Case File: ED accepts order barring enforcement of rule altering CARES Act funds

A quick look at a new ruling on the interim final rule, which required school districts to provide CARES Act funding to nonpublic schools
By: | November 20, 2020
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Case name: State of Michigan v. DeVos, 120 LRP 35916 (N.D. Cal. 11/06/20).

Ruling: The U.S. Education Department will not be able to enforce an interim final rule requiring local educational agencies to provide equitable services to nonpublic schools under the CARES Act based on total student enrollment rather than the low-income formula outlined in the Elementary and Secondary Education Act of 1965. The U.S. District Court, Northern District of California issued a permanent injunction prohibiting ED from enforcing the interim final rule and its calculation method.

What it means: Under the CARES Act, LEAs are required to allocate the nonpublic school portion of GEER and ESSER funds based on the low-income formula outlined in the ESEA. Although ED issued an interim final rule obligating districts to calculate CARES Act funds to nonpublic schools based on total student enrollment, ED in this case did not challenge a permanent injunction barring the enforcement of the interim final rule. This indicates that ED will not take any adverse action against LEAs that provided equitable services under the CARES Act based on the number of children from low-income families who attend private schools.

Summary: A District Court found that ED did not intend to appeal a prior ruling at that the department exceeded its authority by releasing an interim final rule requiring LEAs to allocate CARES Act funds to nonpublic schools based on total student enrollment rather than the low-income formula outlined in Section 1117 of the ESEA. Accordingly, the court granted a permanent injunction prohibiting ED from enforcing the interim final rule and any related guidance. U.S. District Judge James Donato did not determine whether ED violated the Administrative Procedure Act when it issued the interim final rule in July 2020.

Instead, he noted that ED recently released a guidance document acknowledging that the District Court, along with two other courts, “issued decisions concluding that an LEA must determine the proportional share available to provide equitable services to nonpublic school students and teachers in accordance with Section 1117(a)(4)(A) of the [ESEA].”

Judge Donato also observed that on Sept. 25, Education Secretary Betsy DeVos stated in a letter that ED would not challenge the preliminary injunction or other court rulings barring the enforcement of the interim final rule. Although the court found that the preliminary injunction was still in effect, it noted that ED and the plaintiffs, which included the state of Michigan, seven other states, the District of Columbia, and four school districts, agreed to the entry of a permanent injunction in this case. Thus, Judge Donato issued an order, which permanently barred ED from implementing or enforcing the interim final rule, without further analysis.