State of California v. DeVos, No. 3:20-cv-04478 (N.D. Cal.): Council of the Great City Schools amicus curiae brief in support of plaintiffs' motion for preliminary injunction (Document 47-1, filed July 24, 2020)
Summary
The Council of the Great City Schools' amicus curiae brief in support of the plaintiffs' motion for a preliminary injunction in State of Michigan et al. v. Elisabeth D. DeVos and the U.S. Department of Education, Civil Case No. 3:20-cv-04478-JD, Document 47-1, filed 07/24/20, in the U.S. District Court for the Northern District of California before Judge James Donato. The plaintiffs include Michigan, California, the District of Columbia, Maine, Maryland, Wisconsin and the boards of education of New York City, Chicago, Cleveland and San Francisco. The brief argues that Congress declined to require districts to allocate CARES Act equitable services funding on the basis of all private school students rather than eligible or low-income students. It is filed by Husch Blackwell LLP.
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Case 3:20-cv-04478-JD Document 47-1 Filed 07/24/20 Page 1 of 92
1 HUSCH BLACKWELL LLP
Donald J. Mizerk Esq., (CA Bar No. 208477)
2 John W. Borkowski (IL Bar No. 6320147) (pro hac pending)
120 South Riverside Plaza, Suite 2200
3 Chicago, Illinois 60606
4 Phone: (312) 526-1538
Fax: (312) 655-1501
5 don.mizerk@huschblackwell.com
6 Attorneys for Amicus Curiae
COUNCIL OF THE GREAT CITY SCHOOLS
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8 IN THE UNITED STATES DISTRICT COURT
9 FOR THE NORTHERN DISTRICT OF CALIFORNIA
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11 STATE OF MICHIGAN, STATE OF Civil Case No.3:20-cv-04478-JD
12 CALIFORNIA, DISTRICT OF
COLUMBIA, STATE OF MAINE, STATE
13 OF MARYLAND, STATE OF NEW
HUSCH BLACKWELL LLP
120 South Riverside Plaza, Suite 2200
MEXICO, STATE OF WISCONSIN, THE
14 BOARD OF EDUCATION FOR THE
Chicago, Illinois 60606
CITY SCHOOL DISTRICT OF THE
15
CITY OF NEW YORK, BOARD OF THE COUNCIL OF THE GREAT CITY
Phone: (312) 526-1538
16 EDUCATION FOR THE CITY OF SCHOOLS AMICUS CURIAE BRIEF IN
CHICAGO, CLEVELAND MUNICIPAL SUPPORT OF PLAINTIFFS’ MOTION
17 SCHOOL DISTRICT, AND SAN FOR PRELIMINARY INJUNCTION
FRANCISCO UNIFIED SCHOOL
18 DISTRICT,
19 Plaintiffs,
20 v.
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ELISABETH D. DEVOS, in her official Judge: Hon. James Donato
22 capacity as the United States Secretary of Trial Date: None set
Education, and UNITED STATES
23 Action Filed: July 7, 2020
DEPARTMENT OF EDUCATION,
24 Defendants.
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1 TABLE OF CONTENTS
Page
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3 TABLE OF AUTHORITIES ...................................................................................................... iii
4 STATEMENT OF INTEREST.................................................................................................... 1
5 SUMMARY OF ARGUMENT .................................................................................................... 2
6 BACKGROUND ........................................................................................................................... 3
7 ARGUMENT ................................................................................................................................. 4
8 I. The Department Unlawfully Replaced the Equitable Services Allocation Method
9 Adopted by Congress with Its Own Preferred Approach. .................................................. 4
10 A. The Department’s funding formula erroneously considers all private
school students rather than only low-income students residing in the
11 district. .................................................................................................................... 5
12 i. Congress expressly declined to require public school districts to allocate
equitable services funding on the basis of all students in private schools
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rather than “eligible” or low-income students. ........................................... 6
120 South Riverside Plaza, Suite 2200 14 ii. Congress also required that equitable services funding be allocated on the
basis of student residence............................................................................ 8
Chicago, Illinois 60606
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B. There were good reasons for Congress to choose the specific allocation
16 formula that it did.................................................................................................... 8
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17 C. There is bi-partisan support that Congress’s intent was that funds be
allocated based on the Title I formula................................................................... 11
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19 II. The Chaotic Manner in which the Department has Acted Has Delayed the
Distribution of Critical Resources and Placed School Districts in Legal Jeopardy. ......... 12
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A. The Guidance created unnecessary confusion for school districts and put
21 them at legal risk. .................................................................................................. 13
22 B. The Rule effectively mandates the Department’s flawed interpretation and
increases confusion and hardship for school districts. .......................................... 15
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24 C. The Department’s inconsistent interpretation also has resulted in delay in
the distribution of critical resources. ..................................................................... 18
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III. The Interim Final Rule Adopted by the Department Would Divert Hundreds of
26 Millions of Dollars from Public Schools to Private Schools with Devastating
Consequences for School Districts and their Students. .................................................... 20
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A. The Amount of Funds Diverted is Substantial. ..................................................... 20
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B. The Diversion would Deprive Millions of Public School Students of
1 Critical Resources and Life-Saving Services during the Pandemic...................... 22
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CONCLUSION ........................................................................................................................... 24
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CERTIFICATE OF SERVICE ................................................................................................. 25
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1 TABLE OF AUTHORITIES
Page(s)
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Statutory Authorities
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4 20 U.S.C. § 6320 ............................................................................................................................. 5
5 20 U.S.C. § 7881 ............................................................................................................................. 7
6 20 U.S.C. § 3401 note ............................................................................................................ passim
7 CARES Act, PL 116-136, 134 Stat 281 (codified in scattered titles and sections of
U.S.C.) ............................................................................................................................... passim
8
9 Rules and Regulations
10 CARES Act Programs; Equitable Services to Students and Teachers in Non-Public
Schools, 85 Federal Register, 39479 (July 1, 2020) ................................................................... 1
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Business Loan Program Temporary Changes; Paycheck Protection Program, 85 Federal
12 Register, 20811 (April 15, 2020) ................................................................................................ 9
13 Additional Authorities
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120 South Riverside Plaza, Suite 2200 14
Memorandum from Congressional Research Service to House Comm. on Educ. and
Chicago, Illinois 60606
15 Labor (July 1, 2020).................................................................................................................. 12
16 Morgan Craven and Roy L. Johnson, An Analysis of How the Department of Education’s
Phone: (312) 526-1538 Equitable Services Rule Will Harm Texas Students and School Districts, IDRA ISSUE
17 BRIEF (July 16, 2020).......................................................................................................... 21, 23
18 Letter from Betsy DeVos, Sec'y, U.S. Dep't of Educ., to Carissa Moffat Miller, Exec.
19 Dir., Council of Chief State Sch. Officers (May 22, 2020) ...................................................... 15
20 Letter from Carissa Moffat Miller, Exec. Dir., Council of Chief State Sch. Officers, to
Betsy DeVos, Sec'y, U.S. Dep't of Educ. (May 5, 2020).......................................................... 16
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Letter from Carissa Miller, Exec. Dir., Council of Chief State Sch. Officers, to Lamar
22 Alexander, U.S. Congress (June 24, 2020) ............................................................................... 18
23 Bianca Quilantan, Weekly Education: States Push Back Against Steering Coronavirus
24 Funds to Private Schools, POLITICO (June 1, 2020) ........................................................... 16, 17
25 Stephen Rich et al., Explore the SBA Data on Businesses that Received PPP Loans, THE
WASHINGTON POST (July 6, 2020) .............................................................................................. 9
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Letter from Robert C. “Bobby” Scott, Rosa L. DeLauro, and Patty Murray, U.S.
