Court to ED: 'In the Same Manner as' Couldn't be Clearer

Central point: The CARES Act's use of "in the same manner as" doesn't suggest a departure from ESEA Section 1117's requirements for providing equitable services.

Case: National Association for the Advancement of Colored People v. DeVos, No. 20-cv-1996 (D.D.C. 09/04/20).

What happened: Since issuing guidance and then regs in the wake of the CARES Act's passage, the U.S. Education Department has faced public criticism and court rejection of its interpretation of the law's equitable services requirements.

In the latest round of litigation, the NAACP challenged ED's CARES Act interim final rule in District Court, leading to a judge's halting the rule nationwide.

The CARES Act directs districts to "provide equitable services in the same manner as provided under Section 1117 of the ESEA."

In the guidance and regs, ED interpreted this to mean something different from "as provided under Section 1117." As a result, ED's CARES Act regs declined to follow ESEA rules for expenditures for eligible private school children, which must 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. Instead, ED gave districts two options for distributing CARES Act funds:

1. Disburse funds equally between all public schools and all private schools.
2. Disburse funds based on low-income student population for both public and private schools.

In response to ED's interpretation of the CARES Act, several advocacy groups, public school districts, and parents sued, contending that the interim final rule from ED was contrary to the CARES Act.

Rule of law: When an agency's interpretation of a law is at issue, a two-step test from Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984) applies:

1. The court determines whether the statute is ambiguous.
2. If it is, the court determines whether the agency's interpretation is reasonable.

What the court said: "In some statutory interpretation cases, courts must make sense of vague terms, contradictory provisions, or 'inartful drafting,'" wrote U.S. District Judge Dabney L. Friedrich. "This is not one of those cases."

Instead, the court held that the CARES Act "used mandatory language, cross-referenced a statutory provision by section number, and left no term up to interpretation."

Regarding what "in the same manner as" means, the court found that Congress used "ordinary language in its ordinary sense" to direct districts to use "the same methodology and procedures" they use for ESEA Section 1117.

Because ESEA Section 8501 provides equal funding to private and public schools without accounting for income, the court reasoned that if Congress wanted the equal-funding formula ED adopted in the interim final rule, it could have referenced Section 8501 instead of Section 1117.

"Congress expressed a clear and unambiguous preference for apportioning funding to private schools based on the number of children from low-income families, even though [ED's] chosen alternative of equal funding was readily available at the time of drafting," the court wrote. "In the end, it is difficult to imagine how Congress could have been clearer." 

The court also rejected ED's assertion that Congress should have used "as provided in" rather than "in the same manner as" if it thought districts should follow Section 1117.

"It is not at all obvious how [ED's] proposed revision ... is any clearer than Congress' chosen words," the court wrote.

Thus, finding that ED's CARES Act regs conflicted with the statute's unambiguous text, the court granted summary judgment to the groups and voided the interim final rule.

Takeaway: A plain reading of the CARES Act shows that Congress incorporated the formula from ESEA Section 1117 for distributing equitable services by the number of children from low-income families.