State of New York v. Trump

133 F.4th 51

• Court: Court of Appeals for the First Circuit
• Decided: March 26, 2025
• Docket: 25-1236
• Status: Published

Opinion

United States Court of Appeals For the First Circuit

No. 25-1236

STATE OF NEW YORK; STATE OF CALIFORNIA; STATE OF ILLINOIS; STATE OF RHODE ISLAND; STATE OF NEW JERSEY; COMMONWEALTH OF MASSACHUSETTS; STATE OF ARIZONA; STATE OF COLORADO; STATE OF CONNECTICUT; STATE OF DELAWARE; THE DISTRICT OF COLUMBIA; STATE OF HAWAI'I; OFFICE OF THE GOVERNOR ex rel. Andy Beshear, in his official capacity as Governor of the COMMONWEALTH OF KENTUCKY; STATE OF MAINE; STATE OF MARYLAND; STATE OF MICHIGAN; STATE OF MINNESOTA; STATE OF NEVADA; STATE OF NEW MEXICO; STATE OF NORTH CAROLINA; STATE OF OREGON; STATE OF VERMONT; STATE OF WASHINGTON; and STATE OF WISCONSIN,

Plaintiffs, Appellees,

v.

DONALD TRUMP, in his official capacity as President of the United States; U.S. OFFICE OF MANAGEMENT AND BUDGET; RUSSELL VOUGHT, in his official capacity as Director of the U.S. Office of Management and Budget; U.S. DEPARTMENT OF THE TREASURY; SCOTT BESSENT, in his official capacity as Secretary of the Treasury; PATRICIA COLLINS, in her official capacity as Treasurer of the United States; U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; ROBERT F. KENNEDY, JR., in his official capacity as Secretary of Health and Human Services; U.S. DEPARTMENT OF EDUCATION; LINDA MCMAHON, in her official capacity as Secretary of Education; U.S. DEPARTMENT OF TRANSPORTATION; SEAN DUFFY, in his official capacity as Secretary of Transportation; U.S. DEPARTMENT OF LABOR; LORI CHAVEZ-DEREMER, in her official capacity as Secretary of Labor*; U.S. DEPARTMENT OF ENERGY; CHRISTOPHER WRIGHT, in his official capacity as Secretary of Energy; U.S. ENVIRONMENTAL PROTECTION AGENCY; LEE ZELDIN, in his official capacity as Administrator of the U.S. Environmental Protection Agency; U.S. DEPARTMENT OF THE INTERIOR; DOUGLAS BURGUM, in his official capacity as Secretary of the Interior; U.S. DEPARTMENT

* Pursuant to Federal Rule of Appellate Procedure 43(c)(2), Secretary of Labor Lori Chavez-DeRemer is automatically substituted for former Acting Secretary of Labor Vince Micone as Respondent. OF HOMELAND SECURITY; KRISTI NOEM, in her official capacity as Secretary of Homeland Security; U.S. DEPARTMENT OF JUSTICE; PAMELA BONDI, in her official capacity as Attorney General; THE NATIONAL SCIENCE FOUNDATION; DR. SETHURAMAN PANCHANATHAN, in his official capacity as Director of the National Science Foundation; U.S. DEPARTMENT OF AGRICULTURE; BROOKE ROLLINS, in her official capacity as Secretary of Agriculture; U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; ERIC SCOTT TURNER, in his official capacity as Secretary of Housing and Urban Development; U.S. DEPARTMENT OF STATE; U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT; MARCO RUBIO, in his official capacities as Secretary of State and Acting Administrator of the U.S. Agency for International Development; U.S. DEPARTMENT OF DEFENSE; PETER HEGSETH, in his official capacity as Secretary of Defense; U.S. DEPARTMENT OF VETERANS AFFAIRS; DOUG COLLINS, in his official capacity as Secretary of Veterans Affairs; U.S. DEPARTMENT OF COMMERCE; HOWARD LUTNICK, in his official capacity as Secretary of Commerce; NATIONAL AERONAUTICS AND SPACE ADMINISTRATION; JANET PETRO in her official capacity as Acting Administrator of National Aeronautics and Space Administration; CORPORATION FOR NATIONAL AND COMMUNITY SERVICE; JENNIFER BASTRESS TAHMASEBI, in her official capacity as Interim Head of the Corporation for National and Community Service; U.S. SOCIAL SECURITY ADMINISTRATION; LELAND DUDEK, in his official capacity as Acting Commissioner of U.S. Social Security Administration; U.S. SMALL BUSINESS ADMINISTRATION; KELLY LOEFFLER, in her official capacity as Administrator of U.S. Small Business Administration; U.S. FEDERAL EMERGENCY MANAGEMENT AGENCY; and CAMERON HAMILTON, in his official capacity as Acting Administrator of the U.S. Federal Emergency Management Agency,

Defendants, Appellants.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

[Hon. John J. McConnell, Jr., U.S. District Judge]

Before

Barron, Chief Judge, Montecalvo and Rikelman, Circuit Judges.

Yaakov M. Roth, Acting Assistant Attorney General, Sara Miron Bloom, Acting United States Attorney, Eric D. McArthur, Deputy Assistant Attorney General, Daniel Tenny, Sean R. Janda, Brian J. Springer, Attorneys, Appellate Staff Civil Division, U.S. Department of Justice, on brief for appellants. Russell Coleman, Attorney General, and Matthew F. Kuhn, Solicitor General, on brief for Commonwealth of Kentucky, amicus curiae. Nathan J. Moelker and Olivia F. Summers, on brief for American Center for Law and Justice, amicus curiae. Letitia James, Attorney General of New York, Barbara D. Underwood, Solicitor General, Judith N. Vale, Deputy Solicitor General, Mark S. Grube, Senior Assistant Solicitor General, Rabia Muqaddam, Special Counsel for Federal Initiatives, Michael J. Myers, Senior Counsel, Molly Thomas-Jensen, Special Counsel, Colleen Faherty, Special Trial Counsel, Zoe Levine, Special Counsel for Immigrant Justice, Rob Bonta, Attorney General of California, Laura L. Faer, Christine Chuang, Supervising Deputy Attorneys General, Joshua Patashnik, Deputy Solicitor General, Nicholas Green, Carly Munson, Kenneth Sugarman, Marie Logan, Theodore McCombs, Deputy Attorneys General, Kwame Raoul, Attorney General of Illinois, Jane Elinor Notz, Solicitor General, Alex Hemmer, Deputy Solicitor General, Peter F. Neronha, Attorney General of Rhode Island, Kathryn M. Sabatini, Civil Division Chief, Special Assistant Attorney General, Sarah W. Rice, Deputy Chief, Public Protection Bureau, Assistant Attorney General, Leonard Giarrano IV, Special Assistant Attorney General, Matthew J. Platkin, Attorney General of New Jersey, Jeremy M. Feigenbaum, Solicitor General, Andrea Joy Campbell, Attorney General of Massachusetts, Katherine B. Dirks, Deputy Chief, Government Bureau, Turner Smith, Deputy Chief, Energy and Environment Bureau, David C. Kravitz, State Solicitor, Anna Lumelsky, Deputy State Solicitor, Kristen K. Mayes, Attorney General of Arizona, Joshua D. Bendor, Solicitor General, Philip J. Weiser, Attorney General of Colorado, Shannon Stevenson, Solicitor General, William Tong, Attorney General of Connecticut, Michael K. Skold, Solicitor General, Kathleen Jennings, Attorney General of Delaware, Vanessa L. Kassab, Deputy Attorney General, Brian L. Schwalb, Attorney General of the District of Columbia, Andrew Mendrala, Assistant Attorney General, Public Advocacy Division, Anne E. Lopez, Attorney General of Hawai'i, David D. Day, Special Assistant to the Attorney General, Kaliko'onālani D. Fernandes, Solicitor General, Andy Beshear, Governor of Kentucky, S. Travis Mayo, General Counsel, Taylor Payne, Chief Deputy General Counsel, Laura C. Tipton, Deputy General Counsel, Aaron M. Frey, Attorney General of Maine, Jason Anton, Assistant Attorney General, Anthony G. Brown, Attorney General of Maryland, Adam D. Kirschner, Senior Assistant Attorney General, Dana Nessel, Attorney General of Michigan, Linus Banghart-Linn, Chief Legal Counsel, Neil Giovanatti, Assistant Attorney General, Keith Ellison, Attorney General of Minnesota, Liz Kramer, Solicitor General, Aaron D. Ford, Attorney General of Nevada, Heidi Parry Stern, Solicitor General, Raúl Torrez, Attorney General of New Mexico, Anjana Samant, Deputy Counsel, Jeff Jackson, Attorney General of North Carolina, Daniel P. Mosteller, Associate Deputy Attorney General, Dan Rayfield, Attorney General of Oregon, Christina Beatty-Walters, Senior Assistant Attorney General, Charity R. Clark, Attorney General of Vermont, Jonathan T. Rose, Solicitor General, Nicholas W. Brown, Attorney General of Washington, Andrew Hughes, Assistant Attorney General, Leah Brown, Assistant Attorney General, Joshua L. Kaul, Attorney General of Wisconsin, and Aaron J. Bibb, Assistant Attorney General, on brief for appellees. Elizabeth B. Wydra, Brianne J. Gorod, Miriam Becker-Cohen, and Nina G. Henry, on brief for Constitutional Accountability Center, amicus curiae.