27 Congress, to Betsy DeVos, Sec’y, U.S. Dep’t of Educ. (May 20, 2020) ................................. 11
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Texas Educ. Agency, Providing Equitable Services to Students and Teachers in
1 Participating Private Non-Profit Schools Under the CARES Act Programs (updated
2 July 9, 2020) ............................................................................................................................. 19
3 Andrew Ujifusa, DeVos to Release Rule Cementing COVID Aid Push for Private School
Students, EDUCATION WEEK (May 26, 2020) ........................................................................... 16
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Andrew Ujifusa, Sen. Alexander Splits from Betsy DeVos on COVID-19 Aid to Help
5 Private Schools, EDUCATION WEEK (May 21, 2020)................................................................ 12
6 U.S. Dep’t of Educ., Notice Announcing Availability of Funds and Deadline for the
7 Elementary and Secondary School Emergency Relief Fund (April 23, 2020) ......................... 13
8 U.S. Dep’t of Educ., Providing Equitable Services to Eligible Private School Children,
Teachers, and Families Updated Non-Regulatory Guidance (Oct. 7, 2019) ............................. 5
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1 STATEMENT OF INTEREST
2 Amicus curiae, the Council of the Great City Schools (“Council”), is a coalition of 76 of
3 the nation’s largest urban public school systems and is the only national organization exclusively
4 representing the needs of urban public schools. Founded in 1956 and incorporated in 1961, the
5 Council serves as the national voice for urban educators and provides a forum to share best
6 practices. The Council is composed of school districts with enrollments greater than 35,000
7 students located in cities with a population exceeding 250,000. Districts located in the largest
8 city of any state are also eligible for membership based on urban characteristics. The Council’s
9 member districts have a combined enrollment of over 8.2 million students. Headquartered in
10 Washington, D.C., the Council promotes urban education through research, instruction,
11 management, technology, legislation, communications, and other special projects.
12 The Council and its members are deeply concerned that the U.S. Department of
13 Education’s (“Department”) recently announced interim final rule (“Rule”) regarding the
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120 South Riverside Plaza, Suite 2200 14 provision of equitable services under emergency relief funds will divert hundreds of millions of
Chicago, Illinois 60606
15 dollars of desperately needed funds away from their primary intended recipients, public schools
16 serving at-risk students. See CARES Act Programs; Equitable Services to Students and Teachers
Phone: (312) 526-1538
17 in Non-Public Schools, 85 Fed. Reg. 39,479 (July 1, 2020). Through the Coronavirus Aid,
18 Relief, and Economic Security Act (“CARES Act” or “Act”), Congress in March 2020
19 appropriated approximately $16 billion that could be used to support elementary and secondary
20 education, including $13 billion specifically to allow school districts to address needs arising out
21 of the COVID-19 pandemic. The Act expressly required those funds to be allocated pursuant to
22 well-established formulas under Title I of the Elementary and Secondary Education Act
23 (“ESEA”), 20 U.S.C. § 6301 et seq., including a requirement for school districts to reserve
24 funding to provide “equitable services” to students and teachers in private schools based on the
25 number of low-income students residing in the district and attending private schools. In disregard
26 of this clear directive, the Rule adopted by the Department would force school districts to
27 allocate funds not based on low-income private school students residing in the districts, but based
28 on all students attending private schools in the district wherever they live. The Department has
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1 unlawfully adopted an interpretation of the CARES Act equitable services requirement that is
2 directly contrary to both the plain language of the Act and to Congressional intent.
3 The Council submits this brief to underscore the outrageousness of the Department’s
4 actions and their potentially devastating impact on public school districts struggling to find ways
5 to operate safely and effectively during the COVID-19 pandemic.
6 SUMMARY OF ARGUMENT
7 The Department has tried to unlawfully rewrite important emergency legislation to
8 support its own spending priorities rather than those of Congress. In particular, the Department
9 seeks to divert hundreds of millions of dollars that Congress intended to support public schools
10 grappling with the pandemic, including thousands of schools in Council member districts, to
11 private schools, regardless of the financial need of private school students.
12 In the CARES Act, Congress appropriated approximately $13 billion directly for use by
13 elementary and secondary schools and directed school districts to allocate a portion of that
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120 South Riverside Plaza, Suite 2200 14 money to provide equitable services to private schools based on the number of low-income
Chicago, Illinois 60606
15 students residing in the district and attending private schools. While an early version of the bill
16 would have allocated funds to private schools based on their total enrollment of district resident
Phone: (312) 526-1538
17 students, Congress rejected that approach and instead directed that funds be allocated based on a
18 well-established Title I formula, which has been in use for many years. This made sense in part
19 because Congress already had allocated significant resources to private schools, but not to most
20 public schools, in the form of forgivable loans under the Paycheck Protection Program (“PPP”),
21 CARES Act § 1102, and also had made a variety of tax credits available to private schools but
22 not public school districts.
23 Moreover, congressional leaders on both sides of the aisle have made clear that Congress
24 intended the requirement that school districts provide “equitable services” under the CARES Act
25 to be based on low-income private school students residing in their districts and not on all private
26 school students regardless of their affluence or their residence. Likewise, the non-partisan
27 Congressional Research Service concluded this is the proper interpretation of the CARES Act.
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1 Not only is the Department’s attempt to rewrite the CARES Act substantively wrong, it
2 has also been done in a chaotic manner that itself has been damaging to public school districts.
3 More than a month after the Act was passed, the Department first issued non-binding regulatory
4 guidance directing that equitable services should be provided to private schools based on their
5 total enrollment. See Providing Equitable Services to Students and Teachers in Non-Public
6 Schools Under the CARES Act Programs, (April 30, 2020) (“Guidance”). Many states and
7 school districts, seeing that this “interpretation” directly contradicted the language of the Act,
8 indicated that they would not follow it in making their allocations under that CARES Act. In
9 response, two months later, and more than three months after the enactment of the Act, the
10 Department, without notice and comment, adopted the Rule that effectively required the
11 immediate adoption and implementation of its “interpretation” of the CARES Act’s equitable
12 services requirement as first set forth in the Guidance. As a result, more than three months after
13 the enactment of the Act, most states and school districts have not yet been able to allocate the
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120 South Riverside Plaza, Suite 2200 14 desperately needed resources appropriated by Congress to schools.
Chicago, Illinois 60606
15 Even more significantly, the approach demanded by the Department will divert hundreds
16 of millions of dollars from public schools to private schools, regardless of the financial need of
Phone: (312) 526-1538
17 their students. The effect on Council members, their schools, and the students they serve will be
18 devastating. This money is needed to fund counselors, social workers and nurses and to purchase
19 equipment like computers, faces masks, thermometers, hand sanitizer and COVID-19 tests. The
20 need to protect the safety of students and faculty today is paramount. Moreover, many of the
21 schools in Council member districts serve disadvantaged communities where schools must
22 address the digital divide in order to equitably provide on-line educational opportunities. The
23 Department’s unlawful rewrite of the CARES Act severely undermines this critical work.
24 BACKGROUND
25 The CARES Act authorized the Department to create three categories of Education
26 Stabilization Funds (“ESF”) grants that would be administered through state education agencies
27 (“SEAs”). One of these, the Elementary and Secondary School Emergency Relief (“ESSER”)
28 CARES Act § 18003, provides CARES Act funds earmarked specifically for school districts.
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1 The ESSER Fund was designed to provide flexible support directly to school districts, as
2 outlined in a non-exhaustive list of broad possible uses in the CARES Act. Id. at § 18003(d).1
3 The purpose of section 18003 of the CARES Act was to provide financial support to
4 schools, students, and teachers in light of the COVID-19 pandemic. Most of this money is
5 directed to states and public school districts, but—as with other federal grants—a certain portion
6 of the funding must be used to provide equitable services to non-public school students and
7 teachers. The CARES Act, in section 18005, expressly states that the funding must be allocated
8 “in the same manner” as it is allocated in section 1117 of the ESEA, which has long been
9 commonly known as the Title I funding formula. Yet, the Department’s initial Guidance, and
10 then its Rule, both suggest and then effectively mandate a different, more generous, formula for
11 the funding of private schools with money Congress allocated for public schools.
