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Federal Judge Dismisses Governor Ducey’s Lawsuit to Keep COVID Funds for Maskless Schools

July 25, 2022

By Corinne Murdock |

Last Tuesday, a federal judge dismissed Governor Doug Ducey’s lawsuit against the Biden administration’s attempt to recoup COVID-19 relief funds given to mask mandate-free K-12 schools. Arizona District Court Judge Steve Logan dismissed for failure to state a claim. 

Last August, Ducey applied the American Rescue Plan Act’s (ARPA) Arizona cut of the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) to two programs: a $10 million one that would cover $7,000 of tuition or other educational costs at schools without mask mandates, and a $163 million one that made only mask mandate-free schools eligible for funds.

In the Ducey v. Yellen, et al. ruling handed down last week, Logan, an Obama appointee, rejected Ducey’s claim that his application of SLFRF funds were a valid use of addressing the COVID-19 pandemic’s negative economic impacts. Logan insisted that Ducey’s reading of the statute was “too narrow” and thereby neglected its greater context. The judge opined that Ducey’s encouragement of noncompliance with public health guidance worsened, not mitigated, COVID-19’s negative economic impacts.

“In line with the explicit purpose of the SLFRF […] the statute at least carries the possibility that SLFRF funding may not be used for programs with conditions that undermine public health guidance, as such programs would exacerbate rather than mitigate the pandemic’s fiscal effects,” wrote Logan. “This proposition is axiomatic: a program that addresses fiscal effects of the pandemic but contains a condition that would promulgate the spread of the virus prolongs the pandemic and its resulting fiscal effects — thereby failing to provide mitigation of either.”

Logan did agree with Ducey’s argument that the state has authority to decide how to use its SLFRF funds. However, Logan determined that Ducey’s application ran afoul of ARPA’s restrictions. Logan rejected Ducey’s argument that the USDF was too ambiguous when describing permissible uses of SLFRF funds. Rather, the federal judge agreed that the U.S. Department of Treasury’s (USDT) enumeration of permissible usage was sufficient.

In addition to USDT Secretary Janet Yellen, the named defendants in the case were USDT Acting Inspector General Richard Delmar and the USDT itself. 

Ducey first filed the lawsuit in January. 

In response to an October letter from the USDT informing the governor that Arizona’s usage of SLFRF funds weren’t permissible, Ducey accused the Biden administration of government overreach.

“Here in Arizona, we trust families to make decisions that are best for our children. It’s clear that President Bident doesn’t feel the same,” wrote Ducey. “He’s focused on taking power away from American families by issuing restrictive and dictatorial mandates for his own political gain.”

USDT began investigating Ducey’s two programs following a mid-August request from Congressman Greg Stanton (D-AZ-09), issued hours after Ducey first announced the two programs at the heart of this case. 

The governor filed an appeal to Logan’s ruling last Friday.

Corinne Murdock is a reporter for AZ Free News. Follow her latest on Twitter, or email tips to corinne@azfreenews.com.

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