United States Court of Appeals For the First Circuit
No. 25-1477
STATE OF RHODE ISLAND; STATE OF NEW YORK; STATE OF HAWAI'I; STATE OF ARIZONA; STATE OF CALIFORNIA; STATE OF COLORADO; STATE OF CONNECTICUT; STATE OF DELAWARE; STATE OF ILLINOIS; STATE OF MAINE; STATE OF MARYLAND; COMMONWEALTH OF MASSACHUSETTS; PEOPLE OF THE STATE OF MICHIGAN; STATE OF MINNESOTA; STATE OF NEVADA; STATE OF NEW JERSEY; STATE OF NEW MEXICO; STATE OF OREGON; STATE OF VERMONT; STATE OF WASHINGTON; STATE OF WISCONSIN, Plaintiffs, Appellees,
v.
DONALD J. TRUMP, in his official capacity as President of the United States; INSTITUTE OF MUSEUM AND LIBRARY SERVICES; KEITH E. SONDERLING, in his official capacity as Acting Director of the Institute of Museum and Library Services; MINORITY BUSINESS DEVELOPMENT AGENCY; MADIHA D. LATIF, in her official capacity as Deputy Under Secretary of Commerce for Minority Business Development; HOWARD LUTNICK, in his official capacity as Secretary of Commerce; FEDERAL MEDIATION AND CONCILIATION SERVICE; GREGORY GOLDSTEIN, in his official capacity as Acting Director of the Federal Mediation and Conciliation Service; U.S. OFFICE OF MANAGEMENT AND BUDGET; RUSSELL T. VOUGHT, in his official capacity as Director of the Office of Management and Budget, 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, Kayatta and Rikelman, Circuit Judges. Brett A. Shumate, Assistant Attorney General, Yaakov M. Roth, Acting Assistant Attorney General, Sara Miron Bloom, Acting United States Attorney, Eric D. McArthur, Deputy Assistant Attorney General, Mark R. Freeman, Gerard Sinzdak, Simon G. Jerome, Attorneys, Appellate Staff Civil Division, U.S. Department of Justice, on brief for appellants. Peter F. Neronha, Attorney General of Rhode Island, Kathryn M. Sabatini, Chief, Civil Division, Special Assistant Attorney General, Katherine Connolly Sadeck, Solicitor General, Keith D. Hoffmann, Chief of Policy, Assistant Attorney General, Natalya A. Buckler, Assistant Attorney General, Paul Meosky, Special Assistant Attorney General, Anne E. Lopez, Attorney General of Hawai'i, David D. Day, Special Assistant to the Attorney General, Kalikoʻonālani D. Fernandes, Solicitor General, Letitia James, Attorney General of New York, Barbara D. Underwood, Solicitor General, Ester Murdukhayeva, Deputy Solicitor General, Kartik Naram, Assistant Solicitor General, Kristin K. Mayes, Attorney General of Arizona, Syreeta A. Tyrell, Assistant Attorney General, Rob Bonta, Attorney General of California, Jay C. Russell, Deputy Attorney General, Thomas S. Patterson, Senior Assistant Attorney General, Anya M. Binsacca, Supervising Deputy Attorney General, Zelda Vassar, Deputy Attorney General, Philip J. Weiser, Attorney General of Colorado, David Moskowitz, Deputy Solicitor General, William Tong, Attorney General of Connecticut, Ashley Meskill, Assistant Attorney General, Kathleen Jennings, Attorney General of Delaware, Ian R. Liston, Director of Impact Litigation, Vanessa L. Kassab, Deputy Attorney General, Kwame Raoul, Attorney General of Illinois, Holly F.B. Berlin, Assistant Attorney General, Aaron M. Frey, Attorney General of Maine, Vivian A. Mikhail, Deputy Attorney General, Anthony G. Brown, Attorney General of Maryland, Julia Doyle, Solicitor General, Keith M. Jamieson, Assistant Attorney General, Andrea Joy Campbell, Attorney General of Massachusetts, Katherine Dirks, Chief State Trial Counsel, Dana Nessel, Attorney General for the People of Michigan, Neil Giovanatti, BreAnna Listermann, Assistant Attorneys General, Keith Ellison, Attorney General of Minnesota, Jacob Harris, Assistant Attorney General, Aaron D. Ford, Attorney General of Nevada, Heidi Parry Stern, Solicitor General, Matthew J. Platkin, Attorney General of New Jersey, Joshua Bohn, Max Lesser, Deputy Attorneys General, Raúl Torrez, Attorney General of New Mexico, Anjana Samant, Deputy Counsel for Impact Litigation, Dan Rayfield, Attorney General of Oregon, Brian Simmonds Marshall, Senior Assistant Attorney General, Charity R. Clark, Attorney General of Vermont, Ryan P. Kane, Deputy Solicitor General, Nicholas W. Brown, Attorney General of Washington, Kate S. Worthington, Sarah E. Smith-Levy, Assistant Attorneys General, Joshua L. Kaul, Attorney General of Wisconsin, Colin T. Roth, Assistant Attorney General, on brief for appellees.