12 ARGUMENT
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120 South Riverside Plaza, Suite 2200
I. The Department Unlawfully Replaced the Equitable Services Allocation Method
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Adopted by Congress with Its Own Preferred Approach.
Chicago, Illinois 60606
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The CARES Act, as enacted, is clear that the allocation for private schools is to be based
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Phone: (312) 526-1538 on their low-income population residing in the relevant school district just like Title I equitable
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service calculations. Indeed, Congress did not adopt a draft bill that specifically would have
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provided equitable services for private school students and teachers based on total private school
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enrollment, as the Department’s Rule attempts to do. Moreover, Congress rejected that allocation
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methodology justifiably as low-income and minority communities, like those served by Title I,
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have been disproportionately affected by the pandemic, and because the CARES Act and other
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emergency legislation also provide additional resources to private schools that are not available
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to public school districts. Finally, there is bi-partisan and non-partisan support for the view that
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26 CARES Act, PL 116-136, 134 Stat 281. Because the CARES Act was codified in scattered
titles of the United States Code, including as statutory notes, and for ease of reference, all
27 CARES Act provisions enacted in Public Law 116-136, 134 Stat. 281, are cited herein simply as
CARES Act § ____. CARES Act sections 18003 and 18005 are codified at 20 U.S.C. § 3401
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note.
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1 Congress intended the allocations to be done according to the Title I formula, just like the Act
2 says.
3 A. The Department’s funding formula erroneously considers all private school
4 students rather than only low-income students residing in the district.
5 Allocation of CARES Act funds with respect to private schools is statutorily and
6 expressly tied to the well-established formula set forth in Title I. Under the CARES Act, school
7 districts receiving funding under the Act “shall provide equitable services in the same manner
8 as provided under section 1117 of the ESEA of 1965 to students and teachers in non-public
9 schools.” CARES Act § 18005 (emphasis added). Section 1117 of the ESEA, or Title I, requires
10 schools to provide equitable services “[t]o the extent consistent with the number of eligible
11 children . . . in the school district . . . who are enrolled in private” school. 20 U.S.C.
12 § 6320(a)(1) (emphasis added). Title I requires that “[e]xpenditures for educational services and
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other benefits to eligible private school children shall be equal to the proportion of funds
120 South Riverside Plaza, Suite 2200 14 allocated to participating school attendance areas based on the number of children from low-
Chicago, Illinois 60606
15 income families who attend private schools.” Id. § 6320(4)(A)(i) (emphasis added). Congress
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and the Department have long been aware of this methodology and, as recently as October 2019,
17 the Department instructed school districts to “[e]nsure that its expenditures for equitable services
18 [under Section 1117 of Title I] are equal to the proportion of funds generated by children from
19 low-income families who reside in participating Title I public school attendance areas and attend
20 private schools.”2
21 The Department’s directive in two of the three ostensible options under its interim final
22 rule—that CARES Act funds should be provided to private schools on the basis of the number of
23 students attending private school within the school district’s boundaries, regardless of where
24 those students live, rather than on the basis of the number of low-income students residing in the
25 school district’s jurisdiction—is expressly contrary to the statute for two reasons.
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U.S. Dep’t of Educ., Providing Equitable Services to Eligible Private School Children,
27 Teachers, and Families Updated Non-Regulatory Guidance (Oct. 7, 2019),
https://www2.ed.gov/about/inits/ed/non-public-education/files/equitable-services-guidance-
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100419.pdf (emphasis added) (“October 2019 Guidance”).
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1 i. Congress expressly declined to require public school districts to
2 allocate equitable services funding on the basis of all students in
3 private schools rather than “eligible” or low-income students.
4 First, the use of all students rather than low-income students is not supported by the
5 legislative history of the Act. An early version of the bill would have expressly allocated funds to
6 private schools based on their total enrollment. The enacted CARES Act rejected this approach,
7 instead calling for the use of the Title I formula. Under that earlier version of the bill (as under
8 the Department’s Rule), hundreds of millions of dollars would have been diverted away from
9 public schools who truly need those funds and towards private schools who do not. Congress
10 refused to adopt this approach when it chose instead to enact a bill that specifically refers to
11 Section 1117 of the ESEA, recognizing that funds to support private schools should be based on
12 the number of low-income students, not based on all students at private schools.3
13 Specifically, an early draft of the appropriations provision of the CARES Act, received
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120 South Riverside Plaza, Suite 2200 14 by amicus curiae on March 22, 2020, included a section titled “Assistance to Non-Public
Chicago, Illinois 60606
15 Schools,” which provided as follows:
16 SEC. 18005. (a) IN GENERAL.— A local educational agency receiving funds
Phone: (312) 526-1538 under sections 802 or 803 shall provide equitable services to students and teachers
17 in non-public schools, as determined in consultation with representatives of non-
public schools. The level of such services shall reflect the proportion of students
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residing within the boundaries of the local educational agency who attend non-
19 public schools.
20 See Exhibit A, Declaration of Jeff Simering; Exhibit A-1, HEN20279 (emphasis added). This
21 language is not present in the enacted bill. Rather, the enacted CARES Act mandates that the
22 familiar Title I formula be used:
23 SEC. 18005. (a) IN GENERAL. — A local educational agency receiving funds
under sections 18002 or 18003 of this title shall provide equitable services in the
24 same manner as provided under section 1117 of the ESEA of 1965 to students
and teachers in non-public schools, as determined in consultation with
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representatives of non-public schools.
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Significantly, Section 8501 of the ESEA, which does, in fact, direct equitable services to all
eligible private school students regardless of residence status, is not referenced in the CARES
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1 CARES Act § 18005(a) (emphasis added). Congress knew how to write an allocation formula
2 like the one that the Department wants. Indeed, it did write one. It just chose not to enact that
3 version into law.
4 The directive to use the formula set forth in section 1117 of the ESEA—which, as
5 explained above, requires equitable services to be provided to private schools in a proportionate
6 share reflecting the number of low-income students residing within the boundaries of the school
7 district or “local educational agency” (“LEA”)—permits less money to flow to private schools
8 than would have occurred under the previous draft of the CARES Act; the proportionate share is
9 not based on all the students residing in the district’s jurisdiction or even the Title I schools’
10 attendance areas that attend private schools, but only those low-income students who do.
11 The difference between these two versions of the bill—the earlier draft basing equitable
12 services on the proportionate share of all private school students residing in the LEA and the
13 later enacted bill basing equitable services on the number of low-income students residing in
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120 South Riverside Plaza, Suite 2200 14 participating Title I attendance areas—is of critical importance. The Department’s Rule may
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15 track early development of the CARES Act, but entirely fails to follow its enacted provisions.
16 Moreover, there are two formulas in ESEA. In section 1117, equitable services are
Phone: (312) 526-1538
17 provided based on the number of low-income students. In contrast, the equitable services
18 provision in section 8501 does not require school districts to base private schools’ proportional
19 share on the number of low-income children living in the district who attend private school. See
20 20 U.S.C. § 7881(b). Again, if Congress had wanted equitable services to be provided based on
21 all students in private schools, it would have enacted the earlier-drafted formula, or referenced
22 section 8501 of ESEA which applies to part C of Title I, part A of Title II, part A of Title IV, and
23 part B of Title IV, rather than section 1117 which applies only to part A of Title I. The choice to
24 use section 1117 was clear and unambiguous.
