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Order on Motion for Preliminary Injunction, State of Washington v. DeVos, No. 2:20-cv-01119 (W.D. Wash.), Doc. 54 (August 21, 2020)

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Order Granting Motion for Preliminary Injunction in State of Washington v. Betsy DeVos and the United States Department of Education, Case No. 2:20-cv-1119-BJR, Doc. 54, U.S. District Court for the Western District of Washington, filed August 21, 2020. The State seeks to enjoin the Department from implementing an Interim Final Rule on how states allocate CARES Act funding to private schools, and claims it diverts emergency relief funding from economically disadvantaged public schools. The Court concludes the balance of equities favors an injunction and preliminarily enjoins the Department and Secretary Betsy DeVos from implementing or enforcing the Guidance of April 30, 2020 or the Interim Final Rule issued July 1, 2020. It requires no bond, and the signature block names Barbara J. Rothstein.

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“Order on Motion for Preliminary Injunction, State of Washington v. DeVos, No. 2:20-cv-01119 (W.D. Wash.), Doc. 54 (August 21, 2020).” Original at storage.courtlistener.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/order-on-motion-for-preliminary-injunction-state-of-washington-v-devos-b52e7a5d1a/, SHA-256 2cca103b729b3580dc0679d5e425d4e6bf0a9f27af36b208a225ffd272106581.

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                Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 1 of 21




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                             UNITED STATES DISTRICT COURT FOR THE
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                               WESTERN DISTRICT OF WASHINGTON
 7                                       AT SEATTLE

 8                                               )
     STATE OF WASHINGTON                         )
 9                                               )       CASE NO. 2:20-cv-1119-BJR
                           Plaintiff,            )
10                                               )       ORDER GRANTING MOTION FOR
                    v.                           )       PRELIMINARY INJUNCTION
11                                               )
     BETSY DEVOS, in her official capacity as )
12   Secretary of the United States Department of)
13   Education; and the UNITED STATES            )
     DEPARTMENT OF EDUCATION, a                  )
14   federal agency                              )
                                                 )
15                         Defendants.           )
16

17                                         I.   INTRODUCTION

18          Before the Court is                                                           , seeking

19   to enjoin Defendants Secretary Betsy DeVos and the Department of Education from implementing
20   an interim final rule                       , which outlines how states may allocate funding
21
     provided by the Coronavirus Aid, Relief, and Economic Security Act ( CARES Act ) to private
22
     schools.    The State claims that the Interim Final Rule
23
     effectively diverts emergency relief funding from economically disadvantaged public schools to
24

25   less disadvantaged private schools.                         Dkt. No. 8. In essence, the parties

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               Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 2 of 21




     dispute whether the CARES Act requires States to allocate funding to private schools using a
 1
     formula based on the percentage of students from low-income families who attend private school
 2

 3              -                                                     whether, as Defendants claim, the CARES

 4   Act authorized the Department to issue the Interim Final Rule, which directs States to allocate that
 5   funding based on total enrollment in private schools                              -              Having
 6
     reviewed the Motion, the opposition thereto, the record of the case, the relevant legal authorities,
 7
     and having conducted oral argument on August 10, 2020 via video-teleconference, the Court will
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     grant the Motion and issue the injunction
 9

10                                             II.     BACKGROUND

11       A. The COVID-19 Pandemic

12           The case before the Court is but one of many disputes being played out against the backdrop

13   of the COVID-19 pandemic. The pandemic has wreaked havoc on this nation and created novel
14   and difficult questions for the courts. One of the most pressing issues is how to provide education
15
     for children at a time fraught with the dangers of a life-threatening, highly communicable disease.
16
             On February 29, 2020, as the virus spread through the State of Washington, Governor Jay
17
     Inslee declared a state of emergency. See Compl., Dkt. No. 1 ¶ 25; see also
18

19   Proclamation 20-05 (Feb. 29, 2020). 1

20   spread, Gov. Inslee announced the closure of all public and private K-12 schools in King,

21   Snohomish, and Pierce Counties effective March 17 and lasting, at that time, through at least April
22

23

24
     1
      Available at https://www.governor.wa.gov/sites/default/files/proclamations/20-
25   05%20Coronavirus%20%28final%29.pdf.
                                                             2
               Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 3 of 21




     24. Compl. ¶ 26. Through repeated orders by the Governor, schools throughout the State were
 1
     ordered closed for the remainder of the school year, forcing educators to transition to online
 2

 3   instruction for all students. Id. ¶¶ 26, 30. The State reports that significant efforts have been taken

