United States Court of Appeals For the First Circuit
No. 26-1217
STATE OF WASHINGTON; STATE OF NEW YORK; STATE OF RHODE ISLAND; STATE OF ARIZONA; STATE OF CALIFORNIA; STATE OF COLORADO; STATE OF CONNECTICUT; STATE OF DELAWARE; DISTRICT OF COLUMBIA; STATE OF ILLINOIS; OFFICE OF THE GOVERNOR, ex rel. ANDY BESHEAR, in the official capacity as Governor of the Commonwealth of Kentucky; STATE OF MAINE; STATE OF MARYLAND; COMMONWEALTH OF MASSACHUSETTS; STATE OF MICHIGAN; STATE OF MINNESOTA; STATE OF NEW JERSEY; STATE OF NEW MEXICO; STATE OF OREGON; GOVERNOR JOSH SHAPIRO, in the official capacity as Governor of the Commonwealth of Pennsylvania; STATE OF VERMONT; STATE OF WISCONSIN,
Plaintiffs, Appellees,
v.
UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; SCOTT TURNER, in the official capacity as Secretary of the United States Department of Housing and Urban Development,
Defendants, Appellants.
No. 26-1218
NATIONAL ALLIANCE TO END HOMELESSNESS; NATIONAL LOW INCOME HOUSING COALITION; CROSSROADS RHODE ISLAND; YOUTH PRIDE, INC.; CITY OF BOSTON; CITY OF CAMBRIDGE; MARTIN LUTHER KING, JR. COUNTY; METROPOLITAN GOVERNMENT OF NASHVILLE & DAVIDSON COUNTY; COUNTY OF SANTA CLARA; CITY AND COUNTY OF SAN FRANCISCO; CITY OF TUCSON,
v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; SCOTT TURNER, in the official capacity as Secretary of the United States Department of Housing and Urban Development,
APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND
[Hon. Mary S. McElroy, U.S. District Judge]
Before
Gelpí, Montecalvo, and Rikelman, Circuit Judges.
Brett A. Shumate, Assistant Attorney General, Yaakov M. Roth, Principal Deputy Assistant Attorney General, Daniel Tenny, and Sarah Clark Griffin, Attorneys, Appellate Staff, Civil Division, U.S. Department of Justice, on brief for appellants.
Nicholas W. Brown, Attorney General of Washington, Andrew R.W. Hughes, Zane Muller, Aliana Knoepfler, Andrea Alegrett, Assistant Attorneys General, Cristina Sepe, Deputy Solicitor General, Letitia James, Attorney General of New York, Barbara D. Underwood, Solicitor General, Judith N. Vale, Deputy Solicitor General, Peter F. Neronha, Attorney General of Rhode Island, Kathryn M. Sabatini, Special Assistant Attorney General, Jordan G. Mickman, Assistant Attorney General, Leonard Giarrano IV, Special Assistant Attorney General, Kristin K. Mayes, Attorney General of Arizona, Hayleigh S. Crawford, Deputy Solicitor General, William Y. Durbin, Senior Litigation Counsel, Rob Bonta, Attorney General of California, Jarrell Mitchell, Deputy Attorney General, Michael L. Newman, Senior Assistant Attorney General, Joel Marrero, Supervising Deputy Attorney General, Brian Bilford, Lauren Greenawalt, Deputy Attorneys General, Philip J. Weiser, Attorney General of Colorado, David Moskowitz, Deputy Solicitor General, Nora Passamaneck, Senior Assistant Attorney General, William Tong, Attorney General of Connecticut, Andrew M. Ammirati, Assistant Attorney General, Brian L. Schwalb, Attorney General of District of Columbia, Caroline S. Van Zile, Solicitor General, Dia Rasinariu, Assistant Attorney General, Kathleen Jennings, Attorney General of Delaware, Ian R. Liston, Director of Impact Litigation, Vanessa L. Kassab, Deputy Attorney General, Rose Gibson, Assistant Attorney General, Andy Beshear, Governor of Kentucky, S. Travis Mayo, General Counsel, Taylor Payne, Chief Deputy General Counsel, Laura C. Tipton, Deputy General Counsel, Kwame Raoul, Attorney General of Illinois, Alex Hemmer, Deputy Solicitor General, Aaron M. Frey, Attorney General of Maine, Katherine W. Thompson, Special Counsel, Anthony G. Brown, Attorney General of Maryland, James C. Luh, Senior Assistant Attorney General, Dana Nessel, Attorney General of Michigan, Neil Giovanatti, Assistant Attorney General, Andrea Joy Campbell, Attorney General of Massachusetts, Katherine Dirks, Chief State Trial Counsel, Michelle Pascucci, Nita Klunder, State Trial Counsel, Esme Caramello, Director, Housing Affordability Unit, Aaron Dulles, Lauren Yamaguchi, Assistant Attorneys General, Keith Ellison, Attorney General of Minnesota, Brian S. Carter, Special Counsel, Jennifer Davenport, Attorney General of New Jersey, Daniel Resler, Deputy Attorney General, Dan Rayfield, Attorney General of Oregon, Scott P. Kennedy, Senior Assistant Attorney General, Raúl Torrez, Attorney General of New Mexico, Anjana Samant, Deputy Counsel, Jennifer C. Selber, General Counsel to the Governor of the Commonwealth of Pennsylvania, Jacob B. Boyer, Stephen R. Kovatis, Deputy General Counsel, Charity R. Clark, Attorney General of Vermont, Samuel B. Stratton, Assistant Attorney General, Joshua L. Kaul, Attorney General of Wisconsin, Faye B. Hipsman, Assistant Attorney General, on brief for appellees State of Washington, et al.