March 26, 2025 BARRON, Chief Judge. The heads of various federal

agencies as well as the agencies themselves -- collectively, the

Agency Defendants1 -- move for a stay pending appeal. They seek

to block temporarily a preliminary injunction that the United

States District Court for the District of Rhode Island issued

against them on March 6, 2025.2 The Plaintiffs are twenty-two

states, including Rhode Island, as well as the District of Columbia

and the Governor of Kentucky ("Plaintiff-States").

The suit challenges the Office of Management and Budget

("OMB") Memorandum M-25-13 ("OMB Directive"), issued on January

27, 2025. It also challenges alleged funding freezes under the

OMB Directive and Executive Orders that the President issued in

his first week in office to which the OMB Directive referred.

The Plaintiff-States filed their initial complaint on

January 28, 2025. The next day, OMB rescinded the OMB Directive.

The operative complaint alleges that the funding freezes took place

prior to that rescission and continued thereafter.

1 The Appellants before us -- and thus those bringing the stay motion at issue -- also include the President, who is named as a defendant in this suit, but to whom the preliminary injunction does not apply. We thus use the term Agency Defendants except where we mean to refer to all Defendants, the President included, in which case we use the term Defendants. 2 In our discretion, we have accepted the proposed amicus briefs. We have considered them only insofar as they concern legal issues and positions raised by the parties. See Ryan v. U.S. Immigr. & Customs Enf't, 974 F.3d 9, 33 n.10 (1st Cir. 2020).

- 5 - The preliminary injunction, among other things, bars the

Agency Defendants from:

reissuing, adopting, implementing, giving effect to, or reinstating under a different name the directives in [the OMB Directive] with respect to the disbursement and transmission of appropriated federal funds to the States under awarded grants, executed contracts, or other executed financial obligations.[3]

It further prohibits the Agency Defendants from:

pausing, freezing, blocking, canceling, suspending, terminating, or otherwise impeding the disbursement of appropriated federal funds to the States under awarded grants, executed contracts, or other executed financial obligations based on the OMB Directive, including funding freezes dictated, described, or implied by Executive Orders issued by the President before rescission of the OMB Directive or any other materially similar order, memorandum, directive, policy, or practice under which the federal government imposes or applies a categorical pause or freeze of funding

3 An "obligation" is defined in federal appropriations law as "a definite commitment which creates a legal liability of the Government for the payment of appropriated funds for goods and services ordered or received." 2 U.S. Gov't Accountability Off., Principles of Federal Appropriations Law, at 7-3 (3d ed. 2006) (citations omitted) [hereinafter GAO Redbook]. Obligated federal funds may be payable immediately or at a later point, and the "fact that an unmatured liability may be subject to a right of cancellation does not negate the obligation." Id. at 7-4 to -5. Funds available under awarded grants, executed contracts, or other executed financial obligations are obligated federal funds. See 31 U.S.C. § 1501(a)(1), (5) (including, within the scope of the obligation-reporting requirement, funds payable under grant awards, whether fixed by law or under an agreement, and other binding agreements); see also GAO Redbook at 7-40 to -42 (explaining that a grant becomes obligated once it is awarded and its terms are communicated to the grantee).

- 6 - appropriated by Congress. This includes, but is by no means [] limited to, Section 7(a) of Executive Order 14154, Unleashing American Energy.[4]

In addition, the preliminary injunction requires the

Agency Defendants to provide written notice "to all federal

departments and agencies to which the OMB Directive was addressed"

that shall:

[(1)] instruct [them] that they may not take any steps to implement, give effect to, or reinstate under a different name or through other means the directives in the OMB Directive with respect to the disbursement or transmission of appropriated federal funds to the States under awarded grants, executed contracts, or other executed financial obligations[;] [and] [(2)] instruct [them] to release and transmit any disbursements to the States on awarded grants, executed contracts, or other executed financial obligations that were paused on the grounds of the OMB Directive and Executive Orders included by reference therein or issued before the rescission of the OMB Directive.

The stay motion is denied.

4 The preliminary injunction states that it is "by no means not limited to, Section 7(a) of Executive Order 14154, Unleashing American Energy." We understand the inclusion of "not" to be a typographical error, and neither party contends otherwise.

- 7 - I.

This case already has an unusually involved procedural

history. A detailed review of that history is necessary to set

the stage for the substantive analysis that follows.

A.

On January 27, 2025, Matthew Vaeth, Acting Director of

OMB, issued the OMB Directive, which is titled "Temporary Pause of

Agency Grant, Loan, and Other Financial Assistance Programs," to

all heads of executive departments and agencies. The OMB Directive

stated that it "requires Federal agencies to identify and review

all Federal financial assistance programs and supporting

activities consistent with the President's policies and

requirements," (footnotes omitted), and it noted both the

definition of "financial assistance" set forth in 2 C.F.R. § 200.1

and that "[n]othing in this memo should be construed to impact

Medicare or Social Security benefits."

The OMB Directive identified a series of Executive

Orders the President issued in his first week in office. It then

provided that, "[t]o implement these orders, each agency must

complete a comprehensive analysis of all of their Federal financial

assistance programs to identify programs, projects, and activities

that may be implicated by any of the President's executive orders."

It further provided that:

- 8 - [i]n the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.

The OMB Directive explained that "[t]his temporary pause

will provide the Administration time to review agency programs and

determine the best uses of the funding for those programs

consistent with the law and the President's priorities." It

further stated that "[t]he temporary pause will become effective"

the next day -- January 28 -- at 5:00 PM and that "[e]ven before

completing their comprehensive analysis, Federal agencies must

immediately identify any legally mandated actions or deadlines for

assistance programs arising while the pause remains in effect" and

"report this information to OMB along with an analysis of the

requirement."

The OMB Directive went on to provide that: "[n]o later

than February 10, 2025, agencies shall submit to OMB detailed

information on any programs, projects or activities subject to

this pause." It added that:

[e]ach agency must pause: (i) issuance of new awards; (ii) disbursement of Federal funds under all open awards; and (iii) other relevant agency actions that may be implicated by the executive orders, to the extent permissible by law, until OMB has reviewed and

- 9 - provided guidance to your agency with respect to the information submitted.

It provided as well that "OMB may grant exceptions allowing Federal

agencies to issue new awards or take other actions on a

case-by-case basis."

