Summary Judgment, State of Washington v. DeVos (later v. Cardona), No. 2:20-cv-00182 (E.D. Wash.), Doc. 72 (November 20, 2020)
Summary
Plaintiff State of Washington’s motion for summary judgment, filed November 20, 2020, in the Eastern District of Washington at Spokane against Betsy DeVos, in her official capacity as Secretary of the United States Department of Education, and the Department of Education. The motion asks the Court to convert its preliminary injunction into a final judgment and to vacate the April 21 guidance and the Interim Final Rule in their entirety. It states that the Rule is arbitrary and capricious and violates the separation of powers doctrine and the Spending Clause. It says the CARES Act appropriated $14 billion for the Higher Education Emergency Relief Fund (HEERF) and that section 18004 did not grant the Secretary any rulemaking or interpretive authority.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Summary Judgment, State of Washington v. DeVos (later v. Cardona), No. 2:20-cv-00182 (E.D. Wash.), Doc. 72 (November 20, 2020).”
Original at storage.courtlistener.com. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/summary-judgment-state-of-washington-v-devos-later-v-cardona-no-2-20-c-87918642db/
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Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1352 Page 1 of 32
1 ROBERT W. FERGUSON
Attorney General
2
R. JULY SIMPSON, WSBA #45869
3 JEFFREY T. SPRUNG, WSBA #23607
SPENCER W. COATES, WSBA #49683
4 PAUL M. CRISALLI, WSBA #40681
Assistant Attorneys General
5 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
6 (206) 464-7744
7 UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WASHINGTON
8 AT SPOKANE
9 STATE OF WASHINGTON, NO. 2:20-cv-00182-TOR
10 Plaintiff, PLAINTIFF STATE OF
WASHINGTON’S MOTION
11 v. FOR SUMMARY JUDGMENT
12 BETSY DeVOS, in her official NOTED FOR: February 24, 2021
capacity as Secretary of the United Without Oral Argument
13 States Department of Education, and
the UNITED STATES
14 DEPARTMENT OF EDUCATION, a
federal agency,
15
Defendants.
16
17
18
19
20
21
22
PLAINTIFF STATE OF ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1353 Page 2 of 32
1 TABLE OF CONTENTS
2 I. INTRODUCTION ............................................................................... 1
3 II. STATUTORY AND FACTUAL BACKGROUND ........................... 1
4 A. The Coronavirus Aid, Relief, and Economic Security Act........... 1
5 B. The Department’s CARES Act Guidance Initially Complied with
Congress’s Directive ..................................................................... 3
6
C. The Department Reverses Its Policy Without Explanation .......... 5
7
D. Multiple States Seek to Enjoin the Eligibility Requirement and
8 the Department Engages in Rulemaking....................................... 7
9 III. ARGUMENT....................................................................................... 9
10 A. Legal Standard .............................................................................. 9
11 B. The Eligibility Restriction Exceeds the Department’s Statutory
Authority ..................................................................................... 10
12
1. Congress did not delegate authority to the Department to
13 make eligibility rules for student emergency grants............. 10
14 a. The plain language of section 18004 forecloses any
rulemaking authority ...................................................... 10
15
b. The Secretary has no implicit rulemaking authority ...... 11
16
2. The Department’s Eligibility Restriction fails to persuade
17 under Skidmore ..................................................................... 13
18 C. The Department’s Eligibility Restriction is Arbitrary and
Capricious.................................................................................... 19
19
D. The Eligibility Restriction Violates Separation of Powers ......... 22
20
E. The Eligibility Restriction Violates the Spending Clause .......... 23
21
IV. CONCLUSION ................................................................................. 24
22
PLAINTIFF STATE OF i ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1354 Page 3 of 32
1 TABLE OF AUTHORITIES
2 Cases
3 Albino v. Baca,
747 F.3d 1162 (9th Cir. 2014)........................................................................... 9
4
Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy,
5 548 U.S. 291 (2006) ........................................................................................24
6 Charles v. Verhagen,
348 F.3d 601 (7th Cir. 2003 ............................................................................ 24
7
Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,
8 467 U.S. 837 (1984) ..............................................................................9, 13, 15
9 Chinook Indian Nation v. U.S. Dep’t of Interior,
No. C17-5668-RBL, 2020 WL 363410 (W.D. Wash. Jan. 22, 2020) ............ 20
10
City & County of San Francisco v. Trump,
11 897 F.3d 1225 (9th Cir. 2018)......................................................................... 22
12 City of Arlington, Tex. v. F.C.C.,
569 U.S. 290 (2013) .......................................................................................... 9
13
City of Los Angeles v. Barr,
14 941 F.3d 931 (9th Cir. 2019)........................................................................... 12
15 F.C.C. v. Fox Television Stations, Inc.,
556 U.S. 502 (2009) ........................................................................................20
16
FDA v. Brown & Williamson Tobacco Corp.,
17 529 U.S. 120 (2000) ..................................................................................15, 18
18 Gonzalez v. Oregon,
546 U.S. 243 (2006) ........................................................................9, 10, 12, 13
19
King County v. Azar,
20 320 F. Supp. 3d 1167 (W.D. Wash. 2018), appeal dismissed
No. 18-35606, 2018 WL 5310765 (9th Cir. Sept. 20, 2018) .......................... 10
21
22
PLAINTIFF STATE OF ii ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1355 Page 4 of 32
1 La. Pub. Serv. Comm’n v. F.C.C.,
476 U.S. 355 (1986) .......................................................................................... 9
2
Massachusetts v. U.S. Dep’t of Educ.,
3 No. 1:20-11600-LTS, 2020 WL 6750518 (D. Mass. Sept. 3, 2020) ............ 7, 8
4 Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983) ....................................................................................19, 20
5
Nat’l Fed’n of Indep. Bus. v. Sebelius (NFIB),
6 567 U.S. 519 (2012) ........................................................................................23
7 National Cable & Telecommunications Association v. Brand X Internet
Services,
8 545 U.S. 967 (2005) ..................................................................................11, 19