Amy R. Romero, Kevin Love Hubbard, DeLuca, Weizenbaum, Barry & Revens, Ltd., Kristin Bateman, Simon C. Brewer, Madeline H. Gitomer, Carrie Y. Flaxman, Aleshadye Getachew, Aman T. George, Christine L. Coogle, Yenisey Rodríguez, Robin Thurston, Democracy Forward Foundation, Tony LoPresti, County Counsel, Kavita Narayan, Chief Assistant County Counsel, Meredith A. Johnson, Lead Deputy County Counsel, Stefanie Wilson, Deputy County Counsel, Leily Arzy, Litigation Fellow, David Chiu, City Attorney, Yvonne R. Meré, Chief Deputy City Attorney, Mollie M. Lee, Chief of Strategic Advocacy, Sara J. Eisenberg, Chief of Complex and Affirmative Litigation, Ronald H. Lee, Assistant Chief of Complex and Affirmative Litigation, Michael Levin Gesundheit, Deputy City Attorney, Lynette Labinger, Antonia K. Fasanelli, Kathryn M. Scott, National Homelessness Law Center, Wallace W. Dietz, Director of Law, John K. Whitaker, Senior Counsel, Abby Greer, Assistant Metropolitan Attorney, David J. Hackett, General Counsel, King County Department of Local Services, Christopher M. Sanders, General Counsel to the King County Executive, Cristy J. Craig, Senior Deputy Prosecuting Attorney, Toby Merrill, Cassandra Crawford, Graham Provost, Kayla Svihovec, and Public Rights Project on brief for appellees National Alliance to End Homelessness, et al.
April 1, 2026 RIKELMAN, Circuit Judge. To assist homeless individuals
and families in the United States, Congress authorized the
Continuum of Care (CoC) program in 2009. Under that program, the
Department of Housing and Urban Development (HUD) distributes
funds each year to state and local entities to provide housing for
millions of residents, including children, the elderly, and
domestic-violence survivors. For years, consistent with
Congress's intent, HUD administered the CoC program to ensure
continuity and stable access to housing for the people it served.
In November 2025, HUD made sudden and dramatic changes
to the CoC program. Those changes put hundreds of housing projects
at risk of losing funding within just weeks, leaving the thousands
of individuals and families who rely on that funding to once again
face homelessness during the coming winter. Two groups of
plaintiffs sued to challenge HUD's actions, and the district court
granted their requests for preliminary injunctions. Importantly,
HUD chose not to appeal those orders. Instead, two months later,
it moved to dissolve the injunctions in light of Congress's 2026
appropriations law. After the district court denied that motion,
HUD appealed and now requests an emergency stay pending appeal.
Although the facts and procedural history of this case are
complicated, the decisive issue before us is narrow: Has HUD made
a strong showing that the district court overlooked some
significant change in law or fact and thus abused its discretion
- 5 - in denying the motion to dissolve? We conclude that HUD has not
met that burden and thus is not entitled to the extraordinary
relief of a stay.
I. BACKGROUND
Because this case's unique procedural history is
critical to understanding the legal issues, we provide an unusually
detailed account of the facts and travel of the case.
A. The Continuum of Care Program
In 1987, Congress enacted the McKinney-Vento Homeless
Assistance Act (MVA) to address the "immediate and unprecedented
crisis" of homelessness facing the Nation. 42 U.S.C.
§ 11301(a)(1). The statute served as the first comprehensive
federal law designed to reduce homelessness, and it still provides
the key legal architecture for HUD's homeless-assistance programs.
Under the MVA, Congress committed to "provid[ing] funds
for programs to assist the homeless, with special emphasis on
elderly persons, handicapped persons, families with children,
Native Americans, and veterans." Id. § 11301(b)(3). In 2009,
Congress amended and reauthorized the MVA to modernize and
streamline the Nation's approach to homelessness. See id.
§§ 11381-11388.
As part of the 2009 changes to the MVA, Congress codified
the CoC program to support "nonprofit providers and State and local
governments [in] quickly rehous[ing] homeless individuals and
- 6 - families while minimizing the trauma and dislocation
caused . . . by homelessness." Id. § 11381(2). Ever since, HUD
has followed a "Housing First" approach to combat homelessness.1
Formally adopted by HUD during the administration of President
George W. Bush, Housing First describes a set of principles that
prioritize access to supportive services and
housing -- particularly permanent housing -- without mandatory
preconditions (such as sobriety). This approach has proven
effective: One study shows that Housing First programs decreased
homelessness in a sample set of communities by 88 percent, far
outpacing alternative "Treatment First" strategies, which require
participants to be treated for underlying conditions before
receiving permanent housing. For that reason, Housing First has
stood as a cornerstone of the CoC program, promoting continuity in
housing and services through no-strings-attached, long-term
homeless-assistance solutions. See id. §§ 11381, 11386b.
Under the CoC program, HUD awards grants to local
coalitions -- known as "Continuums" -- to "carry out projects that
serve homeless individuals or families." Id. § 11383(a).
Qualifying projects include permanent-housing developments,
rental-assistance programs, and rehousing services, to name a few.
1 The Housing First model is evidence-based, with studies consistently showing that people are more likely to maintain their housing and avoid a return to homelessness when they live in a Housing First facility.
