UPDATED

A federal judge has ruled against the U.S. Department of Education in a lawsuit over how much coronavirus aid public schools must set aside for private school students.

Public school groups and officials argued that the interim final rule from the department unfairly deprives their schools and disadvantaged students of crucial funding during the pandemic.

In a preliminary injunction halting enforcement and implementation of the rule while she considers the case pitting Washington state against the Education Department, U.S. District Court Judge Barbara J. Rothstein harshly and repeatedly rejected the department’s arguments. She said that the agency subverted the intent of Congress and hurt students most affected by the pandemic, and that Secretary of Education Betsy DeVos did not have the authority to issue the rule in the first place.

The Education Department’s interim final rule, publicized in June and formally issued in July, pushes school districts to reserve money under the CARES Act, the federal coronavirus stimulus plan, for services to all local private school students, irrespective of their backgrounds. That represents a major departure from how education law typically governs that arrangement, in which federal money for what’s known as “equitable services” goes to disadvantaged, at-risk private school students.

But Rothstein attacked DeVos’ rule as “blind to the realities of this extraordinary pandemic and the very purpose of the CARES Act: to provide emergency relief where it is most needed.”

“Forcing the State to divert funds from public schools ignores the extraordinary circumstances facing the State and its most disadvantaged students,” she said.

The injunction in the case, issued Friday in the Western District of Washington, represents a setback for the department and a win for public school advocates. Rothstein does not explicitly limit her injunction to the state; however, in a court filing Monday in a separate lawsuit, the U.S. Department of Education said its position is that the injunction applies only to Washington state and not nationwide.

Either way, it could be a bad sign for the department in two other lawsuits about the rule, even if its power to change spending decisions on the ground is unclear.

On Monday, department spokeswoman Angela Morabito declined to comment on the preliminary injunction itself. “The pandemic affected all students and the CARES Act requires federal funds help all students,” Morabito said. “We are following the law. Most importantly, our rule treats all students equally. It’s unfortunate that so many favor discriminating against children who do not attend government-run schools.”

In a statement Saturday, Rep. Bobby Scott, D-Va., the chairman of the House education committee, applauded Rothstein’s ruling and asked DeVos “to abandon its unlawful equitable services rule and finally provide schools the clarity and resources they need.”

‘The Department’s Convoluted Reading’

The fight between DeVos’ department and public schools over this issue has been remarkably divisive during pandemic-driven uncertainty for schools. It’s been underscored by the Trump administration’s ongoing pressure for schools to resume in-person classes. And it’s revived splits over the extent to which DeVos’ attention and actions should focus on traditional public schools.

DeVos and the department have justified the rule by arguing that the virus has hurt students of all backgrounds, regardless of where they went to school. Public school officials and congressional Democrats have countered that the rule improperly diverts money from disadvantaged students to ultimately benefit private schools, and that it defies the intent of Congress.

Rothstein sided with the second group.

“The nature of this pandemic is that its consequences have fallen most heavily on the nation’s most vulnerable populations, including its neediest students,” she stated. “The funding provided throughout the CARES Act, and in particular to schools, is desperately and urgently needed to provide some measure of relief from the pandemic’s harms, many of which cannot be undone.”

Rothstein pointed to separate CARES funding intended primarily for small businesses that private schools could access.

The department not only willfully misinterpreted the CARES Act, according to Rothstein, but the law never gave the department the authority to write the rule in the first place. Based on other parts of the law, she added, “Congress therefore knew how to delegate such authority but declined to do” in this instance.

She also said lawmakers clearly intended CARES money to be allocated based on a subset of private school students, not all of them, and that “the Department’s convoluted reading essentially creates an ambiguity to justify resolving it.”

Sen. Lamar Alexander, R-Tenn., the chairman of the Senate education committee, said this summer he differs from the department on how the law handles the issue.

Originally, the department’s interpretation of the law was included in nonbinding guidance released in April. The interim final rule, released after much public controversy, technically gives districts two options for handling the situation, but ultimately it puts significant pressure on states to allocate equitable services aid for private school students.

The department gives districts the option of setting aside CARES money just for a smaller group of disadvantaged private school students—but in order to do that, they must first agree to use CARES aid only at Title I schools, which have relatively large shares of students from low-income households.

Rothstein’s order prohibits enforcement of the nonbinding April guidance as well as the July rule.

The rule affects roughly 8 to 10 percent of the CARES Act’s $13.2 billion for public schools. However, with the 2020-21 school year well under way in many districts, it’s not clear how such an injunction, it it takes affect nationwide, might affect local school districts’ decisions about CARES aid. Critics of the department’s approach have said for months that it has sown uncertainty in school districts.

A coalition of states, led by California and Michigan, filed a similar lawsuit against the CARES rule last month in the U.S. District Court for the Northern District of California; several large school districts subsequently joined that suit as plaintiffs. A lawsuit headlined by the NAACP and others followed in the U.S. District Court for the District of Columbia.

Read Rothstein’s preliminary injunction below:

Photo: Education Secretary Betsy DeVos speaks during a White House Coronavirus Task Force briefing at the Department of Education building July 8. (Manuel Balce Ceneta/AP)