9 New York v. United States,
505 U.S. 144 (1992) ........................................................................................24
10
Noerand v. Devos,
11 No. 20-11271-LTS, 2020 WL 4274559 (D. Mass. July 24, 2020) ................... 8
12 Oakley v. Devos,
No. 20-CV-03215-YGR, 2020 WL 3268661
13 (N.D. Cal. June 17, 2020) .......................................................................7, 8, 23
14 Pennhurst State Sch. & Hosp. v. Halderman,
451 U.S. 1 (1981) ............................................................................................24
15
Perrin v. United States,
16 444 U.S. 37 (1979) ..........................................................................................16
17 Russello v. United States,
464 U.S. 16 (1983) ..........................................................................................11
18
Sierra Club v. Trump,
19 929 F.3d 670 (9th Cir. 2019).................................................................9, 13, 15
20 Skidmore v. Swift & Co.,
323 U.S. 134 (1944) ..............................................................................8, 13, 15
21
South Dakota v. Dole,
22 483 U.S. 203 (1987) ........................................................................................23
PLAINTIFF STATE OF iii ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
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1 Sutton v. United Air Lines, Inc.,
527 U.S. 471 (1999) ........................................................................................12
2
Train v. City of New York,
3 420 U.S. 35 (1975) ..........................................................................................22
4 Union Station Assocs. LLC v. Puget Sound Energy, Inc.,
238 F. Supp. 2d 1226 (W.D. Wash. 2002) ...................................................... 10
5
Washington v. U.S. Dep’t of State,
6 318 F. Supp. 3d 1247 (W.D. Wash. 2018) ...................................................... 20
7 Woods v. START Treatment & Recovery Ctrs., Inc.,
864 F.3d 158 (2d Cir. 2017) ............................................................................ 13
8
Constitutional Provisions
9
U.S. Const. art. I, § 8, cl. 1…………………………………………………….22
10
Statutes
11
5 U.S.C. § 706(2)(A) (2020)...........................................................................9, 19
12
5 U.S.C. § 706(2)(C) (2020) ................................................................................. 9
13
20 U.S.C. §§ 1001 et seq. (2020)........................................................................ 17
14
20 U.S.C. §§ 1051-1068h (2020) ....................................................................... 17
15
20 U.S.C. §§ 1070-1099d (2020) ....................................................................... 17
16
20 U.S.C. § 1091(a)(3) (2020) .............................................................................. 6
17
20 U.S.C. § 1091(c)(1)(B) (2020) ........................................................................ 6
18
20 U.S.C. §§ 1101-1103g (2020) ....................................................................... 17
19
20 U.S.C. §§ 1121-1132 (2020) ......................................................................... 17
20
20 U.S.C. §§ 1151-1155 (2020) ......................................................................... 17
21
20 U.S.C. § 1161w (2020) .................................................................................. 22
22
PLAINTIFF STATE OF iv ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1357 Page 6 of 32
1 20 U.S.C. § 1161w(f)(2) (2020) ......................................................................... 18
2 31 U.S.C. § 3729(a)(1) .......................................................................................... 6
3 Pub. L. No. 116-136, 134 Stat. 281 (Mar. 27, 2020)............................................ 2
4 Pub. L. No. 116-136, 134 Stat. 281 § 3513 (Mar. 27, 2020) .......................14, 18
5 Pub. L. No. 116-136, 134 Stat. 281 § 3513(f) (Mar. 27, 2020) ......................... 11
6 Pub. L. No. 116-136, 134 Stat. 281 § 18001(b) (Mar. 27, 2020) ......................... 2
7 Pub. L. No. 116-136, 134 Stat. 281 § 18004 (Mar. 27, 2020) ....................passim
8 Pub. L. No. 116-136, 134 Stat. 281 § 18004(a) (Mar. 27, 2020) ................... 2, 16
9 Pub. L. No. 116-136, 134 Stat. 281 § 18004(a)(1) (Mar. 27, 2020) .................... 2
10 Pub. L. No. 116-136, 134 Stat. 281 § 18004(a)(2) (Mar. 27, 2020) .................. 16
11 Pub. L. No. 116-136, 134 Stat. 281 § 18004(a)(3) (Mar. 27. 2020) .................. 16
12 Pub. L. No. 116-136, 134 Stat. 281 § 18004(b) (Mar. 27, 2020) .............2, 17, 18
13 Pub. L. No. 116-136, 134 Stat. 281 § 18004(c) (Mar. 27, 2020) ................... 2, 16
14 Pub. L. No. 116-136, 134 Stat. 281 § 18007 (Mar. 27, 2020) ........................... 16
15 Regulations
16 34 C.F.R. § 668.32 (2020) .................................................................................... 6
17 34 C.F.R. § 668.34(a)(4)(ii) (2020) ...................................................................... 6
18 34 C.F.R. § 685.207 (2020) ................................................................................ 21
19 34 C.F.R. § 690.79 (2020) .................................................................................. 21
20 34 C.F.R. § 690.80 (2020) .................................................................................. 21
21
22
PLAINTIFF STATE OF v ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1358 Page 7 of 32
1 I. INTRODUCTION
2 On June 12, 2020, this Court preliminarily enjoined the U.S. Department
3 of Education’s April 21, 2020, guidance and its June 15, 2020, Interim Final Rule.
4 ECF No. 31. It concluded that “Section 18004 [of the Coronavirus Aid, Relief,
5 and Economic Security Act] . . . does not indicate an intent to subject [Higher
6 Education Emergency Relief Funds] funds to Title IV” of the Higher Education
7 Act, and “Defendants’ minimal consideration of the interests of non-Title IV
8 eligible students at present, combined with Defendants’ position that the April 9
9 and April 21 statements are not inconsistent, do not reflect thorough evidence in
10 support of the agency’s decision-making or consistency between its
11 pronouncements.” Id. at 27, 28-29.
12 Washington now brings this motion for summary judgment asking the
13 Court to affirm its preliminary conclusion and convert its preliminary injunction
14 into a final judgment. In addition, Washington submits that the Rule is arbitrary
15 and capricious and violates the separation of powers doctrine and the Spending
16 Clause. This Court should enter summary judgment against the Department on
17 these claims and vacate the April 21 guidance and the Interim Final Rule in their
18 entirety.