- 7 - See id. Congress has identified certain "proven strategies" for
HUD to prioritize in selecting projects for funding, such as
permanent housing and rapid-rehousing services.2 Id. § 11386b(d).
HUD may identify and fund other effective strategies, but it may
do so only "based on research and after notice and comment to the
public." Id. § 11386b(d)(2)(C).
As of 2025, the CoC program funded nearly 7,000 projects,
with approximately 87 percent of that funding dedicated to
permanent housing. These projects, in turn, served the most
vulnerable members of the community. For example, one Continuum
in Massachusetts reported that 25 percent of its residents were
families, 42 percent were elderly, 24 percent were survivors of
domestic violence, 79 percent had a mental-health disability, and
36 percent had a physical disability.
Each year, Congress appropriates funds for HUD to
distribute under the CoC program. See, e.g., Full-Year Continuing
Appropriations and Extensions Act, 2025, Pub. L. No. 119-4,
"Permanent housing" encompasses programs aimed at swiftly 2
and safely rehousing individuals experiencing homelessness. For example, rapid rehousing (RRH) assists individuals who have become homeless to obtain new housing quickly, often assisting with "short or medium-term rental assistance." Meanwhile, permanent supportive housing (PSH) supports individuals who have experienced "long-term or repeated homelessness" -- including individuals with disabilities, chronic illnesses, and mental-health conditions. The plaintiffs note that PSH "end[s] homelessness" for these "high-need populations" and decreases costs for their communities by, for example, reducing the need for emergency health care.
- 8 - § 1101(a)(12), (c), 139 Stat. 9, 12; see also Consolidated
Appropriations Act, 2024, Pub. L. No. 118-42, 138 Stat. 25, 362.
Relying on a competitive process, HUD then awards CoC funds to
Continuums, each of which represents a geographic area, such as a
county or group of counties.
HUD's grant selection process is guided by criteria set
out by Congress in the MVA, including "the previous performance of
the recipient regarding homelessness"3 and the recipient's use of
"comprehensive strategies for reducing homelessness." 42 U.S.C.
§ 11386a(b)(1). The MVA also directs HUD to perform certain
calculations during the awards process. For example, HUD must
determine "the need within the geographic area for homeless
services" based on a formula it has established. Id.
§ 11386a(b)(2). The MVA also provides for the "renewal of
contracts" for permanent-housing projects if "there is a
demonstrated need for the project" and "the project complies with
program requirements." Id. § 11386c(b). The CoC program's
emphasis on renewals allows for the continuity necessary for
Continuums to avoid funding gaps, which would otherwise disrupt
3 A funding recipient's past performance addressing homelessness is measured by several factors, such as its success in reducing the number of individuals and families experiencing homelessness, preventing homelessness in the first instance, and minimizing returns to homelessness. See 42 U.S.C. § 11386a(b)(1).
- 9 - their ability to provide stable housing, leverage funding from
other sources, and plan long-term projects.
HUD administers the grant application and selection
process through a Notice of Funding Opportunity (NOFO), which
outlines the criteria and deadlines for awards selection. Once
HUD issues its NOFO, which the MVA instructs it must do no "later
than 3 months after" Congress passes its annual appropriations
bill, the application process begins. Id. § 11382(b). Responding
to a NOFO is no small feat because Continuums must implement local
competitions to determine which projects they will include in their
applications to HUD, ranked in order of priority. Generally, HUD
sets an application deadline for 90 days after it issues a NOFO.
Standard grants cover a period of 12 months and are typically
awarded by early January, with renewals beginning the day after
the previous grant expires. HUD has operated according to this
schedule for years with only slight variations, such as issuing a
NOFO one month after the MVA's three-month deadline or awarding
funds in the middle or end of January.
B. The 24-25 NOFO
In March 2024, Congress authorized HUD to issue a single
two-year NOFO for fiscal years 2024 and 2025 in order to streamline
the application process and reduce the administrative burden on
local Continuums. See § 242, 138 Stat. at 386. This authorization
- 10 - applied to funds that would be appropriated by Congress in 2024
and 2025. See id.
In response, HUD released a NOFO (the "24-25 NOFO")
inviting applications by October 2024 and indicating that a single
application could be submitted for both 2024 and 2025. In the
NOFO, HUD committed to evaluating awarded projects for renewal in
2025 under the previously submitted application (contingent on
congressional appropriations for that year). If, however, a
Continuum sought to "reallocate eligible renewal projects and
create new projects" in 2025, then it would need to submit a new
application by August 2025. HUD reserved the right to "modify
this NOFO or issue a supplemental . . . NOFO if necessary," for
example, if it needed "to accommodate a new CoC or . . . priority
or new funding source."
On March 15, 2025, Congress appropriated new funds for
the CoC program. See § 1101(a)(12), 139 Stat. at 10, 12. Because
the 24-25 NOFO was already in place, HUD was not required to issue
a new NOFO, but if it wanted to, the MVA instructed it to do so
within three months, or by June 15, 2025. See 42 U.S.C.
§ 11382(b). HUD did not issue a new 2025 NOFO by that deadline.
Instead, on July 3, 2025, HUD announced via email that it
"intend[ed] to publish a NOFO for 2025 [CoC] awards,"
"recogniz[ing] [that] this [was] a new application process for
- 11 - 2025 funding." The notice did not state when HUD would issue the
new NOFO and provided only a hint about its expected contents.
