763 F.Supp.3d 36
D.D.C.2025Background
- On January 27, 2025, the Office of Management and Budget (OMB) issued Memorandum M-25-13, ordering all federal agencies to pause disbursement of federal financial assistance pending review related to recent executive orders.
- Nonprofit organizations (Plaintiffs) sued OMB, asserting the freeze would cut off critical funding and disrupt essential services.
- Plaintiffs sought a Temporary Restraining Order (TRO) to halt the funding freeze due to alleged violations of the Administrative Procedure Act (APA), statutory authority, and the First Amendment.
- OMB purported to rescind the memorandum the day after the court administratively stayed the freeze, but statements from the White House indicated the funding freeze remained in effect.
- Despite the rescission, evidence showed agencies continued to block disbursements, and parallel litigation in Rhode Island yielded a similar TRO against the freeze.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing | Plaintiffs and members suffer concrete, imminent injuries | Plaintiffs lack standing; no adequate injury or causation | Plaintiffs have standing; injuries are concrete and traceable |
| Mootness | Case is live; freeze persists despite memorandum rescission | Case is moot after rescission; no ongoing conduct | Not moot; voluntary cessation doesn’t eliminate live dispute |
| Final Agency Action for APA Review | M-25-13 is final, binding, and caused legal consequences | Memo was only internal guidance, not final action | M-25-13 is final agency action |
| Arbitrary and Capricious (APA) | OMB failed to rationally justify the freeze or consider consequences | Temporary pause is rational, serves President’s policy | OMB acted arbitrarily/capriciously by not considering impacts |
| Irreparable Harm / TRO Appropriateness | Without prompt relief, essential programs will collapse | Harm is speculative or minimal; relief is unwarranted | Plaintiffs face real, irreparable harm; TRO granted |
Key Cases Cited
- Lujan v. Defs. of Wildlife, 504 U.S. 555 (1992) (establishes the requirements for Article III standing)
- Friends of the Earth, Inc. v. Laidlaw Env’t Servs., 528 U.S. 167 (2000) (voluntary cessation does not moot a live controversy unless it's absolutely clear conduct will not recur)
- Motor Vehicle Mfrs. Ass’n of the United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (standard for arbitrary and capricious review under the APA)
- Bennett v. Spear, 520 U.S. 154 (1997) (defines when agency action is final and reviewable)
- Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006) (factors for granting preliminary injunctive relief)