State of Washington v. U.S. Department Of Transportation, 2:25-cv-00848

Background

The IIJA (2021) appropriated $5 billion for the National Electric Vehicle Infrastructure (NEVI) Formula Program, directing the Secretary of Transportation to distribute funds to States via a statutory formula; funds are to remain available until expended and require FHWA guidance plus State deployment-plan approval to obligate funds.
FHWA issued NEVI guidance in 2022 (updated annually); multiple States (and DC) submitted and received FHWA approvals and relied on those approvals to obligate, contract, and begin EV charging projects.
On January 20–29, 2025 the new Administration issued Executive Order No. 14154 and DOT Order 2100.7; on February 6, 2025 FHWA’s Biondi Letter rescinded prior NEVI guidance, revoked approved State plans, and suspended new obligations—effectively freezing NEVI disbursements.
Sixteen States plus DC sued under the APA and the Constitution and moved for a preliminary injunction to (1) restore approved State plans, (2) prevent withholding/withdrawing NEVI funds except as IIJA prescribes, and (3) enjoin any categorical NEVI termination for those plaintiffs.
The court found Plaintiffs likely to succeed on several claims (exceeding statutory authority, arbitrary and capricious action, failure to follow IIJA procedures, and separation-of-powers concerns), found irreparable harm, and granted a partial preliminary injunction for 14 States (denying relief for DC, Minnesota, and Vermont for lack of specific evidence); the injunction was stayed 7 days.

Issues

Issue	Plaintiffs' Argument	Defendants' Argument	Held
Ripeness / Final agency action	Revocation of approved State plans and immediate funding freeze are concrete, present injuries and constitute final agency action amenable to review	Agency is merely reviewing guidance and has not reached a final decision; harms are speculative until obligation phase	Court: ripe; Biondi Letter and freeze are final agency action and caused immediate operational effects, so reviewable
Exceeding statutory authority (APA §706(2)(C))	IIJA’s text mandates distribution by formula and limits withholding/withdrawal to narrow, procedural conditions—categorical freeze and revocation exceed authority	FHWA may revisit guidance and temporarily suspend plans while updating guidance; pause is permitted adjunct to rulemaking	Court: likely exceeds statutory authority—IIJA does not authorize a categorical, indefinite freeze or revocation of previously approved plans
Arbitrary & capricious (APA §706(2)(A))	Biondi Letter gives only conclusory rationale (align with DOT Order 2100.7) and fails to consider statutory factors, reliance interests, or alternatives	Agency has discretion to change guidance and priorities; review will follow	Court: likely arbitrary and capricious—FHWA did not articulate reasons, failed to address reliance interests or consider alternatives
Separation of powers / Appropriations control	Executive-directed categorical pause implements EO policy preference and withholds Congressionally appropriated funds without statutory basis, usurping Congress’s power of the purse	Actions implement lawful internal policy review and are temporary administrative steps, not an impoundment of appropriations	Court: likely violates separation of powers—Administration cannot categorically withhold/distribute appropriated funds inconsistent with IIJA

Key Cases Cited

Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunctions)
Bennett v. Spear, 520 U.S. 154 (1997) (two-part test for final agency action under the APA)
Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (1983) (arbitrary-and-capricious review and requirements when agencies change course)
FCC v. Fox Television Stations, 556 U.S. 502 (2009) (agency must give reasoned explanation when changing policy and consider reliance interests)
Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952) (limits on executive power; separation-of-powers principles)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing and injury-in-fact doctrine)
City & County of San Francisco v. Trump, 897 F.3d 1225 (9th Cir. 2018) (Executive withholding of appropriated funds); (cited for limits on executive impoundment of funds)
National Federation of Independent Business v. Department of Labor, OSHA, 595 U.S. 109 (2022) (agencies are creatures of statute; scope of statutory authority)
United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016) (Appropriations Clause and spending limits)