C. The November NOFO
On November 13, 2025 -- five months after the statutory
deadline to issue a 2025 NOFO expired -- HUD released a new NOFO
(the "November NOFO"), which "rescind[ed] and supersede[d] any
mention of awards of [fiscal year] 2025 CoC funds" under the 24-25
NOFO.
The November NOFO marked a stark departure from the 24-25
NOFO and longstanding HUD policy. The biggest shift came from
HUD's abrupt deviation from its decades-long Housing First
approach to homelessness. Most significantly, HUD reduced the
amount of funding available for "Tier 1" projects, most of which
are permanent-housing projects. Typically, Tier 1 projects are
the "most critical to meeting community needs" and benefit from
regular, noncompetitive renewals. The November NOFO capped the
Tier 1 renewal rate at 30 percent, compared to 90 percent in the
24-25 NOFO, despite the MVA's express prioritization of
permanent-housing renewal funding. See, e.g., 42 U.S.C.
§§ 11386a(b), 11386b(d). According to one housing agency, the
30 percent Tier 1 cap, if implemented, would "eliminate[] a vast
majority of permanent housing projects" and "reverse[] over 20
years of consistent renewal funding" for projects that house people
at chronic risk of homelessness. In another about-face, the
- 12 - November NOFO added eligibility criteria that would require
certain residents to enroll in services for substance-abuse
treatment in order to access housing. Multiple Continuums reported
that these conditions (and several others), taken together,
threatened a "cascading crisis" to the availability of stable
housing for vulnerable populations.
Despite the drastic changes to the CoC program
requirements and model, the November NOFO set an application
deadline of January 14, 2026 -- just 62 days after its publication.
At the same time, the NOFO indicated that HUD did not plan to
disburse funds under the NOFO until May 2026.
The record reveals that this timeline created chaos for
the Continuums. Most critically, the timeline guaranteed funding
gaps for Tier 1 housing projects that had been expecting renewals
of funding otherwise set to expire in the early months of 2026.
One nonprofit in Rhode Island identified multiple
permanent-housing projects in its portfolio, which supported
hundreds of previously homeless individuals, that would lose
funding on January 1. It stated unequivocally that if it did not
receive its CoC funding on time, people "w[ould] lose their housing
and associated supportive services . . . lead[ing] to an increase
in homelessness." A shelter in Tennessee that served nearly 400
people faced a similar dilemma, with its funding also set to expire
- 13 - in January 2026. It reported that, without CoC funding, its
residents would be forced back into homelessness during the winter.
The record also indicates that meeting the shortened
application deadline in the November NOFO was itself "virtually
impossible." With only two months to run local competitions and
submit applications, Continuums scrambled to meet the condensed
timeline under a radically different set of guidelines. Several
Continuums were forced at the last minute to divert resources and
staff from their primary work -- reducing homelessness -- to
attempt to complete the application process. Altogether, the
November NOFO led Continuums and state officials to anticipate
alarming increases in homelessness in the coming months.
D. The Lawsuits
Less than two weeks after the November NOFO's release,
21 states and the District of Columbia sued HUD and its Secretary.4
Seven local governments and four nonprofit entities filed a
separate suit the next week.5 The plaintiffs in the two lawsuits
alleged that HUD's decisions to rescind the 24-25 NOFO and
implement the November NOFO violated the Administrative Procedure
Act (APA), 5 U.S.C. § 706(2), and various provisions of the U.S.
4 For the remainder of this opinion, we refer to HUD and its Secretary collectively as "HUD." 5 Although the cases have not been consolidated, they have proceeded together in the district court.
- 14 - Constitution.6 Specifically, they challenged certain conditions
in the November NOFO that were not in the 24-25 NOFO, including
the 30-percent cap on Tier 1 funding and wholesale departure from
the Housing First approach.
With severe funding gaps just weeks away, the plaintiffs
sought immediate injunctive relief. They requested an order that
would prohibit HUD from rescinding the 24-25 NOFO or giving effect
to the November NOFO; they also asked the district court to direct
HUD to process applications according to the 24-25 NOFO.
E. The TRO Hearing
The district court scheduled a hearing for a temporary
restraining order (TRO) on December 8, 2025. One hour before the
hearing, HUD issued a notice that it had "withdrawn the challenged
November [NOFO] . . . in order to assess the issues raised by [the
plaintiffs] in their [law]suits and to fashion a revised NOFO."
On that basis, HUD maintained that the plaintiffs' request for a
TRO was "now moot." Nevertheless, HUD made clear "its intention
to issue a new NOFO" for 2025, which it argued the plaintiffs could
challenge after its publication. Because the rescission of the
November NOFO mitigated the need for a TRO, the court directed the
parties to proceed to litigating the preliminary injunction motion
6 The plaintiffs claimed, for example, that HUD violated the APA by taking agency action that was unlawful, arbitrary and capricious, and procedurally defective.
- 15 - without a TRO. With the parties' input, the court set a briefing
schedule and a hearing on the motion for December 19 at 10:00 A.M.
F. The Preliminary Injunction Briefs and Hearing
In opposing the plaintiffs' preliminary injunction
motions, HUD continued to lean heavily on its mootness argument.
