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South Carolina private schools argue for access to Covid relief funds

Attorneys for the state and private school advocates sparred at the Fourth Circuit over a rule that bars private schools from receiving public funding.

RICHMOND, Va. (CN) — The Roman Catholic Diocese of Charleston and a private college association asked a Fourth Circuit panel on Wednesday to strike down a provision of the South Carolina Constitution that prohibits public funds from being diverted to private and religious schools, arguing they are being unfairly deprived of Covid-19 pandemic relief aid.

“Your honors, the district court deserves to be reversed for the very simple reason that there was no evidence properly before it to support summary judgment in favor of the defendants,” Liberty Justice Center attorney Daniel Suhr, who represents the groups, told a three-judge panel of the Richmond, Virginia-based appeals court.

He urged the judges to reverse a district court decision that sided with South Carolina in a lawsuit over a constitutional provision that governs education funding in the Palmetto State. 

Amid the Covid-19 pandemic, Congress rolled out a series of federal funding packages to help states manage the economic impacts, including a CARES Act program called the Governors Emergency Education Relief fund. The GEER program provided appropriations to the governors of every state to use at their discretion to bolster education. 

In July 2020, South Carolina Governor Henry McMaster announced his decision to use GEER funds to create a $32 million scholarship program for low-income students to attend private and religious K-12 schools.  

The Republican governor also said he would allocate some of the federal funds to provide technology upgrades to South Carolina’s historically Black colleges and universities, including private ones. 

Opponents of the governor’s proposed grants sued the state under a rule known as the no-aid provision in an attempt to stop the funds from being diverted to private schools. The rule, enshrined in an 1895 constitutional amendment, states that “no money shall be paid from public funds nor shall the credit of the State or any of its political subdivisions be used for the direct benefit of any religious or other private educational institution.” 

The suits caused the state to withdraw several grants, and disqualified dozens of schools from receiving the federal aid. 

The nonprofit South Carolina Independent Colleges and Universities Inc. and the Roman Catholic Diocese of Charleston then sued the state last year seeking to block the no-aid provision, arguing it discriminates against private and religious school students.

After a federal judge sided with the state and rejected the lawsuit, the groups appealed to the Fourth Circuit, which heard arguments Wednesday.

“Shouldn't we start with the obvious jurisdictional problem?” U.S. Circuit Judge Toby Heytens, an appointee of President Joe Biden, asked Suhr.

“Fair enough your honor. So a few weeks ago, the state introduced an affidavit from one of the defendants saying that the money is gone, essentially,” the attorney responded.  

There were two pots of money involved in this case, Suhr said, pointing to the GEER funds and money that was intended to be allocated to private schools through the General Assembly’s Act 154, which authorized spending of coronavirus relief funds.

“Up until three weeks ago, the plaintiffs and this court thought the Act 154 funds were there,” Suhr told the panel. 

Much of the hearing instead focused on sovereign immunity and whether the state could be a subject of the lawsuit, especially because it was an intervening defendant in the case filed against several officials, including McMaster.

According to state attorney William Grayson Lambert, who represented McMaster during Wednesday’s hearing, the groups’ argument “fails on the merits.” 

“All that has fundamentally happened here as with the state is that it intervened to defend a state constitutional provision from a challenge under federal law. It would be awkward to tell a state your law is being challenged, but you, the state as an entity, may not intervene unless you are willing to waive sovereign immunity,” Lambert said. 

He added, “That puts the state in the precarious position of either defending its law and risking damages, or hoping someone defends the law sufficiently enough and preserving its sovereign immunity.”

“In fairness to them, I'm not sure that's true either,” interjected Heytens, who noted that the state could easily have filed an amicus brief to get its point across.

Lambert, who was joined by his colleague Thomas T. Hydrick in representing the state, said that "the state was simply trying to ensure that it was giving a robust defense to its law when it was challenged in federal court.”

Heytens was joined on the panel by U.S. Circuit Judges Stephanie Thacker and Pamela Harris, both Barack Obama appointees.

The panel did not indicate when a ruling will be issued. 

The NAACP and a public school district said in a May amicus brief that an order invalidating the no-aid provision could significantly reduce the funding available for South Carolina public schools. 

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