California Federal Court Joins Washington Federal Court in Halting the U.S. Department of Education’s Rule on Distributing Coronavirus Aid Relief to Private Schools

On August 26, 2020, the United States District Court for the Northern District of California followed the United States District Court for the Western District of Washington at Seattle and temporarily halted the enforcement of the U.S. Department of Education’s (the "Department") interim final rule on distributing Coronavirus aid relief to private schools. As explained more fully in a previous alert, this Rule diverted CARES Act funds from public schools to private schools. The California Court was highly critical of the Department’s interpretation of the CARES Act. The Court found that the Department's interpretation of Section 18005 went against Congress' intent to distribute funds to private schools. The Court also discussed the enormous harm that many public schools throughout the nation would face if the rule were to stay in-place. For example, Michigan's public schools would lose $16,496,727.63 of federal funding to private schools. While the Court noted the public interest of private schools receiving CARES Act funds, the Department could not legally rewrite the formula for distributing funds.

Law clerk James Fleming contributed to this news alert.