It recognized, however, that any challenges to conditions
"reimposed later would [not] be moot," although it did not provide
details about the substance of any new NOFO. Instead, HUD remained
noncommittal, leaving open the possibility "that the forthcoming
NOFO [may] include any of the same (or similar) conditions that
appeared in the withdrawn [November] NOFO." And notably, HUD did
not address the merits of the plaintiffs' arguments about the
illegality of the challenged conditions in the November NOFO;
rather, it rested on its mootness argument.7
In reply, the plaintiffs argued that HUD's rescission of
the November NOFO amounted to a "litigation tactic rather than an
internal rethinking about the legality of the challenged
directive." Thus, the plaintiffs maintained that the voluntary
cessation doctrine applied and their cases were not moot.8
7 With its brief, HUD filed a five-page "administrative record" consisting of a limited set of public documents about the November NOFO and forthcoming NOFO. 8 HUD's public website indicated that it had rescinded the November NOFO, but HUD expressly reserved the right "to exercise [its] discretion and make changes to the previously issued CoC NOFO to account for new priorities."
- 16 - As to the equities, the plaintiffs argued that allowing
HUD's rescission of the 24-25 NOFO to stand would cause them
irreparable harm by guaranteeing funding gaps, which would then
lead to people "los[ing] housing and related services." In support
of these arguments, the plaintiffs submitted numerous
declarations, which HUD never contested. As one nonprofit
organization reported in its declaration, a funding gap would force
"residents who are now stably housed [to] be responsible for paying
100[ percent] of the rental cost," which, for "the very low-income
population [it] serve[s]," would "not [be] feasible." Others
reported that a funding gap would cause certain permanent-housing
programs to shut down, necessary rehousing and health-support
services to be cut, and essential personnel to be terminated. In
turn, rates of eviction and homelessness would likely spike.
According to the plaintiffs' unrebutted evidence, even
the mere threat of a funding gap had already imposed serious
real-world harm: One housing-support organization reported in
early December that it had "stopped referring new clients to
certain permanent housing programs funded by [CoC] grants because
of the planned [funding] cuts." And multiple Continuums similarly
"stopped accepting referrals" at the end of last year on the chance
that they would "lose funding."
As of 10:00 A.M. on December 19, the time set for the
preliminary injunction hearing, HUD had not issued a new NOFO. At
- 17 - the hearing, the district court asked for a status update; although
HUD did not commit to a deadline, it shared that it expected that
the new NOFO would be "published by close of business" that day.
With that timing in mind, HUD argued that the court should give it
"another chance" to issue the new NOFO rather than subject it to
a preliminary injunction reinstating the 24-25 NOFO.
The district court raised several concerns with HUD's
position. First, given that HUD had waived any argument "about
the substance" of the November NOFO, the court sought to verify
that none of the challenged conditions would carry over into the
new NOFO. HUD equivocated and stated only that it "c[ouldn't]
speak to what the new conditions" would be. Second, the court
asked how HUD intended to manage the interim period to avoid the
imminent funding gaps. HUD again equivocated, maintaining that it
"c[ouldn't] make any representations . . . about what [it] [was]
or [was] not willing to do," other than it would not "be willing
to . . . operate under the [24-25] NOFO." And finally, the court
raised its concern that HUD had "strategic[ally]" timed its release
of the new NOFO to be after the agreed-upon preliminary injunction
hearing in an effort to "evad[e] the [c]ourt's jurisdiction" and
simply "issue the exact same NOFO again." HUD offered only that
it was "working diligently."
Between HUD's lack of clarity on the timing and content
of any new NOFO, and the looming January funding gaps just days
- 18 - away, the district court concluded that it had to proceed to a
decision. In issuing its oral ruling, the court began by rejecting
HUD's mootness argument, concluding that its rescission of the
November NOFO constituted "a classic voluntary cessation
scenario." The court found that HUD had failed to prove that the
challenged conduct would not recur and instead had doubled down
and "expressly reserve[d] the right to re-issue the same or [a]
similar" NOFO.
The district court then moved to the merits, concluding
that the plaintiffs were likely to succeed on their claims that
HUD had violated the APA. First, the court held that the
rescission of the 24-25 NOFO and release of the November NOFO
likely exceeded HUD's statutory authority under the MVA and was
likely contrary to federal law. For example, the court determined
that HUD likely had contravened multiple provisions in the MVA,
including its "prioritization of permanent housing and renewal
stability" and "formula-based allocations scheme." Relatedly, the
court reiterated that the November NOFO failed to meet the
three-month statutory deadline for issuing NOFOs set out in the
MVA. Second, the court determined that HUD's actions were likely
arbitrary and capricious, as HUD had departed from longstanding
policy without explanation, failed to consider significant
reliance interests of the plaintiffs and the people whom they
serve, and adopted sweeping new grant conditions without notice
- 19 - and comment. As the court noted, although HUD "is entitled to
[change] its policies," it cannot do so in ways that violate
federal law, including statutes enacted by Congress.
The district court also ruled that HUD's actions would
cause irreparable harm to the plaintiffs, based on the plaintiffs'
unrebutted declarations. Specifically, it found that the
withdrawal of the 24-25 NOFO, coupled with the delayed processing
of renewals, "guarantee[d] funding gaps" that
"concrete[ly] . . . harm[ed]" the plaintiffs. Finally, the court
concluded that the balance of equities and the public interest
"strongly favor[ed] temporary relief" because "[e]nsuring lawful
agency action, continuity of housing, and stability for vulnerable
populations . . . clearly [is] in the public interest." For these
reasons, the court orally enjoined HUD from rescinding the 24-25
NOFO and directed it to "maintain [the] status quo unless and
until . . . a lawful NOFO . . . is substituted."