September 11, 2025 BARRON, Chief Judge. On May 13, 2025, the United States
District Court for the District of Rhode Island issued a
preliminary injunction in response to a suit by twenty-one states.
The suit challenges actions by various federal agencies and the
officials who head them (collectively, the "agency defendants") to
implement Executive Order 14,238, Continuing the Reduction of the
Federal Bureaucracy (the "EO"), 90 Fed. Reg. 13043. The President
of the United States issued the EO on March 14, 2025. The EO,
among other things, in Section 2 directs federal officials to
"eliminate[]" "the non-statutory components and functions" of
several specified federal agencies and "reduce" their "statutory
functions and associated personnel to the minimum presence and
function required by law." Id.
The relevant agencies in this suit are the Institute of
Museum and Library Services (IMLS), the Minority Business
Development Agency (MBDA), and the Federal Mediation and
Conciliation Service (FMCS). See id. IMLS supports museums and
libraries across the United States by disbursing federal funds and
providing technical assistance. See 20 U.S.C. §§ 9121-9165,
9171-9176. MBDA provides various forms of assistance to support
the growth of "minority-owned business" in the United States. See
15 U.S.C. §§ 9511-9526. FMCS is tasked with using conciliation
and mediation to assist in the resolution of labor disputes in
industries affecting commerce. See 29 U.S.C. § 173(a). All three
- 4 - agencies were established by Congress and continue to receive
annual appropriations from Congress. See Full-Year Continuing
Appropriations and Extensions Act, 2025, Pub. L. No. 119-4,
§ 1101(a)(2), (8), 139 Stat. 9, 10-11 (2025).
The agency defendants and the President request a stay
pending appeal of the District Court's preliminary injunction.
The motion to stay the preliminary injunction is denied.
I.
The plaintiffs' complaint alleges that, in response to
the EO, the agency defendants fired, placed on administrative
leave, or reassigned all or almost all employees in the three
agencies. It further alleges that the agency defendants cancelled
a broad array of grants that the agencies had made. The complaint
alleges that the firing, placing on leave, and reassigning of
employees have already resulted in and will continue to result in
the plaintiffs not receiving services from the three agencies,
including research and data collection, strategic guidance,
administrative support, and training and mediation services. The
complaint alleges that the grant terminations -- both those that
the plaintiffs alleged already had occurred and those that the
plaintiffs alleged would occur -- would require the plaintiffs to
terminate their own employees whose salaries are funded by those
grants, to cancel programming and services to the public, and to
default on contracts with outside service providers.
- 5 - The complaint sets forth claims that the challenged
actions of the agency defendants are in violation of the
Administrative Procedure Act (APA), 5 U.S.C. § 706(2), as well as
various constitutional provisions. The complaint also pleads an
"equitable ultra vires" claim alleging that the challenged actions
"are contrary to law and outside of [the agency defendants']
authority."
On the same day that the plaintiffs filed the complaint,
they moved for a temporary restraining order. The motion was
later converted by stipulation of the parties to a motion for a
preliminary injunction. The District Court granted the motion on
May 6, 2025, and on May 13, 2025, after receiving input from the
parties about the scope of its order granting the motion, issued
a preliminary injunction.
The District Court found that, in consequence of the
grants having been terminated, the plaintiffs and their agencies
have already had to and would continue to have to "diminish" or
"halt services," implement hiring freezes, "deny payments for
contracted services," and "initiate layoffs." Indeed, it credited
the representations of at least one plaintiff that one of its
Business Centers "will close due to the termination" of its MBDA
grant.
The District Court also found that in consequence of the
reduction in capacity at each of the agencies, the plaintiffs would
- 6 - lose access to critical information needed to carry out their
community programming, and had been and would continue to be harmed
by FMCS's inability to provide conciliation and mediation services
on which plaintiffs rely to resolve public sector labor disputes.
In addition, the District Court determined that, given the
statutory basis for the agencies' responsibilities and the record
as to why the actions resulting in the grant terminations and
staffing reductions were taken, those actions were likely in
violation of the APA and the Constitution.
The preliminary injunction enjoins the agency defendants
from "implementing Section 2 of the [EO] as to IMLS, MBDA, and
FMCS." It also orders those parties to "take all necessary steps
to reverse any policies, memoranda, directives, or actions issued
before [the preliminary injunction] that were designed or
intended, in whole or in part, to implement, give effect to, comply
with, or carry out the directives contained in [the EO] with
respect to IMLS, MBDA, or FMCS."