The OMB Directive explicitly identified the following

Executive Orders: Protecting the American People Against Invasion,

Exec. Order No. 14,159, 90 Fed. Reg. 8443 (Jan. 20, 2025);

Reevaluating and Realigning United States Foreign Aid, Exec. Order

No. 14,169, 90 Fed. Reg. 8619 (Jan. 20, 2025); Putting America

First in International Environmental Agreements, Exec. Order

No. 14,162, 90 Fed. Reg. 8455 (Jan. 20, 2025); Unleashing American

Energy, Exec. Order No. 14,154, 90 Fed. Reg. 8353 (Jan. 20, 2025)

[hereinafter Unleashing EO]; Ending Radical and Wasteful

Government DEI Programs and Preferencing, Exec. Order No. 14,151,

90 Fed. Reg. 8339 (Jan. 20, 2025); Defending Women from Gender

Ideology Extremism and Restoring Biological Truth to the Federal

Government, Exec. Order No. 14,168, 90 Fed. Reg. 8615 (Jan. 20,

2025); and Enforcing the Hyde Amendment, Exec. Order No. 14,182,

90 Fed. Reg. 8751 (Jan. 24, 2025). The "Unleashing American

Energy" Executive Order ("Unleashing EO") is particularly relevant

for reasons that will become clear below.

- 10 - The Unleashing EO provides in Section 2 a list of

"polic[ies]" that it states are "the policy of the United States."

It further provides in Section 7(a):

All agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (Public Law 117–169) or the Infrastructure Investment and Jobs Act (Public Law 117–58) . . . and shall review their processes, policies, and programs for issuing grants, loans, contracts, or any other financial disbursements of such appropriated funds for consistency with the law and the policy outlined in section 2 of this order. . . . No funds identified in this subsection . . . shall be disbursed by a given agency until the Director of OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review recommendations they have chosen to adopt.

Unleashing EO, 90 Fed. Reg. 8357.

OMB issued guidance concerning the Unleashing EO on

January 21, 2025 ("Unleashing Guidance"). The guidance states

that "[t]his pause only applies to funds supporting programs,

projects, or activities that may be implicated by the policy

established in Section 2 of the order." It further provides that

"[a]gency heads may disburse funds as they deem necessary after

consulting with the Office of Management and Budget." Id.

On January 28, OMB also issued a separate document about

the scope of the OMB Directive ("OMB Q&A"). The document stated

in bold type: "Any program not implicated by the President's

Executive Orders is not subject to the pause," and then listed the

- 11 - seven Executive Orders discussed above. It explained that "the

pause does not apply across-the-board. It is expressly limited to

programs, projects, and activities implicated by the President’s

Executive Orders, such as ending DEI, the green new deal, and

funding nongovernmental organizations that undermine the national

interest." Additionally, however, OMB circulated a document to

federal agencies entitled "Instructions for Federal Financial

Assistance Program Analysis in Support of M-25-13" ("OMB

Spreadsheet"). It "required" "[a]ll Federal agencies that provide

Federal financial assistance . . . to complete the attached

spreadsheet and submit it to OMB" by February 7, 2025. The

spreadsheet listed over 2,500 federal funding lines, including for

programs that the OMB Q&A explicitly stated were excluded from the

pause, the Head Start program being one example.

B.

The Plaintiff-States filed their suit in the District of

Rhode Island on January 28, 2025, naming as defendants the

President, the OMB and its head, and eleven separate agencies and

their heads. The complaint alleged that the OMB Directive, which

the complaint asserted was "set to take effect at [5:00 PM] today

but [was] actually being implemented even earlier," was

unconstitutional on various grounds. The complaint also alleged

that the OMB Directive violated the Administrative Procedure Act

("APA"), 5 U.S.C. § 701 et seq., because it constituted "final

- 12 - agency action" that was "contrary to law" and "arbitrary and

capricious." As to the action being contrary to law, the complaint

alleged, among other things, that the "Defendants have no authority

to impose a government-wide pause on federal awards without regard

to the individual authorizing statutes, regulations, and terms

that govern each funding stream." As to the action being

"arbitrary and capricious," the complaint alleged, also among

other things, that "the OMB Directive provides no reasoned basis

for pausing the disbursement and obligation of trillions of federal

dollars and fails to consider the consequences of that action."

To support their claims, the Plaintiff-States alleged

that they receive significant amounts of federal funds to provide

essential services to their residents. They further alleged that

the Agency Defendants' implementation of the OMB Directive, by

resulting in the withholding of these funds and providing them

with less than twenty-four hours' notice of doing so, would

interfere with their ability to provide such services. They

alleged, too, that the tight time frame for the OMB Directive's

implementation and the last-minute notice of it "compounded

the[ir] injuries" because they could neither "prepare for or

mitigate" the fiscal impact nor effectively plan for any future or

downstream fiscal effects.

The Plaintiff-States sought a declaratory judgment and

an injunction, as well as to vacate the OMB Directive under § 706

- 13 - of the APA. See 5 U.S.C. § 706. They also moved for a temporary

restraining order ("TRO") to "restrain the Defendants from

enforcing the OMB Directive's directive to 'pause all activities

related to obligation or disbursement of all Federal financial

assistance.'"

The same day the Plaintiff-States filed their complaint,

the U.S. District Court for the District of Columbia issued an

administrative stay of the OMB Directive pending that court's

hearing on a separate request for a temporary restraining order.

See Nat'l Council of Nonprofits v. Off. of Mgmt. & Budget,

No. 1:25-cv-00239, 2025 WL 314433, at *1 (D.D.C. Jan. 28, 2025).

In that case, non-profit organizations brought their own suit

challenging the OMB Directive.5 See id.

On January 29, 2025, prior to the scheduled 3:00 PM

hearing on the Plaintiff-States' TRO motion in the District of

Rhode Island, the Defendants filed a notice with the District

Court. The notice stated that OMB had rescinded the OMB Directive

and that the Plaintiff-States' claims and request for injunctive

relief were moot. The Defendants nevertheless indicated that they

would appear at the 3:00 PM hearing. The District Court proceeded

5 The district court subsequently issued a preliminary injunction in that case. See Nat'l Council of Nonprofits v. Off. of Mgmt. & Budget, No. 1:25-cv-00239, 2025 WL 597959, at *19-20 (D.D.C. Feb. 25, 2025).

- 14 - with the hearing and, on January 31, 2025, granted a TRO as to the

Agency Defendants.

With respect to whether the OMB Directive's rescission

mooted the case, the District Court determined that the rescission

of the OMB Directive was in name only, relying in part on a

statement that the White House Press Secretary made on the social

media platform "X" on the day of the rescission. She stated: "This

is NOT a rescission of the federal funding freeze. It is simply

a rescission of the OMB memo. Why? To end any confusion created

by the court's injunction. The President's EO[]s on federal

funding remain in full force and effect, and will be rigorously

implemented." The District Court also relied on evidence submitted

by the Plaintiff-States regarding emails that the Environmental

Protection Agency ("EPA") sent federal grant recipients one day

"after the so-called rescission." One email stated that the agency

is working "diligently to implement the [OMB Directive], Temporary

Pause of Agency Grant, Loan, and Other Financial Assistance

Programs, to align Federal spending and action with the will of

the American people as expressed through President Trump's

priorities." The email also explained that "[t]he agency is

temporarily pausing all activities related to the obligation or

disbursement of EPA Federal financial assistance at this time" and

that "EPA is continuing to work with OMB as they review processes,

policies, and programs, as required by the memorandum."

- 15 - "Based on the Press Secretary's unequivocal statement

and the continued actions of Executive agencies," the District

Court determined that the case was not moot. It explained that

"the evidence shows that the alleged rescission of the OMB

Directive was in name-only and may have been issued simply to

defeat the jurisdiction of the courts." It also explained that,

based on the record, "the policies in the OMB Directive" were

"still in full force and effect," such that the "substantive effect

of the directive carries on."

C.

One week later, on February 7, 2025, the

Plaintiff-States filed a motion to enforce the TRO as to certain

federal funds that they contended were due to them but remained

paused. That same day, the Plaintiff-States also filed a motion

for a preliminary injunction against the Agency Defendants.

