9, 2024, CDE requested a liquidation extension for ESSER obligations
totaling $152,450,001.72. On January 14, 2025, ED approved CDE’s request for late liquidation.
On February 11, 2025, CDE amended its liquidation extension request to have it apply to an
additional $29,949,690.41. Accordingly, the total amount underlying the ESSER late liquidation
request increased to $182,399,692.13. On February 12, 2025, ED approved CDE’s amended
liquidation extension request, and indicated that California would retain access to these ESSER
funds until March 28, 2026.
96. On February 23, 2024, ED invited CDE to apply for a liquidation extension of its
HCY funds. On December 23, 2024, CDE requested an extension to the liquidation period for
HCY funds totaling $506,002.15. On January 17, 2025, ED approved this liquidation extension
request and extended California’s liquidation period for HCY funds to March 28, 2026.
97. As of March 28, 2025, California has a total of $23,059,020.04 in unliquidated
EANS funds. Because California LEAs receive advancements from CDE under the ESSER and
HCY programs, LEAs across the state have already obligated funds for numerous projects
contemplated under those programs. Accordingly, California’s unliquidated and liquidated ESSER
and HCY funds for which ED had approved liquidation extensions are imperiled by the rescission
from March 28, 2025. As noted above, California’s approved liquidation extension amount for
ESSER is $182,399,692.13, and the approved liquidation extension amount under HCY is
$506,002.15.
26
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 27 of 55
Delaware
98. On July 23, 2024, Delaware submitted a request for additional time to liquidate
$42,604.241.92 in ESSER funds. Delaware intentionally made the extension request prior to the
September 30, 2024, obligation deadline in order to allow local educational agencies sufficient
time to plan educationally supported projects before committing to contractual obligations.
Delaware included an attestation with its request which among other things attested that the
activities and services included within the liquidation extension were allowable and properly
obligated by September 30, 2024, according to the American Rescue Plan Elementary and
Secondary School Emergency Relief Fund.
99. On August 13, 2024, ED approved Delaware’s ESSER extension request and
extended the applicable liquidation period for the remaining ESSER funds through March 28,
2026, finding, “[a]fter careful review, . . . that Delaware’s request provides sufficient justification
and documentation for an extension” in accordance with 2 C.F.R. § 200.344.
100. On September 27, 2024, Delaware submitted a request for additional time to
liquidate $655,928.23 in HCY funds. Delaware included an attestation with its request which
among other things attested that the activities and services included within the liquidation
extension are allowable and have been properly obligated by September 30, 2024, according to the
American Rescue Plan Elementary and Secondary School Emergency Relief – Homeless Children
and Youth. On October 21, 2024, ED approved Delaware’s HCY extension request and extended
the applicable liquidation period for the remaining HCY funds through March 28, 2026, finding,
“[a]fter careful review, . . . that Delaware’s request provides sufficient justification and
documentation for an extension” in accordance with 2 C.F.R. § 200.344.
101. As of March 28, 2025, Delaware had a total of $12,178,114.63 in unliquidated
Education Stabilization funding.
27
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 28 of 55
District of Columbia
102. On January 10, 2025—20 months after the federal government declared the
COVID-19 pandemic to be over—the District of Columbia submitted a request for additional time
to liquidate EANS funds, which ED approved on January 21, 2025.
103. On December 19, 2024, the District of Columbia submitted a request for additional
time to liquidate $22,764.28 in HCY funds and $25,696,312.27 in ESSER funds. ED granted the
District’s ESSER extension request on January 13, 2025, and it granted the District’s HCY request
on January 7, 2025. Id. These approvals extended the applicable liquidation period for the
remaining EANS, ESSER, and HCY funds to March 28, 2026.
104. As of March 28, 2025, the District of Columbia had a total of $33,810,796.21 in
unliquidated ES funding.
Hawai‘i
105. On December 12, 2024, Hawai‘i submitted a request for additional time to liquidate
$752,223 in HCY funds.
106. On January 7, 2025, ED approved Hawaii’s request and extended the applicable
liquidation period for the remaining HCY funds to March 28, 2026, finding, “[a]fter careful review,
. . . that Hawaii’s request provides sufficient justification and documentation for an extension” in
accordance with 2 C.F.R. § 200.344.
107. As of March 28, 2025, Hawai‘i had $327,671.62 in unliquidated HCY funding.
Illinois
108. On January 27, 2025, nineteen months after the federal government declared the
COVID-19 pandemic to be over—Illinois submitted a request for additional time to liquidate
$85,502.86 in ARP HCY funds.
28
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 29 of 55
109. On March 17, 2025, ED approved Illinois’s request and extended the applicable
liquidation period for the remaining ARP HCY funds through March 28, 2026, finding “Illinois’s
request provides sufficient justification and documentation for an extension to the period of
liquidation for ARP-HCY funds” in accordance with 2 C.F.R. § 200.344.
110. On January 10, 2025, nineteen months after the federal government declared the
COVID-19 pandemic to be over—Illinois submitted a request for additional time to liquidate
$97,738,340.35 in ARP ESSER funds.
111. On January 22, 2025, ED approved Illinois’s request and extended the applicable
liquidation period for the remaining ARP ESSER funds through March 28, 2026, finding “Illinois’s
request provides sufficient justification and documentation to the period of liquidation for ARP
ESSER funds” in accordance with 2 C.F.R. § 200.344.
112. As of March 28, 2025, Illinois has a total of $77,248,503.85 in unliquidated ES
funding.
Maine
113. On January 9, 2024, ED invited the Maine DOE to apply for a liquidation extension
of its ESSER funds. On December 19, 2024, the Maine DOE submitted a liquidation extension
request which included detailed grantee and subgrantee information requested by the ED template.
114. On January 13, 2025, through a grantee letter Maine’s ARP ESSER liquidation
extension request was approved through March 28, 2026. The grantee letter states that the USDE
has “determined that Maine’s request provides sufficient justification and documentation for an
extension to the period of liquidation for ARP ESSER funds and approve the extension through
March 28, 2026.”