The preliminary injunction provides that the agency
defendants "shall not take any further actions to eliminate IMLS,
MBDA, and FMCS pursuant to [the EO]." The District Court's
preliminary injunction expressly provides, however, that it should
not be construed "to preclude the Agency Defendants from taking
actions that would improve Agency efficiency or reduce the size or
scope of the Agency Defendants as long as (a) the Agency Defendant
- 7 - provides a reasoned explanation for such action, and (b) the action
will not prevent the Agency Defendant from fulfilling any of their
statutory obligations."
defendants must "restore all IMLS, MBDA, and FMCS employees and
personal service contractors, who were involuntarily placed on
leave or involuntarily terminated due to the implementation of
[the EO], to their status before March 14, 2025," although it made
explicit that "[n]othing in [the preliminary injunction] precludes
the Agency Defendants from making personnel decisions that are not
related to or motivated by [the EO]." The preliminary injunction
also provides that the agency defendants are prohibited from
"further paus[ing], cancel[ing], or otherwise terminat[ing] IMLS
or MBDA grants or contracts or fail[ing] to disburse funds to
recipients in plaintiff States according to such grants or
contracts for reasons other than the grantees or contractors'
non-compliances with applicable grant or contract terms."
Finally, the preliminary injunction requires the agency defendants
to "take immediate steps to resume the processing, disbursement,
and payment of already-awarded funding, and to release awarded
funds previously withheld or rendered inaccessible due to or in
reliance on Section 2 of the [EO] with respect to recipients in
plaintiff States."
- 8 - The District Court required the agency defendants to
file a status report within seven days of the preliminary
injunction confirming their compliance with the order issuing the
preliminary injunction or providing reasons for any
non-compliance. The agency defendants and the President
(collectively, the appellants) filed a notice of appeal. They
also requested that the District Court stay the preliminary
injunction pending resolution of the appeal. The District Court
denied the request. The appellants subsequently moved for a stay
of the preliminary injunction in this Court. In this opinion, we
address only the stay motion.
II.
A stay pending appeal is an "intrusion into the ordinary
processes of administration and judicial review" and relief is not
granted as "a matter of right." New York v. Trump, 133 F.4th 51,
65 (1st Cir. 2025) (quoting Nken v. Holder, 556 U.S. 418, 427
(2009)). Accordingly, the appellants bear the burden of
demonstrating that they are entitled to the "extraordinary" relief
that they seek. Somerville Pub. Schs. v. McMahon, 139 F.4th 63,
68 (1st Cir. 2025).
We are guided by the now-familiar four factors set forth
in Nken:
(1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be
- 9 - irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies.
556 U.S. at 434 (quoting Hilton v. Braunskill, 481 U.S. 770, 776
(1987)). The first two factors are "the most critical." Id.
"[W]e 'rely on the parties to frame the issues for decision.'"
New York, 133 F.4th at 66 (quoting Greenlaw v. United States, 554
U.S. 237, 243 (2008)).
Before turning directly to the parties' arguments, we
note that in Trump v. Boyle, 145 S. Ct. 2653 (2025), the Supreme
Court of the United States explained that, although its "interim
orders are not conclusive as to the merits, they inform how a court
should exercise its equitable discretion in like cases." Id. at
2654. We note, too, that the Court has recently granted a stay
in McMahon v. New York, 145 S. Ct. 2643 (2025) (mem.), which
involved a preliminary injunction concerning an agency's decision
to initiate large-scale employee terminations, and a partial stay
in National Institutes of Health v. American Public Health
Association, No. 25A103, 2025 WL 2415669 (U.S. Aug. 21, 2025) (per
curiam), which involved an order that "vacat[ed] the Government's
termination of various research-related grants," id. at *1. We
make the following observations up front about the potential
bearing of the orders in those cases on our resolution of the stay
request here.
- 10 - A.
The Court's order in McMahon followed our own decision
rejecting a request to stay the injunction in that case. See
Somerville Pub. Schs., 139 F.4th 63. There, we addressed a variety
of grounds that the appellants in that case -- the U.S. Department
of Education ("DOE") and the Secretary of DOE, as well as the
President -- had advanced as to why they were likely to succeed on
the merits in their appeal of the preliminary injunction and why
the equitable factors for securing a stay favored them.
We held that the appellants had failed to make the
requisite "strong showing," Nken, 556 U.S. at 434, that they were
likely to succeed on the merits of their appeal. Somerville Pub.
Schs., 139 F.4th at 76. We further concluded that the equitable
factors did not favor the appellants, in part because they had not
met their burden with respect to their likelihood of success on
the merits. Id.
Following our denial of the stay request in McMahon, the
appellants in that case moved for a stay in the Supreme Court.
That stay request was pending in the Supreme Court while the stay
request in this case was pending in our Court. After the Supreme
Court in McMahon requested a response from the plaintiffs to
appellants' pending stay request, we decided to hold the stay
request in this case in abeyance, given the possible relevance of
the Supreme Court's resolution of the stay request in McMahon.
- 11 - The Supreme Court's order to grant the stay in McMahon
states in full:
The application for stay presented to JUSTICE JACKSON and by her referred to the Court is granted. The May 22, 2025 preliminary injunction entered by the United States District Court for the District of Massachusetts, case No. 1:25-cv-10601, is stayed pending the disposition of the appeal in the United States Court of Appeals for the First Circuit and disposition of a petition for a writ of certiorari, if such a writ is timely sought. Should certiorari be denied, this stay shall terminate automatically. In the event certiorari is granted, the stay shall terminate upon the sending down of the judgment of this Court.