At the close of the hearing, the district court indicated
that, "depending on what the new NOFO . . . does," it would issue
a written order memorializing its oral ruling.
G. The December NOFO
Near midnight that night, on December 19, HUD issued a
new NOFO (the "December NOFO"). Although the December NOFO
modified some aspects of the rescinded November NOFO, it carried
forward several of the challenged conditions. For example, it
- 20 - continued to cap Tier 1 funding at 30 percent. It also continued
to reject the Housing First approach.
The December NOFO set out a two-track application
process with different, but compressed, deadlines. Applications
under the "Normal Track" were due by January 28, 2026 -- just 40
days later (compared to the 62 days ostensibly afforded by the
November NOFO and the 90 days historically provided).9 Meanwhile,
"Extended Track" applications, which applied only to new
permanent-housing projects, were due by February 25, 2026. The
December NOFO also included a caveat that, because of the district
court's oral preliminary injunction ruling, HUD would "not
implement or enforce [it] pending further court order."
H. The Written Preliminary Injunction Orders
On December 23, four days after HUD published the
December NOFO, the district court issued its written preliminary
injunction orders. The orders reiterated that HUD was enjoined
from rescinding the 24-25 NOFO and implementing the challenged
conditions in the November NOFO. Section 5 of the orders also
enjoined HUD from "giving effect to any existing or forthcoming
agency action to further rescind or replace the [24-25] NOFO."
HUD has consistently conceded that Section 5 applies to the
9 The Normal Track application process governed all applications for new and renewal projects except for new permanent housing projects, which were subject to the Extended Track.
- 21 - December NOFO. Finally, the orders directed HUD to "preserve the
status quo ante that existed under the [24-25] NOFO, including by
taking all steps necessary to process eligible renewals for [fiscal
year] 2025 CoC funding pursuant to [that] NOFO."
HUD did not appeal the district court's preliminary
injunction orders, and its deadline to do so expired on February
23, 2026. See Fed. R. App. P. 4(a)(1)(B). The parties instead
proceeded towards summary judgment under an expedited schedule,
focusing on the rescission of the 24-25 NOFO and the December NOFO.
I. THUD
On February 3, 2026, the President signed the
Transportation, Housing and Urban Development, and Related
Agencies Appropriations Act, 2026 (THUD) into law. See Pub. L.
No. 119-75, 140 Stat. 173, 323-437 (2026). In Section 244 of the
statute, Congress set out a structure for awarding CoC funds that
would avoid funding gaps. First, it directed HUD to renew on a
noncompetitive basis all CoC projects expiring in the first quarter
of calendar year 2026 "prior to awarding any amounts through a
[new] [NOFO]." Id. § 244, 140 Stat. at 422. Second, it provided
that "if awards have not been made under a fiscal year 2025 [NOFO]
prior to April 1, 2026," HUD must renew on a noncompetitive basis
all projects set to expire in the second quarter of 2026. Id.
And finally, Congress directed that if HUD had not awarded funding
pursuant to "a fiscal year 2025 [NOFO] prior to July 1, 2026,"
- 22 - then HUD must provide noncompetitive funding renewals to projects
expiring in the third and fourth quarters of 2026. Id. § 244, 140
Stat. at 422-23.
In a separate part of the statute, THUD appropriated
more than $4 billion in new funds for the CoC program to be
"award[ed] . . . not later than December 1, 2026," and disbursed
in 2027. 140 Stat. at 400. It also directed HUD to "issue the
[NOFO] for the [new] amounts made available [for the CoC program]
not later than June 1, 2026." Id. And it provided for a Tier 1
renewal cap of "not less than 60 percent" under the 2026 NOFO.
Id. at 399 (emphasis added).
J. The Motions to Dissolve and Stay Pending Appeal
Two weeks later, on February 17, 2026, HUD moved to
dissolve the preliminary injunctions. It pointed to THUD as the
changed circumstance justifying its request. HUD argued primarily
that the statute eliminated any threat of immediate, irreparable
harm to the plaintiffs because it effectively provided for
noncompetitive grant renewals through June 2026. With the threat
of irreparable harm to the plaintiffs erased, HUD contended, there
was no basis for the preliminary injunctions to continue. HUD
also claimed that THUD "provide[d] . . . support for two of [its]
merits arguments." First, according to HUD, the statute authorized
it to award CoC funds under a 2025 NOFO "modified or issued later
than [the] June 15, 2025" statutory deadline in the MVA. Second,
- 23 - it asserted that THUD reaffirmed its "discretion under the [MVA]
to reduce the number of CoC projects that will be noncompetitively
renewed on a yearly basis." Thus, it argued, THUD had undermined
the plaintiffs' arguments on these two legal issues.
The district court denied the motion to dissolve. As it
explained, notwithstanding THUD, the plaintiffs would continue to
face imminent, irreparable harm if HUD were permitted to implement
the December NOFO while the case proceeded, including from "the
upheaval and service gaps that would result
from . . . overhaul[ing] the funding selection criteria on an
accelerated basis." And based on its "prior determination" about
the legality of the December NOFO, the court concluded that the
plaintiffs continued to be likely to succeed on the merits of their
claims.
HUD timely appealed the denial of its motion to dissolve.
After the district court declined to issue a stay pending appeal,
HUD moved for a stay from our Court, requesting that we stay the
underlying preliminary injunction orders.
