The U.S. Supreme Court on Monday agreed to take up a potentially important case involving the $4.5 billion federal E-rate program that provides discounted internet and other telecommunications services to schools. The court agreed to hear the appeal of a Wisconsin telecom provider facing a civil trial under a federal fraud statute for allegedly overcharging schools under the program.
Meanwhile, the court declined to hear the appeal of a former student with an intellectual disability who was Tased by a school resource officer after a violent outburst at his high school.
The telecom case, Wisconsin Bell Inc. v. United States ex rel. Heath, involves the Schools and Libraries Universal Service Support Program, or E-rate, which is funded by telecom providers and administered by a private company, the Universal Services Administrative Co., under the auspices of the Federal Communications Commission. In 2023, some 1,600 telecom providers performed $2.46 billion worth of reimbursable work for the 132,000 schools and libraries enrolled in the program, court papers say.
The E-rate program requires service providers to charge schools and libraries the “lowest corresponding price”—the price a provider charges for similar services to a similar nonresidential customer in terms of geography, traffic volume, contract length, and other cost factors. After telecom companies provide services to eligible schools and libraries, either the providers or recipients submit reimbursement requests to USAC for the amount of the discount.
Todd Heath, a Wisconsin resident who ran businesses helping schools uncover telecom billing errors, sued Wisconsin Bell, a regional telecom provider owned by AT&T, under the False Claims Act, a Civil War-era statute designed to root out fraud in federal contracting. Under that law, those found liable for fraud are subject to triple damages and other penalties, and the statute allows private citizens with knowledge of alleged fraud in federal programs to pursue claims and receive a portion of the government’s recovery.
Heath alleged that Wisconsin Bell did not comply with the lowest-corresponding price requirement from 2008 to 2015 and that the company failed to train its sales representatives about the rule or put in place any mechanism to comply with it until 2009. To give an example of price differentials cited in the case, Wisconsin Bell allegedly charged Bruce Guadalupe Community School in Milwaukee $1,110 a month per circuit for an Integrated Services Digital Network product, which provides voice, data, images, and video over a single line. Meanwhile, it charged Messmer High School, also in Milwaukee, just $743 for the same product.
“[Wisconsin Bell] has never presented any facts to dispute that BGCS and Messmer were similarly situated customers,” one of Heath’s lower court briefs said. “They clearly were.”
A federal district court granted summary judgment to Wisconsin Bell on grounds that Heath had failed to provide evidence that the company had provided false information or had knowledge of wrongdoing. That court did not rule on the company’s argument that the FCA did not apply because money in the E-rate program was not federal funding.
The U.S. Court of Appeals for the 7th Circuit, in Chicago, reversed the district court, holding that Heath had presented enough evidence for the case to go to trial. The court ruled that the E-rate program was sufficiently tied to the federal government for the false-claims law to apply to any alleged fraud in the program.
Wisconsin Bell appealed to the Supreme Court, arguing that the 7th Circuit decision conflicts with a ruling by another federal appeals court and that “it is private telecommunications carriers—not the federal government—that supply the money used in the E-rate program.”
Two industry groups, USTelecom-the Broadband Association, and CTIA-The Wireless Association, said in a friend-of-the-court brief supporting Wisconsin Bell that the 7th Circuit decision puts their member companies “under the threat of novel—and potentially ruinous—liability.”
“For some providers, this threat may eclipse the benefits of participating in a Universal Service program,” the industry groups said.
The Supreme Court granted review of the case and will hear arguments in its next term.
Court declines case alleging excessive force on student
The declined case about the use of a Taser on a student with a disability is J.W. v. Paley. It involves Jevon Washington, a student who has an unspecified intellectual disability.
In November 2016 at Mayde Creek High School in the Katy, Texas, school district, Washington had an argument with a fellow student, punching him before storming out of a classroom, court papers say. He then threw a desk, kicked a door, and yelled as he headed toward a school exit door.
School resource officer Elvin Paley and three school staff members stopped Washington, who was 6 feet, 2 inches tall and weighed 250 pounds. Washington tried to push past the security guard, and the student eventually squeezed out the door. Paley fired his stun gun at Washington, according to court documents. The student screamed and fell to his knees, and the officer continued pressing the device against the student’s body. Washington was briefly handcuffed before being treated by paramedics.
Washington and his mother filed claims in federal court under the Fourth Amendment for excessive force and the 14th Amendment for a violation of due process of law. A federal district judge dismissed most civil rights claims against the district and all but one civil rights claim against the resource officer. The court rejected qualified immunity for Paley on the Fourth Amendment excessive-force claim, though that decision was reversed by the U.S. Court of Appeals for the 5th Circuit, in New Orleans.
In a separate ruling on Washington’s suit in August 2023, the 5th Circuit said the school resource officer may have used poor judgment in Tasing Washington but held that Washington could not proceed with his 14th Amendment claim that his restraint by the school resource officer violated his right to substantive due process of law, which provides protection for fundamental rights beyond mere procedural due process.
The court said it was bound by a 1990 5th Circuit decision, Fee v. Herndon, which held that “as long as the state provides an adequate remedy, a public school student cannot state a claim for denial of substantive due process through excessive corporal punishment.”
Texas provides various civil and criminal remedies for excessive use of force by school personnel, the court noted.
In their appeal to the Supreme Court, lawyers for Washington argued that the case presented an important question of whether excessive-force claims brought by students should be analyzed under the Fourth Amendment or the 14th Amendment.
The question was “exceptionally important,” they argued, because “as the number of school resource officers increases, so, too, does the potential for violent police–student interactions.”
“It is essential to recognize that the Fourth Amendment applies to these interactions and other similar seizures by school officials,” the appeal said.
The student received support from the libertarian think tank Institute for Justice, as well as the progressive Southern Poverty Law Center.
The school resource officer, Paley, filed a response only after being prompted to do so by the Supreme Court (an indication that at least one justice was giving the case a serious look). His brief argued that students subjected to excessive force have state law remedies in Texas and no matter what the Supreme Court might decide on the Fourth Amendment standard, the officer would still be entitled to qualified immunity in this suit.
“Although excessive student discipline should neither be tolerated nor condoned, the 5th Circuit has appropriately recognized that ‘the Constitution is not a criminal or civil code to be invoked invariably for the crimes or torts of state educators who act in contravention of the very laws designed to thwart abusive disciplinarians,’” the officer’s brief said.
The court declined the student’s appeal without comment or recorded dissent.