145 S. Ct. at 2643.
It is not clear from this order which of the appellants'
arguments for the stay request there led the Court to stay the
preliminary injunction in that case. That is notable because the
appellants in McMahon advanced arguments that the appellants here
do not and those arguments could have been the basis for the
Court's grant of the stay in McMahon.
For example, the appellants in McMahon argued that they
were likely to succeed in showing that the plaintiffs lacked
Article III standing in part by challenging as unduly speculative
the district court's conclusion there that the reduction in force
("RIF") at issue in that case would disable the DOE, and therefore
harm the plaintiffs as "beneficiaries" of the Department's
services. Stay Appl. at 10, 15-18, McMahon, 145 S. Ct. 2643 (No.
- 12 - 24A1203). The appellants here advance no such argument, as they
do not dispute any of the plaintiffs' asserted harms in seeking
the stay.
We emphasize as well that the appellants in McMahon
disputed the district court's finding there that the RIF at issue
had disabled DOE from performing the statutorily assigned
functions by pointing to the fact that a large number of DOE
employees remained. See id. at 2-3, 14; see also id. at 2 (noting
that "most of the pre-RIF workforce" remained). Here, by
contrast, the District Court found that nearly all the employees
at the defendant agencies had been terminated, reassigned, or
placed on administrative leave, and the appellants do not suggest
otherwise.1
Given these and other differences between this case and
McMahon, we cannot conclude from the Court's order in McMahon that
this is a "like" case, such that we must grant the stay requested
here because the Court granted one there. See Boyle, 145 S. Ct.
at 2654. Indeed, a failure to advance an argument for a stay is
At IMLS, for example, the District Court found that only 1
twelve employees remain, none of whom work in the Office of Research and Evaluation, "rendering [that office] essentially defunct." And, at MBDA, the District Court found that the only five employees who were not placed on administrative leave were reassigned outside MBDA, leaving it with no active employees at all. The District Court also found that FMCS placed on administrative leave and initiated a RIF to terminate all but ten to fifteen of its over 200 employees.
- 13 - itself a reason not to grant the requested relief on the basis of
that argument. See New York, 133 F.4th at 66 n.14. Accordingly,
obliged as we are to treat each case on its own merits (and in
light of the arguments made), we will proceed to assess whether a
stay is required insofar as this case pertains to the agency-wide
terminations of employees based on the arguments that have been
advanced to us.
B.
In addition to our anticipation of guidance from the
Court in McMahon, we also held this case in abeyance to await
guidance offered by the Court in American Public Health
Association. We did so because the appellants there raised to the
Court in their stay request a number of arguments concerning the
district court's decision as to the grant terminations at issue in
that case that the appellants also raise to us here. Those
arguments included not only the contention that the Tucker Act, 28
U.S.C. § 1491, divested the district court of jurisdiction to hear
the APA claims raised in that suit, see Stay Appl. at 18-27, Am.
Pub. Health Ass'n, 2025 WL 2415669 (No. 25A103), but also arguments
as to the proper evaluation of the balance of the equities in a
case concerning grant terminations, see id. at 37-38.
The Court ultimately granted the request for a stay in
part in American Public Health Association. Specifically, the
Court stayed the portions of the district court's orders in that
- 14 - case that "vacat[ed] the Government's termination of various
research grants," Am. Pub. Health Ass'n, 2025 WL 2415669 at *1,
and left in place those portions of the district court's orders
vacating related internal agency guidance, see id. A majority of
the Court explained that it did so in part because it concluded
that the Tucker Act likely posed a jurisdictional bar to the
plaintiffs' APA claims insofar as those claims required the
district court to "adjudicate claims 'based on' the
research-related grants or to order relief designed to enforce any
'"obligation to pay money"' pursuant to those grants." Id.
(quoting Dep't of Educ. v. California, 145 S. Ct. 966, 968 (2025)
(per curiam)). And, further, the Court determined that the
appellants faced irreparable harm insofar as the orders at issue
compelled them to disburse funds that "'cannot be recouped' and
are thus 'irrevocably expended.'" Id. (quoting Philip Morris USA
Inc. v. Scott, 561 U.S. 1301, 1304 (2010) (Scalia, J., in
chambers)).
The appellants do advance similar Tucker Act and
irreparable harm arguments here. Thus, in the analysis that
ensues, we will address the relevance, if any, of the Court's
partial stay in American Public Health Association to the
appellants' request for a stay with respect to the portions of the
preliminary injunction that address grant terminations.
- 15 - III.
We begin with the first Nken factor, which concerns the
appellants' likelihood of success on the merits in their pending
appeal. The appellants argue that they are likely to succeed in
showing -- as to the challenge to the terminations of employees,
the failure to carry out statutorily assigned functions, and the
decisions to implement across-the-board terminations of
grants -- that the plaintiffs (1) have not met their burden to
show that they have Article III standing and (2) have not shown
that there is statutory subject matter jurisdiction over certain
of their claims. They separately contend that, even assuming that
there is no jurisdictional bar to the plaintiffs' claims, the
plaintiffs' APA claims fail on the merits because those claims
fail to allege any "agency action" that is cognizable under the
APA. Finally, they contend that the District Court erred in basing
the preliminary injunction on its determination that the
plaintiffs' claims brought under the Constitution were likely to
succeed on the merits, because constitutional claims of that sort
are impermissible, in the appellants' view, under Dalton v.
