American Federation of Teachers v. DeVos

Background

The plaintiffs challenged, under the Administrative Procedure Act, the Department of Education’s 2019 rule rescinding portions of the Department’s 2014 gainful-employment regulations. The 2014 rules included a disclosure requirement for institutions offering gainful-employment programs and an eligibility framework that could revoke access to future federal Title IV funds for programs that repeatedly failed performance thresholds. The 2019 rule eliminated the debt-to-earnings measure and the affirmative requirement to publish disclosures and warnings.

The American Federation of Teachers, the California Federation of Teachers, and individual plaintiffs Isai Baltezar and Julie Cho filed the case. The organizations later voluntarily dismissed their claims against the Department without prejudice, so only the individual plaintiffs remained. In an earlier order, the court dismissed claims concerning the disclosure requirement and eligibility framework for lack of standing but allowed Count 11, concerning the 2019 rule’s citations to unnamed sources and unexplained analyses, to proceed based on an alleged procedural injury.

Motions and arguments

The Department asked for voluntary remand without vacatur. Voluntary remand would have sent the challenged agency action back to the Department for reconsideration without setting the rule aside. The Department said it had begun new rulemaking concerning gainful-employment regulation and sought to avoid unnecessary litigation and positions that might affect that rulemaking. The Department did not confess error and did not represent that it would reconsider the specific 2019 Rescission Rule or reinstate the 2014 rule.

The plaintiffs did not oppose remand itself, but opposed remand without vacatur. They were concerned about the length of the new rulemaking process and alternatively requested expedited briefing on summary judgment. The Department alternatively asked the court to hold the case in abeyance, meaning to pause the case while retaining jurisdiction.

Court’s reasoning

The court explained that an agency may request remand to reconsider an action challenged under the Administrative Procedure Act. Because the Department was not relying on an intervening event outside its control and was not admitting error, the court had discretion to grant or deny the remand request. A remand request made in good faith and based on a substantial and legitimate concern may ordinarily be granted, but the agency must show that it intends to reconsider the specific agency action being challenged.

The court found that the Department had not made that showing. The Department’s new rulemaking would consider gainful-employment regulation anew, but the Department had not said it would reconsider the 2019 Rescission Rule or resurrect the 2014 regulations. The court was concerned that remand could leave the plaintiffs without a decision on their remaining claim if the Department later failed to issue new regulations. The court therefore denied voluntary remand.

The court found that holding the case in abeyance would provide many of the same practical benefits as remand while preserving the plaintiffs’ ability to seek further judicial review. During the abeyance, the court would retain jurisdiction, and the plaintiffs could ask to resume the litigation if the new rulemaking did not make their claims moot or otherwise resolve them. The court therefore granted the Department’s alternative request to hold the case in abeyance.

The court also declined to order expedited summary-judgment briefing. It concluded that resolving the case immediately could disrupt the ongoing rulemaking and that later issuance of a final rule could make further litigation moot. The court did not reach the issue of whether remand should be with or without vacatur because it denied remand.

Disposition

The court granted in part and denied in part the Department’s Motion for Voluntary Remand Without Vacatur. Specifically, it denied voluntary remand, granted the alternative request to hold the case in abeyance, and did not order expedited summary-judgment briefing. The case was held in abeyance pending a later status report, and the parties were directed to file a joint status report within 90 days addressing the rulemaking and whether the abeyance should continue. This order did not decide the merits of the remaining Administrative Procedure Act claim.