25 In enacting the CARES Act, Congress thus declined to use a formula which would allow
26 for more money to flow through public schools to serve private schools than is allowed by the
27 longstanding method set forth in section 1117 of the ESEA. The Department’s position is not
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1 only contrary to the plain language of the CARES Act, but also to clear Congressional intent as
2 demonstrated by the Act’s context and legislative history.
3 ii. Congress also required that equitable services funding be allocated on
4 the basis of student residence.
5 Second, the Department’s position that the proportionate share is based on the number of
6 students who attend a private school that is located in the district—rather than the number of
7 low-income students residing in the district who attend a private school—impermissibly requires
8 that the proportionate share be based not on which students live in the district, but which students
9 attend private schools in the district. As with the use of all private school students in the formula
10 rather than only low-income students, the use of students who attend private school in the
11 district, regardless of where the students reside leads to more money diverted to private schools.
12 It is also plainly inconsistent with the text of the CARES Act and the ESEA.
13 This distinction matters: LEAs receive local tax revenue from persons living in their
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120 South Riverside Plaza, Suite 2200 14 district, but not from those living outside it. Under the Department’s interpretation, public
Chicago, Illinois 60606
15 schools are required to take money dedicated to the students who both reside in and attend
16 school in their district and allocate it instead to students who may reside elsewhere—and pay
Phone: (312) 526-1538
17 taxes elsewhere—but attend private schools in the district. Ignoring the residency requirement of
18 Section 1117 of the ESEA, as expressly required by the CARES Act, reflects the Department’s
19 arbitrary and unlawful interpretation.
20 Congress expressly chose to require that equitable services be provided to private schools
21 “in the same manner” as that required in Title I, or section 1117 of ESEA. The Department
22 cannot override the statutory text of the CARES Act, and its interpretation must be declared
23 arbitrary and capricious.
24 B. There were good reasons for Congress to choose the specific allocation
25 formula that it did.
26 First, it is well documented that the COVID-19 pandemic is disproportionately affecting
27 low-income and minority communities. As the primary source of federal support for elementary
28 and secondary education, Title I targets precisely these communities, many of whom are located
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1 in Council member districts. It also makes sense, for this same reason, to allocate resources
2 based on low-income students rather than all students and to focus on the students in private
3 schools residing in these urban areas rather than those that may be commuting to those private
4 schools from affluent suburbs. Indeed, in some Council member districts near state borders,
5 students commute from other states to attend expensive private schools. Thus, allocating
6 resources where they are most needed, which Congress did, makes sense.
7 Second, allocating these CARES Act funds to private schools based on their total
8 enrollment and thereby dramatically increasing their proportionate allocation would have been
9 unreasonable and unfair for Congress to do, because private schools are eligible for other federal
10 resources that public school districts are not. For example, the CARES Act also created the
11 Paycheck Protection Program (“PPP”), through which the Small Business Administration
12 (“SBA”) provided loans to certain small businesses, including private schools. CARES Act
13 § 1102. These loans will be fully forgiven by the SBA. CARES Act § 1106. Under the PPP, all
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120 South Riverside Plaza, Suite 2200 14 small businesses, as well as all tax-exempt non-profit organizations described in section
Chicago, Illinois 60606
15 501(c)(3) of the Internal Revenue Code, are eligible to receive loans. CARES Act §
16 1102(a)(2)(D).4 The 500-employee cap as well as the inclusion of Section 501(c)(3) nonprofits
Phone: (312) 526-1538
17 opened the door for private schools to secure PPP loans to the tune of millions of dollars. Just in
18 Council member school districts alone, over 75 private schools each received over a million
19 dollars from the PPP, with some individual schools receiving close to 10 million dollars. 5
20 Here are a few examples of such schools:6
School Name City, State PPP Loan Range
21
St. Ann’s School NYC, NY $5–$10 million
22 Columbia Grammar and Preparatory School NYC, NY $5–$10 million
23
4
See also Business Loan Program Temporary Changes; Paycheck Protection Program, 85 Fed.
24 Reg. 20811 (April 15, 2020) (the SBA interim final rule regarding implementation of CARES
25 Act §§ 1102, 1106).
5
Stephen Rich et al., Explore the SBA Data on Businesses that Received PPP Loans, THE
26 WASHINGTON POST (July 6, 2020),
https://www.washingtonpost.com/graphics/2020/business/sba-ppp-
27 data/?utm_campaign=wp_main&utm_medium=social&utm_source=twitter&itid=lk_inline_man
ual_5; see also Exhibit B.
28 6
See Exhibit B (citations contained therein).
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School Name City, State PPP Loan Range
1
Poly Prep Country Day School NYC, NY $5–$10 million
2 Albuquerque Academy Albuquerque, NM $2–$5 million
Head-Royce School Oakland, CA $2–$5 million
3 Francis Parker School San Diego, CA $2–$5 million
De Paul College Prep Chicago, IL $1–$2 million
4
Cincinnati Hills Christian Academy Cincinnati, OH $2-$5 million
5 Sidwell Friends School Washington, D.C. $5–$10 million
St. Louis University High School St. Louis, MO $2-$5 million
6 Bishop Lynch High School Dallas, TX $2–$5 million
Antonian College Preparatory High School San Antonio, TX $1–$2 million
7
Christopher Columbus High School Miami, FL $2–$5 million
8 Central Catholic High School Portland, OR $2–$5 million
9 In addition to the benefit of these substantial sums in forgivable loans, private schools are
10 also eligible for tax credits that are not available to public school districts. For example, private
11 schools benefit from payroll tax credits under the Families First Coronavirus Response Act (the
12 “FFCRA”), signed by President Trump on March 18, 2020. PL 116-127, March 18, 2020, 134
13 Stat 178, Division G, §§ 7001–7005. The FFCRA provides small and midsize employers
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120 South Riverside Plaza, Suite 2200 14 refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick
Chicago, Illinois 60606
15 and family leave wages to their employees for leave related to COVID-19. Id. §§ 7001 (“Payroll
16 Credit for Required Paid Sick Leave”), 7003 (“Payroll Credit for Required Paid Family Leave”).
Phone: (312) 526-1538
17 Similarly, private schools, but not public school districts, also benefit from the Employee
18 Retention Credit, which is a refundable tax credit against certain employment taxes equal to 50
19 percent of the qualified wages an eligible employer pays to employees after March 12, 2020, and
20 before January 1, 2021. CARES Act, § 2301. Eligible employers can get immediate access to the
21 credit by reducing employment tax deposits they are otherwise required to make. Id. For each
22 employee, wages (including certain health plan costs) up to $10,000 can be counted to determine
23 the amount of the 50% credit. Id. § 2301(a)(b)(1). Congress clearly has provided many
24 significant COVID-19-related financial benefits to private schools that it has not provided to
25 public school districts.
26 Thus, for at least two obvious reasons, it made sense for Congress to reject a bill that
27 would have allocated CARES Act resources to private schools based on their total enrollment
28 and to instead mandate the Title I allocation methodology. In contrast, the Rule adopted by the
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1 Department is not only unlawful (as discussed above in section I.A.) but also unfair and
2 unreasonable (as discussed further below in sections II and III).
3 C. There is bi-partisan support that Congress’s intent was that funds be
4 allocated based on the Title I formula.
5 Even if in some manner the relevant text of the CARES Act were ambiguous—which it is
6 not—and the legislative history were unpersuasive—which it is not—the drafters of the bill
7 themselves have clearly indicated that it was their intent in drafting and passing the bill that
8 equitable services be provided to private schools using the Title I funding formula.