That motion described the Plaintiff-States' requested

relief in terms that approximate the preliminary injunction that

the District Court ultimately entered. To support the motion, the

Plaintiff-States introduced a large body of evidence to show that

the Agency Defendants had implemented, within a matter of hours or

days, categorical freezes of obligated federal funds, without

regard to whether the relevant statute or grant award permitted

the funding freezes.

- 16 - This evidence included 127 exhibits, which included more

than 100 declarations, as well as grant documents and

communications with the relevant agencies. The communications

concerned the named agencies' decisions to freeze funds in

implementation of the OMB Directive and the President's Executive

Orders. The declarations, most of which were submitted by public

officials from the Plaintiff-States, described these states'

inability to access their federal funding in the immediate

aftermath of the issuance of the OMB Directive and the President's

Executive Orders. The declarations also discussed the harm that

the funding freezes and attendant uncertainty were causing and

would continue to cause the Plaintiff-States.

Based on this evidence, the Plaintiff-States argued that

they had standing and that the case was not moot. As to the

elements of the established test for securing preliminary

injunctive relief, see Winter v. Nat. Res. Def. Council, Inc., 555

U.S. 7, 20 (2008), the Plaintiff-States contended that they had

established a likelihood of success on the merits based on their

claims that the Defendants' actions violated the APA and the

Constitution, and exceeded the Executive's statutory authority.6

They further contended that the remaining elements of the Winter

6As discussed below, the Plaintiff-States subsequently amended their complaint to expressly include this statutory ultra vires claim as a separate count.

- 17 - test favored their request for preliminary injunctive relief due

to the impact of the funding freezes on their ability to reliably

provide essential services to their residents, and the absence of

harm that the relief they sought would cause the Defendants.

The APA claims are the only ones that we address in

resolving the stay motion before us here. The Plaintiff-States

contended that they were likely to succeed in showing that the

challenged agency actions -- which their preliminary injunction

motion collectively termed the "Federal Funding

Freeze"7 -- violated the APA because those actions were contrary

to law and ultra vires, 5 U.S.C. § 706(2)(B)-(C), as well as

arbitrary and capricious, id. § 706(2)(A).

With respect to the agency actions being "contrary to

law," the Plaintiff-States pointed to the Impoundment Control Act

("ICA"), 2 U.S.C. § 681 et seq. They also pointed to various

statutory schemes governing the disbursement of federal funds

under specific programs, including the Inflation Reduction Act

("IRA"), Pub. L. No. 117-169, 136 Stat. 1818 (2022), and the

Infrastructure Investment and Jobs Act ("IIJA"), Pub. L. No.

117-58, 135 Stat. 429 (2021). They contended that these measures

7 The term "Federal Funding Freeze" appears to be drawn from the White House Press Secretary's statement that the rescission of the OMB Directive "is NOT a rescission of the federal funding freeze."

- 18 - establish mandatory funding directives based on allocation

formulas and enumerated factors.

With respect to the challenged agency actions being

"arbitrary and capricious," the Plaintiff-States asserted that the

"only explanation provided" for the "Funding Freeze" was its

"inten[t] to help the Executive achieve his policy priorities."

They also argued that the Agency Defendants had neither identified

statutory authority for the actions making up the "Funding Freeze"

nor "attempted to explain their utter disregard for the [resulting]

harms." And they argued that "freezing all funds under the IRA

and the IIJA" was "substantively unreasonable" because doing so

conflicted with applicable statutory directives.

The Plaintiff-States separately made arguments about the

existence of "final agency action." See 5 U.S.C. § 704. They

contended that the OMB Directive itself constituted final agency

action. They also contended that the Agency Defendants' "actions

to implement the Funding Freeze by unilaterally suspending

funding" separately constituted final agency actions because

"[e]ach of th[o]se actions . . . marked 'the consummation' of

agency decision making and determined 'rights or

obligations . . . from which legal consequences' flowed." (Second

- 19 - alteration in original) (quoting Bennett v. Spear, 520 U.S. 154,

177-78 (1997)).8

D.

Two days later, on February 9, 2025, the Defendants

responded to the Plaintiff-States' pending motion to enforce the

TRO. The District Court granted the motion the next day.

On February 10, 2025, the Defendants appealed the TRO

(as well as the District Court's order granting its extension) and

the District Court's order granting the motion to enforce the TRO.

They also asked us to stay these orders pending appeal and to

administratively stay them pending resolution of their motion for

a stay pending appeal.9 In seeking the administrative stay, the

Defendants argued, among other things, that the order granting the

motion to enforce effectively required them to go to the District

Court for "preclearance" before exercising their lawful authority

to withhold funds "across [a] multitude of [federal] programs."

On February 11, 2025, we denied the motion for an

administrative stay without prejudice. We also noted the

The Plaintiff-States also argued that "the funding freezes 8

implemented by Agency Defendants are likewise reviewable as, at minimum, the 'denial' of 'relief' -- another form of agency action reviewable under the APA, 5 U.S.C. § 551(13), defined to include the denial of 'the whole or part of agency . . . grant of money,' id. § 555(11)." The Defendants simultaneously sought a stay pending appeal 9

of those same orders from the District Court.

- 20 - Plaintiff-States' position that the District Court's order

granting the motion to enforce the TRO "does not stop [D]efendants

from limiting access to funds without any preclearance from the

[D]istrict [C]ourt on the basis of the applicable authorizing

statutes, regulations, and terms" (internal quotation marks

omitted), as well as our confidence that the District Court would

provide any clarification necessary as to that issue. The next

day, the District Court issued an order clarifying that: (1) the

TRO "permits the Defendants to limit access to federal funds on

the basis of the applicable authorizing statutes, regulations, and

terms" (internal quotation marks omitted); (2) the order granting

Plaintiff-States' motion to enforce "does not bar[] both the

President and much of the Federal Government from exercising their

own lawful authorities to withhold funding without the prior

approval of the [D]istrict [C]ourt" (internal quotation marks

omitted); and (3) neither order "require[s] the Defendants to seek

'preclearance' from the Court before acting to terminate funding

when that decision is based on actual authority in the applicable

statutory, regulatory, or grant terms."10

10In a separate order issued the same day, the District Court denied the Defendants' motion to stay the TRO, the order extending the TRO, and the order granting the Plaintiff-States' motion to enforce the TRO pending appeal to this Court. On February 13, 2025, the Defendants voluntarily dismissed their appeal.

- 21 - E.

On February 12, 2025, the Defendants filed their

opposition to the Plaintiff-States' motion for a preliminary

injunction. Their primary argument was that the "Plaintiffs'

Complaint challenges one action -- the OMB [Directive] -- which

has now been rescinded," and they asserted that the rescission of

the OMB Directive rendered the case moot. They did not attempt to

dispute the Plaintiff-States' evidence or introduce any contrary

evidence of their own.

As to the merits of the APA claims, the Defendants

contended, among other things, that the Plaintiff-States had not

identified any final agency action other than the rescinded OMB

Directive. They also argued that the Plaintiff-States' attempt to

invoke the ICA was unavailing, because that statute did not apply

here and, in any event, was not enforceable under the APA. They

further argued that the Plaintiff-States' claims "rest on

a . . . flawed premise" because the OMB Directive and Executive

Orders "expressly instruct[] agencies to implement a pause only to

the extent permissible by law," and thus do not direct a

"categorical[]" pause "without consideration of whether [such] a

pause is consistent with the underlying legal framework governing

that funding."

At the end of their response in opposition, the

Defendants included the statement: "[p]articularly in light of the

- 22 - extraordinary breadth of Plaintiffs' requested relief, to the

extent the Court issues any injunctive relief, the United States

respectfully requests that such relief be stayed pending the

disposition of any appeal that is authorized, or at a minimum that

such relief be administratively stayed for a period of seven days

to allow the United States to seek an emergency, expedited stay

from the court of appeals if an appeal is authorized." They did

not thereafter file a motion for such a stay with the District

Court or at any point in the proceedings below mention or address

the established test for securing one set forth in Nken v. Holder,

556 U.S. 418 (2009). See Fed. R. App. P. 8(a)(1)(A) ("A party

must ordinarily move first in the district court for . . . a stay

of the judgment or order of a district court pending appeal.").