 4   to provide support to students in need in particular, including serving meals, providing special
 5   education and related services to students with disabilities, providing remote learning access for
 6
     English learners, and offering computing and connectivity technology to low-income students. Id.
 7
     Many of these efforts are on-going.
 8
         B. The CARES Act GEER and ESSER Funds
 9
             In response to the wide-ranging economic consequences of the pandemic, Congress passed
10

11   the CARES Act, which the President signed on March 27, 2020. See Pub. L. No. 116-136, 134

12   Stat. 281 (Mar. 27, 2020); Compl. ¶¶ 32 33.2 The CARES Act contains a wide array of federal

13   funding designed to combat the consequences of the pandemic, including $30.75 billion for the
14
     creation of an Education Stabilization Fund                   to address educational needs
15
     students. See Compl. ¶ 34.
16
             The CARES Act directs the Secretary of Education to allocate ESF funding to three sub-
17
     funds, two of which are pertinent here.3 See CARES Act § 18001(b); Compl. ¶¶ 34 44. The first
18

19

20

21
     2
       Since the CARES Act was codified in scattered titles across the U.S. Code, the Court will refer to specific
22   provisions therein by their section within the CARES Act. For example, CARES Act sections 18003 and 18005,
     relevant to this case, are codified in 20 U.S.C. § 3401 note.
23   3
       The third sub-                                                                                         See
     CARES Act § 18004. Notably, however, at least two courts within the Ninth Circuit have recently granted
24   preliminary injunctions limiting the Department  thority to impose eligibility restrictions on students who may
     receive HEER funding. See Oakley v. Devos, No. 20-cv-03215, 2020 WL 3268661 (N.D. Cal. June 17, 2020);
25   Washington v. DeVos, No. 20-cv-0182, 2020 WL 3125916 (E.D. Wash. June 12, 2020).
                                                             3
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     is the                                    ation Relief               ) Fund, for which Congress appropriated
 1
     approximately $3 billion. See CARES Act § 18002, § 18001(b)(1). The CARES Act directs the
 2

 3   Secretary to make GEER funding available to the governor of each state based on the relative

 4   population of students in that state and, in particular, the relative population of students from low-
 5   income families. Id. § 18002(a), (b). The Act further provides that GEER funds may be used to
 6
              e emergency support through gr
 7
     educational agency                    deems have been most significantly impacted by coronavirus to
 8
     support the ability of such local educational agencies to continue to provide educational services
 9
                                                                                                                   4
10   to their students and to support the on-                                                                          Id. §

11   18002(a), (b), (c)(1).

12            The second ESF fund is the Elementary and Secondary School Emergency Relief
13               ) Fund, for which Congress appropriated approximately $13.5 billion. See id. §§ 18003,
14
     18001(b)(2). The CARES Act directs the Secretary of Education to make ESSER funding
15
     available by grant directly to SEAs, again according to a formula based on the relative population
16
     of students from low-income families. Id. § 18003(b). The Act then instructs SEAs to provide the
17

18   funding to LEAs through sub-grants. Id. § 18003(c). The Act specifies the uses that LEAs may

19

20

21
     4
       An LEA is
22   either administrative control or direction of, or to perform a service function for, public elementary schools or
                                        303.23(a). In Washington, LEAs include school districts, charter schools, and
23   state-tribal education compact schools. Compl. ¶ 17. SEAs
     agency or officer primarily responsible for the State supervision of public elementary schools and secondary
24                                                         SEA is the Office of Superintendent for Public Instruction.
     Compl. ¶ 39.
25
                                                               4
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     put ESSER                                     oordination of preparedness and response efforts and
 1
         roviding principals and others school leaders with the resources necessary to address the needs
 2

 3   of their individual schools.   Id. § 18003(d)(1) (12). The statute explicitly provides that ESSER

 4   funds may be used for                                                 -income children or students,
 5   children with disabilities, English learners, racial and ethnic minorities, students experiencing
 6
     homelessness, and                         Id. § 18003(d)(4).
 7
               Critically for purposes of this dispute, Congress outlined how LEAs are to allocate GEER
 8
     and ESSER funding to non-public, i.e. private, schools. See Compl. ¶ 43 44. Specifically, Section
 9

10   18005 provides that                 receiving [GEER or ESSER] funds . . . shall provide equitable

11   services in the same manner as provided under section 1117 of the [Elementary and Secondary

12                                of 1965 to students and teachers in non-public schools, as determined
13   in consultation with representatives of non-public schools.     CARES Act § 18005(a) (emphasis
14
     added).
15
               Given           reference to Section 1117 of the ESEA, closer examination of that statute
16
     is necessary. The ESEA                                                                       is the
17

18   statute by which Congress provides federal funding for primary and secondary education. Pub.

