On Tuesday, the district court in Rhode Island, following the lead of numerous other recent court decisions[*], enjoined further implementation of the “funding freeze” announced in Executive Order 14,154 (“Unleashing American Energy”), which directed all federal agencies to “immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (IRA) or the Infrastructure Investment and Jobs Act (IIJA).”
The opinion by district judge McElroy – a Trump appointee, as it happens – is well-written and well-reasoned – worth reading, I think, within the whirlwind of court decisions flying this way and that out there. From the introductory summary:
The Nonprofits[**] argue that the Government—in summarily freezing billions of dollars in IIJA and IRA funding—ran afoul of three Administrative Procedure Act (“APA”) provisions: its requirement that agency actions (1) are not “arbitrary and capricious,” (2) are not “in excess” of the authority that Congress granted the agencies, and (3) are not otherwise contrary to law. The Nonprofits now move for a preliminary injunction—a temporary court order requiring the agencies to turn the funding spigots back on, at least while their case is pending.
The Nonprofits’ Motion is GRANTED…. [T]he Court holds that the Nonprofits have demonstrated a strong likelihood of success on two of their three APA claims. First, they have adequately shown at least three ways that the sudden, indefinite freeze of all already-awarded IIJA and IRA money was arbitrary and capricious: it was neither reasonable nor reasonably explained, and it also failed to account for any reliance interests. Second, the broad powers that OMB, the NEC Director, and the five Agencies assert are nowhere to be found in federal law.
The Agencies likely possess narrower powers related to individualized funding pauses and terminations, but in cases of vast economic and political significance—like this one—the Supreme Court has urged lower courts to be skeptical of agencies’ sweeping claims of power. That is to say: those narrower powers cannot justify the broad exercise of authority that OMB, the NEC Director, and the Agencies asserted here. . . .
[That is a nice rhetorical touch, no? For many years, conservative jurists, including several now sitting on the Supreme Court, have been urging courts to be “skeptical of [executive] agencies’ sweeping claims of power.” Judge McIlroy appears to suggest that skepticism is just as appropriate now, when the agencies are in Republican hands, as it was when they were controlled by Democrats. Justice Gorsuch, wouldn’t you agree?]
Having found that the plaintiffs had “adequately demonstrated irreparable harm” and that “the balance of the equities and the public interest weigh heavily in their favor,” the court added:
Because of these claims’ unique nature, the broad powers that the Government asserts, and the harms inflicted on the Nonprofits and similarly situated nonparties, the Court holds that a nationwide injunction is appropriate. After finding that the Government’s sweeping actions were likely unlawful, the Court cannot see why similarly situated nonparties should remain subject to them. . . . [W]hen a reviewing court determines that agency regulations are unlawful, the ordinary result is that the rules are vacated— not that their application to the individual petitioners is proscribed.
Each of these points is discussed in detail in the 63-page opinion.[***]
And Judge McElroy adds this interesting explanatory bit:
The Court wants to be crystal clear: elections have consequences and the President is entitled to enact his agenda. The judiciary does not and cannot decide whether his policies are sound. In other words, “the wisdom” of his decisions “is none of our concern.” But where the federal courts are constitutionally required to weigh in—meaning we, by law, have no choice but to do so—are cases ‘about the procedure’ (or lack thereof) that the Government follows in trying to enact those policies. Agencies do not have unlimited authority to further a President’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration.
And the answer to my obviously rhetorical question posed in the subtitle above is, of course, “no.” Spend a little time at services like the Civil Rights Litigation Clearinghouse or JustSecurity’s Litigation Tracker to get a sense of the scope of the problem. It is a breath-taking record of unlawful conduct by our chief executive. I haven’t counted them all up, but in the less than 3 months since Inauguration Day courts all over the country have entered literally dozens and dozens of restraining orders and injunctions against the executive branch. Obviously, those decisions are not final, and in some or perhaps many cases a final adjudication will absolve the government of having acted unlawfully. But still. It is increasingly difficult to argue that Trump is “faithfully executing” the laws of the United States. Why it seems to matter not at all to his supporters is a mystery I doubt I’ll ever quite fathom.
[*]See, e.g., State of New York v. Trump (D.R.I. 2025); State of Maine v. Trump (D. ME); State of Colorado v HHS (D.R.I.); Widakuswara v. Lake (D.D.C.); RFE/RL v. Lake (DDC); CPB v. FEMA (DDC); State of California v. Dep’t of Education (D. MA); Commonwealth of Mass. v. NIH (D MA); Association of American Universities v. HHS (D MA); Association of American Medical Colleges v. HHS (D MA); National Treasury Employees Union v. Vought (DDC) With many thanks to the Civil Rights Litigation Clearinghouse for keeping track of all of these lawsuits.
[**] The plaintiffs in the case are a number of non-profit organizations (e.g., the Woonasquatucket River Watershed Council, the Childhood Lead Action Project) who have received grants under either the IRA or the IIJA (or both), along with an umbrella organization, the National Council of Nonprofits. Defendants are the USDA, the US Department of Energy, the Dept. of the Interior, the EPA, HUD, the National Economic Council, and the Office of Management and Budget.
[***] The opinion also contains useful discussions of the court’s jurisdiction to hear the claim, the plaintiffs’ standing to bring the claim, and the “finality” of the agency action involved.
Of particular interest is the court’s resolution of the claim that the agencies lack the statutory authority to broadly halt the disbursement of funding appropriated by the IRA and IIJA.
“The government suggests that there is no need for the Court to search for a statute specifically authorizing Defendants to pause funding and redirect it to a different recipient, because the authority to do so is implicit in the grant programs and appropriations laws themselves. The Government’s last point is actually the starting point for the analysis. It is well-established that an agency “literally has no power to act—including under its regulations—unless and until Congress authorizes it to do so by statute.” And “where the statute at issue is one that confers authority upon an administrative agency, that inquiry must be shaped, at least in some measure, by the nature of the question presented—whether Congress in fact meant to confer the power the agency has asserted.” It is probably true that, as the Government suggests, that the greater power to administer the funds includes some lesser power to pause individual grants. But the power that the Agency Defendants have actually asserted is a much broader one. It is not to pause individual, already-awarded funds for failure to comply with a grant agreement or because of a change in policy, but rather to freeze any access to all already-awarded funds under two statutes indefinitely, based solely on the fact that the funds came from those two statutes. In doing so, the Defendant Agencies have summarily tied up a significant subset of the billions of dollars already awarded under those acts. The Court cannot see how they can claim that power.”
