155 F.4th 67
1st Cir.2025Background
- In March 2025 HHS issued a "March 27 Communiqué" announcing a department-wide reorganization that included terminating ~10,000 employees, consolidating sub-agencies, and reducing regional offices; the Department began implementing the plan and placed many employees on administrative leave.
- Nineteen states and D.C. sued (May 5, 2025), seeking a preliminary injunction as to four HHS sub-agencies (CDC components, FDA Center for Tobacco Products, Office of Head Start regional staff, and ASPE's Division of Data and Technical Analysis), alleging loss of services, data, and technical assistance to states.
- The district court granted a preliminary injunction (July 1, 2025) finding plaintiffs likely to succeed on their APA arbitrary-and-capricious and related claims; it then clarified the injunction (Aug. 12, 2025) to bar further RIF notices, placements on leave, or execution of existing RIFs at those four sub-agencies.
- The government moved this Court for a stay pending appeal, arguing likely success on appeal (standing defects, CSRA preclusion, and non-reviewability/finality of the agency action) and irreparable harms if a stay were denied.
- The First Circuit denied the stay: it found the government had not made the required strong showing of likelihood of success on the merits (particularly on standing, CSRA, and arbitrary-and-capricious arguments), and it concluded the other Nken factors did not favor a stay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing | States suffer concrete operational and fiscal injuries (loss of lab testing, data, technical assistance) to state instrumentalities | Plaintiffs rely on parens patriae or informational injuries and thus lack cognizable state injury | Court: Plaintiffs showed concrete, particularized injuries to states and redressability; government did not show likely success on standing challenge |
| CSRA / jurisdiction | District court may review agency reorganization and RIF effects on third parties; dispute not exclusively channeled to MSPB | CSRA channels personnel disputes to MSPB, divesting district court jurisdiction | Court: Government failed to show strong likelihood CSRA precludes district court; prior Supreme Court interim orders do not control here |
| APA reviewability & merits | March 27 Communiqué is final, had legal consequences, and the implementation was arbitrary and capricious (no data-driven analysis) | Communiqué was programmatic/non-final and agency personnel discretion precludes APA review | Court: Government did not rebut district court's findings; failed to show strong likelihood of reversing arbitrary-and-capricious ruling |
| Stay factors / public interest | Government faces irreparable injury (payroll, Article II authority) absent a stay | Injured states and public interest weigh against continuation of allegedly unlawful agency action | Court: Although some government harms acknowledged, the lack of strong likelihood of success and the public interest in preventing unlawful agency action support denying the stay |
Key Cases Cited
- Nken v. Holder, 556 U.S. 418 (stay standard and four-factor test)
- Bennett v. Spear, 520 U.S. 154 (final agency action standard)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (arbitrary-and-capricious review)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (Article III standing principles)
- Hilton v. Braunskill, 481 U.S. 770 (stay factors; quoted in Nken)
- Sampson v. Murray, 415 U.S. 61 (government personnel discretion; addressed but distinguished)
- TransUnion LLC v. Ramirez, 594 U.S. 413 (informational-harm and downstream-consequences standing analysis)
- Biden v. Nebraska, 600 U.S. 477 (states' standing to protect instrumentalities)
- Department of Education v. California, 604 U.S. 650 (limits on district-court relief ordering payments; jurisdictional principles)
- McMahon v. New York, 145 S. Ct. 2643 (Supreme Court interim stay relied on by government; treated as persuasive guidance)