19   89 10, 79 Stat. 27, as amended, 20 U.S.C. § 6301 et seq. Title I of the ESEA created a grant

20   program designed to improve the academic achievement of disadvantaged children. See id. Under
21
     Title I, public schools are eligible to receive funding for schoolwide programs if 40 percent or
22
     more of the children in the LEA attendance area come from low-income families.               Id. §
23
     6314(a)(1)(A).
24
               Section 1117 of Title I    specifically referenced in the CARES Act   outlines how LEAs
25
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     are to share Title I funding with eligible private schools, instructing LEAs to provide services to
 1
                                                    20 U.S.C. § 6320(a)(1). More specifically, the formula
 2

 3   that determines how much Title I funding private schools are to receive                          equal to the

 4   proportion of funds allocated to participating school attendance areas based on the number of
 5   children from low-income families who attend private schools                   Id. § 6320(a)(4)(A)(i). This
 6
     formula has consistently been interpreted to mean that LEAs are to share their Title I funding in
 7
     proportion to the number of students from low-income families that reside in their attendance area
 8
     but who attend private school.                            -
 9

10           The State of Washington submitted its application for CARES Act funding pursuant to the

11   GEER and ESSER Funds on April 27, 2020. Compl. ¶ 78; see also Compl., Ex. 6, Dkt. No. 1-9.

12   The State was awarded $216.9 million in federal aid through the ESSER Fund and $ 56.8 million
13   through the GEER Fund. Compl. ¶ 78;                                         at 6.
14
         C. The                     CARES Act Guidance and Interim Final Rule
15
             On April 30, 2020, the Department published guidance purporting to interpret the provision
16
                                                                   -                     Section 18005. Compl. ¶¶
17
     53 55; see also Compl., Ex. 1, Dkt. No. 1-4 (                                , Providing Equitable Services
18

19   to Students and Teachers in Non-Public Schools Under the CARES Act Programs (Apr. 30, 2020)

20                   5
                         Claiming an ambiguity in the statute, the Guidance directed LEAs to provide
21   private schools with CARES Act funding                            the proportional share based on the number
22

23

24
     5
      Available at https://web.archive.org/web/20200526004048/https:/oese.ed.gov/files/2020/04/FAQs-Equitable-
25   Services.pdf.
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     of children enrolled in each non-public school whose students or teachers participate in the CARES
 1
     Act programs compared to the number of students enrolled in public schools in the LEA. Compl.,
 2

 3   Ex. 1 at 4; see also id. at 6. In other words, the Guidance adopted a formula for allocating ESF

 4   funding to private schools, based on the total number of enrolled students, regardless of their
 5                 income levels. This is the enrollment-based formula.
 6
                On July 1, 2020, despite objections from numerous constituencies, including the State, to
 7
                                                         -based formula, the Department issued its Interim Final
 8
     Rule.6 See CARES Act Programs; Equitable Services to Students and Teachers in Non-Public
 9

10   Schools, 85 Fed. Reg. 39,479 (codified at 34 C.F.R. § 76.665) 7                                             ; see also

11

12

13
     6
      The State was not alone in its concern that the enrollment-based formula would improperly divert funding from
14   public to private schools. The Guidance garnered a bevy of reactions. See Compl. ¶¶ 56 58. For example,

15                                                                                    ce to Section 1117 was clear and
     required the use of the poverty-based formula. Compl., Ex. 2, Dkt. No. 1-5 (Letter from Carissa Moffat Miller,
16                                                                                 ,
     https://ccsso.org/sites/default/files/2020-05/DeVosESLetter050520.pdf); Compl., Ex. 3, Dkt. No. 1-6 (Letter from
17
     Educ. (May 20, 2020), https://edlabor.house.gov/imo/media/doc/2020-5-
18   20%20Ltr%20to%20DeVos%20re%20Equitable%20Services.pdf).
     7
         The final text of the Rule reads
19
         (c) Determining proportional share.
20         (1) To determine the proportional share of funds for equitable services to students and teachers in non-public
           elementary and secondary schools for each CARES Act program, an LEA must use one of the following
21         measures. The LEA need not use the same measure for each CARES Act program.
              (i) An LEA using all its funds under a CARES Act program to serve only students and teachers in public
22            schools participating under Title I, Part A of the ESEA may calculate the proportional share in accordance
              with paragraph (c)(1)(ii) of this section or by using
23               (A) The proportional share of Title I, Part A funds it calculated under section 1117(a)(4)(A) of the ESEA
                 for the 2019 2020 school year; or
24               (B) The number of children, ages 5 through 17, who attend each non-public school in the LEA that will
                 participate under a CARES Act program and are from low-income families compared to the total number
25               of children, ages 5 through 17, who are from low-income families in both Title I schools and participating
                 non-public elementary and secondary schools in the LEA.
                                                                 7
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     Compl. ¶¶ 62 73.
 1
             Based again on a claimed ambiguity in Section 18005, the Department gave LEAs two
 2

