Venue debate sends Title IX dispute over transgender restroom policies to Fourth Circuit

RICHMOND, Va. (CN) —The Fourth Circuit heard from two northern Virginia school divisions on Thursday that dispute the U.S. Department of Education’s attempts to force the divisions to adopt noninclusive restroom policies.

Under Title IX, the federal government provides schools with funds in exchange for compliance with conditions that prohibit discrimination based on sex. The litigation follows the Department of Education telling Fairfax County and Arlington school divisions this past August that they are at high risk of being out of compliance with federal law because they allow students to use restrooms and locker rooms that align with their gender identity. The designation means the federal government is distributing funds only through reimbursement, contingent on the divisions ditching their restroom policies.

The school divisions believe the Department of Education’s interpretation of Title IX is flawed in light of the Fourth Circuit’s ruling in *Grimm v. Gloucester County School Board.*In Grimm, the Fourth Circuit ruled that the equal protection clause and Title IX compel school divisions to grant students access to sex-segregated facilities that correspond with their gender identities.

U.S. District Court Judge Rossie Alston, a Donald Trump appointee, dismissed the case in light of the Supreme Court’s ruling in Department of Education v. California, where the high court ruled that under the Tucker Act, the Court of Federal Claims has sole jurisdiction over suits based on contracts with the federal government.

The school divisions argue in their appeals that Congress made Title IX funding challenges subject to judicial review under the Administrative Procedure Act and that the act’s waiver of sovereign immunity does not extend to money damages.

“The district court’s dismissal of the school divisions’ action effectively denies them a remedy at law to protect against arbitrary and capricious agency overreach,” the school divisions wrote in their brief.

The Fourth Circuit recently applied the Supreme Court’s decision in California in Sustainability Institute v. Trump, a case concerning nonprofit organizations’ umbrage at grant freezes, and ruled the claims are contractual in nature, making a federal district court an improper venue. Attorney Timothy Heaphy, of Heaphy Smith, representing the school divisions, distinguished those cases with the divisions’ claims, arguing that the divisions seek to preserve the prospective availability of federal funds rather than retrospective relief.

“What it involves is not the terms of a contract, which is appropriate for adjudication in the Court of Federal Claims, but rather the substantive interpretation of Title IX and the Equal Protection Clause,” Heaphy told the three-judge panel. “This is not simply, does the grant recipient abide by the terms of the grant. It is the department imposing an unlawful, unconstitutional condition upon those federal funds.”

Deputy Associate Attorney General Abhishek Kambli disagreed.

“Their argument that grants are not contracts, that’s foreclosed by the recent Supreme Court precedent,” Kambli said.

U.S. Circuit Judge Allison Rushing questioned Kambli on whether Title IX claims specifically call for U.S. district court review.

“I am kind of stuck there, because Title IX and the General Education Provisions Act provide very specific routes for appealing decisions to terminate or withhold funds,” the Trump appointee said. “If the Department of Education withheld funds from these schools as part of this enforcement action, they could appeal that directly to us, right?”

Rushing further pressed Kambli on whether a district court could hear claims the divisions brought that don’t involve funding.

“Why wouldn’t the district court have jurisdiction over any part of this suit?” Rushing asked. “What about the request to set aside the designation of the schools as high risk because they’re violating Title IX?”

Kambli said all the claims center on funding and that the high-risk designation isn’t an enforcement action but rather a contract modification.

“The reason that they’re in court in the first place is because the high-risk status doesn’t allow them to get their payments on time,” Kambli said. “If you take that away, they wouldn’t have been in court."

U.S. Circuit Court Judge Julius Richardson, another Trump appointee, echoed the sentiment to Heaphy.

“The government’s action is to add terms to the grant,” Richardson said. “Their justification might be Title IX, but what they’re doing, in your view, is making the grant more onerous. But that means that claim is founded upon the grant.”

Heaphy suggested looking at the source of the dispute, which arises from the purported misinterpretation of Title IX as applied to transgender restroom policies.

The hearing comes a month after the Justice Department sued neighboring Loudoun County on behalf of two Virginia students who are challenging their school board’s progressive transgender restroom policy.

“Feeling safe in the restroom is critical to every student’s school experience,” Equality Virginia and the Arlington Gender Identity Alliance wrote in a brief supporting the school divisions. “Requiring a transgender girl to use a boys’ bathroom, or requiring a transgender boy to use a girls’ bathroom, is directly related to feelings of experiencing less school safety, as well as lower self-esteem and grades than their peers.”

Heaphy and the Justice Department declined to comment. Chief U.S. Circuit Judge Albert Diaz, a Barack Obama appointee, rounded out the panel, which did not indicate how or when it would rule.