29
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 30 of 55
115. The request and the grantee letter clearly articulated the “need for additional time
to liquidate $17,144,640.72 of ARP ESSER funds after the period of liquidation under 2 CFR §
200.344(b) expires” for ongoing student support and delayed air quality projects.
Maryland
116. On December 11, 2024, Maryland submitted a request for additional time to
liquidate $312,277 in ARP-EANS funds.
117. On January 22, 2025, ED approved Maryland’s request and extended the applicable
liquidation period for the remaining ARP-EANS funds through March 28, 2026, finding “[a]fter
careful review, . . . that Maryland’s request provides sufficient justification and documentation for
an extension” in accordance with 2 C.F.R. § 200.344.
118. On December 18, 2024, Maryland submitted a request for additional time to
liquidate $1,741,854 in ARP-HCY funds.
119. On January 7, 2025, ED approved Maryland’s ARP-HCY extension request and
extended the applicable liquidation period for the remaining ARP-HCY funds through March 28,
2026, finding, “[a]fter careful review, . . . that Maryland’s request provides sufficient justification
and documentation for an extension” in accordance with 2 C.F.R. § 200.344.
120. On January 14, 2025, Maryland submitted a request for additional time to liquidate
$160,505,073.59 in ARP-ESSER funds.
121. On January 22, 2025, ED approved Maryland’s ARP-ESSER extension request and
extended the applicable liquidation period for the remaining ARP-ESSER funds through March
28, 2026, finding, “[a]fter careful review, . . . that Maryland’s request provides sufficient
justification and documentation for an extension” in accordance with 2 C.F.R. § 200.344.
30
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 31 of 55
122. On January 26, 2025, Maryland submitted a request for additional time to liquidate
$79,919,204.78 in CRRSA-ESSER funds and $3,325,422.73 in CRRSA-EANS funds.
123. On February 6, 2025, after the change in administration, Massachusetts submitted
to ED updated financial information for its EANS and ESSER awards. In two emails, both dated
February 12, 2025, ED employee Khloe Graczyk acknowledged the amendments and stated that
“[a]s a reminder, continued access to” the remaining EANS and ESSER funds “will be approved
through March 28, 2026.”
124. On March 17, 2025, ED approved Maryland’s CRRSA-ESSER and CRRSA-EANS
extension requests and extended the applicable liquidation period for the remaining funds through
March 31, 2025, finding, “[a]fter careful review, . . . that Maryland’s request provides sufficient
justification and documentation for an extension” in accordance with 2 C.F.R. § 200.344.
125. As of March 28, 2025, Maryland had upwards of $245,876,498.23 in unliquidated
ES funding.
Massachusetts
126. On October 8, 2024, Massachusetts submitted a request for additional time to
liquidate $2,333,904.24 in EANS funds.
127. In a letter dated November 20, 2024, Adam Schott, Principal Deputy Assistant
Secretary for ED stated: “After careful review, I have determined that Massachusetts’ request
provides sufficient justification and documentation for an extension to the period of liquidation for
ARP EANS funds and approve the extension through March 28, 2026.”
128. On October 8, 2024, Massachusetts submitted a request for additional time to
liquidate $182,252,073.11 in ESSER funds.
129. In a letter dated October 24, 2024, Adam Schott, Principal Deputy Assistant
Secretary for ED stated: “After careful review, I have determined that Massachusetts’ request
31
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 32 of 55
provides sufficient justification and documentation for an extension to the period of liquidation for
ARP ESSER funds and approve the extension through March 28, 2026.”
130. As of March 28, 2025, Massachusetts had a total of $105,961,602.79 in
unliquidated ES funding.
Michigan
131. Michigan received an extension to liquidate ESSER II funds appropriated under the
CRRSA totaling $3,628,022.57. On June 20, 2024, Michigan submitted a request for additional
time to liquidate the $3,628,022.57 in ESSER II funds for administrative expenditures. On July 5,
2024, ED approved Michigan’s request and extended the liquidation period for these funds through
March 31, 2025.
132. Michigan received an extension to liquidate ESSER III funds appropriated under
the ARP totaling $44,283,405.21. On December 27, 2024, Michigan submitted a request for
additional time to liquidate the $44,283,405.21 ($4,213,646 for administrative, $40,069,759.21 for
grants) in ESSER III funds. On January 14, 2025, ED approved Michigan’s request and extended
the liquidation period for these funds through March 28, 2026.
133. Michigan also received an extension to liquidate ARP-HCY funds. On September
27, 2024, Michigan submitted a request for additional time to liquidate $326,677.76 in ARP-HCY
funds ($138,658 in administrative funds and $188,019.76 in grant funds). On January 7, 2025, ED
approved Michigan’s request and extended the liquidation period for these funds through March
28, 2026.
134. In addition, Michigan received an extension to liquidate EANS funds appropriated
under the ARP. On September 27, 2024, Michigan submitted a request for additional time to
liquidate approximately $50,000 in ARP EANS (administrative) funds. On October 25, 2024, ED
32
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 33 of 55
approved Michigan’s request and extended the liquidation period for these funds through March
31, 2026.
135. As of April 8, 2025, Michigan had a total of 25,137,628.93 in unliquidated ES
funding.
Minnesota
136. On December 20, 2024, MDE requested an extension for contracts it was unable to
liquidate before the October 2024 deadline in the amount of $2,189,622. MDE received the
requested extension. As of the date of this filing, MDE has not yet received $914,868 of the
requested extension funding.
Nevada
137. Upon information and belief, in December 2024, Nevada requested late liquidation
and was approved in January 2025. Nevada intends to request the case-by-case project liquidation
extension.
New Jersey
138. On December 20, 2024, New Jersey submitted a liquidation extension request for
an extension of time for 21 of its local school districts to liquidate ARP ESSER funds, which was
later amended on December 23, 2024, and January 3, 2025.