19 II. STATUTORY AND FACTUAL BACKGROUND
20 A. The Coronavirus Aid, Relief, and Economic Security Act
21 On March 27, 2020, Congress enacted the Coronavirus Aid, Relief, and
22
PLAINTIFF STATE OF 1 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1359 Page 8 of 32
1 Economic Security Act (CARES Act). Pub. L. No. 116-136, 134 Stat. 281
2 (Mar. 27, 2020). The CARES Act appropriated $14 billion for the Higher
3 Education Emergency Relief Fund (HEERF), the section at issue in this litigation.
4 CARES Act § 18001(b).
5 Congress explained its intent in enacting the HEERF in section 18004.
6 First, it commanded the Secretary of Education to distribute the HEERF to
7 institutions of higher education. CARES Act § 18004(a). Second, it specified
8 exactly how the Secretary is to allocate the money, prescribing a formula based
9 on student enrollment. Id. § 18004(a)(1). Third, it provided explicit instructions
10 on the means of distribution, dictating that the Secretary employ the
11 Department’s existing grants management system used to distribute federal
12 student aid funds. CARES Act § 18004(b). Fourth, it specified how HEERF
13 funds may be used, providing, as relevant to this litigation:
14 Institutions of higher education shall use no less than 50 percent of
such funds to provide emergency financial aid grants to students for
15 expenses related to the disruption of campus operations due to
coronavirus (including eligible expenses under a student’s cost of
16 attendance, such as food, housing, course materials, technology,
health care, and child care).
17
CARES Act § 18004(c).
18
Section 18004 did not grant the Secretary any rulemaking or interpretive
19
authority, nor any discretion in implementing Congress’s directives. Indeed,
20
subsection (c), the use provision, did not mention the Secretary at all.
21
22
PLAINTIFF STATE OF 2 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1360 Page 9 of 32
1 B. The Department’s CARES Act Guidance Initially Complied with
Congress’s Directive
2
The Department initially followed Congress’s instructions. On
3
April 9, 2020, it released the portion of the CARES Act funding Congress
4
appropriated for student emergency grants. In addition the Department issued a
5
press release, a letter from Secretary DeVos to college and university presidents,
6
a certification form for higher education institutions, and a list of individual
7
allocations to colleges and universities. Administrative Record (AR) 99-100,
8
103-105, 125-26; ECF No. 6-1 (Ex. D).
9
The Department’s April 9, 2020, issuances correctly read the CARES Act
10
as giving no authority to the Department to restrict the students to whom
11
institutions awarded emergency grants, and as empowering institutions to
12
determine the recipients limited only by the express requirements in the Act.
13
Specifically, in the April 9, 2020, letter to college and university presidents,
14
Secretary DeVos wrote that “[t]he CARES Act provides institutions with
15
significant discretion on how to award this emergency assistance to students.”
16
AR 99-100. This “means that each institution may develop its own system and
17
process for determining how to allocate these funds[.]” Id. She stated that “[t]he
18
only statutory requirement is that the funds be used to cover expenses related to
19
the disruption of campus operations due to coronavirus (including eligible
20
expenses under a student’s cost of attendance, such as food, housing, course
21
materials, technology, health care, and child care).” Id. (emphasis added).
22
PLAINTIFF STATE OF 3 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
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1 Further, the Department’s press release confirmed that once institutions
2 submitted the required certification, “[t]he college or university will then
3 determine which students will receive the cash grants.” AR 125-26. And the
4 certification form also acknowledged that institutions “retain[] discretion to
5 determine the amount of each individual emergency financial aid grant consistent
6 with all applicable laws including non-discrimination laws.” AR 103-105. The
7 language in the certification regarding institutions’ use of CARES Act
8 emergency grant funding was intentionally hortatory and not mandatory, using
9 phrases such as “the Secretary recommends,” “the Recipient should be mindful,”
10 and the “Secretary strongly encourages.” Id. The certification form expressly
11 disavowed that CARES Act emergency grants were subject to the requirements
12 of Title IV of the Higher Education Act (HEA): “The Secretary does not consider
13 these individual emergency financial aid grants to constitute Federal financial aid
14 under Title IV of the HEA.” Id.
15 Washington higher education institutions, acting urgently on Congress’s
16 offer of federal aid to their students, promptly submitted applications and signed
17 certifications according to the Department’s then-existing instructions and
18 assurances. ECF No. 7 (Woods Decl.) at 6 ¶ 12 (applied April 10, 2020);
19 ECF No. 8 (Flores Decl.) at 6 ¶ 12 (applied April 12, 2020); ECF No. 9 (Allison
20 Decl.) at 6 ¶ 12 (applied April 13, 2020); ECF No. 10 (Buchmann Decl.) at 6-8
21 ¶¶ 12-13 (applied April 21, 2020); ECF No. 11 (Soto Decl.) at 5-6 ¶ 12 (applied
22
PLAINTIFF STATE OF 4 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1362 Page 11 of 32
1 April 21, 2020); ECF No. 12 (Sanchez Decl.) at 6 ¶ 12 (applied April 10, 2020).
2 C. The Department Reverses Its Policy Without Explanation
3 Nevertheless, 11 days later the Department abruptly and inexplicably
4 reversed course. On April 21, 2020, in connection with its release of different
5 CARES Act funding, the Department issued “FAQs” that purported to restrict
6 student eligibility for emergency grants. The Department asserted that “[o]nly
7 students who are or could be eligible to participate in programs under Section
8 484 in Title IV of the Higher Education Act of 1965, as amended (HEA), may
9 receive emergency financial aid grants.” AR 109 (FAQ #9); (see also
10 ECF No. 6-1, Ex. H, FAQ #5 (the “Eligibility Restriction”)). Despite Congress
11 having assigned the Department no role in determining institutions’ use of
12 emergency grant funds, the Department engrafted its own eligibility restriction
13 onto those grant funds from a different statute, unlawfully adding that onto “[t]he
14 only statutory requirement” it previously had identified, AR 99-100, and
15 restricted institutions’ discretion.
16 The Department’s unilateral Eligibility Restriction excluded hundreds of
17 thousands of students in desperate need of financial assistance nationwide. The
18 HEA contains numerous requirements for student eligibility for financial aid not
19 found in the CARES Act. These include U.S. citizenship or legal permanent
20 resident status; a valid Social Security number; registration with Selective Service
21 (if the student is male); a high school diploma, GED, or completion of high school
22
PLAINTIFF STATE OF 5 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
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1 in an approved homeschool setting; that the student not be in default on any loan
2 issued by the Department; and maintenance of at least a cumulative C average, or
3 its equivalent or academic standing consistent with the requirements for graduation.