 3   options. First, an LEA could choose to use either the enrollment-based or poverty-based formula,

 4   but only if it agreed to limit CARES Act funding to schools that are qualified to participate in the
 5   ESEA Title I grant program, and actually receive funding under that program. Alternatively, if
 6
     the LEA elected to use its CARES Act funding for all schools within its attendance area, regardless
 7
     of Title I participation, the Final Interim Rule required the LEA to use the enrollment-based
 8
     formula in apportioning funding to private schools. Interim Final Rule at 39,481; see also 34
 9

10   C.F.R. § 76.665(c).

11           According to the State, this choice has the effect of increasing the proportion of CARES

12   Act funding going to its private schools, at the expense of its public schools. In Washington, as in
13   many states, not all Title I eligible schools choose to participate in Title I. The State avers that of
14
     its 2,369 primary and secondary public schools, 1,594 are eligible to participate in Title I, but only
15
     1,002 actually do. Compl. ¶ 74. Regardless of which option an LEA chooses, in a state like
16
     Washington in which not all Title I eligible schools participate in that program, private schools
17

18   will receive a larger share of CARES Act funding than they would under a straight-forward

19                                              -based formula.

20

21

22

23
           (ii) Any other LEA must calculate the proportional share based on enrollment in participating non-public
24         elementary and secondary schools in the LEA compared to the total enrollment in both public and
           participating non-public elementary and secondary schools in the LEA.
25         34 C.F.R. §76.665(c).
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            D. Procedural History
 1
                The State filed suit                                                            on July 20, 2020. See
 2

 3   Compl., Dkt. No. 1.8                                                                            ; three under the

 4                                                   , 5 U.S.C. § 706, (Counts I to III),9 and one each under

 5   Separation of Powers (Count IV) and the Spending Clause, U.S. CONST. art. I. § 8, cl. 1 (Count V).
 6
     Compl. ¶¶ 95 119. The Complaint seeks injunctive and declaratory relief, including a declaration
 7
     that the Interim Final Rule is contrary to law and invalid; and preliminary and permanent
 8
     injunctions prohibiting its implementation, compelling the issuance of the contested CARES
 9
     funding to the State without the restrictions imposed by the Interim Final Rule, and permitting the
10

11   State to use the apportionment formula provided by Section 1117 of the ESEA. Id. at 30, ¶¶ a f.

12   On July 23, 2020, the State filed its Motion for Preliminary Injunction, asking the Court to

13   preliminarily enjoin Defendants from implementing or enforcing the Interim Final Rule. See
14
     Mot. for Prelim. Inj., Dkt. No. 8. In its response to the motion, the Department denies that the
15
     State is likely to succeed on the merits of its claims, or that the State will suffer irreparable harm
16
     absent an injunction.                     i          to                                  Dkt. No. 50. A hearing
17
     on the motion took place, over video-teleconferencing, on August 10, 2020. Dkt. No. 52.
18

19

20

21
     8
      The parties have advised the Court that this is one of four related cases challenging the same agency action. See
22   Council of Parent Attorneys and Advocates, Inc. v. DeVos, et al., No. 20-cv-02310 (D. Md. Filed Aug. 10, 2020);
     NAACP, et. al. v. Elizabeth DeVos, et. al., 20-cv-1996 (D.D.C. filed July 22, 2020); State of Michigan, et. al. v.
23   Betsy DeVos, et. al., No. 20-cv-4478 (N.D. Cal. filed July 7, 2020).
     9
         In Count III of its Complaint, t
24
     justification for foregoing notice and comment. Compl. ¶¶ 103 06. The State has not, however, raised this claim in
25   this Motion.
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                                         III.         LEGAL STANDARD
 1
             A preliminary injunction is an extraordinary remedy. Munaf v. Geren, 553 U.S. 674, 689
 2

 3   90 (2008). To demonstrate entitlement to a preliminary injunction, the movant bears the burden

 4   of establishing: (1) likelihood of success on the merits; (2) likelihood of suffering irreparable harm

 5   in the absence of a preliminary relief; (3) that the balance of equities tips in its favor; and (4) that
 6
     an injunction is in the public interest. See E. Bay Sanctuary Covenant v. Barr, 964 F.3d 832, 844
 7
     45 (9th Cir. 2020) (citing                                                      , 559 F.3d 1046, 1052
 8
     (9th Cir. 2009)); see also Pimentel-Estrada v. Barr, No. 20-cv-495, 2020 WL 2092430, at *10
 9
     (W.D. Wash. Apr. 28, 2020).                                             []                           E.
10

11   Bay Sanctuary Covenant, 964 F.3d at 845 (quoting Drakes Bay Oyster Co. v. Jewell, 747 F.3d

12   1073, 1092 (9th Cir. 2014)).