F.

On February 13, 2025, the day after the Defendants filed

their opposition, the Plaintiff-States filed an Amended Complaint.

It alleged that the challenged "Federal Funding Freeze" violated

the APA, the Constitution, and exceeded the Executive's statutory

authority. It also alleged that the "Federal Funding Freeze [was]

effectuated through EOs, the Unleashing [Guidance], the OMB

Directive, and other agency actions implementing [those orders and

directives] as detailed [in the Amended Complaint]."

The Amended Complaint named eleven additional agencies

and their heads as defendants. It also included additional factual

- 23 - allegations regarding "major funding disruptions" that followed

the issuance of certain Executive Orders that "direct[ed] federal

agencies to review funding recipients in connection with

widespread policy changes" but predated the issuance of the OMB

Directive. Among other things, the Amended Complaint sought as

relief an "injunction preventing the Agency Defendants from

maintaining or reinstating the Federal Funding Freeze, including

through implementation of EOs, such as the Unleashing EO, and

agency actions implementing them."

The Plaintiff-States filed a reply to the Defendants'

opposition to their motion for preliminary injunction the next

day. The Defendants did not request an opportunity to respond to

the Amended Complaint, either in a sur-reply or by filing a new

opposition. That was so even though their opposition to the motion

for the preliminary injunction focused on the Plaintiff-States'

initial complaint and asserted that it targeted only the OMB

Directive itself, which had been rescinded.

On February 21, 2025, the District Court held a hearing

on the preliminary injunction motion. Both parties addressed the

Amended Complaint, but the Defendants did not seek to make any

additional filing or suggest it would be improper for the District

Court to focus on the Amended Complaint in resolving the

preliminary injunction motion.

- 24 - G.

On March 6, 2025, the District Court issued its ruling

on the motion for the preliminary injunction. It granted the

motion.

The District Court reasoned that the OMB Directive's

rescission did not moot the case. The District Court concluded

that, under the "voluntary cessation" doctrine, Lowe v.

Gagné-Holmes, 126 F.4th 747, 756 (1st Cir. 2025), the rescission

"was a clear effort to moot legal challenges to the federal funding

freeze" and that it was "unreasonable to conclude that the

Defendants will not reinstate [the OMB Directive] absent an

injunction." The District Court also reasoned that the

Plaintiff-States' claims were not moot because the challenged

funding freezes continued and because of the additional claims in

the Amended Complaint relating to "the Unleashing Guidance, the

related Unleashing [Executive Order], and the general

implementation of funding freezes based on the President's

EO[s]."11 Winding up its jurisdictional analysis, the District

11 Although the District Court referred to a singular "EO," it later explained -- correctly -- that the Amended Complaint seeks to "enjoin the Agency Defendants from implementing 'the Federal Funding Freeze' 'effectuated through EOs, the Unleashing [Guidance], the OMB Directive, and other agency actions.'" (Emphasis added) (alteration in original). It further explained that the Plaintiff-States' challenge is to "a pause on federal funding that was implemented under not only the OMB Directive, but also . . . the EOs incorporated therein and other agency actions

- 25 - Court determined that the Plaintiff-States had met their burden

with respect to their Article III standing to sue.

The District Court then addressed the Plaintiff-States'

contention that they were likely to succeed on the merits as to

their APA claims. The District Court identified the OMB Directive

and the Agency Defendants' "swift actions to execute the

categorical funding freeze" under the OMB Directive, Unleashing

EO, and Unleashing Guidance as final agency actions. It explained

that those actions "marked the 'consummation of each agency's

decisionmaking process'" (quoting Drs. for Am. v. Off. of Pers.

Mgmt., No. CV 25-322, 2025 WL 452707, at *5 (D.D.C. Feb. 11,

2025)), and that the "abrupt, categorical, and indefinite pause of

obligated federal funds is the direct, appreciable legal

consequence" of those actions.

The District Court also determined that the

Plaintiff-States had demonstrated that they were likely to succeed

in showing that the challenged final agency actions were contrary

to law and arbitrary and capricious. The District Court concluded

that there was sufficient evidence to establish that the Agency

Defendants' funding freezes were categorical in nature,12 and not

such as the OMB's issuance of the Unleashing Guidance." (Emphasis added). The District Court treated the Unleashing EO and Guidance 12

interchangeably at points.

- 26 - individualized assessments of their authority to pause individual

funding streams. In doing so, the District Court referred to the

evidence that the Plaintiff-States had submitted along with their

motion for a preliminary injunction discussing their inability to

access funds in the immediate aftermath of the issuance of the OMB

Directive and the Unleashing EO, as well as communications received

from Agency Defendants regarding the freezing of such funds. Based

on the unrebutted evidence before it, the District Court observed

that any "suggest[ion] that the challenged federal funding freezes

were purely the result of independent agency decisions" was

"disingenuous."

As to the Plaintiff-States' "contrary to law" showing,

the District Court determined that the challenged actions of the

Agency Defendants involved categorical funding determinations that

were likely barred by both the ICA and specific directives in

individual statutes mandating that funds be spent in specific ways.

As to the Plaintiff-States' "arbitrary and capricious" showing,

the District Court determined that the challenged agency actions,

given their breadth and immediacy, were likely not supported by

rational reasons and that the Defendants had failed to consider

meaningfully important aspects of the problem that they sought to

address in taking those actions.

Finally, the District Court concluded both that the

Plaintiff-States had presented "unrebutted evidence" of

- 27 - irreparable harm and that the balance of equities, as well as the

public interest, weighed heavily in favor of the Court granting

preliminary relief. Accordingly, the District Court issued a

preliminary injunction against the Agency Defendants, which

contained the elements described at the outset of this opinion.13

The District Court also denied "Defendants' request to stay this

Order pending appeal to the First Circuit."

H.

The Defendants appealed the District Court's order

granting the preliminary injunction on March 10, 2025. They then

moved for a stay pending appeal, which is the sole motion that we

address here.

II.

Because only the stay motion is before us, we address

only the narrow question of whether the Defendants have met their

burden to show that they are entitled to judicial intervention

that is "not a matter of right," as a stay pending appeal is "an

'intrusion into the ordinary processes of administration and

13In response to a second motion to enforce the TRO filed by the Plaintiff-States on February 28, 2025, in connection with certain Federal Emergency Management Agency ("FEMA") funds, the District Court in the preliminary injunction also directed Defendant FEMA to "file a status report on or before March 14, 2025, informing the Court of the status of [its] compliance with th[e] [preliminary injunction]." The District Court further denied as moot Plaintiff-States' motion to enforce the TRO because the issuance of the preliminary injunction "renders the TRO expired."

- 28 - judicial review.'" Nken, 556 U.S. at 427 (first quoting Virginian

R. Co. v. United States, 272 U.S. 658, 672 (1926); and then quoting

Va. Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921, 925 (D.C. Cir.

1958)). To obtain the stay, the Defendants bear the burden of

satisfying a most familiar test. They must: (1) make a "strong

showing that [they are] likely to succeed on the merits" in their

appeal; (2) show that they "will be irreparably injured absent a

stay"; (3) show that "issuance of the stay will [not] substantially

injure the other parties interested in the proceeding"; and

(4) show that the stay would serve "the public interest." Id. at

434 (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)).

In evaluating whether this burden has been met, we are

mindful that the "first two factors" -- likelihood of success and

irreparable injury -- "are the most critical." Id. We also

emphasize that addressing interlocutory motions on a "tight

timeline" is "not always optimal for orderly judicial

decisionmaking," Labrador v. Poe, 144 S. Ct. 921, 930 (2024)

(Kavanaugh, J., concurring in the grant of stay), and that,

especially in those circumstances, we "rely on the parties to frame

the issues for decision," Greenlaw v. United States, 554 U.S. 237,

243 (2008). We note, too, that a district court's decision to

grant a preliminary injunction is reviewed for abuse of discretion.