4 20 U.S.C. §§ 1091(a)(3), (c)(1)(B) (2020); see also 34 C.F.R. §§ 668.32,
5 668.34(a)(4)(ii) (2020); ECF No. 13 (Yoshiwara Decl.) at 5-6 ¶ 11.
6 While technically a student does not need to possess a Department-approved
7 federal student aid application (called a Free Application for Federal Student Aid,
8 or FAFSA), most schools do “not have the capability to determine if students are
9 eligible for federal financial aid under Title IV without information provided by
10 [the Department], such as an approved FAFSA.” ECF No. 8 (Flores Decl.) at 5
11 ¶ 10; see also ECF No. 13 (Yoshiwara Decl.) at 11-12 ¶ 21. Furthermore, “given
12 the number of these students and the urgent need for us to distribute the
13 emergency grants,” those schools “do not have the capacity to research and
14 independently determine if these students would qualify for federal financial aid
15 under Title IV.” ECF No. 8 (Flores Decl.) at 9 ¶ 18.
16 Institutions’ compliance with the Eligibility Restriction is mandatory. The
17 Department’s required certifications made institutions that received HEERF money
18 liable for any failure to comply with the CARES Act—threatening treble damages
19 under the False Claims Act, 31 U.S.C. § 3729(a)(1), if they did not abide by the
20 Eligibility Restriction. AR 104; ECF No. 6-1 (Ex. I) at 139 ¶ 4(i); see also
21 ECF No. 8 (Flores Decl.) at 6 ¶ 11; ECF No. 7 (Woods Decl.) at 6 ¶ 11;
22
PLAINTIFF STATE OF 6 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
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1 ECF No. 10 (Buchmann Decl.) at 6 ¶ 11; ECF No. 9 (Allison Decl.) at 6 ¶ 11;
2 ECF No. 12 (Sanchez Decl.) at 6 ¶ 11.
3 Thus the Department’s Eligibility Restriction immediately cut off access to
4 emergency grants to tens of thousands of Washington students and denied
5 institutions discretion granted by Congress in using HEERF funds.
6 D. Multiple States Seek to Enjoin the Eligibility Requirement and the
Department Engages in Rulemaking
7
On May 19, 2020, Washington State filed suit against the Department
8
challenging the Eligibility Restriction and that same day filed a Motion for
9
Preliminary Injunction seeking to enjoin the Eligibility Restriction. ECF No. 1
10
and ECF No. 5. California filed suit on May 11, 2020, along with a Motion for
11
Preliminary Injunction on May 13, 2020. Oakley v. Devos, No. 20-CV-03215-
12
YGR, 2020 WL 3268661 (N.D. Cal. June 17, 2020). And on August 26, 2020,
13
Massachusetts filed suit and a motion for preliminary injunction. Massachusetts
14
v. U.S. Dep’t of Educ., No. 1:20-11600-LTS, 2020 WL 6750518 (D. Mass. Sept.
15
3, 2020). In spite of these challenges, on June 11, 2020, the Department filed a
16
notice that they would be filing an interim final rule to codify the Eligibility
17
Restriction that would be published in the Federal Register within a few days.
18
ECF No. 28.
19
However, on June 12, 2020, this Court granted Washington’s Motion for
20
Preliminary Injunction holding that Washington was likely to succeed on its
21
arguments that the CARES Act did not delegate rulemaking authority to the
22
PLAINTIFF STATE OF 7 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1365 Page 14 of 32
1 Department and that the Eligibility Restriction fails to persuade under Skidmore.
2 ECF No. 31 at 23-25, 30. The Court did not reach Washington’s argument that
3 the Eligibility Requirement is arbitrary and capricious, nor did the Court reach
4 the constitutional challenges raised by Washington. Id.
5 Subsequent district courts followed suit enjoining the Eligibility
6 Requirement in those states, though on different legal grounds. On June 17, 2020,
7 the Northern District of California enjoined enforcement of the Eligibility
8 Requirement in California, holding that the Department exceeded its authority in
9 imposing the Eligibility Requirement and that the Eligibility Requirement
10 violated the constitution under separation of powers principles and the Spending
11 Clause. Oakley, 2020 WL 3268661, at *18. On July 24, 2020, in Noerand v.
12 Devos, No. 20-11271-LTS, 2020 WL 4274559 (D. Mass. July 24, 2020), a case
13 filed by a student, the District of Massachusetts granted a motion for preliminary
14 injunction, holding that the CARES Act directs the distribution of funds
15 regardless of immigration status and directing the Secretary to disburse funds to
16 the Plaintiff. And on September 3, 2020, in the case filed by the State of
17 Massachusetts, the District of Massachusetts issued a preliminary injunction
18 barring the Department from enforcing the interim final rule in Massachusetts.
19 Massachusetts v. U.S. Dep’t of Educ., No. 1:20-11600-LTS, 2020 WL 6750518
20 (D. Mass. Sept. 3, 2020).
21
22
PLAINTIFF STATE OF 8 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1366 Page 15 of 32
1 III. ARGUMENT
2 A. Legal Standard
3 The APA provides that courts must “hold unlawful and set aside” agency
4 action that is “in excess of statutory jurisdiction, authority, or limitations,” “not
5 in accordance with law,” or “arbitrary, capricious, [or] an abuse of discretion[.]”
6 5 U.S.C. §§ 706(2)(A), (C) (2020). Additionally, an agency “literally has no
7 power to act . . . unless and until Congress confers power upon it.” La. Pub. Serv.
8 Comm’n v. F.C.C., 476 U.S. 355, 374 (1986). In determining whether agency
9 action exceeds statutory authority, “the question . . . is always whether the agency
10 has gone beyond what Congress has permitted it to do[.]” City of Arlington, Tex.
11 v. F.C.C., 569 U.S. 290, 297-98 (2013). When Congress has not delegated
12 interpretive authority and yet an agency takes it upon itself to exercise that
13 authority, the agency’s action is not entitled to deference. Chevron, U.S.A., Inc.
14 v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984). See also Gonzalez
15 v. Oregon, 546 U.S. 243, 258 (2006); Sierra Club v. Trump, 929 F.3d 670, 692
16 (9th Cir. 2019). Even where an agency has authority to interpret a statute, its
17 interpretation will receive no deference where “the intent of Congress is clear”
18 on the question at issue. Chevron, 467 U.S. at 842 & n.9.