13           In weighing whether a preliminary injunction is appropriate, courts in this Circuit may use
14

15
     so that a stronger showing of one                                                          Alliance for
16
     the Wild Rockies v. Cottrell, 632 F.3d 1127, 1131 35 (9th Cir. 2011); see also Al Otro Lado v.
17
     Wolf, 952 F.3d 999, 1007 (9th Cir. 2020); Kater v. Churchill Downs Inc., 423 F. Supp. 3d 1055,
18

19   1061 (W.D. Wash. 2019).

20                                              IV.     DISCUSSION
21       A. Likelihood of Success on the Merits
22

23
     Innovation Law Lab v. Wolf, 951 F.3d 1073, 1080 (9th Cir. 2020). The State bears the burden of
24
     showing that it is likely to succeed on the merits of its claims. See E. Bay Sanctuary Covenant,
25
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     964 F.3d at 845.
 1
             1. Administrative Procedure Act Claims (Counts I and II)
 2

 3           The State                                                         the APA, which broadly sets

 4   forth the procedures by which federal agencies are accountable to the public and their actions

 5   subject to review by the courts.                                                                             ,
 6
     140 S. Ct. 1891, 1905 (2020) (quoting Franklin v. Massachusetts, 505 U.S. 788, 796 (1992)).
 7
     Under the APA, agencies must
 8
     to set aside any action which runs afoul of                requirements. Id. (citations omitted). When
 9
     reviewing a claim under the APA, the Court is limited to reviewing
10

11                                           Id. at 1907 (quoting Michigan v. EPA, 576 U.S. 743, 758

12   (2015)). 5 U.S.C. § 706 lays out the familiar scope of judicial review under the APA and instructs,

13   in its relevant parts
14
     to be . . . (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
15
     [or] . . . (C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right
16
     5 U.S.C. § 706(2). In its Motion, the State challenges the Interim Final Rule on both grounds,
17
     which the Court examines in turn.
18

19               a. Count I- The Agency Action is in Excess of Statutory Authority and Not in
                    Accordance with Law
20
             T                                          Interim Final Rule is in excess of statutory authority
21
     and not in accordance with law. Compl. ¶¶ 95 98;                                      at 8 11;
22

23   in Supp. of Mot. for Prelim. Inj., Dkt. No. 51 at 2 5. Specifically, the State claims that Congress

24   did not delegate to the Department the authority to promulgate rules under Section 18005 of the

25   CARES Act. Compl. ¶ 97. Further, the State argues that Section 18005 is not ambiguous, and
                                                         11
             Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 12 of 21




     that the Department therefore has no implicit rulemaking authority.
 1
     8. The Department, in response, argues that it had general rulemaking authority to promulgate the
 2

 3   Interim Final Rule and that Section 18005 is ambiguous and, therefore, it had implicit authority to

 4   interpret the statute by way of the Rule.               i         to                            at 7
 5   9.
 6
                   i. There is No Delegation of Rulemaking Authority to the Department
 7
            The Department does not, and indeed cannot, argue that Congress explicitly delegated it
 8
     rulemaking authority over the CARES Act, because such authority is simply absent from its text.
 9
     Instead, the Department argues that its authority to promulgate the Interim Final Rule is grounded
10

11   in                           rulemaking authority in 20 U.S.C. § 1221e-3 and 20 U.S.C. § 3474. See

12   Interim Final Rule at 39,481. Again, however, nothing in either the text or construction of Section

13   18005 of the CARES Act evidences an intent to import general rulemaking authority. See
14
     Washington, 2020 WL 3125916, at *9 ( Nothing in the CARES Act grants [the Department]
15
     authority to use [its] general rulemaking power . . . to impose conditions on the general allocations
16
                                  ). As the State observes, other sections of the CARES Act, in contrast,
17
     affirmatively grant the implementing agencies such authority. See, .e.g., CARES Act §§ 1114,
18

19   3513(f), 12003(c). Congress therefore knew how to delegate such authority but declined to do so

20   in Section 18005. The Court therefore finds that the Department did not have explicit authority
21   either specific or general    to promulgate rules under this section of the CARES Act.
22
                  ii. The Statute is Not Ambiguous
23
            The Department further argues that it was permitted to engage in rulemaking because
24
     Section 18005 is ambiguous, and ambiguities in statutes within an agency s jurisdiction to
25
                                                       12
               Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 13 of 21




     administer are delegations of authority to the agency to fill the statutory gap in a reasonable
 1
                                                            n v. Brand X Internet Servs., 545 U.S. 967, 980,
 2

 3   (2005).