Specter, 511 U.S 462, 473 (1994). Ultimately, for the reasons we
will explain, the appellants' arguments fall short of the requisite
"strong showing" that they are likely to succeed on the merits of
their challenge to the preliminary injunction.
- 16 - A.
We turn first to the appellants' arguments concerning
the plaintiffs' Article III standing. The appellants contend
chiefly that the plaintiffs likely lack Article III standing
because they are asserting a generalized interest in having the
agency defendants perform their statutory duties rather than a
"legally and judicially cognizable" harm or a sufficiently
particularized injury. (Quoting Raines v. Byrd, 521 U.S. 811, 819
(1997).) But the complaint alleges that, with respect to the
across-the-board policy to terminate grants, the plaintiffs have
been and will continue to be injured by the denial of funds to
which they are entitled, and that, with respect to the other
challenged actions, they have been and will continue to be injured
by the defendants' failure to provide services on which the
plaintiffs rely. Thus, the complaint does not allege that the
plaintiffs will be injured simply by the Executive's general
failure to adhere to the separation of powers in the abstract.
See, e.g., Czyzewski v. Jevic Holding Corp., 580 U.S. 451, 464
(2017) ("For standing purposes, a loss of even a small amount of
money is ordinarily an 'injury.'" (quoting McGowan v. Maryland,
366 U.S. 420, 430–31 (1961))); cf. Crossroads Grassroots Pol'y
Strategies v. FEC, 788 F.3d 312, 317 (D.C. Cir. 2015) (recognizing
cognizable injury in fact "where a party benefits from" an agency's
- 17 - actions and an adverse decision "would remove the party's
benefit").
We note, too, that the appellants do not meaningfully
dispute in their stay motion the District Court's findings that
the losses of funding and services of which the plaintiffs complain
have or will imminently occur due to the defendants' decisions.
So, if the appellants are contending that the plaintiffs have not
plausibly demonstrated an "injury in fact" for purposes of securing
their Article III standing, Lujan v. Defs. of Wildlife, 504 U.S.
555, 560 (1992), they have not made a strong showing as to their
likelihood of success, see Nken, 556 U.S. at 434.
Indeed, the appellants here, unlike the appellants in
McMahon, do not argue that the plaintiffs "lack any non-speculative
harm to support Article III standing," Stay Appl. at 14, McMahon,
145 S. Ct. 2643 (No. 24A1203), because their alleged injuries
depend on attenuated chains of speculation, id. at 15-21. Nor do
they contend with respect to Article III standing, as the
appellants in McMahon did, that they are likely to succeed in
showing that the plaintiffs' asserted injuries are not caused by
the actions at issue, id. at 19, 24.
We note as well that, also unlike the appellants in
McMahon, the appellants here do not argue that the plaintiffs'
injuries are essentially "informational" and so not cognizable
harms under TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), Stay
- 18 - Appl. at 23-24, McMahon, 145 S. Ct. 2643 (No. 24A1203); that the
plaintiffs have failed to establish a "statutory right to any
particular level of government services," id. at 20-22; that the
plaintiffs have no parens patriae standing to raise claims on
behalf of their residents, id. at 24; or that many of the injuries
of which the plaintiffs complain are "self-inflicted" and thus
impermissibly "manufacture[d]" under Clapper v. Amnesty Int'l USA,
568 U.S. 398 (2013), Stay Appl. at 24-25, McMahon, 145 S. Ct. 2643
(No. 24A1203).
The appellants do contend that, "even if the plaintiffs
have standing to challenge particular actions the agenc[ies]
ha[ve] taken in implementing the Executive Order," they have such
standing only to challenge those actions and terminations that
"involve programs or grants on which the States allegedly rely."
Accordingly, the appellants contend that they are likely to succeed
in showing that the plaintiffs lack Article III standing because
the plaintiffs cannot show that they were or imminently would be
harmed by all such actions and terminations.
The District Court found, however, that the termination
of the employees and other actions of the agency defendants that
the preliminary injunction covers directly caused and will
continue to cause the loss of services of which the plaintiffs
complain. The appellants do not make any developed argument that
this finding was clearly erroneous. See Dep't of Com. v. New
- 19 - York, 588 U.S. 752, 767 (2019) (applying clear error review to
district court's findings regarding the likely "result" of
challenged government conduct and that such conduct would "lead to
many of the [plaintiffs'] asserted injuries"). Nor do the
appellants develop an argument that, even if the plaintiffs have
Article III standing, the District Court abused its discretion
because, by ordering the reinstatement of employees terminated
pursuant to the agency defendants' implementation of the Executive
Order, it ordered more relief than necessary. See Ross-Simons of
Warwick, Inc. v. Baccarat, Inc., 217 F.3d 8, 14 (1st Cir. 2000);
Trump v. CASA, Inc., 145 S. Ct. 2540, 2549 n.2, 2549-50, 2562-63
(2025) (treating the question of whether an injunction is "broader
than necessary to provide complete relief" as distinct from whether
a plaintiff has "standing to sue").