139. On January 14, 2025, the Department granted NJDOE’s request to extend the time
to liquidate $82,769,868.00 of ARP ESSER funds through March 28, 2026, finding “[a]fter careful
review, . . . that New Jersey’s request provides sufficient justification and documentation for an
extension” in accordance with 2 C.F.R. § 200.344.
140. As of March 28, 2025, New Jersey had a total of $84,642,982.10 in unliquidated
ES funding.
33
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 34 of 55
New Mexico
141. On January 13, 2025—19 months after the federal government declared the
COVID-19 pandemic to be over—New Mexico submitted a request for additional time to liquidate
its remaining EANS funds.
142. On January 21, 2025, ED approved New Mexico’s request and extended the
applicable liquidation period for the remaining EANS funds through March 28, 2026, finding
“[a]fter careful review, . . . that New Mexico’s request provides sufficient justification and
documentation for an extension” in accordance with 2 C.F.R. § 200.344.
143. On November 6, 2024, New Mexico submitted a request for additional time to
liquidate its remaining HCY funds.
144. On December 10, 2024, ED approved New Mexico’s HCY extension request and
extended the applicable liquidation period through March 28, 2026, finding, “[a]fter careful
review, . . . that New Mexico’s request provides sufficient justification and documentation for an
extension” in accordance with 2 C.F.R. § 200.344.
145. On October 29, 2024, New Mexico submitted a request for additional time to
liquidate its remaining ESSER funds.
146. On November 25, 2024, ED approved New Mexico’s ESSER extension request and
extended the applicable liquidation period for the remaining ESSER funds through March 28,
2026, finding, “[a]fter careful review, . . . that New Mexico’s request provides sufficient
justification and documentation for an extension” in accordance with 2 C.F.R. § 200.344.
147. As of March 28, 2025, New Mexico had a total of approximately $17.8 million in
unliquidated ES funding.
34
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 35 of 55
Oregon
148. On October 16, 2024, Oregon requested an extension of the liquidation period for
$3,925,000 of the ESSER funds. On December 23, 2024, ED granted the extension, finding that
the request “provide[d] sufficient justification and documentation for an extension” and extended
the liquidation period through March 28, 2026. On March 28, 2025, before 5:00 p.m., Oregon
submitted a reimbursement request for $145,000 to ED and has received no response.
149. Separately, on July 22, 2024, Oregon requested a waiver to consolidate and extend
the period of availability for administrative expenses to be claimed for both the ESSER and HCY
programs under the Elementary and Secondary Education Act of 1965 (“ESEA”) and the General
Education Provisions Act along with an eligible Title fund program. On August 26, 2024, ED
approved Oregon’s extension request, finding that “the request meets the requirements in ESEA
section 8401.” The availability period was extended through March 31, 2026.
150. Additionally, on October 10, 2024, Oregon notified ED that it would need a Late
Liquidation extension for its EANS funds. On December 26, 2024, ED provided Oregon with
instructions for submitting an EANS Late Liquidation request, to include a cover letter and
completed form. On January 16, 2025, ED instructed Oregon to submit its request only after
Oregon had “full data” and were ready to draw down all remaining EANS funds. ED also
confirmed that this submission should occur after the liquidation period expired on January 28,
2025. On March 28, 2025, at 5:02 p.m., Oregon submitted a request for reimbursement as
instructed by ED, seeking reimbursement for $331,388.67. Oregon has not received a response
from ED.
Pennsylvania
151. On February 10, 2025, and through subsequent email communications, PDE
submitted requests to continue liquidating EANS funds.
35
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 36 of 55
152. ED has not responded to PDE’s repeated requests to permit extended liquidation of
EANS grant funds.
153. On December 19, 2024, 19 months after the federal government declared the
COVID-19 pandemic to be over, Pennsylvania submitted a request for additional time to liquidate
$12,190,576.89 in HCY funds.
154. On January 8, 2025, 20 months after the official end of the COVID-19 pandemic,
ED approved Pennsylvania’s HCY extension request and extended the applicable liquidation
period for the remaining HCY funds through March 28, 2026, finding, “[a]fter careful review, . . .
that Pennsylvania’s request provides sufficient justification and documentation for an extension”
in accordance with 2 C.F.R. § 200.344
155. On January 16, 2025, Pennsylvania submitted a request for additional time to
liquidate $39,614,602.67 in ESSER funds.
156. On January 22, 2025, 20 months after the official end of the COVID-19 pandemic,
ED approved Pennsylvania’s ESSER extension request and extended the applicable liquidation
period for the remaining ESSER funds through March 28, 2026, finding, “[a]fter careful review, .
. . that Pennsylvania’s request provides sufficient justification and documentation for an extension”
in accordance with 2 C.F.R. § 200.344.
157. As of March 28, 2025, Pennsylvania had a total of $$207,107,649.53 in
unliquidated ES funding (including unliquidated CRSSA funding of $21,953,215.85).
D. ED Abruptly Rescinds Plaintiffs’ Extension Approvals and Imposes an Immediate
Termination of All Liquidation Periods
158. Prior to March 28, 2025, Plaintiffs (along with their local school districts, nonpublic
schools, and contractors) were relying on the extension approvals permitting Plaintiffs to draw
upon the ES funding through the expiration of the extended liquidation periods in executing
36
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 37 of 55
agreed-upon plans to deliver services to students and engage in building projects aimed at
combating the long-term effects of the pandemic.
159. At 5:03pm ET on March 28, 2025, ED’s Office of Communications and Outreach
sent a mass email to all “Chief State School Officers” attaching the Rescission Letter from
Secretary McMahon. The Rescission Letter, also dated March 28, 2025, notified all recipients,
including the state education departments of Plaintiffs, that ED “is modifying the liquidation period
to end on March 28, 2025, at 5:00pm ET” based on its conclusion that ED’s prior approvals of
requests to extend liquidation periods were “not justified.”