19 “[S]ummary judgment is appropriate when ‘there is no genuine dispute as
20 to any material fact and the movant is entitled to judgment as a matter of law.’ ”
21 Albino v. Baca, 747 F.3d 1162, 1168 (9th Cir. 2014) (en banc) (quoting Fed. R.
22
PLAINTIFF STATE OF 9 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1367 Page 16 of 32
1 Civ. P. 56(a)). Where, as here, the material facts are not genuinely in dispute and
2 the questions before the Court are purely legal, the Court can resolve APA
3 challenges on summary judgment. King County v. Azar, 320 F. Supp. 3d 1167,
4 1171 (W.D. Wash. 2018), appeal dismissed No. 18-35606, 2018 WL 5310765
5 (9th Cir. Sept. 20, 2018). Similarly, questions of statutory interpretation are
6 questions of law, which may properly be resolved at summary judgment. See
7 Union Station Assocs. LLC v. Puget Sound Energy, Inc., 238 F. Supp. 2d 1226,
8 1229 (W.D. Wash. 2002).
9 B. The Eligibility Restriction Exceeds the Department’s Statutory
Authority
10
1. Congress did not delegate authority to the Department to make
11 eligibility rules for student emergency grants
12 a. The plain language of section 18004 forecloses any
rulemaking authority
13
The language of section 18004 lacks any delegation of rulemaking
14
authority to the Secretary. See ECF No. 31 at 23.The starting point for an inquiry
15
into rulemaking authority is the language of the statutory provision at issue.
16
Gonzalez, 546 U.S. at 258. As in Gonzalez, the CARES Act “does not grant” the
17
Department “broad authority to promulgate rules.” Id. at 259. And, as this Court
18
has already stated, “[t]he . . . limited powers [granted to the Department], to be
19
exercised in specific ways,” id., is “inconsistent with [the Department’s] claim of
20
general rulemaking authority under the HEA.” ECF No. 31 at 25.
21
The absence of rulemaking authority in section 18004 is in sharp contrast
22
PLAINTIFF STATE OF 10 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
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1 to other portions of the Act that do delegate rulemaking authority to agencies. For
2 example, in an earlier section—specifically addressing relief for student loan
3 borrowers—the Secretary is delegated authority to “waive the application of . . .
4 negotiated rulemaking” under the HEA. CARES Act § 3513(f).
5 But what is lacking is any reference to rulemaking to interpret section
6 18004. “[W]here Congress includes particular language in one section of a statute
7 but omits it in another section of the same Act, it is generally presumed that
8 Congress acts intentionally and purposely in the disparate inclusion or
9 exclusion.” Russello v. United States, 464 U.S. 16, 23 (1983). The CARES Act
10 is clear: Congress did not intend to delegate rulemaking authority to the
11 Department to interpret section 18004. See ECF No. 31 at 23.
12 b. The Secretary has no implicit rulemaking authority
13 Nor is there a statutory ambiguity that grants implicit rulemaking authority
14 to limit which students may or may not receive CARES emergency grants. As
15 this Court noted, although “ambiguities in statutes within an agency’s jurisdiction
16 to administer are delegations of authority to the agency to fill the statutory gap in
17 reasonable fashion,” National Cable & Telecommunications Association v.
18 Brand X Internet Services, 545 U.S. 967, 980 (2005), there is no statutory
19 ambiguity here that would justify the kind of rulemaking authority the
20 Department has attempted to invoke. ECF No. 31 at 24. Although section 18004
21 references some language from the HEA, the fact that Congress only incorporated
22
PLAINTIFF STATE OF 11 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1369 Page 18 of 32
1 limited portions of the HEA “raises the inference that the failure to similarly
2 incorporate all of Title IV’s eligibility restrictions into the CARES Act was
3 intentional.” Id., citing Navajo Nation v. Dep’t of Health & Human Servs., Sec’y,
4 325 F.3d 1133, 1139-40 (9th Cir. 2003).
5 Moreover, numerous court cases have found that delegated authority in
6 one area does not imply rulemaking authority to interpret the law or terms in the
7 law. Gonzalez, 546 U.S. at 263-64 (holding that the Attorney General lacked
8 authority to interpret the meaning of the law, even when delegated the authority
9 to ensure compliance with the law); Sutton v. United Air Lines, Inc., 527 U.S.
10 471, 478 (1999) (holding EEOC lacked authority to define “disability” even when
11 given authority to issue regulations in a separate subchapter from the definition);
12 City of Los Angeles v. Barr, 941 F.3d 931, 939 (9th Cir. 2019) (holding Assistant
13 Attorney General lacked authority to impose immigration conditions on Byrne
14 JAG formula grants without specific authority to do so even though the statute
15 delegated authority to “plac[e] special conditions on all grants, and determin[e]
16 priority purposes for formula grants”).
17 Even more so here, where Congress did not authorize the Department even
18 to impose conditions on or determine purposes of grants. Section 18004 directed
19 the Secretary to make the funds available and to use the same “system” it
20 normally uses to distribute grant money. But it does not delegate any rulemaking
21 authority to the Department or any authority to otherwise interpret other portions
22
PLAINTIFF STATE OF 12 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1370 Page 19 of 32
1 of the Act. See ECF No. 31 at 25.
2 2. The Department’s Eligibility Restriction fails to persuade under
Skidmore
3
The basis of Chevron deference is that “Congress has delegated authority
4
to an administrative agency to make rules carrying the force of law and that
5
agency’s interpretation to which deference is to be given was promulgated in the
6
exercise of that authority.” Woods v. START Treatment & Recovery Ctrs., Inc.,
7
864 F.3d 158, 168 (2d Cir. 2017). When Congress has not delegated interpretive
8
authority and yet an agency takes it upon itself to exercise that authority, the
9
agency’s action is not entitled to Chevron deference. Gonzalez, 546 U.S. at 258;
10
Sierra Club, 929 F.3d at 692. Here, as noted by this Court, ECF No. 31 at 30, the
11
proper standard of review is prescribed by Skidmore v. Swift & Co., 323 U.S. 134,
12
140 (1944), under which an agency’s interpretation is only given deference to the
13
extent it has the “power to persuade.” Skidmore deference depends on “the
14
thoroughness evident in its consideration, the validity of its reasoning, its
15
consistency with earlier and later pronouncements” as well as its overall “power
16
to persuade[.]” Skidmore, 323 U.S. at 140.