Ryan v. U.S. Immigr. & Customs Enf't, 974 F.3d 9, 18 (1st Cir.

2020).

- 29 - Finally, we make two clarifying observations about the

analysis that follows. First, we proceed on the understanding

that the Defendants seek to stay the injunction in its entirety,

notwithstanding their expressed choice to develop no argument in

their stay motion that they are likely to succeed in showing that

the District Court's analysis of the OMB Directive was mistaken.

Second, after considering the parties' positions, we understand

the scope of the District Court's preliminary injunction to operate

on freezes that were implemented: (1) pursuant to the Unleashing

EO and Guidance, the OMB Directive itself, or the other EOs

referenced in the OMB Directive; and (2) regardless of whether the

freezes began before the OMB Directive's issuance on January 27,

2025.

We begin with the Defendants' arguments regarding the

first Nken factor -- which requires that they make a "strong

showing" that they are likely to succeed on the merits in their

appeal. Nken, 556 U.S. at 434 (quoting Hilton, 481 U.S. at 776).

We conclude that the Defendants have not made that showing.

1.

A central line of the Defendants' challenge is that the

preliminary injunction appears "[i]n the guise of litigation under

the" APA but is in fact "unmoored from any specific agency

- 30 - action."14 They assert that the Plaintiff-States have "leveraged

their challenge to" the rescinded OMB Directive into "broad-based

relief against innumerable funding decisions at twenty-three

federal agencies" and that "such broad-based APA challenges" are

impermissible. As support, the Defendants cite to the Supreme

Court's decision in Norton v. Southern Utah Wilderness Alliance,

542 U.S. 55, 64 (2004), and contend that "[i]t is black-letter law

that cases under the APA must challenge discrete agency actions

and may not level a 'broad programmatic attack,'" (quoting Norton,

542 U.S. at 64). The thrust of this line of argument thus appears

to be that the preliminary injunction rests on a broad programmatic

attack rather than on challenges to discrete final agency actions.

Norton does make clear that the APA permits review of

only discrete final agency actions and "precludes the kind of broad

programmatic attack [the Supreme Court] rejected in Lujan v.

14 As to the merits of the APA claims themselves, the Defendants only argue that the District Court erred in relying on the Impoundment Control Act ("ICA"), 2 U.S.C. §§ 681-692. The District Court, however, separately determined that the Agency Defendants' actions violated the APA by virtue of having been arbitrary and capricious -- a determination that does not in any part rely on the ICA. The Defendants fail to challenge that determination in their stay motion, thus leaving that independent ground for issuing the preliminary injunction unchallenged before us. See Wadsworth v. Nguyen, 129 F.4th 38, 52 (1st Cir. 2025) (concluding that an appellate claim must fail where only one part of a two-part test was challenged on appeal); cf. United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) ("[I]ssues adverted to in a perfunctory manner, unaccompanied by some effort at developed argumentation, are deemed waived."). Accordingly, we need not address the Defendants' contentions regarding the ICA.

- 31 - National Wildlife Federation, 497 U.S. 871 (1990)." 542 U.S. at

64. Norton explains, however, that the "broad programmatic attack"

at issue in Lujan was an attempt to seek "wholesale" "programmatic

improvements" "by court decree" by "couch[ing]" "[the Bureau of

Land Management's] land withdrawal review program" as an "unlawful

agency 'action'" that should be "'set aside' under § 706(2)" of

the APA. Id. (emphasis omitted) (quoting Lujan, 497 U.S. at 891,

879). Because "the program was not [itself] an 'agency action,'"

Norton explained, the Court in Lujan rejected the plaintiff's

challenge to it. Id. (quoting 5 U.S.C. § 706(2)).

Indeed, Lujan concluded that the "program" challenged

there was "simply the name by which [the government] ha[d]

occasionally referred to the continuing (and thus constantly

changing) operations of the [Bureau of Land Management] in

reviewing withdrawal revocation applications and the

classifications of public lands and developing land use plans as

required" under federal law. 497 U.S. at 890 (emphasis added).

Lujan observed that, in styling the challenge as against the

"program," the plaintiff there was in fact challenging a variety

of programmatic deficiencies that it claimed were unlawful for

varied reasons. Id. at 891. But the APA, Lujan explained, does

not "permit[] a generic challenge to all aspects of" a program,

"as though that itself constituted a final agency action." Id. at

890 n.2.

- 32 - The District Court determined here, by contrast, that

the Plaintiff-States' APA claims do challenge discrete final

agency actions. To be sure, those claims, like the motion for the

preliminary injunction, describe those actions, collectively, as

the "Federal Funding Freeze." The District Court at points uses

that nomenclature as well. But the claims themselves, like the

motion, assert that the discrete final agency actions are the

decisions by the Agency Defendants to implement broad, categorical

freezes on obligated funds.

It is also clear that the District Court determined that

the discrete challenged agency actions were "final." The District

Court did so based on its assessment that these actions satisfied

the test set forth in Bennett v. Spear, 520 U.S. 154, 177-78 (1997)

(holding that agency actions will be deemed final where the

challenged action (1) "mark[s] the 'consummation' of the agency's

decisionmaking process" and (2) is an action "by which 'rights or

obligations have been determined,' or from which 'legal

consequences will flow'" (first quoting Chi. & S. Air Lines, Inc.

v. Waterman S.S. Corp., 333 U.S. 103, 113 (1948); and then quoting

Port of Bos. Marine Terminal Ass'n v. Rederiaktiebolaget

Transatlantic, 400 U.S. 62, 71 (1970))).

The stay motion does not address those findings by the

District Court or, for that matter, Lujan itself. That is so even

though Lujan recognized that "[i]f . . . in fact some specific

- 33 - order or regulation[] appl[ied] some particular measure across the

board to all individual classification terminations and withdrawal

revocations, and . . . that order or regulation is final . . . it

can of course be challenged under the APA." 497 U.S. at 890 n.2;

see also Hisp. Affs. Project v. Acosta, 901 F.3d 378, 388 (D.C.

Cir. 2018) (applying that statement in Lujan and holding that the

plaintiffs' APA challenge to the Department of Homeland Security's

administration of the H-2A visa program was not impermissibly

programmatic in nature because the plaintiffs were challenging an

across-the-board agency practice in violation of a statutory

command). The stay motion instead makes the conclusory, implicit

assertion, based on a passage in Norton concerning a holding in

Lujan, that no such discrete final agency actions were identified

to support the preliminary injunction. And the Defendants do not

develop any independent argument as to why the challenged agency

actions, if discrete, do not satisfy the Bennett test for finality.

We therefore do not see how the Defendants have met their burden

of making a "strong showing," Nken, 556 U.S. at 434 (quoting

Hilton, 481 U.S. at 776), that the injunction was based on a "broad

programmatic attack" of the type Norton had in mind, 542 U.S. at

64.

Elsewhere in their stay motion, and more clearly in their

reply, the Defendants offer a variation on the same theme. They

assert that the Plaintiff-States challenge "unidentified past

- 34 - funding decisions across thousands of programs and an untold number

of hypothetical future funding decisions." They contend that such

a challenge "runs squarely into the APA's limitation on leveling

a 'broad programmatic attack' rather than seeking review of

discrete agency actions."

To the extent that this argument is distinct from the

one discussed above, we are not aware of any supporting authority

for the proposition that the APA bars a plaintiff from challenging

a number of discrete final agency actions all at once. Nor do the

movants identify any such precedent.

The Defendants do assert in their reply that the

Plaintiff-States' opposition to their motion for a stay does not

identify "specific agency actions other than the rescinded OMB

[Directive]" and that "most of the agencies that are now subject

to the injunction are not mentioned in [Plaintiff-States']

opposition at all." The Defendants are the movants, however.

