Washington v. DeVos, CASE NO. 2:20-cv-1119-BJR

481 F.Supp.3d 1184

State of WASHINGTON, Plaintiff,

v.Betsy DEVOS, in her official capacity as Secretary of the United States Department of Education; and the United States Department of Education, a federal agency, Defendants.

CASE NO. 2:20-cv-1119-BJR

United States District Court, W.D. Washington, at Seattle.

Signed August 21, 2020

Brian Hunt Rowe, Pro Hac Vice, Jeffrey Todd Sprung, Paul M. Crisalli, Spencer W. Coates, Attorney General's Office, Seattle, WA, R. July Simpson, Attorney General's Office, Olympia, WA, for Plaintiff.

Kristin Berger Johnson, US Attorney's Office, Seattle, WA, William Kerwin Lane, III, DOJ-Civil Division, Washington, DC, for Defendants.

ORDER GRANTING MOTION FOR PRELIMINARY INJUNCTION

BARBARA J. ROTHSTEIN, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

Before the Court is the State of Washington's Motion for Preliminary Injunction, seeking to enjoin Defendants Secretary Betsy DeVos and the Department of Education from implementing an interim final rule ("Interim Final Rule"), which outlines how states may allocate funding provided by the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") to private schools. The State claims that the Interim Final Rule misconstrues Congress's intent and effectively diverts emergency relief funding from economically disadvantaged public schools to less disadvantaged private schools. Pl.’s Mot. for Prelim. Inj., Dkt. No. 8. In essence, the parties dispute whether the CARES Act requires States to allocate funding to private schools using a formula based on the percentage of students from low-income families who attend private school ("poverty-based formula"), as advanced by the State, or whether, as Defendants claim, the CARES Act authorized the Department to issue the Interim Final Rule, which directs States to allocate that funding based on total enrollment in private schools ("enrollment-based formula"). Having reviewed the Motion, the opposition thereto, the record of the case, the relevant legal authorities, and having conducted oral argument on August 10, 2020 via video-teleconference, the Court will grant the Motion and issue the injunction. The reasoning for the Court's decision follows.

II. BACKGROUND

A. The COVID-19 Pandemic

The case before the Court is but one of many disputes being played out against the backdrop of the COVID-19 pandemic. The pandemic has wreaked havoc on this nation and created novel and difficult questions for the courts. One of the most pressing issues is how to provide education for children at a time fraught with the dangers of a life-threatening, highly communicable disease.

On February 29, 2020, as the virus spread through the State of Washington, Governor Jay Inslee declared a state of emergency. See Compl., Dkt. No. 1 ¶ 25; see also Wash. Governor's Proclamation 20-05 (Feb. 29, 2020).¹ In an effort to protect school students and stem the virus's spread, Gov. Inslee announced the closure of all public and private K-12 schools in King, Snohomish, and Pierce Counties effective March 17 and lasting, at that time, through at least April 24. Compl. ¶ 26. Through repeated orders by the Governor, schools throughout the State were ordered closed for the remainder of the school year, forcing educators to transition to online instruction for all students. Id. ¶¶ 26, 30. The State reports that significant efforts have been taken to provide support to students in need in particular, including serving meals, providing special education and related services to students with disabilities, providing remote learning access for English learners, and offering computing and connectivity technology to low-income students. Id. Many of these efforts are on-going.

B. The CARES Act GEER and ESSER Funds

In response to the wide-ranging economic consequences of the pandemic, Congress passed the CARES Act, which the President signed on March 27, 2020. See Pub. L. No. 116-136, 134 Stat. 281 (Mar. 27, 2020); Compl. ¶¶ 32–33.² The CARES Act contains a wide array of federal funding designed to combat the consequences of the pandemic, including $30.75 billion for the creation of an Education Stabilization Fund ("ESF") to address educational needs of the nation's students. See Compl. ¶ 34.

The CARES Act directs the Secretary of Education to allocate ESF funding to three sub-funds, two of which are pertinent here.³ See CARES Act § 18001(b); Compl. ¶¶ 34–44. The first is the Governor's Emergency Education Relief ("GEER") Fund, for which Congress appropriated approximately $3 billion. See CARES Act § 18002, § 18001(b)(1). The CARES Act directs the Secretary to make GEER funding available to the governor of each state based on the relative population of students in that state and, in particular, the relative population of students from low-income families. Id. § 18002(a), (b). The Act further provides that GEER funds may be used to "provide emergency support through grants to local educational agencies [("LEAs")] that the State educational agency [("SEA")] deems have been most significantly impacted by coronavirus to support the ability of such local educational agencies to continue to provide educational services to their students and to support the on-going functionality of the local educational agency."⁴ Id. § 18002(a), (b), (c)(1).