Having concluded that the appellants have not made a
strong showing that they are likely to succeed in challenging the
plaintiffs' Article III standing, we turn to their contentions as
to the District Court's reasoning that the plaintiffs' claims were
likely to succeed on the merits. As we will explain, we need not
address any of the appellants' arguments concerning the portions
of the District Court's decision that address the plaintiffs' APA
claims, because the appellants have failed to persuasively contest
the District Court's grant of the preliminary injunction insofar
- 20 - as it is based -- as it also is -- on the plaintiffs' constitutional
claims. We therefore need not address the appellants' contentions
as to the plaintiffs' likelihood of success on their APA claims.
Cf. Somerville Pub. Schs., 139 F.4th at 72 ("[W]e may bypass the
appellants' contentions about the District Court's constitutional
ruling because we conclude that the appellants have not met their
'strong showing' burden as to the District Court's APA ruling.").
The District Court held that, independent of the APA
claims, the plaintiffs were likely to succeed in demonstrating
that the agency defendants' actions violated the Take Care Clause
of the Constitution and the constitutional separation of powers.
The appellants raise two arguments -- apart from their contentions
about Article III standing -- as to why the District Court erred
in so holding.
The District Court so erred, the appellants first argue,
because the plaintiffs' constitutional claims are "are little more
than a repackaging of plaintiffs' alleged statutory violations."
Drawing from Dalton, the appellants contend that such claims "'are
not "constitutional" claims'" insofar as they simply "'alleg[e]
that the President has exceeded his statutory authority.'"
(Quoting Dalton, 511 U.S. at 473.) The appellants additionally
argue that the Civil Service Reform Act (CSRA), 5 U.S.C.
§§ 7503-7515, divests the District Court of "jurisdiction to
adjudicate the States' challenges to the federal agencies'
- 21 - employment decisions," citing Elgin v. Dep't of Treasury, 567 U.S.
1 (2012). They make no argument that the Tucker Act precludes the
District Court's jurisdiction over the plaintiffs' constitutional
claims.
As the plaintiffs point out in their response, however,
the appellants failed to raise their Dalton argument in their
motion for a stay of the preliminary injunction before the District
Court (or in their reply to the plaintiffs' opposition to that
motion, for that matter). And, although the appellants reassert
the argument in their reply brief to us, they make no attempt to
argue that they raised this argument in their stay motion below or
that their failure to raise this argument before the District Court
should be excused. Nor did appellants raise their CSRA argument
in their motion for stay of the preliminary injunction before the
District Court or their reply to the plaintiffs' opposition.
The appellants' failure to raise these arguments to the
District Court dooms their argument that they are likely to succeed
on appeal in showing that the District Court erred in basing the
preliminary injunction on the plaintiffs' likelihood of succeeding
on their constitutional claims. See New Jersey v. Trump, 131
F.4th 27, 41-42 (1st Cir. 2025) (citing Acevedo-García v.
Vera-Monroig, 296 F.3d 13, 17-18 (1st Cir. 2002), for the
proposition that we decline to "consider arguments raised for first
time in this court in support of stay pending appeal of preliminary
- 22 - injunction"). "'[A]s a general rule, a disappointed litigant
cannot surface an objection to a preliminary injunction for the
first time in an appellate venue' because doing so deprives the
district court of the opportunity to 'consider [the objection] and
correct the injunction if necessary, without the need for appeal.'"
Id. at 43 (alteration in original) (quoting Philip Morris, Inc. v.
Harshbarger, 159 F.3d 670, 680 (1st Cir. 1998)); see also United
States v. Lindsey, 3 F.4th 32, 40-41 (1st Cir. 2021).
This principle is especially important at this stage in
the proceedings, on a motion for stay in the court of appeals,
because Federal Rule of Appellate Procedure 8(a)(1)(A) ordinarily
requires parties to move first for a stay in the district court
before seeking relief in the court of appeals. Allowing
appellants in this court to rely on arguments that they did not
make in their motion before the district court undermines that
rule. The appellants, represented by counsel, had several
opportunities to raise this argument below, yet failed to do so,
thus waiving it. See Mullane v. U.S. Dep't of Just., 113 F.4th
123, 137 (1st. Cir. 2024) ("[W]e agree with the government that
[plaintiff] ignored a viable opportunity to challenge the district
court's jurisdictional analysis below . . . . [and] therefore
forfeited his right to challenge that analysis on appeal.").