 4             T
 5   of construction.    Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019) (citing Chevron U.S.A., Inc. v.
 6
     Natural Resources Defense Council, Inc., 467 U.S. 837, 843 n.9 (1984)). This involves
 7
                     the text, structure, history, and purpose of a regulation, in all the ways [the Court]
 8
     would if it had no agency to fall back on       Id. (quoting Pauley v. BethEnergy Mines, Inc., 501
 9

10   U.S. 680, 707 (1991) (Scalia, J., dissenting)). Based on such a review, a statute is only ambiguous

11   if it is susceptible to more than one reasonable interpretation     Alaska Wilderness League v. U.S.

12   E.P.A., 727 F.3d 934, 938 (9th Cir. 2013).
13             Here, the statute could hardly be less ambiguous.            In Section 18005, Congress
14
     unequivocally and plainly instructed the Department to allocate GEER and ESSER funding in
15
     the same manner as provided under section 1117 of the ESEA of 1965 to students and teachers in
16
     non-public schools.     This directive, referring to a simple, familiar, and time-tested formula,
17

18   includes all the hallmarks of inflexibility, such as an explicit

19   an overt statutory cross-reference. Moreover, historically speaking,

20   Section 1117 of the ESEA cannot be construed as casual or incidental; it is an explicit citation to
21
     a formula with which LEAs are well acquainted
22
     educational programs, providing funding for                                             .
23
               The Guidance and Interim Final Rule                              claims to ambiguity, which
24
                                                                     These purported justifications do not
25
                                                       13
               Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 14 of 21




     alter             conclusion. First, the Interim Final Rule claims ambiguity arising from an alleged
 1
     tension
 2

 3   circumstances, on the one hand,                                                               students,

 4   on the other. See, e.g.                                              S Act is a special appropriation
 5   to combat the effects of . . . COVID-19. . . . Nothing in the CARES Act suggests Congress intended
 6
     to differentiate between students based upon the public or non-public nature of their school with
 7
     respect to eligibility fo
 8
               This argument is unavailing. Distribution of funds under the poverty-based formula will
 9

10   not result in private schools receiving no ESF funding; only in receiving funding in a smaller

11   proportion than they would under the Department-created formula. This reflects                   stated

12   intent in the CARES Act to distribute education funding to all, but to concentrate on those in direst
13   need. As the CARES Act explicitly provides, one of the central uses for the ESSER Fund is to
14
                 the unique needs of low-income children or students
15
     communities. CARES Act § 18003(d)(4). Furthermore, as the State notes, private schools have
16
     access to other sources of relief provided by Congress to which public schools do not, such as
17

18   Payback Protection Program loans and benefits under the Families First Coronavirus Response

19   Act. See Compl. ¶ 87. There is no tension between the two statutes, and certainly not one that

20   creates ambiguity sufficient to sanction rulemaking.
21
               The Court also rejects the Interim Final Rule               to create ambiguity from the
22
                   . First, the Rule argues that in prescribing how funding should be allocated,
23

24

25
                                                       14
             Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 15 of 21




                                            Interim Final Rule at 39,481.
 1
                                               an ambiguity arises from the use of a slightly longer
 2

 3

 4   generously put, a stretch; its adoption would render all but the most laconic Congressional
 5   directives ambiguous.    Section 18005 contains a clear reference to the poverty-based formula
 6
     found in Section 1117                                . See 20 U.S.C. § 6320(a)(4)(A)(i); see Judd
 7
     v. Weinstein, No. 19-55499, 2020 WL 4343738, at *3 (9th Cir. July 29, 2020)       nless the statute
 8
     clearly expresses otherwise, we interpret statutory terms in accordance with their ordinary
 9

10   meaning . The wording choice here simply does not create an ambiguity, or otherwise evidence

11   Congressional intent to open up the funding process to agency rulemaking. See Connecticut Nat.

12   Bank v. Germain, 503 U.S. 249, 253 54 (1992)     canons of construction are no more than rules of
13   thumb that help courts determine the meaning of legislation, and in interpreting a statute a court
14
     should always turn first to one, cardinal canon before all others. We have stated time and again
15
     that courts must presume that a legislature says in a statute what it means and means in a statute
16
     what it says there.
17

18          Second, the Interim Final Rule identifies ambiguity                            inclusion of

19   consultation and public control of funds provisions in Section 18005 notwithstanding the fact that

20   Section 1117 already contains similar provisions. Interim Final Rule at 39,481; compare CARES
21
                                                              presentatives of non-
22
     18005(b) (Public Control of Funds) with 20 U.S.C. § 6320(a)(1)(A), § 6320(b) (consultation
23
     provisions), § 6320(d) (Public Control of Funds). Given the purportedly duplicative provisions,
24
     according to the Department,                                                                      ,
25
                                                    15
             Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 16 of 21




     would create redundancies requiring resolution.
 1
            This argument also fails.
 2