Their contention about deficiencies in an opposition to their

motion thus cannot itself constitute a strong showing that they

are likely to succeed in challenging the preliminary injunction

itself. See Nken, 556 U.S. at 433-34 (burden to show that "the

circumstances justify" a stay is on the party seeking such relief).

In any event, the Plaintiff-States' opposition does

identify specific agency actions. The Plaintiff-States make clear

that they challenge the Agency Defendants' "actions -- following

- 35 - the executive orders and [OMB] Directive -- to implement

categorical funding freezes without regard and contrary to legal

authority." The Defendants' contention about the deficiencies in

the Plaintiff-States' opposition to the stay motion also must be

considered in light of the fact that, as we have already explained,

the stay motion does not address the District Court's findings

regarding the final agency actions that undergird the preliminary

injunctive relief.

Indeed, the record before the District Court included

numerous notices and emails authored by Agency Defendants that

support the finding that their funding freezes were categorical in

nature, rather than being based on "individualized assessments of

their statutory authorities and relevant grant terms." The

Plaintiff-States also attached numerous declarations describing

pauses, freezes, and sudden terminations of obligated funds that

suggested that these actions were taken pursuant to such

categorical decisions. And we note as well the familiar

proposition that, in reviewing the record, a court is "not required

to exhibit a naiveté from which ordinary citizens are free." Dep't

of Com. v. New York, 588 U.S. 752, 785 (2019) (quoting United

States v. Stanchich, 550 F.2d 1294, 1300 (2d Cir. 1977) (Friendly,

J.)); see also, e.g., Nat'l Council of Nonprofits v. Off. of Mgmt.

& Budget, No. 1:25-cv-00239, 2025 WL 597959, at *7 (D.D.C. Feb.

25, 2025) (rejecting the contention that "countless federal

- 36 - agencies . . . suddenly began exercising their own discretion to

suspend funding across the board at the exact same time" because

it requires "unfathomable" "coincidental assumptions" and

"contradicts the record").

For these reasons, we see no basis for concluding that

the Defendants have made a strong showing as to their likelihood

of success on appeal insofar as they aim to demonstrate that there

is no final agency action to support the entirety of the

injunction. This ground for satisfying the first Nken factor

therefore fails.

2.

The Defendants separately argue that because the

District Court "fail[ed] to limit its injunction to the few

statutory schemes that it concluded were nondiscretionary," it

"enjoin[ed] broad swaths of lawful conduct."15 The Defendants

emphasize that "many federal funding programs and instruments

provide the Executive with discretion to suspend or terminate

funding that the Executive determines is inconsistent with the

national interest." They also observe that the District Court

found that the OMB Directive was implemented in a way that violated

In the stay motion, the Defendants argue that the District 15

Court's TRO "essentially acknowledged as much." We note, however, that the TRO merely questioned whether there "might be" "some aspects" of implementations of the OMB Directive that could be "legal and appropriate constitutionally for the Executive to take."

- 37 - statutes that require the disbursement of funding in only "a

handful of cases." Because the District Court did not limit its

injunction to the implementation of the OMB Directive to funding

streams under those statutes, they contend, the District Court

enjoined lawful behavior. As the Defendants at one point put it,

the District Court erred in "enter[ing] a sweeping injunction that

was not tethered to the supposed flaws in the OMB [Directive], but

instead broadly and unjustifiably prohibited actions based on

other Executive Orders or directives."

The District Court found, however, that the

"suggest[ion] that the challenged federal funding freezes were

purely the result of independent agency decisions rather than the

OMB Directive or the Unleashing Guidance . . . [was]

disingenuous." (Emphasis omitted). And the District Court

explicitly rejected the Defendants' "claim that the [OMB]

Directive and the [Executive Orders] required the agencies to pause

funding and impose restriction[s] on obligated funds consistent

with the law." The District Court did so, moreover, because it

found that the "undisputed evidence before [it] [wa]s that adding

the 'consistent with the law' caveat was nothing more than window

dressing on an unconstitutional directive by the Executive."

The District Court further found that "[t]he OMB

Directive essentially ordered agencies to effectuate the blanket

pause and then decide later which funding streams they actually

- 38 - had lawful authority to withhold," given "the mere twenty-four

hours" that the OMB Directive gave agencies to "discern" which

funding streams must be paused. It found, too, that the Unleashing

EO and Unleashing Guidance, in particular, "instruct[ed] that

agencies immediately pause disbursements of funds under the IRA or

IIJA and d[id] not even attempt to allow for agency discretion."

The stay motion does not meaningfully engage with this

aspect of the District Court's analysis. That is so even though

the analysis rests on the District Court's view of the record

considered as a whole and resulted in its conclusion that the final

agency actions at issue -- the funding freezes by each of the

Agency Defendants -- violated the APA because they were either

contrary to law or arbitrary and capricious or both.

Moreover, the record contains evidence that the

Plaintiff-States submitted to show that categorical freezes were

undertaken pursuant to directives in Executive Orders referenced

in the OMB Directive other than the Unleashing EO. Yet, despite

bearing a "strong showing" burden under Nken's first factor, the

Defendants make no clear or developed argument to us that the

District Court abused its discretion in relying on that record to

apply the preliminary injunction to such freezes. We thus conclude

that, as to this aspect of their motion for the stay, the

Defendants also have failed to make a strong showing of their

- 39 - likelihood of success. See United States v. Zannino, 895 F.2d 1,

17 (1st Cir. 1990).

Accordingly, the Defendants' repeated assertions that

the OMB Directive and Executive Orders solely directed agencies to

pause funding "to the extent permitted by law" fail to show that

the movants have a strong likelihood of success on appeal as to

the merits of the Plaintiff-States' APA claims. So, this ground

for satisfying the first Nken factor also is without merit.16

3.

The Defendants' final argument as to the first Nken

factor is that "the preliminary injunction . . . operates to

interfere with the President's authority to supervise federal

agencies by providing policy direction in the exercise of each

agency's authorities" because it "appears to demand that, in

exercising their discretionary authority, agencies should not take

policy direction from the President." The contention is that this

16 The Defendants also argue that the preliminary injunction is "unclear" as to whether it permits agencies to make funding decisions based on Executive priorities when they have legal authority to do so. But the preliminary injunction clearly refers to a "categorical pause or freeze of funding," which, by its terms, could not apply to a pause or freeze based on an individualized determination under an agency's actual authority to pause such funds. Consistent with this understanding, the District Court explained in its opinion that the preliminary injunction "does not prevent the [Government] from making funding decisions in situations under the Executive's actual authority in the applicable statutory, regulatory, or grant terms." (Internal quotation marks omitted).

- 40 - feature of the preliminary injunction "cannot be squared with

Article II" of the Constitution, which grants the President

"authority to exercise 'general administrative control of those

executing the laws, throughout the Executive Branch of government,

of which he is the head.'" (Quoting Bldg. & Constr. Trades Dep't.,

AFL-CIO v. Allbaugh, 295 F.3d 28, 32 (D.C. Cir. 2002)).

To be clear, the argument is not that the President has

Article II authority to order a funding pause in contravention of

a statutory directive precluding such a pause. We understand the

argument to be only that the District Court has interfered with

the Agency Defendants' ability to lawfully carry out the

President's directives.17 Indeed, the stay motion argues that the

preliminary injunction interferes with the Executive's authority

because the "President's Executive Orders are plainly lawful."

And the stay motion rests this argument on the view that the

"Executive Orders . . . simply direct federal agencies to pause or

terminate federal funding programs that may not accord with the

President's priorities where such action is consistent with

applicable law."

17The Defendants also note, without further argument, that "the President's directions to subordinates" are not "themselves reviewable under the APA" because the "President is not an 'agency' within the meaning of th[at] statute." (Quoting Franklin v. Massachusetts, 505 U.S. 788, 800-01 (1992)). But the District Court did not review the President's actions for consistency with the APA. Rather, it reviewed -- and ultimately enjoined -- the Agency Defendants' actions under the Executive Orders.