9 For example, on May 20, 2020, three Democratic congressional leaders—Representative
10 Bobby Scott, Representative Rosa DeLauro, and Senator Patty Murray—wrote to Secretary
11 DeVos, stating:
12 [T]he Department broke with statutory requirements of the CARES Act and
longstanding precedent of the equitable services provision in section 1117 of
13
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ESEA by issuing guidance that directs LEAs to use emergency relief funds for the
120 South Riverside Plaza, Suite 2200 14 provision of services to students at private schools regardless of their wealth or
residence. This action also contradicts the Department’s equitable services non-
Chicago, Illinois 60606
15 regulatory guidance issued on October 7, 2019.
16 Exhibit C.7 The members, all of whom are Congressional committee chairs or ranking members
Phone: (312) 526-1538
17 on committees specific to education and/or appropriations, went on to say, “[t]he statutory
18 language and Congressional intent is clear: LEAs should use these emergency relief funds to
19 provide equitable services only based on the number of low-income students attending private
20 schools in their LEA, not all students attending private schools in the LEA.” Id. This
21 Congressional intent was confirmed by senior Republican Senator Lamar Alexander, chairman
22 of the Senate Committee on Health, Education, Labor, and Pensions and former U.S. Secretary
23 of Education, the next day. On May 21, 2020, Senator Alexander was asked about the
24
25
7
26 Letter from Robert C. “Bobby” Scott, Rosa L. DeLauro, and Patty Murray, U.S. Congress, to
Betsy DeVos, Sec’y, U.S. Dep’t of Educ. (May 20, 2020) (available at
27 https://edlabor.house.gov/imo/media/doc/2020-5-
z0%20Ltr%20to%20DeVos%20re%20Equitable%20Services.pdf and attached hereto at Exhibit
28
C).
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1 Department’s Guidance, and said, “I thought, and I think most of Congress thought, that money
2 from the CARES Act would be distributed in the same way that Title I is distributed.” 8
3 Moreover, the non-partisan Congressional Research Service (“CRS”) undertook an
4 extensive analysis of the text of the CARES Act and its legislative history and concluded that “a
5 straightforward reading of section 18005(a) based on its text and context suggest that the CARES
6 Act requires LEAs [school districts] to follow section 1117’s method for determining the
7 proportional share, and thus to allocate funding for services for private school students and
8 teachers based on the number of low income children attending private schools.” Memorandum
9 from Congressional Research Service to House Comm. on Educ. and Labor 2 (July 1, 2020)
10 (attached hereto as Exhibit D). The CRS further concluded that the relevant number for this
11 calculation is the “number of private-school children from low-income families residing in the
12 LEA’s participating public school attendance areas.” Id. at 3.
13 Thus, Congress clearly intended that the funds provided to school districts under the
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120 South Riverside Plaza, Suite 2200 14 CARES Act be proportionately shared with private schools based on the number of low-income
Chicago, Illinois 60606
15 students residing in the school district’s Title I school attendance areas. This clear
16 Congressional intent, supported by the statutory text itself as well its context and legislative
Phone: (312) 526-1538
17 history, is controlling. The Department does not have any authority to depart from that clear
18 intent or to rewrite the plain language of the Act.
19 II. The Chaotic Manner in which the Department has Acted Has Delayed the
20 Distribution of Critical Resources and Placed School Districts in Legal Jeopardy.
21 Besides being an unlawful abuse of agency authority resulting in significant harms—
22 including the potential deprivation of hundreds of millions of dollars of much-needed funds for
23 our nation’s most vulnerable students, as detailed in Section III below—the Department’s
24 arbitrary and ad hoc actions also have led to considerable confusion that has delayed the
25 distribution of critical resources. The Department’s interpretation of the Act has constantly
26
27 8
Andrew Ujifusa, Sen. Alexander Splits from Betsy DeVos on COVID-19 Aid to Help Private
Schools, EDUCATION WEEK (May 21, 2020), https://blogs.edweek.org/edweek/campaign-k-
28
12/2020/05/alexander-devos-COVID-aid-private-schools-CDC-reopening.html.
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1 shifted since its enactment. For example, the Rule issued on July 1, 2020 contains new
2 substantive requirements that differ both from those in the Act (enacted in March), the
3 Department’s initial notice, the Department’s April 30, 2020 Guidance. Moreover, by virtue of
4 its interim nature, the Rule also creates the possibility for yet additional changes in the
5 Department’s policy after the 30-day comment period. Throughout this period of uncertainty,
6 however, the Department has consistently done one thing: presented school districts with an
7 impossible choice between compliance with its current “interpretation” or with the actual terms
8 of the Act. If school districts do the former, they forfeit hundreds of millions of dollars to private
9 schools and also run the risk of violating certifications that they will follow the allocation
10 requirements of the Act. If they do the latter, they risk penalties from the Department. The
11 Department’s actions over the last four months thus have created an untenable situation.
12 A. The Guidance created unnecessary confusion for school districts and put
13 them at legal risk.
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120 South Riverside Plaza, Suite 2200 14 Congress passed the CARES Act on March 27, 2020. Section 18002(a) of the Act
Chicago, Illinois 60606
15 mandated: “[T]he Secretary shall make Emergency Education Relief grants to the Governor of
16 each State with an approved application”; “shall issue a notice inviting applications not later than
Phone: (312) 526-1538
17 30 days of enactment of this Act”; and “shall approve or deny applications not later than 30 days
18 after receipt.” CARES Act § 18002(a) (emphasis added).
19 Accordingly, on April 23, 2020, the Department published a notice which included a
20 “Deadline for Transmittal of Certification and Agreement” of “[n]o later than July 1, 2020.” See
21 U.S. Dep’t of Educ., Notice Announcing Availability of Funds and Deadline for the Elementary
22 and Secondary School Emergency Relief Fund at 2 (April 23, 2020)9 (the “Notice”). The Notice
23 also indicated that “[e]ach SEA’s Certification and Agreement will be processed as it is received
24 and funds will be obligated on a rolling, expedited basis with the expectation that State
25 educational agencies (SEAs) and local educational agencies (LEAs) will also use every effort to
26 expend the funds quickly to address exigent student needs.” Id. The Notice emphasized the
27
28 9
Available at https://oese.ed.gov/files/2020/04/ESSER-Fund-Notice-Final.pdf.
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1 urgency of applying for and utilizing the emergency funding to address challenges of educating
2 students in a remote learning environment, stating:
3 Consistent with section 18003(d) of the CARES Act, LEAs may use ESSER
funds to address the impact that COVID19 has had, and continues to have, on
4
elementary and secondary schools across the Nation. The Department encourages
5 SEAs that use funds for remote learning to make strategic investments that
promote student achievement through long-term improvements in infrastructure
6 and operations so that students may receive educational services whether or not
school campuses are open or closed.
7
Id. at 4. With respect to equitable services, the Notice restated the text of section 18005(a),
8
without any indication that it would be deviating from the approach recently reaffirmed 10 in its
9
2019 Title I equitable services guidance. See Id. at 6 (“An SEA must ensure that an LEA that
10
receives an ESSER Fund subgrant provides equitable services to students and teachers in non-
11
public schools located within the LEA in the same manner as provided under section 1117 of
12
the ESEA . . . .”) (emphasis added).11
13
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120 South Riverside Plaza, Suite 2200
Consistent with the Act, the Notice included “Certification and Agreement” instructions,
14
requiring each applicant to “provide an assurance that it will comply with all requirements that
Chicago, Illinois 60606
15
apply to the ESSER Fund,” including the statute’s equitable services provision. Relevant here,
16
Phone: (312) 526-1538 the certification form required applicants for CARES Act funds to:
17
18 “allocate [ESSER] funds to LEAs on the basis of their respective shares of funds
received under title I, part A of the Elementary and Secondary Education Act of 1965 in
19 fiscal year 2019”;
20 “ensure that LEAs receiving ESSER funds will provide equitable services to students
and teachers in non-public schools as required under 18005 of Division B of the CARES
21 Act”; and
22
“ensure that an LEA receiving ESSER funds will provide equitable services to
23 students and teachers in non-public schools located within the LEA in the same
24
25 10
See October 2019 Guidance, supra n. 2.