 3   the Department argues, the importation of all o

 4   A straightforward reading of                                                 is that
 5                                                                      -based formula; not that it requires
 6
     wholesale import of all of Section 1117.                                               essentially creates
 7
                                                                                              . This the APA
 8
     does not allow. See In re Pangang Grp. Co., LTD., 901 F.3d 1046, 1056 (9th Cir. 2018)                 we
 9

10   disfavor efforts to use canons of construction to introduce ambiguity into straightforward text

11

12   statutes can be more easily interpreted as purposeful. Congress instructed SEAs and LEAs
13

14
     further than their familiar mirrors in Section 1117 to determine how such provisions are intended
15
     to operate.
16

17

18   educational agency receiving funds under sections 18002 or 18003 of this title shall provide

19                        CARES Act § 18005(a).                                               the Department

20   apparently discerns a congressional intent that funding for private schools should be equal or
21
     close thereto. See, e.g.,                              to                                       Congress
22
     mandated that these services be provided equitably          for the benefit of both public and non-public
23
                             original). First, it should be apparent that
24

25
                                                       16
                 Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 17 of 21




                                      Compare Equitable, Dictionary.com (last visited Aug. 21, 2020)10
 1
          characterized by equity or fairness; j                                    with Equal, Dictionary.com
 2

 3   (last visited Aug. 21, 2020)11         as great as; the same as      Funding can be equitable even if it is

 4   not equal, which is certainly the case when Congress chooses to concentrate funding on those in
 5   the most need.                                         in Section 18005                    , and does not
 6
     refer, as the Department would have it, to how funds should be apportioned. Thus, the context and
 7
     plain meaning of this term show that Congress meant
 8
     apportioned funds themselves, i.e. the support LEAs must provide private schools, not to the
 9

10   manner of apportioning that funding. For that, the Court repeats, Congress referred the LEAs to

11   Section 1117.

12              Based on the foregoing, the Court concludes that Congress neither explicitly, nor implicitly
13   by ambiguity, granted the Department the authority to promulgate the Interim Final Rule. The
14
     Court finds that the             promulgation was in excess of statutory authority and not in accordance
15
     with law, and that the State, therefore, is likely to succeed on the merits of this claim. See 5 U.S.C.
16
     § 706(2)(A) and (C).
17

18                  b. Count II- Arbitrary and Capricious Agency Action

19              The State also claims that the Interim Final Rule runs contrary to 5 U.S.C. § 706(2)(A) of

20   the APA because it is arbitrary and capricious. Compl. ¶ 99 102. As the Court has already
21   concluded that the Department did not have the authority to promulgate the Interim Final Rule in
22

23

24
     10
          Available at https://www.dictionary.com/browse/equitable?s=t.
25   11
          Available at https://www.dictionary.com/browse/equal.
                                                              17
             Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 18 of 21




     the first instance, however, it need not visit this claim. See Oakley, 2020 WL 3268661, at *12
 1
     (declining to rule on arbitrary and capriciousness); Washington, 2020 WL 3125916, at *11 (same).
 2

 3      2. Constitutional Claims (Counts IV and V)

 4          The State claims the Interim Final Rule runs afoul of two Constitutional principles, (1)

 5   Separation of Powers (Count IV) and (2) the Spending Clause (Count V). Compl. ¶¶ 107 19.
 6
            Again, however, given the conclusion that the Department lacked authority to promulgate
 7
     the Rule, the Court declines to reach this question. It is well-established that courts should not
 8

 9
     Nw. Austin Mun. Util. Dist. No. One v. Holder, 557 U.S. 193, 205 (2009) (internal quotation and
10

11   citation omitted); see also State v. Trump, 441 F. Supp. 3d 1101, 1125 (W.D. Wash. 2020). As

12   the Court has already determined that the State is likely to succeed on its APA claim, it need not

13   reach the St     constitutional claims. See Washington, 2020 WL 3125916, at *11.
14
        B. Irreparable Harm
15
            It is the burden of a plaintiff seeking a preliminary injunction to demonstrate that
16
     irreparable harm is likely in the absence of an injunction. Winter v. Nat. Res. Def. Council, Inc.,
17
     555 U.S. 7, 22 (2008) (listing cases); see also E. Bay Sanctuary Covenant, 964 F.3d at 854.
18

19                                                 harm for which there is no adequate legal remedy,

20   such as an award of damages      Arizona Dream Act Coal. v. Brewer, 757 F.3d 1053, 1068 (9th