Of course, we have, on occasion, overlooked a failure to
present an argument before the district court in certain
- 23 - circumstances. See, e.g., Menninger v. PPD Dev., L.P., 145 F.4th
126, 136-37, 136 n.5 (1st Cir. 2025) (explaining exceptions). But
this motion is particularly unsuited for such review; the
appellants make no argument to excuse the failure -- indeed, they
do not even acknowledge that the arguments were not raised below.
The posture of this case, furthermore, weighs against relieving
appellants of their obligation to present arguments to the district
court in the first instance, as a stay pending appeal, after all,
is "extraordinary relief." New Jersey, 131 F.4th at 34. And
Rule 8 would have little import if we were to consider issues not
raised in the first instance in the district court when no argument
is even made to us for our doing so.
Because the appellants make no argument that the
District Court's conclusion as to the plaintiffs' constitutional
claims -- if correct under Dalton and the CSRA -- would not suffice
to support the full scope of the preliminary injunction independent
of the District Court's holdings as to the plaintiffs' APA claims,
we cannot conclude that they have made a strong showing that they
are likely to succeed on the merits of their appeal. We further
observe that we rejected appellants' seemingly identical CSRA
argument in Somerville Public Schools, 139 F.4th at 71 ("[W]e are
loath at this juncture of the proceedings to attribute to Congress
the intention in enacting the CSRA . . . to bar every challenge to
an unlawful effort by the Executive to shut down a statutorily
- 24 - created agency by summarily firing its employees en
masse . . . except for those specific challenges that the
terminated employees themselves may choose to bring."), and
nothing in McMahon indicates that we must now conclude otherwise,
see McMahon, 145 S. Ct. at 2643.
IV.
There remain the appellants' arguments about the three
other Nken factors. See 556 U.S. at 434 (describing irreparable
harm to the appellant, substantial injury to other parties
interested in the proceeding, and the public interest as factors
relevant to a stay request). As we will explain, those arguments
fail to show that the appellants are entitled to a stay of the
preliminary injunction.
A.
As to irreparable harm, the appellants argue that the
portions of the injunction directed at the "reinstate[ment]" of
agency employees irreparably harm the appellants by requiring each
of the agencies "to employ particular personnel against its will."
They appear to contend that this requirement will so harm them in
a number of ways.
First, the appellants contend that they will be
irreparably harmed because the preliminary injunction allows the
District Court, as to each agency, to "superintend[] its own
judgment about requisite agency staffing," and to
- 25 - "second-guess[] . . . every staffing decision the agencies make."
But we rejected a similar contention in Somerville Public Schools,
139 F.4th at 74-75, and the appellants do not provide any reason
that we should not do the same here. Nor, for reasons described
at the outset, does the Supreme Court's order in McMahon require
a different conclusion.
Second, the appellants contend for the first time in
their reply brief that forcing them to employ particular personnel,
notwithstanding their desire to not do so, will "creat[e] workplace
tensions and affect[] agency administration." The appellants do
not point to anything in the record, however, to support the
factual premise that the restoration of terminated employees in
fact will have such consequences. We thus decline to credit this
contention as to irreparable harm.
Nonetheless, with respect to the portions of the
preliminary injunction that address grant terminations, the
appellants argue that they will separately be subject to
irreparable harm by having to disburse funds that may not be
recoverable if they later prevail on the merits. They appear to
make this contention both with respect to the portion of the
preliminary injunction that ordered the restoration of grants as
well as that portion of it that prohibits the agency defendants
from, in the future, "paus[ing], cancel[ing], . . . otherwise
terminat[ing,] . . . or fail[ing] to disburse" grant funding "for
- 26 - reasons other than the grantees or contractors' non-compliances
with applicable grant or contract terms." The Supreme Court, for
its part, has recognized this type of fiscal harm as an irreparable
harm in the grant context. See Am. Pub. Health Ass'n., 2025 WL
2415669 at *1; California, 145 S. Ct. at 968-69; see also
Somerville Pub. Schs., 139 F.4th at 75 (recognizing irreparable
harm to the government where it may be required to pay employee
salaries that could not later be recouped).
To be sure, the plaintiffs contend that the appellants'
"own evidence states that grant payments ultimately found to be
unwarranted may be recovered through 'debt collection
procedures[.]'" But we do not see how the evidence to which the
plaintiffs point can be read to undermine the appellants'
contention in this respect.
We may also credit the appellants' contention that they
will be irreparably harmed insofar as they are erroneously required
to pay salaries to restored employees, because those funds would
likely be "unrecoverable." Somerville Pub. Schs., 139 F.4th at
75. True, the appellants did not raise this argument in their
opening brief, but, even if we overlook their having raised it
only in their reply, our doing so would not affect the disposition
of the present stay motion. See infra Part V.
- 27 - B.
The appellants next contend that, under Nken's third
factor, the other parties interested in this proceeding -- here,
the plaintiffs -- will not be substantially injured if the
preliminary injunction is stayed pending appeal. They argue that
"the gravamen of plaintiffs' injury [regarding grant restorations]
is monetary -- the classic example of reparable harm." They
further argue, with respect to the staffing reductions at issue,
that "loss of government employment generally does not constitute
irreparable injury, especially when there is a separate review
scheme established by Congress to hear such claims."