11
26 Although the equitable services provision of the Notice indicated that, “[t]he Department will
provide additional guidance to LEAs on equitable services requirements,” id., no reasonable state
27 or school district could have predicted the Department’s arbitrary conditions imposed on the
provision of ESSSER funds first in the Guidance on April 30 and then in the Rule issued on July
28
1.
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manner as provided under section 1117 of the ESEA, as determined through timely and
1 meaningful consultation with representatives of non-public schools.” 12
2
Thus, as of April 23, 2020, school districts and states were led to believe by the plain
3
language of the Act and by the form released by the Department that equitable services
4
allocations under the CARES Act would employ the Title I methodology. Initial planning
5
proceeded based on that understanding and many states and school districts, including Council
6
members, executed certifications that they would comply. It was not until the non-binding
7
Guidance was issued on April 30, 2020 (more than a month after the Act was enacted) that
8
school districts had any idea the Department might encourage a different approach.
9
As a result, school districts face legal risk if they fail to follow the allocation method set
10
forth in the Act, as they have certified that they will. On the other hand, if they follow the Act
11
and not Department’s “interpretation” as originally announced in the Guidance, they face
12
potential penalties from the Department and possible challenges from private schools based on
13
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120 South Riverside Plaza, Suite 2200
the Department’s position. Either way, the Department has put school districts in an impossible
14
situation.
Chicago, Illinois 60606
15
B. The Rule effectively mandates the Department’s flawed interpretation and
16
Phone: (312) 526-1538 increases confusion and hardship for school districts.
17
Recognizing the significant hardships the Guidance imposed on school districts, multiple
18
educational associations, spearheaded by the Council of Chief State School Officers (“CCSSO”),
19
alerted the Department of its flawed interpretation of the CARES Act and put the Department on
20
notice of the significant confusion and harm the Guidance was causing for both states and school
21
districts. See Letter from Carissa Moffat Miller, Exec. Dir., CCSSO, to Betsy DeVos, Sec'y, U.S.
22
Dep't of Educ. (May 5, 2020).13 Rather than mitigate the damage already done by withdrawing
23
and/or amending the Guidance, the Department doubled down, accusing the CCSSO of
24
25
12
26 U.S. Dep’t of Educ., Certification and Agreement for Funding under the Education
Stabilization Fund Program Elementary and Secondary School Emergency Relief Fund (ESSER
27 Fund) at 2–3 (April 2020), https://oese.ed.gov/files/2020/04/ESSERF-Certification-and-
Agreement-2.pdf.
28 13
Available at https://ccsso.org/sites/default/files/2020-05/DeVosESLetter050520.pdf.
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1 “improperly discriminat[ing] against an entire class of children,” despite the fact that Congress,
2 not the CCSSO, had selected the allocation formula. 14
3 Therefore, many states and school districts subsequently decided to follow the statute and
4 to expressly reject the approach outlined in the Guidance. According to one report, 15 a number of
5 states led by both Republican and Democratic governors rejected the Department’s
6 interpretation. For example, Oklahoma, Mississippi, Indiana, Maine, Washington, Pennsylvania,
7 New Mexico and Wisconsin, all began calculating allocations according to the plain text of the
8 statute. New Mexico, for example, in a letter from its Public Education Department to
9 superintendents and charter school heads stated it would follow the plain language of the CARES
10 Act stating “[t]his advisory aligns with the plain language of the CARE Act and is consistent
11 with longstanding equitable services calculations under Title I criteria, as well as U.S.
12 Department of Education’s interpretations of the [ESEA] over decades and as recently as
13 October 2019.” Mem. from State of New Mexico Public Educ. Dep’t 5 (May 14, 2020) (attached
HUSCH BLACKWELL LLP
120 South Riverside Plaza, Suite 2200 14 hereto as Exhibit E).
Chicago, Illinois 60606
15 In early June, ten states indicated they would or were likely to follow the Department’s
16 guidance.16 States such as Colorado, Illinois and Ohio have followed the Department’s
Phone: (312) 526-1538
17 cautionary directive in its letter response to CCSSO17 and advised school districts to calculate the
18
19
14
See Letter from Betsy DeVos, Sec'y, U.S. Dep't of Educ., to Carissa Moffat Miller, Exec. Dir.,
20 CCSSO (May 22, 2020) (hereinafter “DeVos Letter”)
21 https://blogs.edweek.org/edweek/campaign-k-
12/Secretary%20DeVos%20Response%20to%20Carrisa%20Moffat%20Miller%205%2022%20
22 20.pdf; see also Andrew Ujifusa, DeVos to Release Rule Cementing COVID Aid Push for Private
School Students, EDUCATION WEEK (May 26, 2020), https://blogs.edweek.org/edweek/campaign-
23 k-12/2020/05/devoscovid-aid-private-school-students-rule.html)
15
See Bianca Quilantan, Weekly Education: States Push Back Against Steering Coronavirus
24 Funds to Private Schools, POLITICO (June 1, 2020),
25 https://www.politico.com/newsletters/morning-education/2020/06/01/meet-acts-new-top-
executive-788066.
16
26 Id.
17
See DeVos Letter, supra n. 13, at 1 (“If they or their district superintendents insist on acting
27 contrary to the Department’s stated position, they should, at minimum, put into an escrow
account the difference between the amount generated by the proportional-student enrollment
28
formula and the Title I, Part A formula.”).
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1 equitable share based on students in poverty, but to set aside the difference in funding in an
2 escrow account.18 Other states remained unsure and are still waiting to see what happens.
3 In response, however, more than three months after the CARES Act was enacted, the
4 Department concluded its Guidance was inadequate and it adopted the Rule. On July 1, 2020, the
5 Department published the Rule in the Federal Register without notice and comment and made it
6 effective immediately. 85 Fed. Reg. 39,479. In so doing, the Department added yet another layer
7 of confusion and complexity to Congress’s simple mandate to “make Emergency Education
8 Relief grants to the Governor of each State with an approved application.” See CARES Act §
9 18002(a).
10 Indeed, instead of merely codifying the already flawed and inequitable approach
11 suggested by the Guidance, the Rule effectively created two ostensible choices for school
12 districts with respect to how to calculate the proportional share of CARES Act funds for
13 equitable services. However, neither of these “choices” is viable. Rather, both choices are
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120 South Riverside Plaza, Suite 2200 14 effectively “poison pills,” as explained in detail in the Plaintiffs’ brief. See Dkt. 25-3 at 7:27–
Chicago, Illinois 60606
15 8:28. Under the Rule, school districts can either (1) follow the Department’s preferred approach,
16 in violation of the Act, and forfeit a substantial share of their funds for the benefit of private
Phone: (312) 526-1538
17 schools, but maintain their congressionally-granted discretion with respect to how to spend the
18 remaining funds; or (2) maintain the full funding intended for public schools under the CARES
19 Act, but give up the ability to serve all of their students and adhere to severe restrictions on how
20 the money can be spent.
21 Neither option is allowed by the Act, as discussed above, and neither one is workable for
22 school districts. First, the funds allocated are desperately needed by school districts trying to
23 reopen during the pandemic. COVID-19 has drastically affected public education in the United
24 States. School districts across the nation were ordered to close and transition to online learning in
25 the spring, incurring significant additional expenses to ensure all students (particularly low-
26 income students like many of those served by Council members) had adequate access to
27 necessary technology. Since then, states throughout the country have faced declining revenue
28 18
Quilantan, supra n. 14.
