Poder in Action v. Phoenix, City of, 481 F.Supp.3d 962

Background

CARES Act created a $150 billion Coronavirus Relief Fund (CRF); Phoenix received $293 million and allocated $25.7 million to a COVID-19 Emergency Utility, Rent, and Mortgage Assistance Program administered by the nonprofit Wildfire.
The City required applicants to verify lawful presence, citing the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which bars non-"qualified aliens" from most "federal public benefits."
Plaintiffs (Poder in Action, Arizona Dream Act Coalition, and Aurora Galan Mejia, a DACA recipient) sued under the Supremacy Clause, seeking a preliminary injunction to enjoin the City from excluding immigrants from the Program.
The City contends PRWORA compels immigration-based verification because CRF disbursements are federal funds constituting a "federal public benefit;" Plaintiffs counter that the CARES Act or PRWORA exceptions (notably the "short-term, non-cash, in-kind emergency disaster relief" exception) permit inclusion.
The court found the parties’ statutory interpretations both plausible: plaintiffs raised serious questions that the PRWORA exception might apply, but did not show a likelihood of success on the merits, nor a likelihood of irreparable harm (no imminent evictions shown), and the balance of equities did not tip sharply in plaintiffs’ favor.
The motion for a preliminary injunction was denied; the court ordered the parties to propose an accelerated schedule to resolve the merits of the Supremacy Clause claim.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the CARES Act implicitly overrides PRWORA for CRF funds	CARES Act silence/careful drafting implies Congress did not intend immigration limits on CRF recipients	PRWORA already bars unqualified aliens from federal public benefits; implied repeal of PRWORA not justified by CARES Act silence	Court: No clear manifest intent to repeal PRWORA; implied repeal standard not met
Whether the Program is a "federal public benefit" under PRWORA	Rely on HHS interpretation: program-level statutory text must mandate eligibility criteria; CRF not a federal public benefit	DOJ-based interpretation: benefits paid from appropriated federal funds to households (rent/utility assistance) fit §1611(c) definition	Court: DOJ interpretation more persuasive; Program likely a federal public benefit; plaintiffs not likely to prevail on categorical inapplicability
Whether PRWORA’s exception for "short-term, non-cash, in-kind emergency disaster relief" applies	Program constitutes short-term, non-cash, in-kind relief because payments go to landlords/utilities on behalf of households	Payments to third parties are essentially cash disbursements and not "in-kind" goods/services; exception should be narrow	Court: Close question; plaintiffs raised serious questions that §1611(b)(1)(B) may apply (non-cash + in-kind debate), but not enough for likelihood of success
Irreparable harm and balance of equities for preliminary injunctive relief	Excluding immigrants from emergency housing/utility aid causes irreparable harm (evictions, permanent records, penalties); preemption claims often imply irreparable harm	Plaintiffs offered no evidence of imminent eviction; Arizona eviction moratoria and alternate nonprofit assistance mitigate harm; injunction would risk depleting finite CRF funds for others	Court: Plaintiffs showed only possibility, not likelihood, of irreparable harm; balance of harms does not tip sharply in plaintiffs’ favor; PI denied

Key Cases Cited

Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (establishes the preliminary-injunction Winter test).
Lopez v. Brewer, 680 F.3d 1068 (9th Cir. 2012) (preliminary injunction is extraordinary; movant bears burden on each element).
Shell Offshore, Inc. v. Greenpeace, Inc., 709 F.3d 1281 (9th Cir. 2013) (serious-questions variant: lesser showing on merits may be offset by a sharply tipped balance of hardships).
City & County of San Francisco v. U.S. Citizenship & Immigration Servs., 944 F.3d 773 (9th Cir. 2019) (characterizes certain rental-assistance programs as in-kind non-cash benefits—relevant to PRWORA exception analysis).
Pimentel v. Dreyfus, 670 F.3d 1096 (9th Cir. 2012) (discusses PRWORA’s purpose to limit public benefits to avoid incentives to immigrate).
Park Village Apartment Tenants Ass’n v. Mortimer Howard Trust, 636 F.3d 1150 (9th Cir. 2011) (imminent eviction can establish irreparable harm warranting preliminary relief).
Ledezma-Galicia v. Holder, 636 F.3d 1059 (9th Cir. 2010) (implied repeal requires a clear and manifest legislative intent).
Marx v. Gen. Revenue Corp., 568 U.S. 371 (2013) (canons like against surplusage are contextual and not absolute).
American Trucking Ass’ns, Inc. v. City of L.A., 559 F.3d 1046 (9th Cir. 2009) (constitutional violations plus demonstrable business harms can support irreparable harm).