The appellants do not develop any argument in support of
their apparent premise that a harm must be irreparable to be
substantial. But, in any event, the substantial harm that the
plaintiffs allege with respect to the termination of employees is
not the "loss of government employment" itself. It is the lost
services that flow from the terminations' effective dismantling of
each of the relevant agencies. And we have found analogous harms
in the form of lost services flowing from an agency-wide RIF
sufficient to demonstrate that plaintiffs faced substantial
injury. See Somerville Pub. Schs., 139 F.4th at 75.
The Supreme Court's order in McMahon is not to the
contrary. The order in that case does not identify a lack of harm
to the plaintiffs as a basis for the stay. In addition, the
- 28 - appellants there -- unlike the appellants here -- argued that
reinstatement of the terminated employees "has at best an
attenuated impact on any specific services on which [the
plaintiffs] allegedly rely." See Stay Appl. at 38, McMahon, 145
S. Ct. 2643 (No. 24A1203).
We note as well that the sole case on which appellants
rely for the proposition that harms stemming from the loss of
employment are not generally irreparable is Sampson v. Murray, 415
U.S. 61 (1974). But that case is not on point because it concerns
only harms to the terminated employee. See id. at 62-63, 91-92 &
n.68 (explaining that termination-related "loss of income,"
possible reputational damage, and "insufficiency of savings or
difficulties in immediately obtaining other employment" "will not
support a finding of irreparable injury, however severely they may
affect a particular individual").
Moreover, although "traditional economic damages" are
not generally thought of as "irreparable," "some economic losses
can be deemed irreparable." Vaquería Tres Monjitas, Inc. v.
Irizarry, 587 F.3d 464, 485 (1st Cir. 2009) (collecting cases).
For example, we have recognized that harms to plaintiffs resulting
from withheld grant funding -- including "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" -- may be "irreparabl[e]" and so constitute
- 29 - "substantial injury" under Nken's third factor. See New York, 133
F.4th at 73.
Here, the District Court found that the plaintiffs were
likely to suffer irreparable harm stemming from the loss of grant
funding. Specifically, it found that plaintiffs and their
agencies would have to "diminish" or "halt services," implement
hiring freezes, "deny payments for contracted services," and
"initiate layoffs" if they do not receive funding from the
terminated grants. Indeed, at least one plaintiff represented
that one of its Business Centers "will close due to the
termination" of its MBDA grant. The appellants have not
explained, in light of these findings, why the specific harms to
the plaintiffs resulting from the loss of grant funding here do
not constitute substantial injury. See Vaquería Tres Monjitas,
587 F.3d at 485 (explaining that irreparable harm may be found
"where the potential economic loss is so great as to threaten the
existence of the movant's business" (quoting Performance
Unlimited, Inc. v. Questar Publishers, Inc., 52 F.3d 1373, 1382
(6th Cir. 1995))); see also id. (noting that, in a previous case,
"we suggested that the inability to supply a full line of products
may irreparably harm a merchant by shifting purchasers to other
suppliers" (citing Automatic Radio Mfg. Co. v. Ford Motor Co., 390
F.2d 113, 116-17 (1st Cir. 1968))). And, although the appellants
do not invoke it, we note that California cannot provide us any
- 30 - guidance in this respect because, unlike here, the plaintiffs in
that case, according to the Court, had "represented . . . that
they have the financial wherewithal to keep their programs
running." 145 S. Ct. at 969.
C.
That leaves only the fourth Nken factor, which concerns
"where the public interest lies." 556 U.S. at 434 (quoting Hilton,
481 U.S. at 776). The appellants contend that, where the
government is the party seeking a stay, Nken's second and fourth
factors "merge." For the reasons provided above, the appellants'
arguments on this score only succeed to the limited extent that
the appellants may not be able to recoup wrongfully disbursed funds
at the close of litigation. We have also previously explained,
however, that "there is generally no public interest in the
perpetuation of unlawful agency action," Somerville Pub. Schs.,
139 F.4th at 76 (quoting League of Women Voters of the U.S. v.
Newby, 838 F.3d 1, 12 (D.C. Cir. 2016)), especially where -- as
here -- the appellants make no argument that their actions were
legal on the merits, see New Jersey, 131 F.4th at 41. Given these
competing considerations, we conclude that the appellants have not
met their burden to show that Nken's fourth factor favors the grant
of a stay pending appeal in this case.
- 31 - V.
While the appellants have established the possibility of
some limited irreparable harm to themselves from the District
Court's preliminary injunction, they have failed to (1) make a
strong showing that they are likely to succeed on the merits of
their appeal, (2) show that other parties interested in this
litigation would not be substantially injured were we to issue the
requested stay, or (3) show that the issuance of a stay is in the
public interest. We thus cannot conclude that the mere
possibility of some limited irreparable harm to the appellants
warrants the issuance of a stay. See Somerville Pub. Schs., 139
F.4th at 76.
VI.
The motion for a stay is denied.
- 32 -