160. The Rescission Letter further advised that “[e]xtending deadlines for COVID-
related grants . . . years after the COVID pandemic ended is not consistent with [ED’s] priorities
and thus not a worthwhile exercise of its discretion.” The Rescission Letter also advised that ED
finds “any reliance interests developed” by ES funding recipients based on prior extension
approvals “are minimal” and “unreasonable,” stating that because the extension approvals were a
matter of agency discretion, ES funding recipients “could not rely on the Department adhering to
its original decision.” This was the sum of ED’s alleged justification for rescinding the liquidation
period extensions granted to Plaintiffs.
161. The Rescission Letter purports to “amend[] the period of liquidation to end on
March 28, 2025, at 5:00pm ET”—three minutes before the email attaching the Rescission Letter
was sent.
E. The Rescission Letter Has Caused and Will Continue to Cause Irreparable Harm
162. ED’s rescission of all prior extension request approvals and declaration without any
advance notice that all previously extended liquidation periods are now deemed to have already
expired is already having and will continue to have devastating effects on vital state and local
37
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 38 of 55
government education programs and services designed to ameliorate the long-term effects of the
pandemic.
163. ED’s rescission is causing, and will continue to cause, significant and irreparable
harm to Plaintiffs. Plaintiffs and their local school districts, nonpublic schools, and contractors
have created budgets, hired staff, offered services to families and children, and developed
operating plans in reliance on the already approved extensions of the liquidation period through
March 28, 2026. Indeed, Plaintiffs had already spent awarded funds for which they have not yet
sought reimbursement from ED when the Rescission Letter issued. The Rescission Letter purports
to cutoff the period during which Plaintiffs can obtain reimbursement for these funds as well as
ES funding Plaintiffs have committed to pay in the future under obligations incurred through
September 30, 2024.
164. Plaintiffs and their subgrantees relied on the extensions of the liquidation period
through March 2026 in budgeting around the programs and services to be paid for by the awarded
grants.
165. The abrupt rescission of the previously approved extensions has caused upheaval
for Plaintiffs, including immediate harm to public education initiatives and the termination, and
future termination, of state employees and contractors as States and districts absorb the losses of
the obligated ES funding with their operational budgets.
New York
166. New York’s primary vendor for implementing the EANS program, who contracts
directly with the New York State Education Department (NYSED), has already furloughed staff in
response to the Rescission Letter, with plans to lay those staff off if the funds are not made available
soon. If that happens, there will not be enough time to hire new staff and get the programs back up
38
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 39 of 55
and running for the 2024-2025 academic year. Furthermore, NYSED has 19 employees that it has
hired using EANS administrative funds.
167. Also at risk are numerous educational, social-emotional, and construction projects
that were supported by these funds, including construction that was ongoing, with costs being
incurred or projects partially completed with the understanding that reimbursement would be
available. New York does not have funds in its education budget to make up for the shortfall in
funds resulting from the Rescission Letter.
Arizona
168. In Arizona, a school district located on the Navajo Reservation was approved to use
ESSER III funds for a tutoring service to supplement students' reading and math instruction and
to repair aging infrastructure that left students vulnerable during the COVID-19 pandemic. After
ED’s rescission letter, the school terminated the tutoring service and the infrastructure
project. Because the school has not been reimbursed for funds already expended, it has used a
majority of its limited reserve funds to cover outstanding costs and will likely need to lay off
teachers and staff members as a result.
California
169. In the short time since its enactment, ED’s rescission of ARP liquidation extensions
has created a substantial hardship for CDE and its vendors under the ARP programs at issue, to
say nothing of the communities and students who benefit from their services. For example, in
accordance with the ED’s approval of CDE’s liquidation extensions, CDE has obligated EANS
funds through contractual agreements with vendors to provide services to non-public schools and
has relied on the vendors’ invoices as the documentation to support accessing and drawing down
the EANS funding. Due to ED’s sudden rescission of liquidation extensions, CDE has lost the
39
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 40 of 55
ability to reimburse vendors for EANS costs they have already incurred, thereby materially
impeding CDE’s contractual obligations to these vendors. To date, of the 10 vendors CDE relies
on to provide its services under EANS, 3 have already communicated to CDE they are ceasing all
of their EANS-related services to schools and students due to non-payment.
170. Similarly, since California LEAs receive advancements from CDE under the
ESSER and HCY programs, LEAs across the state have already obligated funds for numerous
projects contemplated under those programs. For example, many school districts across California
have entered into multi-million-dollar contracts for the renovation and improvement of their
heating, ventilation, and air conditioning (HVAC) systems, and did so with the understanding that
they would be able to cover associated expenses through ESSER funding. Now, in light of ED’s
rescission of those funding sources, LEAs can no longer fulfill their payment obligations under
those contracts, thereby leaving the underlying projects unfinished and compromising the
relationship between California LEAs and their contractors.
Delaware
171. The Delaware Department of Education does not have the budget to make up for
the shortfall if the unliquidated Education Stabilization funding is not disbursed. This critical loss
of Education Stabilization funding has caused upheaval for Delaware, including immediate harm
to public education initiatives and confusion among grant recipients. If the recission is allowed to
stand the State will be forced to quickly find unbudgeted and unplanned funds or cancel contracts
which would significantly delay and interrupt efforts to create healthy and safe learning
environments. For example, Caesar Rodney School District used grant funds to purchase Smart
Boards, a technology necessary to support their students' recovery and academic success after the
disruptions caused by COVID-19. The Smart Boards have been delivered but without the
40
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 41 of 55
additional funds, Caesar Rodney will not be able to install the Boards, wasting the funds already
expended while failing to get the technology that supports teaching and learning.
District of Columbia
172. The District of Columbia was relying on ES funding to continue high-impact
tutoring, administer professional development for teachers, conduct student assessments, and
implement data tools to support ongoing academic recovery for students. See Stewart Decl. ⁋ 10.
