784 F.Supp.3d 861
D.S.C.2025Background
- Plaintiffs, comprised of nonprofits and municipalities, challenged the freeze and/or termination of 38 federal grants by various federal agencies and officials.
- The affected grants were primarily funded under the Inflation Reduction Act (IRA), the Infrastructure Investment and Jobs Act (IIJA), and other mandatory congressional appropriations.
- The grants were frozen or terminated following Executive Order 14154, issued by President Trump on January 20, 2025, directing agencies to pause disbursements of IRA/IIJA funds as part of a "Terminating the Green New Deal" initiative.
- Plaintiffs alleged violations of the Administrative Procedure Act (APA) and the U.S. Constitution, claiming the freeze targeted grants disfavored by the new administration.
- Defendants conceded judgment on 32 of the 38 APA claims but contested injunctive relief and opposed the court’s jurisdiction; they continued to contest 6 USDA grants funded by general appropriations.
- The court consolidated Plaintiffs’ APA and nonstatutory ultra vires constitutional claims, granting relief for the uncontested grants but denying preliminary injunctive relief for the 6 USDA-contested grants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to freeze/terminate grants funded by mandatory congressional appropriations | Agencies lacked authority to freeze/terminate grants because Congress mandated these funds be expended for designated purposes | Agencies had discretion to pause or terminate grants for policy reasons; actions not tied to opposition to laws | Agencies exceeded authority; action was ultra vires and unconstitutional |
| Availability of APA and equitable relief | Plaintiffs entitled to declaratory and injunctive relief under the APA; also entitled to nonstatutory review for ultra vires acts | Remedies should be limited; jurisdiction under APA challenged; no basis for nonstatutory review | Court granted both APA and nonstatutory declaratory/injunctive relief for uncontested grants |
| Standing | Plaintiffs suffered concrete operational and reputational injury due to the abrupt freeze/termination; injury traceable and redressable | Harms speculative or non-irreparable; some plaintiffs may lack standing | Plaintiffs had standing; injury in fact established and redressable |
| Preliminary injunction for 6 USDA grants (PCSC) | Terminations were abrupt, under unclear standards, with no process/explanation; likely APA violation | Terminations based on new 65% direct-benefit policy, within USDA's discretionary authority; invited reapplication | Denied preliminary injunction; record insufficient to show likelihood of APA violation at current stage |
Key Cases Cited
- Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682 (Supreme Court recognized nonstatutory review jurisdiction over federal officials exceeding authority)
- Leedom v. Kyne, 358 U.S. 184 (Supreme Court allowed exception to sovereign immunity for acts beyond agency authority)
- Spokeo, Inc. v. Robins, 578 U.S. 330 (Articulates Article III standing requirements: injury-in-fact, traceability, redressability)
- Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (Sets four-factor test for preliminary injunctions)
- Nken v. Holder, 556 U.S. 418 (Outlines standard for stay pending appeal, including likelihood of success and irreparable harm)
- O'Shea v. Littleton, 414 U.S. 488 (Addresses ongoing harm requirement for injunctive relief)
- Watt v. Energy Action Educ. Found., 454 U.S. 151 (Establishes that only one plaintiff with standing is needed)