17
Here, as this Court noted, “Defendants’ minimal consideration of the
18
interests of non-Title IV eligible students at present, combined with Defendants’
19
position that the April 9 and April 21 statements are not inconsistent, do not
20
reflect thorough evidence in support of the agency’s decision-making or
21
consistency between its pronouncements.” ECF No. 31 at 28-29. Moreover, the
22
PLAINTIFF STATE OF 13 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1371 Page 20 of 32
1 Department’s actions manifest telltale inconsistency. It initially stated that
2 institutions would have “significant discretion” in how to award the funds and
3 “[t]he only statutory requirement is that the funds be used to cover expenses
4 related to the disruption of campus operations due to coronavirus,” AR 99
5 (emphasis added), and its own Certification form specifically stated that the
6 grants do not “constitute Federal financial aid under Title IV of the HEA.”
7 AR 103. Yet just 11 days later the Department reversed course and determined
8 the emergency funds are federal financial aid and students would have to qualify
9 under Title IV of the HEA. Id.; ECF No. 6-1, Ex. C.
10 Further, the Department initially took this position, which was codified in
11 an interim final rule after multiple lawsuits were filed, in so-called “FAQs,”
12 which contained no analysis or explanation for the change. The Department failed
13 to explain where or how Congress expressed its intent to apply Title IV to
14 CARES Act emergency grants—particularly when federal financial aid is
15 addressed in a separate section of the Act. Compare CARES Act § 3513
16 (addressing federal financial aid) with section 18004 (addressing relief for higher
17 education institutions and students). Nor was the certification updated to remove
18 the language that grants were not considered Title IV federal financial aid. Its
19 pronouncement is fatally conclusory and reflects no reasoning, valid or
20 otherwise. Where, as here, an agency’s reasoning is “entirely conclusory,” lacks
21 valid reasoning by adding language that is not in the statute, and is inconsistent
22
PLAINTIFF STATE OF 14 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1372 Page 21 of 32
1 with its earlier pronouncement, it fails to meet Skidmore’s requirement of
2 “thorough consideration.” Skidmore, 323 U.S. at 140; Sierra Club, 929 F.3d at
3 693.
4 Moreoever, even if the Eligibility Restriction were entitled to deference
5 under Chevron, Congress’s intent was clear. Congress did not delegate authority
6 to the Department to interpret sections 18001-18007 of the CARES Act, making
7 Chevron deference inappropriate. But even if it did, Congress’s intent was
8 clear—institutions of higher education are not restricted as to which students they
9 may consider eligible for grants. This ends the analysis.
10 When an agency has been delegated authority to interpret a statute, its
11 implementation is analyzed using a two-step approach. Chevron, 467 U.S. at
12 842–44. First, using the “traditional tools of statutory construction,” the court
13 first determines whether “the intent of Congress is clear[.]” Id. at 842 & n.9. The
14 “traditional tools” include the statute’s text, history, structure, “context”—
15 including its place among other statutes enacted previously or “subsequently”—
16 as well as “common sense.” FDA v. Brown & Williamson Tobacco Corp.,
17 529 U.S. 120, 132-33 (2000). If Congress’s intent is clear, “that is the end of the
18 matter[.]” Chevron, 467 U.S. at 842–43. If not, and the statute “is silent or
19 ambiguous with respect to the specific issue,” the court determines “whether the
20 agency’s answer is based on a permissible construction of the statute.” Id.
21 Here, Congress’s intent with regard to student emergency grants when
22
PLAINTIFF STATE OF 15 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1373 Page 22 of 32
1 passing the CARES Act is clear: all students are eligible for grants if their school
2 determines they have need. Starting with the text, section 18004(c) is entitled
3 “Uses of Funds.” It directs that: “[i]nstitutions of higher education shall use no
4 less than 50 percent of such funds to provide emergency financial aid grants to
5 students for expenses related to the disruption of campus operations due to
6 coronavirus (including eligible expenses under a student’s cost of attendance,
7 such as food, housing, course materials, technology, health care, and child care).”
8 CARES Act § 18004(c) (emphasis added). Similarly, section 18004(a) twice
9 directs that the money should be given as “grants to students for any component
10 of the student’s cost of attendance . . . .” Id. §§ 18004(a)(2), (3) (emphasis added).
11 Nothing in this language indicates Congress only intended some students to get
12 aid, let alone that they intended to exclude some of the students with the greatest
13 needs.
14 Nor did Congress choose to define “student” to only include those eligible
15 for federal financial aid in the definitions section applicable to sections
16 18001-18006, where it would have if it so intended. CARES Act § 18007.
17 “A fundamental canon of statutory construction is that, unless otherwise defined,
18 words will be interpreted as taking their ordinary, contemporary, common
19 meaning.” Perrin v. United States, 444 U.S. 37, 42 (1979). Here, the ordinary
20 meaning of “student” is not restricted to those who meet the eligibility criteria for
21 federal financial aid.
22
PLAINTIFF STATE OF 16 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1374 Page 23 of 32
1 Further, there is no reference to the eligibility requirements in Title IV,
2 section 484, of the HEA anywhere in sections 18001-18007. The only reference
3 to Title IV is in section 18004(b), which states that “[t]he funds made available
4 to each institution under subsection (a)(1) shall be distributed by the Secretary
5 using the same systems as the Secretary otherwise distributes funding to each
6 institution under title IV of the Higher Education Act of 1965 (20 U.S.C. § 1001
7 et seq.).” (Emphasis added.) The plain language of this provision indicates that
8 the Secretary shall distribute money to the institution itself using the system it
9 already has in place to transfer aid money to institutions.
10 Title IV as a whole compels the conclusion that the term “system” is a
11 technological system, not a methodology for determining eligibility. In addition
12 to governing how federal financial aid is distributed, Title IV contains a nearly
13 countless number of grants the Department distributes directly to institutions for
14 a wide variety of purposes. 20 U.S.C. §§ 1051-1068h, 1101-1103g, 1121-1132,
15 1151-1155 (2020). In fact, the sections governing grants that go directly to
16 institutions of higher education dwarf the number of provisions governing money
17 that goes to students for federal financial aid. 20 U.S.C. §§ 1070-1099d (2020)
18 (governing Student Assistance).