The immediate loss of these funds will cause the District to terminate contracts and discontinue
services providing: state-administered high-impact tutoring in over 40 schools supporting more
than 1,900 students; school-based high-impact tutoring for students in grades 2-5; afterschool
tutoring; reading intervention staff; high-quality core subject instructional materials; professional
development services for teachers; contracts for substitute teachers; school operations contracts;
classroom assessments; and the termination of up to 140 school staff members.
Illinois
173. Without the nearly $80 million Illinois has in unliquidated ES funding, Illinois will
be forced to end education initiatives aimed to improve quality of instruction and learning
outcomes for students across the State. The State Board of Education will be forced to cancel 66
intergovernmental contracts with regional offices of education that provide instructional services
and professional learning to school districts. The ES funding is also relied upon to employ 91
instructional coaches who enhance teaching quality and improve student learning outcomes for
students across Illinois. These instructional coaches have performed 2,738 visits with districts
across Illinois this school year alone. The State may also have to end new teacher and principal
mentoring programs—programs which, between now and the end of the fiscal year, will have
supported 1,225 new educators, 378 virtual coaches, 172 mentors, and 165 first-year principals
41
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 42 of 55
from schools across the State. These programs make teachers and principals more likely to stay in
their roles for longer and equip them with the necessary skills to provide students with the math,
literacy, and social-emotional learning they missed out on during the COVID-19 pandemic.
Maine
174. Without the unliquidated ES funding, Maine is cancelling trainings that would have
served hundreds of educators. The state’s contractors will have to lay off staff. More than 100
teachers will not be paid for their work or reimbursed for materials they paid for out-of-pocket.
Two school districts will be left footing the bill for partially completed ventilation projects that
they have not budgeted local funds for.
Maryland
175. In Maryland, one of the state’s local education agencies, Baltimore City Public
Schools, has announced the cancellation of tutoring and afterschool programs supported by ES
funds.
176. Baltimore City Public Schools already has spent the vast majority of ES funds for
which it requested liquidation extensions and will need to cut other projects and programs to cover
the approximately $48 million budget gap created by ED’s rescission.
Michigan
177. In Michigan, Battle Creek Public Schools is completing an HVAC project at their
schools with the $2,491,807.91 in ESSER III funds that had been approved for liquidation over
the next year. If Michigan does not receive these funds that would otherwise be available absent
the Rescission Letter for this project, Battle Creek Public Schools would likely need to abandon
the HVAC project that is in process.
42
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 43 of 55
178. In addition, Michigan’s Department of Education had received extensions for
approximately $8 million in administrative funds available under ESSER II, ESSER III, and ARP-
HCY. This funding supported contracts used for reporting and monitoring under the CRRSA and
ARP requirements. If Michigan does not receive the funding that would otherwise be available
absent the Rescission Letter, Michigan’s Department of Education risks being found in default of
these contracts. In addition, these administrative funds support MDE staff oversight of district use
and spending of ESSER funds.
Minnesota
179. If the funds are not forthcoming, MDE may have to narrow the scope of the planned
work and pay for the remaining contractual obligations with state funds, for MDE has budgeted
the funding to other entities in reliance to USDOE approval of the extension.
Nevada
180. Upon information and belief, as a result of the ED rescission letter, fourteen
temporary employees who were paid under ESSER have been terminated.
181. Upon information and belief, in response to the ED rescission letter, at least one
company disabled its invoicing portal which is affecting the ability of other vendors to submit bills
for payment.
New Jersey
182. ED’s rescission of the approved liquidation extension for ES funds will cause
significant irreparable harm for New Jersey and its local school districts.
183. The school districts that received liquidation extensions have created budgets,
entered into contracts, have purchased raw materials, and developed operating funds to improve
school environmental standards in line with public health standards. These school districts acted
43
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 44 of 55
in reliance on the fact that, so long as they complied with the terms and conditions of the ES
funding awards, they would be able to draw upon those funds through March 28, 2026.
184. As a result of ED’s February 19, 2025, guidance, many school districts have made
payments on these obligations, intending to seek reimbursement from ED. Some school districts
have not yet been able to seek such reimbursement and face uncertainty as to whether they will
need to foot the bill for these services that ED had previously pledged to pay.
185. Separate from the school districts, the New Jersey Department of Education
(“NJDOE”) has also suffered irreparable harm. For example, NJDOE has given an offer to fill a
Literacy Specialist position, who would be paid from ARP HCY funds. The Literacy Specialist
was intended to work in the Office of Learning Equity Academic Recovery to assist in designing
literacy curricula, training, and program improvement. NJDOE was also using its ES funds to
create a homeless case management system, and implement upgrades to its grant system. Without
the ES funds, NJDOE is unlikely to be able to complete these necessary projects due to budgetary
constraints.
New Mexico
186. New Mexico’s Public Education Department was relying on the availability of this
approximately $17.8 million in unliquidated funds to address the negative impact that COVID-19
had on children’s education and educational outcomes. Among other things, these funds were to
be used to provide educational services to remedy learning loss that resulted from the long-term
pause in in-person instruction including intensive tutoring programs in math and literacy and
family and student engagement programs. The funds were also to be used to improve school
facilities, including ventilation and air conditioning systems.
44
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 45 of 55
Oregon
187. Without the ES grant funds, among other things, Oregon will have to terminate all
work associated with its WestEd contract. As one example of the negative repercussions flowing
from that termination, Oregon will have to cancel five scheduled summits that were carefully
planned and booked to ensure statewide participation, intended to provide training on the
frameworks and instructional resources prepared by WestEd for ultimate dissemination to 750
educators across the state. Oregon will also lose the benefit of investments already made into that
and other efforts intended to address widespread learning losses that occurred during the pandemic.