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1 and corresponding budget cuts, including billions of dollars in reduction to funding for public
2 education. These cuts come at the same time when the additional costs of re-opening schools
3 safely, according to protocols recommended by the Center for Disease Control (“CDC”), are
4 estimated by the CCSSO to amount to somewhere between $158 and $245 billion. 19 School
5 districts cannot afford to lose any resources at this time.
6 Similarly, it is impractical for school districts, including Council members, to give up
7 their ability under the CARES Act to use these funds with flexibility in any school in which they
8 are needed. Some of the emergency funds authorized by Congress are desperately needed
9 precisely to make up for lost state and local revenue, an approach complicated if not made
10 unworkable by the Rule, particularly if a school district follows the Act’s allocation method
11 rather than the Department’s. Likewise, as discussed in Section III below, resources to open
12 schools safely like personal protective equipment for schools opening for in-person instruction or
13 technology to support online instruction are needed at all schools and not only Title I schools,
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120 South Riverside Plaza, Suite 2200 14 but the Rule would restrict districts from using the funds in this manner, unless they adopt the
Chicago, Illinois 60606
15 Department’s allocation method. As a result, the Rule does not give school districts any actual
16 choice.
Phone: (312) 526-1538
17 The Rule also increases the legal pressure on school districts because it purports to be
18 legally binding, even though it directly contradicts the Act. And, to make matters worse, as an
19 interim rule, the Rule itself is subject to further modification by the Department. In sum, the Rule
20 exacerbates the problems for school districts caused by the Guidance and further underscores the
21 arbitrary nature of the Department’s approach to equitable services under the CARES Act.
22 C. The Department’s inconsistent interpretation also has resulted in delay in the
23 distribution of critical resources.
24 In addition to causing unnecessary confusion and uncertainty regarding an otherwise
25 clear and unambiguous statutory entitlement, the Department’s unclear and shifting “guidance”
26
27
19
Letter from Carissa Miller, Exec. Dir., CCSSO, to Lamar Alexander, U.S. Congress (June 24,
28
2020) (available at https://ccsso.org/sites/default/files/2020-06/HELPLetterFinal.pdf).
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1 has resulted in unacceptable delay in school districts’ ability to apply for and access these much-
2 needed resources.
3 First, because of the changing interpretations and the introduction of entirely new
4 formulas for calculating the proportionate share under the Guidance and then the Rule, there is
5 little to no consensus or clarity regarding the actual dollar amounts available for school districts
6 to rely on in order to plan appropriately for their use. Because of the Department’s actions, the
7 academic (and fiscal) year during which the pandemic first began disrupting delivery of in-
8 person education and other operations has now expired without school districts having access to
9 congressionally-appropriated emergency funds to cover expenditures back to March. In addition,
10 with each new interpretation, school districts have been required to re-analyze and re-assess
11 current budgets, undermining school administrators’ ability to focus on the real emergencies at
12 hand: initially, the continuation of high-quality education with schools closed and, now, the safe
13 return of students and teachers to schools (if possible) in the midst of a global pandemic.
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120 South Riverside Plaza, Suite 2200 14 Second, under the CARES Act, as under Title I, school districts must engage in a
Chicago, Illinois 60606
15 consultation process with private schools in order to provide appropriate services to students in
16 those private schools.20 With each new interpretation from the Department, school districts have
Phone: (312) 526-1538
17 had to delay, restart, or repeat this consultation process, which has harmed not only students in
18 public school districts, but also disadvantaged students in private schools who should be
19 benefitting from these resources. In some states, like Texas, state educational authorities have
20 gone so far as to expressly require school districts to restart a consultation requirement based on
21 the Department’s July 1 Rule.21 As mandated by the Act, it is critical for school districts to
22
20
See CARES Act § 18005(a) (requiring LEAs to provide equitable services “in consultation
23 with representatives of non-public schools”); see also Notice, supra note n.7, at 6 (“An SEA
must ensure that an LEA that receives an ESSER Fund subgrant provides equitable services to
24 students and teachers in non-public schools located within the LEA in the same manner as
25 provided under section 1117 of the ESEA, as determined through timely and meaningful
consultation with representatives of non-public schools.”) (emphasis added).
21
26 See Texas Educ. Agency, Providing Equitable Services to Students and Teachers in
Participating Private Non-Profit Schools Under the CARES Act Programs 3 (updated July 9,
27 2020), https://tea.texas.gov/sites/default/files/covid/COVID-19-CARES-Act-Equitable-Services-
FAQ.pdf (“If consultation has already been completed and the district is changing the calculation
28
option, the consultation process must be reopened. The revised consultation process must be
19
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IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION (3:20-cv-04478-JD)
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1 engage in a meaningful consultation process with private school representatives to ensure that
2 the funds are utilized in an effective way.
3 The Department’s chaotic deployment of its preferred policy position through the
4 Guidance and then the Rule has unnecessarily delayed that process to the detriment of school
5 districts and private schools nationwide.
6 III. The Interim Final Rule Adopted by the Department Would Divert Hundreds of
7 Millions of Dollars from Public Schools to Private Schools with Devastating
8 Consequences for School Districts and their Students.
9 If the approach to CARES Act equitable services allocations suggested in the Guidance
10 and mandated by the Rule is allowed to stand, it would divert hundreds of millions of dollars
11 away from public school districts that are already facing massive budget cuts and exacerbate the
12 challenges of operating safely and effectively during an ongoing global pandemic. The
13 consequences of this diversion would be devastating for students and teachers nationwide,
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120 South Riverside Plaza, Suite 2200 14 including the millions in Council member districts.
Chicago, Illinois 60606
15 A. The Amount of Funds Diverted is Substantial.
16 The approach towards equitable service allocations suggested and then mandated by the
Phone: (312) 526-1538
17 Department would dramatically increase the percentage of the funds appropriated by Congress
18 under the CARES Act to support elementary and secondary education that flow to private
19 schools, regardless of the number of low-income students they serve. For example, the
20 proportion of CARES Act allocations going to private schools would increase in member
21 districts polled by the Council, in one district by as much at 1280%. See Exhibit. F, Declaration
22 of Manish Naik; Exhibit F-1. The diversion of funds to private schools, regardless of need,
23 would dramatically reduce the funds available to public school districts like members of the
24 Council. In polling its members this week, the Council received 16 reliable responses which
25 indicated that the dollar amount lost to private schools in these districts would range from about
26 $628,000 to $6,485,000. See Exhibit F ¶¶ 3-6; Exhibit F-1. The total amount lost by these
27
documented. TEA recommends extending consultation timeline to ensure the new requirements
28
are discussed with private school officials.”).
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THE COUNCIL OF THE GREAT CITY SCHOOLS AMICUS CURIAE BRIEF
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1 districts would be approximately $33,337,000. Id. Three other Council members, the New York
2 City Department of Education, the Chicago Public Schools, and the San Francisco Unified
3 School District, all of whom are Plaintiffs in this case, disclosed in written testimony that they
4 would lose about $53,000,000, $10,170,000, and $1,740,000 respectively. See Exhibit F ¶¶ 7, 9
5 (citing Dkt. 35-2, Declarations of Lindsey Oates, Dr. Janice K. Jackson and Meaghan Wallace).
6 If the amount of CARES Act funding lost through the Department’s approach was similar in
7 other school districts relative to their total low-income population, the Council projects that its
8 member districts would lose a total of about $292,000,000 of these much-needed, emergency
9 resources. Id. ¶ 11.