19 A myriad of eligibility requirements match the many provisions providing
20 aid to students and institutions. See 20 U.S.C. §§ 1001 et seq. (2020). For
21 example, to be eligible under the Path to Success program, an individual must be
22
PLAINTIFF STATE OF 17 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1375 Page 24 of 32
1 aged 16-25, convicted of a criminal offense, and detained or released from a
2 juvenile detention center. 20 U.S.C. § 1161w(f)(2) (2020). None of these
3 eligibility requirements—including eligibility for federally financial aid—can
4 rationally be determined to be a “system” for distribution. See CARES Act
5 § 18004(b).
6 The structure of the CARES Act itself also shows that Congress did not
7 intend to limit CARES Act emergency grants under section 18004 only to
8 students eligible for federal financial aid. Among the many eligibility provisions
9 available under Title IV, the Department selected a single eligibility provision
10 and applied it to block needy students from accessing emergency grant money.
11 Worse, the Department selected the eligibility provisions that apply to students
12 applying for federal financial aid when Congress created a wholly separate
13 section of the CARES Act that dealt with federal financial aid. CARES Act
14 § 3513. It also defies credulity that Congress would intend to force an immensely
15 burdensome administrative task—determining each individual student’s
16 technical eligibility for federal financial aid under Title IV—during a pandemic
17 when school resources are extremely limited and time is of the essence for
18 dispersing much-needed financial assistance. The Department’s decision to add
19 an additional eligibility requirement simply defies “common sense.”
20 Thus when using the “traditional tools” of statutory construction such as
21 the statutes text, structure, context, and common sense, Brown & Williamson,
22
PLAINTIFF STATE OF 18 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1376 Page 25 of 32
1 529 U.S. at 132, Congress’s intent is clear. Congress assigned to institutions the
2 ability to determine the students who would receive CARES Act grants, subject
3 “only [to the] statutory requirement . . . that the funds be used to cover expenses
4 related to the disruption of campus operations due to coronavirus . . . .” AR 99.
5 C. The Department’s Eligibility Restriction is Arbitrary and Capricious
6 The APA requires that a court “hold unlawful and set aside agency action
7 . . . found to be . . . arbitrary [and] capricious[.]” 5 U.S.C. § 706(2)(A) (2020).
8 An “unexplained inconsistency” between agency actions is “a reason for holding
9 an interpretation to be an arbitrary and capricious change . . . .” Nat’l Cable,
10 545 U.S. at 981. Agency action is also arbitrary and capricious if the agency
11 “entirely failed to consider an important aspect of a problem, offered an
12 explanation for its decision that runs counter to the evidence before the agency,
13 or [made a decision that] is so implausible that it could not be ascribed to a
14 difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n
15 of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
16 First, the Eligibility Restriction is an unexplained inconsistency. A policy
17 is arbitrary and capricious when that policy is an unexplained inconsistency, but
18 a change in policy is permissible under the APA if the agency (1) displays
19 “awareness that it is changing position,” (2) shows that “the new policy is
20 permissible under the statute,” (3) “believes” the new policy is better, and
21 (4) provides “good reasons” for the new policy. F.C.C. v. Fox Television Stations,
22
PLAINTIFF STATE OF 19 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1377 Page 26 of 32
1 Inc., 556 U.S. 502, 515-16 (2009).
2 The Department’s unexplained policy reversal fails to meet the standards
3 under Fox. First, the FAQs failed to mention the Department’s previous position
4 and failed to display any awareness that it was changing its position. Second,
5 unlike the Secretary’s Letter to Presidents and the Certification, which
6 specifically referenced the statutory language of the CARES Act, the FAQs failed
7 to refer to any portion of the CARES Act. AR 99-100, 103-105, 106-110. And,
8 finally, the Department fails the third and fourth prongs because the FAQs did
9 not acknowledge the Department’s previous position entirely and included no
10 analysis of the need for the change and thus lacked any statements that the new
11 policy is “better” or that there were “good reasons” for the change. The
12 Department’s sudden, unexplained policy shift is arbitrary and capricious and
13 should be set aside. See Chinook Indian Nation v. U.S. Dep’t of Interior,
14 No. C17-5668-RBL, 2020 WL 363410, at *7 (W.D. Wash. Jan. 22, 2020);
15 Washington v. U.S. Dep’t of State, 318 F. Supp. 3d 1247, 1260 (W.D. Wash.
16 2018).
17 Second, the Eligibility Restriction “entirely fail[s] to consider an important
18 aspect of the problem,” Motor Vehicle Manufacturers Association, 463 U.S. at
19 43, which is that there are many students at Washington’s institutions of higher
20 education who do not qualify for financial aid under Title IV, section 484 of the
21 HEA, but who need emergency financial assistance due to the impacts of
22
PLAINTIFF STATE OF 20 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1378 Page 27 of 32
1 COVID-19. In fact, many of the students who do not qualify are those most in
2 need of financial support such as adult basic education students who are typically
3 lower income and seeking to gain education and skills to improve their
4 employment prospects or Running Start students on free or reduced lunch
5 programs. ECF No. 13 (Yoshiwara Decl.) at 9-11 ¶¶ 18-20; ECF No. 7 (Woods
6 Decl.) at 9-12 ¶¶ 18-24; ECF No. 8 (Flores Decl.) at 7-10 ¶¶ 15-22; ECF No. 9
7 (Allison Decl.) at 8-12 ¶¶ 16-23; ECF No. 10 (Buchmann Decl.) at 8-15 ¶¶ 15-
8 27.
9 And, third, the decision to tie emergency grants to eligibility for federal
10 financial aid ignores another important aspect of the problem: the Congressional
11 purposes for each type of funding are different. Financial aid under Title IV of
12 the HEA is comprised of Direct Loans, which must be repaid, and Pell Grants,
13 which must be repaid under certain circumstances (e.g., leaving the program,
14 change in enrollment status, receiving other grants that reduce financial need).
15 See 34 C.F.R. §§ 685.207, 690.80, 690.79 (2020). By contrast, CARES funds do
16 not need to be repaid. See CARES Act § 18004. Thus, any reasons Congress may
17 have conditioned eligibility for Federal Financial Aid under the HEA are simply
18 absent under the CARES Act.
19 And, finally, the Department’s decision to limit emergency grants only to
20 students who are eligible for federal financial aid is completely implausible and
21 thus cannot be ascribed to a difference in view or the product of agency expertise.