Pennsylvania
188. Defendants’ abrupt rescission of the previously approved extensions has harmed
PDE, Pennsylvania schools, and taxpayers. Pennsylvanians will ultimately bear the burden of the
ED’s failure to keep its word, as PDE, its LEAs and Pennsylvania taxpayers have been or will be
forced to make payments for goods and services already provided under CARES grant programs
based on the ED’s assurance that such payments would be reimbursed as enacted by Congress and
as promised by ED. Further, in the absence of a remedy here, Pennsylvania schools and students
will continue to suffer from the lack of appropriate physical facilities and will not benefit from the
programs designed to address learning loss that the CARES Act funded.
189. All Plaintiffs have suffered, and will continue to suffer, immediate irreparable
harms similar to these examples.
190. That Defendants rescinded the approved liquidation period extension requests
without any warning and with immediate effect—indeed, declaring at the time of the rescission
that the prior liquidation periods were already deemed to have expired—only exacerbates the harm
45
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 46 of 55
to Plaintiffs by depriving them of any opportunity to undertake advance planning to mitigate the
devastating impact of ED’s reversal of position.
191. In sum, Defendants’ actions to unlawfully and suddenly rescind the extension
request approvals and declare all previous liquidation periods to have already expired has resulted
in immediate and continuing irreparable harm to Plaintiffs, their public education agencies, local
school districts, nonpublic schools, contractors, and their residents. These harms will deepen
considerably if Defendants are not enjoined from rescinding the prior extension request approvals
through March 2026.
CAUSES OF ACTION
COUNT I
Rescission Letter Violates Administrative Procedure Act – Arbitrary and Capricious
192. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if
set forth herein.
193. The Rescission Letter is a final agency action subject to the APA.
194. The APA requires that a court “hold unlawful and set aside agency action, findings,
and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in
accordance with law.” 5 U.S.C. § 706(2)(A).
195. An agency action is arbitrary and capricious if the agency has “relied on factors
which Congress has not intended it to consider, entirely failed to consider an important aspect of
the problem, offered an explanation for its decision that runs counter to the evidence before the
agency, or is so implausible that it could not be ascribed to the difference in view or the produce
of agency expertise.” Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983).
46
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 47 of 55
196. The APA directs a court to set aside an agency action that is not the product of
“reasoned decisionmaking” and is “arbitrary and capricious.” Dep’t of Homeland Sec. v. Regents
of the Univ. of California, 591 U.S. 1, 16 (2020). An agency cannot “depart from a prior policy
sub silentio” or simply disregard its prior practice. FCC v. Fox Television Stations, Inc., 556 U.S.
502, 515-16 (2009). Rather, when changing positions agencies must “provide a reasoned
explanation for the change,” “‘display awareness that [they are] changing position,’ ” and consider
“ ‘serious reliance interests.’ ” Encino Motorcars, LLC v. Navarro, 579 U. S. 211, 221–222 (2016)
(quoting Fox Television Stations, 556 U. S. at 515).
197. ED’s Rescission Letter fails to pass muster under the Supreme Court’s “change-in-
position doctrine,” which applies where an “agency changed existing policy.” Food & Drug
Admin. v. Wages and White Lion Investments, L.L.C., No. 23-1038, 2025 WL 978101, at *13-*14
(U.S. Apr. 2, 2025). ED has changed existing policy because, by issuing the Rescission Letter, it
has acted “inconsistent[ly]” with an “earlier position,” Encino Motorcars, 579 U.S. at 224,
performed “a reversal of [its] former views as to the proper course,” State Farm, 463 U. S., at 41,
and “disavow[ed]” prior “inconsistent” agency action as “no longer good law,” Fox Television,
556 U. S., at 517 (internal quotation marks omitted). See also Wages and White Lion Investments,
2025 WL 978101, at *14.
198. Despite changing existing policy, Defendants have not provided any “good
reasons” for rescinding its prior approval of Plaintiffs’ extension requests and setting aside
longstanding policy. Wages and White Lion Investments, 2025 WL 978101, at *14. The Rescission
Letter provides only a single purported justification for ED’s sudden change of position:
“Extending deadlines for COVID-related grants . . . years after the COVID pandemic ended is not
consistent with the Department’s priorities and thus not a worthwhile exercise of its discretion.”
47
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 48 of 55
The government had already declared the COVID-19 emergency over when ED issued approvals
of the extension requests; thus, the rationale ED uses to support its abrupt change in policy is
nonsensical.
199. The Rescission Letter points to no other facts supporting ED’s reversal of position.
It contains no acknowledgment of the public education purposes for which the fully obligated
grants actually have been and are being used, much less an explanation of why those uses are no
longer necessary. Indeed, substantial evidence before the agency shows that the grants at issue
continued to be used for needed purposes such as supporting summer instruction and extended day
programs to mitigate the long-term effects on students of lost instruction time, as Congress
intended, and as ED recognized in granting the extensions.
200. There is no indication that Congress intended Defendants to rely on the pandemic
being “over” as a reason to rescind prior approval of extension requests.
201. Upon information and belief, in issuing the Rescission Letter, Defendants
conducted no individualized assessment of the justifications previously provided by Plaintiffs in
support of their extension requests and accepted by ED as sufficient.
202. Moreover, Defendants failed to take into consideration the substantial reliance
interests of Plaintiffs and their districts and the tremendously harmful impact of immediately
rescinding the liquidation period extensions, without any warning—to the contrary, Defendants
erroneously characterized Plaintiffs’ reliance interests as “minimal” and “unreasonable.” Plaintiffs
and their districts face the impossible decision of terminating partially completed projects and
services, defaulting on payments to contractors, and/or having to absorb costs in operational
budgets, affecting funding for teachers and core educational services.
48
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 49 of 55
203. Defendants have provided no other reasoned explanation for their sudden change
in position since approving the extensions requests within the past few months.
204. Pursuant to 5 U.S.C. § 706 and 28 U.S.C. § 2201, Plaintiffs are entitled to a
declaration that the Rescission Letter violates the APA because it is arbitrary and capricious.
205. Plaintiffs are also entitled to vacatur of the Rescission Letter and reinstatement of
the prior extended liquidation periods pursuant to 5 U.S.C. § 706; all appropriate preliminary relief
under 5 U.S.C. § 705; and a preliminary and permanent injunctions preventing Defendants from
implementing, enforcing, or reinstating the Rescission Letter.
