Michigan argues in court DeVos pulled a ‘reverse Robin Hood’ on COVID-19 school funding

U.S. Secretary of Education Betsy DeVos speaks as Chief Operating Officer of Federal Student Aid Mark Brown listens during a hearing before House Education and Labor Committee December 12, 2019 on Capitol Hill in Washington, DC. | Alex Wong/Getty Images

Oral arguments took place Tuesday for a lawsuit led by Michigan Attorney General Dana Nessel against Education Secretary Betsy DeVos, with attorneys for the former arguing the latter’s requirement for K-12 public schools to split CARES Act relief funding with private schools is unlawful.

The CARES Act passed in March by Congress stipulates that public school districts share coronavirus relief funding with low-income students at private schools within the same district. In June, DeVos issued a rule that says aid can’t be restricted to only poor private school students — all are eligible.

“There is nothing in the law Congress passed that would allow districts to discriminate against children and teachers based on private school attendance and employment,” DeVos said of the rule.

But in July, Nessel brought litigation against DeVos, saying the rule diverts $16 million from Michigan public schools to private institutions in violation of Congress’ requirements, the U.S. Constitution and the Administrative Procedure Act (APA), a 1946 federal statute that governs the way federal agencies make regulations. 

Nessel sues DeVos for ‘unlawfully’ splitting COVID-19 funds between public, private schools

Nessel partnered with California Attorney General Xavier Becerra to bring the case. A coalition of states — California, the District of Columbia, Hawaii, Maine, Maryland, Pennsylvania, Wisconsin, plus local jurisdictions — joined them.

Oral arguments were conducted via Zoom technology. Judge James Donato of the U.S. District Court for the Northern District of California heard the case.

Focus of arguments

The CARES Act allocates almost $31 billion to K-12 school districts and higher education during the COVID-19 pandemic. A chunk totaling $13.2 billion goes to states’ education agencies. Funds are handed down to Local Education Agencies (LEAs) that distribute funds to each school district.   

The Michigan Department of Education gets almost $390 million of that funding. Congress appropriated the funds under a need-based formula set forth in Title I, a program that provides supplemental funds to school districts with high poverty rates to meet education goals. 

Neil Giovanatti, a Michigan assistant attorney general, made the core argument that DeVos and the Education Department acted beyond its authority in issuing a rule on the statute.

“At a time when state and local government projects have been decimated by the economic effects of the coronavirus and when public education desperately needs immediate sources of funding, the department rewrites Congress’s scheme for allocating the CARES Act funding to private school students, diverting significant funding away those school districts that need these funds the most,” Giovanatti said. 

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“In effect, Secretary DeVos pulls a reverse Robin Hood, taking from the poor and giving to the rich,” Giovanatti added. “This rewrite of the statute is unlawful and was issued without any authority.”

Key parts of the plaintiffs’ argument say public schools stand to lose CARES Act funding during the COVID-19 crisis, something they say is contrary to Congressional intent. 

The plaintiffs also argue that the Education Department did not follow the aforementioned APA.  That statute calls for a notice, plus a public comment period for a majority of new rules.

But counsel for DeVos backed her rule and said private schools should be able to receive more emergency funds.

“The plaintiffs stated that it’s unfair because the private schools have access to [Paycheck Protection Program] funds, for instance, and public schools do not,” countered William Lane, an attorney with the U.S. Department of Justice’s Civil Division. “… You could make a very similar argument in the other direction. Public schools have access to taxpayer funding, private schools do not.”

Donato didn’t indicate a specific timeframe for his decision in the case, but said he would issue one “in a responsible fashion” as soon as he could.