The second ESF fund is the Elementary and Secondary School Emergency Relief ("ESSER") Fund, for which Congress appropriated approximately $13.5 billion. See id. §§ 18003, 18001(b)(2). The CARES Act directs the Secretary of Education to make ESSER funding available by grant directly to SEAs, again according to a formula based on the relative population of students from low-income families. Id. § 18003(b). The Act then instructs SEAs to provide the funding to LEAs through sub-grants. Id. § 18003(c). The Act specifies the uses that LEAs may put ESSER funding towards, including "[c]oordination of preparedness and response efforts" and "[p]roviding principals and others school leaders with the resources necessary to address the needs of their individual schools." Id. § 18003(d)(1)–(12). The statute explicitly provides that ESSER funds may be used for "[a]ctivities to address the unique needs of low-income children or students, children with disabilities, English learners, racial and ethnic minorities, students experiencing homelessness, and foster care youth." Id. § 18003(d)(4).

Critically for purposes of this dispute, Congress outlined how LEAs are to allocate GEER and ESSER funding to non-public, i.e. private, schools. See Compl. ¶ 43–44. Specifically, Section 18005 provides that an LEA "receiving [GEER or ESSER] funds ... shall provide equitable services in the same manner as provided under section 1117 of the [Elementary and Secondary Education Act ("ESEA")] of 1965 to students and teachers in non-public schools, as determined in consultation with representatives of non-public schools." CARES Act § 18005(a) (emphasis added).

Given the Act's reference to Section 1117 of the ESEA, closer examination of that statute is necessary. The ESEA, a central component of President Johnson's "War on Poverty," is the statute by which Congress provides federal funding for primary and secondary education. Pub. 89–10, 79 Stat. 27, as amended, 20 U.S.C. § 6301 et seq. Title I of the ESEA created a grant program designed to improve the academic achievement of disadvantaged children. See id. Under Title I, public schools are eligible to receive funding for schoolwide programs if 40 percent or more of the children in the LEA attendance area come from low-income families. Id. § 6314(a)(1)(A).

Section 1117 of Title I—specifically referenced in the CARES Act—outlines how LEAs are to share Title I funding with eligible private schools, instructing LEAs to provide services to private schools "on an equitable basis." 20 U.S.C. § 6320(a)(1). More specifically, the formula that determines how much Title I funding private schools are to receive is to be "equal to the proportion of funds allocated to participating school attendance areas based on the number of children from low-income families who attend private schools." Id. § 6320(a)(4)(A)(i). This formula has consistently been interpreted to mean that LEAs are to share their Title I funding in proportion to the number of students from low-income families that reside in their attendance area but who attend private school. This is the "poverty-based formula."

The State of Washington submitted its application for CARES Act funding pursuant to the GEER and ESSER Funds on April 27, 2020. Compl. ¶ 78; see also Compl., Ex. 6, Dkt. No. 1-9. The State was awarded $216.9 million in federal aid through the ESSER Fund and $ 56.8 million through the GEER Fund. Compl. ¶ 78; Pl.’s Mot. for Prelim. Inj. at 6.

C. The Department's CARES Act Guidance and Interim Final Rule

On April 30, 2020, the Department published guidance purporting to interpret the provision in the CARES Act pertaining to "Assistance to Non-Public Schools," Section 18005. Compl. ¶¶ 53–55; see also Compl., Ex. 1, Dkt. No. 1-4 (U.S. Dep't of Educ., Providing Equitable Services to Students and Teachers in Non-Public Schools Under the CARES Act Programs (Apr. 30, 2020) ("Guidance")).⁵ Claiming an ambiguity in the statute, the Guidance directed LEAs to provide private schools with CARES Act funding according to "the proportional share based on the number of children enrolled in each non-public school whose students or teachers participate in the CARES Act programs compared to the number of students enrolled in public schools in the LEA. Compl., Ex. 1 at 4; see also id. at 6. In other words, the Guidance adopted a formula for allocating ESF funding to private schools, based on the total number of enrolled students, regardless of their families’ income levels. This is the "enrollment-based formula."

On July 1, 2020, despite objections from numerous constituencies, including the State, to the Guidance's adoption of the enrollment-based formula, the Department...