- 41 - As we have already noted, however, the stay motion does

not meaningfully address the District Court's findings as to the

Agency Defendants having adopted categorical funding freezes.

Therefore, the Defendants have not demonstrated that they have a

likelihood of success in demonstrating that the injunction reaches

lawful conduct. It follows that they have not made a strong

showing that they are likely to succeed in defending what on their

own account is a necessary premise of their Article II-based

argument. We therefore conclude that the Defendants cannot rely

on their Article II-based argument to satisfy their burden with

respect to the first Nken factor.

The remaining three Nken factors require the movants to

show that they "will be irreparably injured absent a stay," that

"issuance of the stay will [not] substantially injure the other

parties interested in the proceeding," and that the stay would be

in "the public interest." 556 U.S. at 434 (quoting Hilton, 481

U.S. at 776). The movants have not done so.

The Defendants advance two arguments as to the second

Nken factor, which concerns their irreparable harm absent a stay.

As we noted at the outset of our substantive analysis, this factor,

along with the likelihood of success factor, is one of the two

"most critical" factors under the Nken test. Id.

- 42 - The first contention is that the preliminary injunction

"interferes with agencies' ability to exercise their lawful

authorities to implement the President's policy directives." It

further asserts that the preliminary injunction "undermines the

President's unquestioned Article II authority to direct

subordinate agencies how to exercise their own authorities, giving

rise to an intolerable intrusion on the prerogatives of the

Executive Branch."

The District Court's order granting the preliminary

injunction does not bar all freezes in funding, however. It

instead enjoins the discrete final agency actions to adopt the

broad, categorical freezes challenged here. This argument thus

suffers from the same flaw as the Article II-based argument as to

the first Nken factor, as it rests on the same undefended premise

about the lawfulness of the enjoined agency actions as that

argument does.

Relatedly, the Defendants assert that the injunction

includes "multiple vague instructions" and so "invites the

[D]istrict [C]ourt to engage in precisely the sort of

'preclearance' regime that led the government to appeal the

[District Court's TRO], and which the [D]istrict [C]ourt purported

to disclaim." This type of separation-of-powers harm, the argument

goes, "itself reflects irreparable injury."

- 43 - For starters, no "preclearance" language appears in the

preliminary injunction itself, a fact that the Defendants appear

to acknowledge in their reply. The Defendants also acknowledge

that the District Court has previously clarified that it had

imposed no such requirement in enjoining the Agency Defendants,

via its TRO or order granting the Plaintiff-States' motion to

enforce, from taking specific funding actions.

We also cannot agree that the Defendants have made the

case that the preliminary injunction is vague as to the OMB

Directive or funding freezes pursuant to it. The Defendants take

issue with the District Court's injunction against their

"'implementing' or 'giving effect to' the OMB [Directive] 'under

a different name,'" contending that this lacks the detail necessary

for compliance. But Rule 65 requires injunctions to "describe in

reasonable detail -- and not by referring to the complaint or other

document -- the act or acts restrained or required." Fed. R. Civ.

P. 65(d)(1)(C) (emphasis added). It does not "require that an

order list the components of a term whose boundaries are understood

by common parlance." United States v. Pro. Air Traffic Controllers

Org. (PATCO), PATCO Local 202, 678 F.2d 1, 3 (1st Cir. 1982). And

the Defendants do not identify any particular action with respect

to which they are unclear about the reach of this portion of the

injunction.

- 44 - Insofar as the Defendants contend that the injunction is

vague because it enjoins them from "pausing funds as 'described'

or 'implied by' the President's Executive Orders," we also do not

agree. The order granting the preliminary injunction plainly

enjoins the Agency Defendants from maintaining categorical

"funding freezes" based on the identified Executive Orders. And,

as we have explained, "funding freezes" are "categorical" freezes

on obligated funds. Given that the Defendants are in the best

position to know the basis for any freezing decisions, we do not

see -- nor do the Defendants explain -- why this instruction does

not provide them with "reasonable detail" of the "acts restrained."

Fed. R. Civ. P. 65(d)(1)(C); see also 11A Charles Alan Wright &

Arthur R. Miller, Federal Practice and Procedure § 2955 (3d ed.

2024) ("[T]he issuance of a nonspecific injunction or restraining

order may be justified. . . . when the information needed to make

the order specific in form is known only to the party to be

enjoined." (footnotes omitted)); see also M.G. ex rel. Garcia v.

Armijo, 117 F.4th 1230, 1249-51 (10th Cir. 2024) (explaining how

an injunction's form may depend on "information[al]

asymmetr[ies]").

That leaves, as to the second Nken factor, only the

argument that the Defendants face irreparable pecuniary harm

absent a stay. Here, they argue that "[i]f the government's

position is later vindicated at the conclusion of the litigation,

- 45 - there would be no guarantee that funds that the government

obligated or disbursed pursuant to the [preliminary injunction]

would be retrievable from the States or their subgrantees after

the fact."

The Defendants devote only the single sentence mentioned

above to making this argument in their stay motion, and they

identify no authority and offer no reasoning suggesting that this

would be the case here. Because the Defendants bear the burden of

demonstrating that they "will be irreparably injured absent a

stay," Nken, 556 U.S. at 434 (emphasis added) (quoting Hilton, 481

U.S. at 776), we cannot see how their speculative and conclusory

statement suffices.

We note that the Defendants rely entirely on these same

contentions to satisfy the fourth Nken factor -- whether a stay

would be in the public interest. Id. So, they have failed to

satisfy their burden as to that factor as well. That leaves to

address the Defendants' arguments about the third Nken

factor -- whether the "issuance of the stay will substantially

injure the other parties interested in the proceeding." Id.

As to the third Nken factor, the Defendants first contend

that the Plaintiff-States "have no cognizable interest in

receiving federal funds to which they are not legally entitled or

on a timeline that is not legally compelled." This contention,

- 46 - however, just repackages the arguments as to the first Nken factor

that we rejected above. And while the Defendants cite Citizens to

Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 415 (1971),

for the proposition that "reviewing courts owe agency actions a

'presumption of regularity,'" Overton Park did not hold that a

court addressing a motion for a stay pending appeal of a lower

court's injunction should presume the lawfulness of the enjoined

conduct in assessing the harm to "the other parties interested in

the proceeding" under the third Nken factor. Nken, 556 U.S. at

434 (quoting Hilton, 481 U.S. at 776). Indeed, Overton Park

affirmatively stated that the "presumption [of regularity] is not

to shield [agency] action from a thorough, probing, in-depth

review." 401 U.S. at 415.

The Defendants separately urge us to disregard the harms

that the Plaintiff-States' residents would suffer, because "States

cannot invoke harms on behalf of their citizens in actions against

the federal government." The Defendants cite Haaland v. Brackeen,

599 U.S. 255, 294-95 (2023), as support for that proposition.

Brackeen did not hold, however, that residents of a state

may not be counted among "the other parties interested in this

proceeding" under the third Nken factor when that state obtained

the injunction that is sought to be stayed. It held only that

"[a] State does not have [Article III] standing as parens patriae

to bring an action against the Federal Government." Id. at 295

- 47 - (quoting Alfred L. Snapp & Son, Inc. v. Puerto Rico ex rel. Barez,

458 U.S. 592, 610 n.16 (1982)).

Even if we were to set aside the harms to the

Plaintiff-States' residents, the District Court still found a

number of harms that the Plaintiff-States themselves would

irreparably suffer. These harms included the obligation of new

debt; the inability to pay existing debt; impediments to planning,

hiring, and operations; and disruptions to research projects by

state universities. And the Defendants do not contend that these

harms are not "substantial" or "irreparable," except by asserting

that "[the Plaintiff-States] will receive any funds that agencies

are legally obligated to disburse." But without supporting

explanations for how and when the Plaintiff-States could recoup

those funds, the movants have not met their burden to show that

the third Nken factor weighs in favor of a stay.

III.

For the foregoing reasons, we deny the motion for a stay

pending appeal of the District Court's preliminary injunction.

- 48 -