10 Moreover, the Council’s 76 members, though relatively large in size are just a small
11 fraction of the public school districts in the United States. An analysis of the effect of the
12 Department’s approach on the 185 school districts in Texas alone, for example, indicates that
13 those districts would collectively lose about $38 million in CARES Act funds. 22
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120 South Riverside Plaza, Suite 2200 14 The allocation method effectively mandated by the Rule would also divert resources from
Chicago, Illinois 60606
15 private schools that serve a large number of low-income students. In Cleveland, for example,
16 where a large number of low-income students attend private schools because of Ohio’s voucher
Phone: (312) 526-1538
17 program, Council member the Cleveland Metropolitan School District (“CMSD”) estimates that
18 most private schools will lose money under the Department’s methodology, favoring a select few
19 who serve few low-income students. Id. ¶¶ 13-14. Overall the cumulative effect of the allocating
20 funds for equitable services based on total enrollment in Cleveland’s private schools would be to
21 divert about $822,952 away from CMSD’s public schools, reallocate approximately $890,000
22 away from 47 non-public schools with high poverty, and redirect approximately $1.7 million to
23 16 private schools with low numbers of high poverty students. Id. ¶¶ 14-15.
24 The overall effect of the Department’s approach is thus to divert hundreds of millions of
25 dollars of critically needed funds away from public school districts serving low-income
26
22
Morgan Craven and Roy L. Johnson, An Analysis of How the Department of Education’s
27 Equitable Services Rule Will Harm Texas Students and School Districts, IDRA ISSUE BRIEF (July
16, 2020), https://www.idra.org/wp-content/uploads/2020/07/Cutting-Public-School-Relief-
28
Funds-to-Subsidize-Private-Schools-IDRA-Issue-Brief-July-16-2020.pdf (“IDRA Issue Brief”).
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1 communities and millions more away from private schools serving high percentages of low-
2 income students. This is not how Congress wanted to support educators’ efforts to address the
3 pandemic.
4 B. The Diversion would Deprive Millions of Public School Students of Critical
5 Resources and Life-Saving Services during the Pandemic.
6 The diversion of these substantial funds away from school districts is depriving millions
7 of students of exactly the resources these funds were supposed to support. The funds made
8 available through the CARES Act were intended, once allocated, to be used for purposes such as
9 purchasing sanitization and cleaning supplies, purchasing personal protective equipment for
10 teachers and students, and planning for and coordinating long-term closures including by
11 providing portable meals and technology services. These are critical resources necessary during
12 this pandemic that are being deprived from millions of students in Council member districts.
13 The Council polled its member districts and asked them to list the consequences of the
HUSCH BLACKWELL LLP
120 South Riverside Plaza, Suite 2200 14 losses suffered due to the diversion of significant funds away from public schools and into the
Chicago, Illinois 60606
15 hands of private schools. Exhibit F, ¶¶ 3-4. Here are five salient examples:
16
Phone: (312) 526-1538
Broward County Public Schools: Because $540,000 has been diverted to private school
17
funding, the District was not able meet the technology needs of schools as they
18
transitioned to a virtual environment. It also had to reduce funds for professional
19
development and instructional materials.
20
21 Baltimore City Public Schools: If the District must provide the additional $2,419,639 to
22 private schools this will reduce the number of students that can receive a Chromebook to
23 support distance learning by 6,050. Alternatively, the District would have to reduce the
24
number of students that can be provided a semester of tutoring by 3,252.
25
Charleston County School District: This District was not able to provide the childcare
26
services that the district’s teachers needed to support online instruction. It also will not be
27
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able to purchase sufficient PPE to support reopening. In addition, it will struggle to
1
2 provide Wi-Fi devices for students living in areas with limited internet capability.
3 District of Columbia Public Schools: The $1.8M this District will lose could purchase
4 2,100 additional laptop devices for low-income students to support their virtual learning.
5
$400,000 could provide mentoring and tutoring services for 400 at-risk students. $1.2M
6
could purchase internet connectivity for one year for 5,000 low-income students.
7
Portland Public Schools: This District would need to cut more than $628,000 from
8
9 needed Chromebooks, safety supplies and materials, and other resources as well.
10
The analysis of Texas school districts discussed earlier shows a similar impact across the
11
school districts in that state. The study concludes that the $38 million lost by those districts could
12
“have been used to fund hundreds of counselors, social workers and nurses and to purchase
13
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120 South Riverside Plaza, Suite 2200
equipment like facemasks and hand sanitizer. It could have been used to support remote learning
14
and other critical services for students and teachers.” IDRA Issue Brief at 1.
Chicago, Illinois 60606
15
As positive COVID-19 test results rise throughout numerous places in the country, school
16
Phone: (312) 526-1538 districts are faced with an impossible choice made even more difficult by this diversion of funds:
17
do we start school in-person without enough face masks and personal protective equipment or do
18
we start school remotely when often large portions of the student body have neither internet
19
connectivity or laptop devices to allow them to work remotely? This dilemma was intended to be
20
at least partially alleviated by the availability of CARES Act funds. Instead, the Department’s
21
unlawful Guidance and Rule exacerbate the problem by depriving public schools of necessary
22
funds. If the language of the CARES Act itself is properly followed, then Council member
23
districts would have significantly more funds available to help address current conditions by
24
providing resources necessary for safe in-person instruction and/or equitable remote learning.
25
The challenges facing public school districts today are real and the potential
26
consequences are grave. School districts are addressing unprecedented issues with scarce
27
resources. The Department’s attempt to divert hundreds of millions of dollars should not be
28
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THE COUNCIL OF THE GREAT CITY SCHOOLS AMICUS CURIAE BRIEF
IN SUPPORT OF PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION (3:20-cv-04478-JD)
Case 3:20-cv-04478-JD Document 47-1 Filed 07/24/20 Page 29 of 92
1 allowed to make these difficult tasks even more challenging. The funds these districts stand to
2 lose under the Department’s arbitrary interpretation, if freed up by this Court’s injunction, would
3 allow them better to address the challenges of the COVID-19 pandemic, as Congress intended.
4 CONCLUSION
5 For all of these reasons, the Council of the Great City Schools respectfully suggests that
6 Plaintiffs’ motion for preliminary injunction should be granted.
7
8 Dated: July 24, 2020 Respectfully submitted,
9 HUSCH BLACKWELL LLP
10 /s/ Donald J. Mizerk
11 Donald J. Mizerk (CA Bar No. 208477)
John W. Borkowski (IL Bar No. 6320147)
12 Mary Deweese (IL Bar No. 6326512)
Pro hac vice motions pending
13 120 South Riverside Plaza, Suite 2200
HUSCH BLACKWELL LLP
120 South Riverside Plaza, Suite 2200
Chicago, Illinois 60606
14
Phone: (312) 526-1538
Chicago, Illinois 60606
15 Fax: (312) 655-1501
don.mizerk@huschblackwell.com
16 john.borkowski@huschblackwell.com
Phone: (312) 526-1538 mary.deweese@huschblackwell.com
17
18
Paige Duggins-Clay (TX Bar No. 24105825)
19 Pro hac vice motion pending
111 Congress Avenue, Suite 1400
20 Austin, Texas 78701
Phone: (512) 472-5456
21 Fax: (512) 479-1101
paige.duggins-clay@huschblackwell.com
22
23 Aleksandra O. Rushing (MO Bar No. 68304)
Shmuel B. Shulman (MO Bar No. 71175)
24 Pro hac vice motions pending
190 Carondelet Plaza, Suite 600
25 St. Louis, Missouri 63141
Phone: 314-345-6275
26 Fax: 314-480-1505
aleks.rushing@huschblackwell.com
27 shmuli.shulman@huschblackwell.com
28
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1 CERTIFICATE OF SERVICE
2 The undersigned certifies that on the 24th day of July, 2020, a copy of the above and
3 foregoing document was filed with the Clerk of Court using the CM/ECF system which sent
4 electronic notification of such filing to all those individuals currently electronically registered
5 with the Court.
6
7 /s/ Donald J. Mizerk
8
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120 South Riverside Plaza, Suite 2200 14
Chicago, Illinois 60606
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