22
PLAINTIFF STATE OF 21 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1379 Page 28 of 32
1 As discussed above, there are myriad and diverse eligibility requirements found
2 in Title IV’s many provisions. The Department’s decision to cherry-pick a single
3 eligibility requirement from all of Title IV, in the absence of any direction from
4 Congress to do so, runs so far counter to the language of the CARES Act that it
5 is nonsensical and prima facie arbitrary and capricious. See 20 U.S.C. §§ 1161w,
6 1161k (2020).
7 D. The Eligibility Restriction Violates Separation of Powers
8 The Department’s Eligibility Restriction also violates constitutional
9 separation of powers principles by permitting it to refuse to disburse money
10 appropriated by Congress. The Constitution gives Congress, not the Executive
11 branch, the power to spend and to set conditions on funds. U.S. Const. art. I, § 8,
12 cl. 1. As the Ninth Circuit recently reaffirmed, the Executive Branch “does not
13 have unilateral authority” to “thwart congressional will by canceling
14 appropriations passed by Congress.” City & County of San Francisco v. Trump,
15 897 F.3d 1225, 1232 (9th Cir. 2018) (internal quotation marks and citations
16 omitted). If the Executive branch wishes to condition the receipt of federal funds,
17 it may only do so pursuant to a specific delegation of spending authority by
18 Congress. City & County of San Francisco, 897 F.3d at 1233-34. The Executive
19 cannot amend or cancel appropriations that Congress has duly enacted by
20 imposing, without congressional authority, its own conditions on the receipt of
21 such funds. See Train v. City of New York, 420 U.S. 35, 38, 44 (1975).
22
PLAINTIFF STATE OF 22 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1380 Page 29 of 32
1 Nonetheless, this is what the Department has done by placing the
2 Eligibility Restriction on CARES Act funds that Congress did not. As the
3 Northern District of California Court noted when analyzing whether the
4 Department violated separation of powers principles, “Congress has
5 demonstrated consistently that it knows how to impose conditions on funding and
6 delegate to the Secretary the authority to impose such conditions when intended”
7 but, here “no such language exists in section 18004.” Oakley, 2020 WL 3268661,
8 at *9. Thus Congress did not afford the Department any discretion or authority to
9 place such restrictions. In unilaterally imposing the Eligibility Restriction, the
10 Department usurped Congress’ power to legislate in violation of the principles of
11 separation of powers.
12 E. The Eligibility Restriction Violates the Spending Clause
13 The Spending Clause mandates that an agency must not impose conditions
14 on federal funds that are (1) so coercive that they compel (rather than encourage)
15 recipients to comply, (2) ambiguous, (3) retroactive, or (4) unrelated to the
16 federal interest in a particular program. Nat’l Fed’n of Indep. Bus. v. Sebelius
17 (NFIB), 567 U.S. 519, 575–78 (2012); South Dakota v. Dole, 483 U.S. 203,
18 206-08 (1987). The Eligibility Restriction is ambiguous, retroactive, and is not
19 reasonably related to the federal interest in the CARES Act.
20 First, the Eligibility Restriction violates the prohibition on “ambiguity”
21 because it is not stated in the CARES Act and thus Washington institutions did
22
PLAINTIFF STATE OF 23 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1381 Page 30 of 32
1 not know of the Eligibility Restriction at the time they signed the Department’s
2 certification to receive emergency financial aid grants for their students.
3 Arlington Cent. Sch. Dist. Bd. of Educ. v. Murphy, 548 U.S. 291, 296 (2006)
4 (quoting Pennhurst State Sch. & Hosp. v. Halderman, 451 U.S. 1, 17 (1981))
5 (States “cannot knowingly accept conditions of which they are ‘unaware’ or
6 which they are ‘unable to ascertain[.]’ ”). Second, the Eligibility Restriction is
7 retroactive because the Department has improperly surprised Washington’s
8 colleges with post-acceptance conditions on funds by imposing the eligibility
9 requirements after those colleges executed the required Certification. Pennhurst,
10 451 U.S. at 25 (federal government may not “surprise[] participating States with
11 post acceptance or ‘retroactive’ conditions” on congressionally appropriated
12 funds). And, third, the Eligibility Restriction is not “reasonably related to the
13 purpose of the expenditure[.]” New York v. United States, 505 U.S. 144, 172
14 (1992). But the Department’s Eligibility Restriction frustrates the goal of the
15 CARES Act of providing financial assistance to students of higher education
16 during a public health crisis. Charles v. Verhagen, 348 F.3d 601, 609 (7th Cir.
17 2003) (the condition placed on a spending program must “share[] the same goal”
18 as the program).
19 IV. CONCLUSION
20 For the foregoing reasons, the State of Washington requests that the Court
21 grant Plaintiff State of Washington’s Motion for Summary Judgment.
22
PLAINTIFF STATE OF 24 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1382 Page 31 of 32
1 RESPECTFULLY SUBMITTED this 20th day of November 2020.
2 ROBERT W. FERGUSON
Attorney General of Washington
3
4 /s/ R. July Simpson
R. JULY SIMPSON, WSBA #45869
5 JEFFREY T. SPRUNG, WSBA #23607
SPENCER W. COATES, WSBA #49683
6 PAUL M. CRISALLI, WSBA #40681
Assistant Attorneys General
7 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
8 (206) 464-7744
july.simpson@atg.wa.gov
9 jeff.sprung@atg.wa.gov
spencer.coates@atg.wa.gov
10 paul.crisalli@atg.wa.gov
Attorneys for Plaintiff State of Washington
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PLAINTIFF STATE OF 25 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
Case 2:20-cv-00182-TOR ECF No. 72 filed 11/20/20 PageID.1383 Page 32 of 32
1 DECLARATION OF SERVICE
2 I hereby declare that on this day I caused the foregoing document to be
3 electronically filed with the Clerk of the Court using the Court’s CM/ECF System
4 which will serve a copy of this document upon all counsel of record.
5 DATED this 20th day of November 2020, at Tacoma, Washington.
6
/s/ R. July Simpson
7 R. JULY SIMPSON, WSBA #45869
Assistant Attorney General
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PLAINTIFF STATE OF 26 ATTORNEY GENERAL OF WASHINGTON
Complex Litigation
WASHINGTON’S MOTION FOR 800 Fifth Avenue, Suite 2000
Seattle, WA 98104-3188
SUMMARY JUDGMENT (206) 464-7744
NO. 2:20-cv-00182-TOR
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