II. STANDARD OF REVIEW
"A stay is an intrusion into the ordinary processes of
administration and judicial review" and is not granted as "a matter
of right." Nken v. Holder, 556 U.S. 418, 427 (2009) (internal
quotation marks and citations omitted). As the party seeking a
stay, HUD bears the burden of demonstrating that it is entitled to
- 24 - this "extraordinary remedy" under Nken's familiar four-factor
test. Id. at 437 (Kennedy, J., concurring).
To satisfy the Nken test, HUD must (1) make "a strong
showing that [it] is likely to succeed on the merits" of its appeal
and also show that (2) it "will be irreparably injured absent a
stay"; (3) the "issuance of the stay will [not] substantially
injure the other parties interested in the proceeding"; and (4)
"the public interest lies" with it, not the plaintiffs. Id. at
434. The first two factors "are the most critical." Id. Under
the fourth factor, we consider the interests of the public in
general, including people affected by homelessness, not just the
interests of the parties. See New Jersey v. Trump, 131 F.4th 27,
41 (1st Cir. 2025); see also Trump v. Int'l Refugee Assistance
Project, 582 U.S. 571, 580 (2017) (exploring "the relative harms
to applicant and respondent, as well as the interests of the public
at large" (quoting Barnes v. E-Systems, Inc. Grp. Hosp. Med. &
Surgical Ins. Plan, 501 U.S. 1301, 1305 (1991) (Scalia, J., in
chambers))).
III. DISCUSSION
We begin by detailing what is -- and more importantly,
what is not -- at issue in this appeal.
A. Scope of the Appeal
HUD's appeal is limited. We are not evaluating the
district court's underlying preliminary injunction orders. HUD
- 25 - did not appeal those orders and thus they are not before us. The
law is clear on this point: When a party chooses not to appeal an
order granting an injunction, it may not smuggle an appeal of that
order into its appeal of a decision denying a motion to dissolve
that injunction. See Karnoski v. Trump, 926 F.3d 1180, 1198 (9th
Cir. 2019) (stating that a party may not "regain its lost
opportunity" to appeal an injunction by moving to dissolve the
injunction and then appealing its denial (quoting Gon v. First
State Ins. Co., 871 F.2d 863, 866 (9th Cir. 1989))); see also Hoult
v. Hoult, 373 F.3d 47, 53 (1st Cir. 2004) (explaining that "the
propriety of the original [preliminary injunction] order" was
"beyond the scope of our review" of a motion to modify that
injunction (quoting 16 Wright & Miller's Federal Practice &
Procedure § 3924.2 (3d ed. 2025))). Otherwise, a party could
leverage the appeal to "resurrect [its] expired time" to challenge
the preliminary injunction itself. 16 Wright & Miller, supra,
§ 3924.2.
Turning to the motion to dissolve, it was HUD's
obligation to demonstrate to the district court that an intervening
change in fact or law "warrant[ed] the discontinuation" of the
preliminary injunctions. Concilio de Salud Integral de Loiza,
Inc. v. Pérez-Perdomo, 551 F.3d 10, 16 (1st Cir. 2008) (quoting
Sprint Commc'ns Co. v. CAT Commc'ns Int'l, Inc., 335 F.3d 235, 242
(3d Cir. 2003)). Thus, in ruling on HUD's request for a stay, we
- 26 - must evaluate the district court's denial of the motion to dissolve
in light of "the new material" that HUD presented to demonstrate
a change in circumstances. Karnoski, 926 F.3d at 1198 (quoting
Sharp v. Weston, 233 F.3d 1166, 1170 (9th Cir. 2000)); see also
Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 15 F.3d 1222, 1225
(1st Cir. 1994) (explaining that, in deciding whether to grant a
motion to dissolve a preliminary injunction, a district court
should consider new evidence that emerged after its original order
to determine whether it affects the four-prong preliminary
injunction analysis).
That means that we may not consider one of HUD's primary
arguments in its stay motion to us: that the district court did
not "adjudicate[]" or sufficiently "analy[ze]" the lawfulness of
the December NOFO in its written preliminary injunction orders.
This argument squarely attacks the underlying orders and has
nothing to do with any intervening change in law or facts between
December 23, when the district court issued the orders, and
February 17, when HUD filed its motion to dissolve the injunctions.
See Karnoski, 926 F.3d at 1198; Pérez-Perdomo, 551 F.3d at 16.
If HUD believed that the district court did not
sufficiently analyze the December NOFO in the written preliminary
injunction orders, it could have moved the district court to
reconsider or clarify those orders. It also could have appealed
them. HUD did neither, even though it conceded from the get-go
- 27 - that Section 5 of the orders applied to the December NOFO. Because
HUD's argument about the alleged inadequacy of the orders is not
based on any "new material" or intervening change in law or facts,
it is not properly before us in this appeal. Karnoski, 926 F.3d
at 1198 (quoting Sharp, 233 F.3d at 1170).
There is one more reason why we cannot consider HUD's
argument about the insufficiency of the December 23 preliminary
injunction orders in evaluating its stay request: HUD has waived
it. HUD did not make this argument to the district court in its
motion to dissolve, despite the fact that it consistently
acknowledged that the orders applied to the December NOFO. And as
we have held many times, a party seeking to overturn a district
court's order cannot do so based on arguments that it debuts for
the first time on appeal. See, e.g., Cámara de Mercadeo, Industria
y Distribución de Alimentos, Inc. v. Emanuelli-Hernández, 72 F.4th
361, 364-65 (1st Cir. 2023).
