Personal Services Contractor Association v. Trump

District Court, District of Columbia·Decided July 25, 2025·No. Civil Action No. 2025-0469·Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

AMERICAN FOREIGN SERVICE ASSOCIATION, et al.,

Plaintiffs,

v. Civil Action No. 1:25-cv-352 (CJN)

DONALD TRUMP, et al., Defendants.

PERSONAL SERVICES CONTRACTOR ASSOCIATION,

Plaintiff,

v. Civil Action No. 1:25-cv-469 (CJN)

DONALD TRUMP, et al., Defendants.

MEMORANDUM OPINION

Across these two cases, four organizations challenge what they describe as the unlawful dismantling of USAID. Three represent employees or contractors at USAID: the American Foreign Service Association (AFSA) represents USAID foreign service officers, the American Federation of Government Employees (AFGE) represents USAID civil servants, and the Personal Services Contractor Association (PSCA) represents USAID personal services contractors, who perform standard government work for the agency without having been “directly hired” by it. The fourth organization, Oxfam America, is a humanitarian group that sees its mission as combatting

global poverty, inequality, and injustice. Each organization alleges that the government’s actions taken with respect to USAID, as detailed below, violate the Constitution, the APA, and are ultra vires.

The Court ultimately cannot reach the merits of any plaintiff’s allegations, however, because it concludes that it lacks jurisdiction over the claims of AFSA, AFGE, and Oxfam (which have moved for summary judgment after the Court denied their earlier motion for a preliminary injunction), and that it likely lacks jurisdiction over the claims of the PSCA (which has moved for a preliminary injunction). The Court will accordingly grant the government’s motion to dismiss the AFSA case and will deny the PSCA’s motion for a preliminary injunction. I. Background A. Factual Background The Court previously recounted many of the facts underlying these cases. See Am. Foreign Serv. Ass’n v. Trump (AFSA I), 768 F. Supp. 3d 6, 11–14 (D.D.C. 2025). But there have been some further developments since that juncture, so a brief recap is in order before breaking new ground.

USAID is “the lead international humanitarian and development arm of the U.S.

government.” Cong. Rsch. Serv., U.S. Agency for International Development: An Overview (Jan. 6, 2025). President Kennedy initially created USAID via Executive Order, as an arm of the State Department. See Exec. Order 10,973 § 102, 26 Fed. Reg. 10,469 (Nov. 3, 1961). But in 1998, Congress passed a statute that installed the agency as an “independent establishment,” outside of State. 22 U.S.C. § 6563(a); 5 U.S.C. § 104(1); but see 22 U.S.C. § 6592 (specifying that the USAID Administrator “shall report to and be under the direct authority and foreign policy guidance of the Secretary of State”). Since then, Congress has consistently appropriated funds for

USAID, including in the Further Consolidated Appropriations Act of 2024. See Pub. L. 118–47, 138 Stat 460 (2024). Relevant here, that Act provides that appropriated funds may not be used to “implement a reorganization [or] redesign” of the agency without “prior consultation” by the agency head with appropriate congressional committees. Id. § 7063(a); see also id. § 7063(b) (defining “reorganization” and “redesign” to include actions to “downsize the United States official presence overseas,” “reduce the size of the permanent Civil . . . [or] Foreign Service,” and “eliminate, consolidate, or downsize covered departments, agencies, or organizations”).

Until recently, USAID used its appropriated funds to support humanitarian and development projects in approximately 120 foreign countries—both via its independent work and via grants awarded to partner organizations and governments. AFSA, ECF No. 51-2 (SOMF) ¶¶ 3– 5. On January 20, 2025, however, President Trump issued an Executive Order directing “a 90-day pause in United States foreign development assistance,” pending an “assessment of [its] programmatic efficiencies and consistency with United States foreign policy.” Exec. Order. 14,168, 90 Fed. Reg. 8619 § 3(a) (Jan. 20, 2025). The Order further instructed that, at the end of 90 days, “responsible department and agency heads” would determine “whether to continue, modify, or cease each foreign assistance program based upon the review recommendations.” Id. § 3(c).

Secretary of State Rubio implemented that Executive Order in a January 24 memorandum that paused “all new obligations of funding, pending a review, for foreign assistance programs funded by or through the [State] Department and USAID.” Dep’t of State, Mem. 25 STATE 6828 ¶ 1 (Jan. 24, 2025). The memorandum also directed that, “[f]or existing foreign assistance awards, contracting officers and grant officers shall immediately issue stop work orders, consistent with the terms of the relevant award, until such time as the Secretary shall determine, following a

review.” Id. ¶ 7. According to the government, a “blanket pause” on foreign aid “was the more efficient and effective path,” since, given the scale of programming, “an ad hoc review would [have] unduly burden[ed] the execution of the President’s other foreign policy priorities.” AFSA, ECF No. 85 (AR) at 121–22. Still, Secretary Rubio did exempt from the pause several categories of expenditures: foreign military financing for Israel and Egypt; emergency food assistance; legitimate expenses incurred prior to the date of the memorandum; and salaries and related administrative expenses for certain direct hire employees, personal services contractors, and locally employed staff. See Mem. 25 STATE 6828 ¶¶ 12(a)–(e). And Secretary Rubio later also waived the pause as to spending on “life-saving humanitarian assistance” and “[l]ife-saving HIV care and treatment services.”1 SOMF ¶¶ 28–30.

Six days later, President Trump appointed Secretary Rubio as the Acting Administrator of USAID. AR at 16. On February 3, 2025, Secretary Rubio sent a letter to Congress stating that Peter Marocco was delegated the duties of Deputy Administrator of USAID and would “begin the process of engaging in a review and potential reorganization of USAID’s activities to maximize [its] efficiency and align [its] operations with the national interest.” Id.

To effectuate that review and potential reorganization, and in light of alleged “noncompliance” with those efforts by former agency leadership, Deputy Administrator Marocco began placing USAID employees on administrative leave and terminating contracts with USAID personal services contractors (PSCs). See id. at 7, 17–20. By February 7, 2025, USAID had placed 2,140 of its 4,746 direct-hire employees on administrative leave, and had approved the termination

1 Plaintiffs maintain that these waivers were largely ineffectual, due to newly imposed restrictions on who could access payment systems and heightened approval processes before payments could be disbursed, among other changes at the agency. See, e.g., AFSA, ECF No. 51 (MSJ) at 5.

of 791 of its 1,239 PSCs. Id. at 7, 19. However, pursuant to a TRO issued in AIDS Vaccine Advocacy Coalition (AVAC) v. United States Department of State, D.D.C. Case No. 25-cv-400, and Global Health Council v. Trump, D.D.C. Case No. 25-cv-402, USAID ceased the “generalized stop work, suspension, or pause of Agency contracts, grants, or other federal assistance awards” under the Executive Order and Secretary Rubio’s memorandum. Id. at 51; see AVAC v. United States Dep’t of State, 770 F. Supp. 3d 121, 130 (D.D.C. 2025) (summarizing the scope of the TRO). Nonetheless, consistent with the AVAC TRO, USAID continued to “exercise Agency discretion to individually examine outgoing payments pursuant to a new Payment Integrity Review Process, and, as appropriate, to enforce the terms and conditions, including provisions allowing the Agency to issue stop work or termination notices, contained in USAID awards and contracts.” AR at 51.

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