COUNT II
Rescission Letter Violates Administrative Procedure Act – Contrary to Law
206. Plaintiffs incorporate by reference the foregoing paragraphs of this Complaint as if
set forth herein.
207. The Rescission Letter is a final agency action subject to the APA.
208. The Rescission Letter provides only a single purported justification for ED’s sudden
change of position: “Extending deadlines for COVID-related grants . . . years after the COVID
pandemic ended is not consistent with the Department’s priorities and thus not a worthwhile
exercise of its discretion.”
209. However, states may lawfully request extensions of the liquidation periods for their
ES funding pursuant to longstanding ED precedent and federal regulation. See California Tydings
Decision; 2 CFR § 200.344(c) (“When justified, the Federal Agency . . . may approve extensions
for the recipient or subrecipient.”).
49
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 50 of 55
210. Congress urged ED to exercise its authority extend the liquidation period for
Plaintiffs. Senate Report 118-84, Committee on Appropriations, at pg. 253, available at
https://perma.cc/BGA9-XFBP.
211. To qualify for an extension under established ED decisions and policy, Plaintiffs
were required to provide sufficient justification and documentation of the underlying obligation of
funds. In granting Plaintiffs’ requests for extensions of the liquidation periods for ES funding, ED
expressly determined in every instance Plaintiffs had provided sufficient justification and
documentation of the underlying obligations.
212. Defendants did not undertake any individualized consideration of the awards at
issue; instead, they simply issued a blanket rescission of all prior approvals of Plaintiffs’ extension
requests based on the end of the COVID-19 pandemic in 2023 when, as a matter of law, that is not
a lawful basis to rescind an already-granted extension of a liquidation period.
213. The relevant regulations and policy do not authorize rescinding an extension
already granted based on the fact that the pandemic has ended. To the contrary, Congress
affirmatively chose to continue funding the ES funding grants as recently as June 2023—after
approval of the resolution formally ending the COVID-19 emergency. This is particularly relevant
because, in other contexts, Congress spoke unambiguously about whether funds should continue
to be available at the end of the public health emergency. See, e.g., ARP § 9401, 135 Stat. at 127
(“during the emergency period . . . and the 1-year period immediately following the end of such
emergency period”); id. § 9811(hh), 135 Stat. at 210-11 (“ends on the last day of the first quarter
that begins one year after the last day of the emergency period”); CARES Act § 1109(h), 134 Stat.
at 306 (“until the date on which the national emergency . . . expires”); Fiscal Responsibility Act of
50
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 51 of 55
2023, Pub. Law 118-5 (June 3, 2023) (rescinding $27 billion of appropriations deemed no longer
necessary once the pandemic was over).
214. Pursuant to 5 U.S.C. § 706 and 28 U.S.C. § 2201, Plaintiffs are entitled to a
declaration that the Rescission Letter is contrary to law and in violation of the APA.
215. Plaintiffs are also entitled to vacatur of the Rescission Letter and reinstatement of
the prior extended liquidation periods pursuant to 5 U.S.C. § 706; all appropriate preliminary relief
under 5 U.S.C. § 705; and a preliminary and permanent injunctions preventing Defendants from
implementing, enforcing, or reinstating the Rescission Letter.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs pray that this Court:
i. Pursuant to 5 U.S.C. § 706 and 28 U.S.C. § 2202, vacate and set aside the Rescission Letter,
and any other further actions taken by Defendants to implement or enforce the Rescission
Letter;
ii. Pursuant to 28 U.S.C. § 2201, issue a judicial declaration that the Rescission Letter is an
unlawful act that violated the APA;
iii. Preliminarily and permanently enjoin Defendants from implementing or enforcing the
Rescission Letter or otherwise revoking ED’s approvals of extension requests that extended
the liquidation periods for Plaintiffs’ ES funding through March 28, 2026;
iv. Award Plaintiffs their reasonable fees, costs, and expenses, including attorneys’ fees,
pursuant to 28 U.S.C. § 2412; and
v. Grant other such relief as this court deems appropriate, just, and proper.
Respectfully submitted,
51
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 52 of 55
LETITIA JAMES KRISTIN K. MAYES
ATTORNEY GENERAL OF NEW YORK ATTORNEY GENERAL OF ARIZONA
By: /s Andrew Amer By: /s/ Alexa Salas
Andrew Amer Alexa Salas*
Special Counsel Assistant Attorney General
Molly Thomas-Jensen Lauren Watford*
Special Counsel Assistant Attorney General
Rabia Muqaddam 2005 North Central Avenue
Special Counsel for Federal Initiatives Phoenix, Arizona 85004
Stephen C. Thompson (602) 542-3333
Assistant Attorney General Alexa.Salas@azag.gov
28 Liberty Street Lauren.Watford@azag.gov
New York, NY 10005 ACL@azag.gov
(212) 416-6127
andrew.amer@ag.ny.gov Counsel for the State of Arizona
Counsel for the State of New York
ROB BONTA KATHLEEN JENNINGS
ATTORNEY GENERAL OF CALIFORNIA ATTORNEY GENERAL OF THE STATE OF
DELAWARE
By: /s/ Maureen C. Onyeagbako
Maureen C. Onyeagbako* By: /s/ Vanessa L. Kassab
Supervising Deputy Attorney General Vanessa L. Kassab
José Pablo Galán de la Cruz* Deputy Attorney General
Deputy Attorney General Delaware Department of Justice
Cheryl L. Feiner* 820 N. French Street
Senior Assistant Attorney General Wilmington, DE 19801
California Attorney General’s Office (302) 683-8899
1300 I Street, Ste. 125 vanessa.kassab@delaware.gov
P.O. Box 944255
Sacramento, CA 94244-2550 Counsel for the State of Delaware
Telephone: (916) 210-7324
Email: Maureen.Onyeagbako@doj.ca.gov
Pablo.Galan@doj.ca.gov
Cheryl.Feiner@doj.ca.gov
Counsel for Plaintiff State of California
52
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 53 of 55
BRIAN L. SCHWALB ANNE E. LOPEZ
ATTORNEY GENERAL FOR THE DISTRICT OF ATTORNEY GENERAL FOR THE STATE OF
COLUMBIA HAWAIʻI
By: /s/ Andrew Mendrala By: /s/ Kalikoʻonālani D. Fernandes
Andrew Mendrala* David D. Day*
Assistant Attorney General Special Assistant to the Attorney General
Public Advocacy Division Kalikoʻonālani D. Fernandes*
Office of the Attorney General for the Solicitor General
District of Columbia 425 Queen Street
400 Sixth Street, NW Washington, DC Honolulu, HI 96813
20001 (808) 586-1360
(202) 724-9726 kaliko.d.fernandes@hawaii.gov
Andrew.Mendrala@dc.gov
Counsel for the State of Hawaiʻi
Counsel for the District of Columbia
AARON M. FREY KWAME RAOUL
ATTORNEY GENERAL FOR THE STATE OF ATTORNEY GENERAL FOR THE STATE OF
MAINE ILLINOIS
By:/s/ Sarah A. Forster By: /s/ Elena S. Meth
Sarah A. Forster* Cara Hendrickson*
Assistant Attorney General Assistant Chief Deputy Attorney General
Office of the Attorney General Elena S. Meth*
6 State House Station Assistant Attorney General
Augusta, ME 04333-0006 Office of the Illinois Attorney General
Tel.: 207-626-8800 115 S. LaSalle St.
