D.C. Ass'n of Chartered Pub. Sch. v. Dist. of Columbia, 930 F.3d 487

Background

In 1996 Congress enacted the School Reform Act creating parallel traditional public and charter school systems in D.C. and requiring a uniform per-student operating-funding formula.
The D.C. per-pupil baseline was $10,658, but the District provides additional funding streams to traditional public schools and applies the per-pupil formula differently for charter schools (annual prior-year payment vs. quarterly adjusted payments).
D.C. Association of Chartered Public Schools sued the District alleging underfunding of charter schools in violation of the School Reform Act, the Home Rule Act (HRA), and the Constitution; the district court ruled for the District.
On appeal the D.C. Circuit assumed (for jurisdictional analysis) that the Acts could provide causes of action but considered whether the federal courts had subject-matter jurisdiction under 28 U.S.C. § 1331.
The court focused on 28 U.S.C. § 1366, which excludes from the phrase “laws of the United States” those laws applicable exclusively to the District of Columbia, and concluded § 1366 bars federal-question jurisdiction over the Association’s claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Jurisdiction over claim under the School Reform Act	School Reform Act creates federal cause of action or raises a federal question because it is a federal statute	School Reform Act applies exclusively to D.C. and §1366 removes such local federal laws from §1331 coverage	No federal-question jurisdiction; §1366 excludes the Act from being a "law of the United States" for §1331 purposes
Whether School Reform Act claim raises a federal issue under the Gunn/Grable test	Claim necessarily raises a federal question: whether D.C. can amend/repeal the Act under the Home Rule Act	That question is an anticipated federal defense, not an essential element of the claim, so Grable/Gunn test fails	Not necessarily raised; anticipated federal defense cannot create federal-question jurisdiction
Jurisdiction over Home Rule Act claim	Home Rule Act provisions (§602(a)(3), §717(b)) are federal and thus support §1331 jurisdiction	Those provisions are local in character and covered by §1366 exclusion	Home Rule provisions at issue are local; §1366 excludes them from §1331 jurisdiction
Preemption/common-law federal claim to enforce School Reform Act	Claim can be styled as preemption or enforced under the District Clause/Supremacy Clause or federal common law to enjoin conflicting local law	Even a federal-common-law cause of action would be limited to D.C. because it enforces a statute applicable only to D.C., so §1366 bars §1331 jurisdiction	No federal-question jurisdiction for preemption/common-law claim because enforcement would apply exclusively to D.C. and §1366 removes such claims from §1331

Key Cases Cited

District of Columbia v. John R. Thompson Co., 346 U.S. 100 (1953) (Congress may delegate legislative power over D.C.)
Steel Co. v. Citizens for a Better Env't, 523 U.S. 83 (1998) (absence of a valid cause of action generally does not implicate subject-matter jurisdiction)
Gunn v. Minton, 568 U.S. 251 (2013) (two ways a case can arise under federal law; four-part Grable test for embedded federal issues)
American Well Works Co. v. Layne & Bowler Co., 241 U.S. 257 (1916) (federal law creates causes of action that arise under federal law)
Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 545 U.S. 308 (2005) (federal issue must be necessarily raised to support federal-question jurisdiction)
Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149 (1908) (anticipated federal defense does not confer federal-question jurisdiction)
Thomas v. Barry, 729 F.2d 1469 (D.C. Cir. 1984) (Home Rule Act is a hybrid statute; analyze character of specific provisions)
Dimond v. District of Columbia, 792 F.2d 179 (D.C. Cir. 1986) (Home Rule Act provisions that apply only to D.C. are excluded from federal law by §1366)
Key v. Doyle, 434 U.S. 59 (1977) (distinguishing federal from local legislative character)
Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320 (2015) (District Clause and Supremacy Clause do not by themselves create causes of action; federal-common-law enforcement is a judicially created remedy)
Verizon Md., Inc. v. Pub. Serv. Comm'n of Md., 535 U.S. 635 (2002) (availability of federal jurisdiction for preemption claims depends on Congress's intent to permit federal jurisdiction)
Illinois v. City of Milwaukee, 406 U.S. 91 (1972) (federal-common-law claims ordinarily fall within federal-question jurisdiction)