474 F.Supp.3d 13
D.D.C.2020Background
- In 2014 the Department of Education (DOE) promulgated the Gainful Employment (GE) Rule to require disclosures by and to sanction postsecondary programs that do not “prepare students for gainful employment,” using debt-to-earnings metrics and disclosure templates; the Rule took effect July 1, 2015.
- After litigation defending the Rule, the Trump Administration delayed and modified implementation (multiple postponements of disclosure and appeal deadlines) and later proposed and promulgated a rescission of the Rule (final rescission published July 1, 2019, effective July 1, 2020, with early-implementation option).
- Eighteen States sued the DOE and Secretary DeVos under the Administrative Procedure Act (APA), alleging unlawful delay, unlawful new rulemaking without notice-and-comment, arbitrary and capricious action, and unlawful refusal to calculate/publish debt-to-earnings rates.
- The DOE moved to dismiss (including on standing and mootness grounds); the States moved for summary judgment. The Court considered intervening DOE actions (further delays and the Rescission Rule) during briefing.
- The district court concluded the States lacked Article III standing: the alleged nonsovereign injuries (lost tuition revenue, waste of state grants/loans, and costs of investigations) were either speculative or self-inflicted and not fairly traceable to DOE action; the court also held states may not bring parens patriae suits against the federal government under the APA absent clear congressional authorization.
- Result: DOE’s Rule 12(b)(1) motion granted for lack of jurisdiction; cross-motions for summary judgment denied as moot. The court did not adjudicate the merits of the States’ APA claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing based on lost tuition revenue | States: DOE’s delay caused students to enroll in failing for‑profit programs instead of state schools, reducing state tuition receipts | DOE: Loss is speculative and depends on many independent third‑party choices; not fairly traceable | No — too speculative; chain of causation too attenuated to be an injury in fact |
| Standing based on waste of state grants/loans and investigation costs | States: DOE nonenforcement forces states to pay grants/loans to failing programs and to spend resources policing fraud | DOE: Those expenditures are voluntary/state policy choices (self‑inflicted); not caused by DOE | No — injuries are self‑inflicted and not fairly traceable to DOE conduct |
| Parens patriae standing against federal government under the APA | States: As parens patriae, they may vindicate quasi‑sovereign economic harms to citizens; APA permits review | DOE: Supreme Court and D.C. Circuit bar parens patriae suits against the federal government absent clear congressional waiver; APA does not waive | No — parens patriae suits against federal government barred absent explicit congressional authorization; APA does not supply one |
| Applicability of "special solicitude" (Massachusetts v. EPA) | States: State plaintiffs deserve special solicitude and thus standing here | DOE: Massachusetts involved property/coastal injury and statutory rights; this case differs | No — special solicitude inapplicable because injury type and statutory context differ; state must still show Article III standing |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires injury‑in‑fact, causation, redressability; speculative chains fail)
- Clapper v. Amnesty Int’l USA, 568 U.S. 398 (2013) (future injury must not rest on highly attenuated chain of possibilities)
- Massachusetts v. EPA, 549 U.S. 497 (2007) (states may receive special solicitude when asserting quasi‑sovereign harms tied to their own interests and where statute provides procedural rights)
- Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez, 458 U.S. 592 (1982) (recognition of states’ sovereign, quasi‑sovereign, and proprietary interests; parens patriae concept)
- Pennsylvania v. New Jersey, 426 U.S. 660 (1976) (injury that is self‑inflicted by a state’s own policy choices does not support standing)
- Department of Commerce v. New York, 139 S. Ct. 2551 (2019) (states demonstrated standing where third parties’ predictable reactions to a rule created a substantial risk of direct harms)
- Manitoba v. Bernhardt, 923 F.3d 173 (D.C. Cir. 2019) (APA does not authorize parens patriae suits by states against the federal government)
- Petro‑Chem Processing, Inc. v. EPA, 866 F.2d 433 (D.C. Cir. 1989) (self‑inflicted injuries break the causal chain for standing)