Fax: 207-287-3145 Chicago, IL 60603
Sarah.Forster@maine.gov (773) 835-0182
Cara.Hendrickson@ilag.gov
Counsel for the State of Maine Elena.Meth@ilag.gov
Counsel for the State of Illinois
53
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 54 of 55
ANTHONY G. BROWN ANDREA JOY CAMPBELL
ATTORNEY GENERAL FOR THE STATE OF ATTORNEY GENERAL OF MASSACHUSETTS
MARYLAND
By: /s/ David C. Kravitz
By: /s/ Keith M. Jamieson David C. Kravitz*
Elliott Schoen* State Solicitor
Principal Counsel Katherine Dirks
Assistant Attorney General Chief State Trial Counsel
Alan J. Dunklow* Office of the Attorney General
Deputy Principal Counsel One Ashburton Place, 20th Floor
Assistant Attorney General Boston, MA 02108
Maryland State Department of Education (617) 963-2427
Keith M. Jamieson* david.kravitz@mass.gov
Assistant Attorney General
Federal Accountability Unit Counsel for the
Office of the Attorney General Commonwealth of Massachusetts
200 Saint Paul Place
Baltimore, Maryland 21202
(410) 576-6960 KEITH ELLISON
kjamieson@oag.state.md.us ATTORNEY GENERAL FOR THE STATE OF
MINNESOTA
Counsel for the State of Maryland By: /s/ Liz Kramer
Liz Kramer*
Solicitor General
445 Minnesota Street, Suite 1400
DANA NESSEL St. Paul, Minnesota, 55101
ATTORNEY GENERAL OF MICHIGAN (651) 757-1010
Liz.Kramer@ag.state.mn.us
By: /s/ Neil Giovanatti
Neil Giovanatti Counsel for the State of Minnesota
BreAnna Listermann*
Assistant Attorneys General
Michigan Department of Attorney General AARON D. FORD
525 W. Ottawa ATTORNEY GENERAL OF NEVADA
Lansing, MI 48909
(517) 335-7603 By: /s/ Heidi Parry Stern
GiovanattiN@michigan.gov Heidi Parry Stern (Bar. No. 8873)
ListermannB@michigan.gov Solicitor General
Office of the Nevada Attorney General
Counsel for the People of the State of 1 State of Nevada Way, Ste. 100
Michigan Las Vegas, NV 89119
HStern@ag.nv.gov
Counsel for the State of Nevada
54
Case 1:25-cv-02990 Document 1 Filed 04/10/25 Page 55 of 55
MATTHEW J. PLATKIN RAÚL TORREZ
ATTORNEY GENERAL OF NEW JERSEY ATTORNEY GENERAL OF THE STATE OF NEW
MEXICO
/s/ Lauren E. Van Driesen
Lauren E. Van Driesen
Jessica L. Palmer /s/ Anjana Samant
Justine Longa* Anjana Samant*
Deputy Attorneys General Deputy Counsel
Office of the Attorney General New Mexico Department of Justice
124 Halsey Street, 5th Floor 408 Galisteo Street
Newark, NJ 07101 Santa Fe, NM 87501
(609) 696-5279
Lauren.VanDriesen@law.njoag.gov asamant@nmdoj.gov
Jessica.Palmer@law.njoag.gov (505) 270-4332
Justine.Longa@law.njoag.gov
Counsel for the State of New Mexico
Counsel for the State of New Jersey
JENNIFER C. SELBER
DAN RAYFIELD General Counsel
ATTORNEY GENERAL FOR THE STATE OF Michael J. Fischer
OREGON Executive Deputy General Counsel
By: /s/ Sara Van Loh
Sara Van Loh OSB #044398* By:/s/ Thomas P. Howell
Senior Assistant Attorney General Thomas P. Howell*
100 SW Market Street Deputy General Counsel
Portland, Oregon 97201 Governor’s Office of General Counsel
Tel (971) 673-1880 30 N. 3rd Street, Suite 200
Fax (971) 673-5000 Harrisburg, PA 17101
Sara.VanLoh@doj.oregon.gov (717) 460-6786
thowell@pa.gov
Attorneys for the State of Oregon
Counsel for Governor Josh Shapiro,
Commonwealth of Pennsylvania
* Pro Hac Vice application to be filed
55