21   Cir. 2014); see also E. Bay Sanctuary Covenant v. Trump, 950 F.3d 1242, 1280 (9th Cir. 2020)
22
      [E]conomic harm is not generally considered irreparable. But where parties cannot typically
23
     recover monetary damages flowing from their injury         as is often the case in APA cases
24
     economic harm can be considered irreparable. .
25
                                                     18
              Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 19 of 21




              The State s claims to irreparable harm are myriad, and include interference with the
 1
     obligation enshrined in its Constitution to provide essential education to its children. See
 2

 3   Mot. for Prelim. Inj. at 19 23. The heart                                              Washington

 4   public schools, and in particular                      public school students, are irreparably harmed
 5   by the                       diversion of CARES Act funding to private schools. The Court agrees
 6
     that this potential harm is great, and irreparable.
 7
              The nature of this pandemic is that its consequences have fallen most heavily on the
 8
                                                                                   The funding provided
 9

10   throughout the CARES Act, and in particular to schools, is desperately and urgently needed to

11   provide some measure of relief                                 s, many of which cannot be undone.

12   Congress, in its wisdom and without equivocation, determined that funding to schools should be
13   distributed according to the same formula found in Section 1117 of the ESEA; to allow otherwise
14
     under the guise of a manufactured ambiguity runs counter to the APA and to Congressional intent.
15
              The Department claim that the State faces only an economic injury, which ordinarily does
16
     not qualify as irreparable harm, is remarkably callous, and blind to the realities of this
17

18   extraordinary pandemic and the very purpose of the CARES Act: to provide emergency relief

19   where it is most needed. The school year is rapidly approaching; every day that goes by in which

20   educators are denied access to these funds creates unnecessary risk, to both the health and
21
                                                                          districts, the percentage of low-
22
     income families is significantly higher in public schools than in private schools. Compl. ¶ 55. As
23
     a consequence, distribution of CARES Act funding according to an enrollment-based formula
24
     ineluctably advantages private schools at the expense of public schools. Forcing the State to divert
25
                                                       19
             Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 20 of 21




     funds from public schools ignores the extraordinary circumstances facing the State and its most
 1
     disadvantaged students.
 2

 3          The Court therefore concludes that

 4                                           ; that harm is, with potentially tragic consequences in this
 5   case, irreparable.   See Oakley, 2020 WL 3268661, at *16 17 (finding irreparable injury);
 6
     Washington, 2020 WL 3125916, at *11 (same).
 7
        C. Balance of Equities and Public Interest
 8
            As a final consideration,
 9
     consider the effect on each party of                                                           Winter,
10

11   555 U.S. at 24 (quotation marks and citation omitted).

12          The State argues that the balance of equities and the public interest tilts in its favor because

13   such interests disfavor the perpetuation of an unlawful agency action.
14
     at 23 24;                                                 at 8. Further, the State argues, the public
15
     interest favors permitting the State to expend the emergency funds Congress allocated to serve its
16
     most vulnerable students. The Department replies that the balance of equities disfavors an
17
     injunction and that the State highlights only the harm to public schools and discounts the harm to
18

19   private schools.               i         to                             at 14 15.

20          The Court concludes that the balance of equities favors the issuance of a preliminary
21   injunction.   There is generally no public interest in the perpetuation of unlawful agency action.
22
     To the contrary, there is a substantial public interest in having governmental agencies abide by the
23
                                                                League of Women Voters of United States
24
     v. Newby, 838 F.3d 1, 12 (D.C. Cir. 2016) (internal quotations and citations omitted). Conversely,
25
                                                      20
             Case 2:20-cv-01119-BJR Document 54 Filed 08/21/20 Page 21 of 21




     public interest tips strongly in favor of permitting the State to apportion its emergency funding
 1
     according to Congress                                                                            .
 2

 3   See Oakley, 2020 WL 3268661, at *17 18 (finding the balance of equities favored the State);

 4   Washington, 2020 WL 3125916, at *12 (same).
 5                                       V.     CONCLUSION
 6
            For the foregoing reasons, the Court hereby GRANTS
 7
     Injunction. Dkt. No. 8. The Court hereby ORDERS as follows
 8
            1) The United States Department of Education, Secretary of Education Betsy DeVos, and
 9
            their officers, agents, servants, employees, attorneys, and any person in active concert or
10

11          participation with them, are hereby preliminarily enjoined from implementing or enforcing

12          the provisions in the Guidance of April 30, 2020 or the Interim Final Rule issued July 1,

13          2020.
14
            2) No bond shall be required pursuant to Federal Rule of Civil Procedure 65(c).
15

16
            DATED this 21st day of August, 2020.
17

18

19

20                                                       _______________________________
                                                         BARBARA J. ROTHSTEIN
21                                                       UNITED STATES DISTRICT JUDGE
22

23

24

25
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