With that framing in place, we proceed to analyze the
four prongs of the Nken test for a stay pending appeal.
B. Likelihood of Success on the Merits
To satisfy the first Nken factor, HUD must make a "strong
showing" that it is likely to succeed on the merits of its appeal
by establishing that the district court abused its discretion in
denying its motion to dissolve. 556 U.S. at 434 (quoting Hilton
v. Braunskill, 481 U.S. 770, 776 (1987)); see Pérez-Perdomo, 551
- 28 - F.3d at 15 ("We review a district court's decision to dissolve a
preliminary injunction for abuse of discretion."). And that
requires convincing us that HUD identified a "significant change
in facts or law" that should have led the district court to
dissolve the injunction. Karnoski, 926 F.3d at 1198 (quoting
Sharp, 233 F.3d at 1170); see Pérez-Perdomo, 551 F.3d at 16.
HUD's motion to dissolve pointed to only one intervening
change: THUD's enactment in February 2026. HUD argues that THUD
both undermined the plaintiffs' legal claims and eliminated the
threat of any irreparable harm to them while the case continued.
Thus, according to HUD, THUD knocked out two of the legs supporting
the preliminary injunctions. The district court disagreed. HUD
has not convinced us that the court likely abused its discretion
in so concluding.
1. THUD's Impact on the Plaintiffs' APA Claims
Beginning with the plaintiffs' legal claims, HUD makes
two interrelated arguments about why the district court was wrong
not to treat THUD as a "game changer." First, it maintains that
THUD "expressly contemplat[es]" that HUD could award funds under
"a fiscal year 2025 [NOFO]," but that the preliminary injunctions
"thwart[]" its ability to do so. Second, it contends that THUD
"confirm[s] that HUD has the authority and flexibility to modify
or rescind the [24-25] NOFO and to issue a NOFO for 2025" well
- 29 - after the MVA's three-month deadline for doing so, including in
the waning days of 2025.10 We disagree.
To begin, HUD ignores that it does have "a fiscal year
2025" NOFO in its hands. Indeed, the 24-25 NOFO, which is formally
titled the "FY 2024 and FY 2025 Continuum of Care Competition," is
just that. (Emphasis added.) The NOFO details a process for HUD
to review CoC applications in 2025 and disburse funds in 2026, and
it conditions "any FY 2025 funding [on] authoriz[ation] by a FY
2025 [c]ongressional [a]ppropriation." Although the 24-25 NOFO
covered a two-year period (as authorized by Congress) to streamline
the application process, it preserved discrete funding and
application review protocols for each year. Indeed, it even
established a separate August 2025 deadline for new grant
applications and funding requests for projects ineligible for
renewal. And categorizing the 24-25 NOFO as "a fiscal year 2025
NOFO" also makes sense in light of THUD's renewal scheme directing
HUD either to (1) award funds under a 2025 NOFO (such as the 24-25
NOFO currently in place) or (2) noncompetitively renew grants for
the remainder of this year. Thus, we do not see how HUD, even
10HUD also briefly suggests that the district court "did not even acknowledge [THUD]" in denying the motion to dissolve. That is incorrect. The district court expressly referenced "Congress['s]" action and held that it did not eliminate the irreparable harm faced by the plaintiffs or affect their likelihood of success on the merits.
- 30 - under the preliminary injunctions, is "thwart[ed]" from
"award[ing] 2025 funds under a 2025 NOFO."
Of course, HUD's goal is to enforce the December NOFO.
So, we move to HUD's second argument: that THUD reaffirms its
"authority and flexibility to modify or rescind the [24-25] NOFO
and to issue a NOFO for 2025" even after the MVA's three-month
deadline.11
HUD has not made a strong showing that its interpretation
of THUD is correct. As usual, when tasked with interpreting a
statute, we "must start with the text of the statute itself,"
aiming as best we can "to effectuate congressional intent." Teles
de Menezes v. Rubio, 156 F.4th 1, 12 (1st Cir. 2025) (quoting City
of Providence v. Barr, 954 F.3d 23, 31 (1st Cir. 2020)). Unless
the statute specifies otherwise, "we generally assume that the
[text] carries its plain and ordinary meaning." City of
Providence, 954 F.3d at 31.
The plain text of Section 244 does not support HUD's
interpretation. Nothing in the text purports to amend the MVA
itself or retroactively alter the deadline in the MVA for issuing
a 2025 NOFO. The text of Section 244 simply permits the agency to
award funds "under a fiscal year 2025 notice of funding
11In the stay motion filed in our Court, HUD does not identify which of the MVA's provisions were affected by THUD. We thus construe its arguments about THUD in light of the claims it raised in its motion to dissolve in the district court.
- 31 - opportunity." § 244, 140 Stat. at 422 (emphasis added). Although
HUD argues repeatedly that Section 244 allows it to issue a "new"
2025 NOFO, the word "new" is conspicuously missing from the text.
Even looking beyond Section 244 to the
"surrounding . . . provision[s] and the structure of the statutory
scheme as a whole," City of Providence, 954 F.3d at 31, we see no
indication that Congress intended to discard the MVA deadline for
issuing a 2025 NOFO. No other provision of THUD mentions a 2025
NOFO, let alone speaks to a modified timeline for issuing one.
In fact, other sections of THUD arguably reflect
Congress's continued support for the deadlines set out by the MVA.
In appropriating new CoC funds for 2026, Congress expressly
directed HUD to issue a 2026 NOFO "not later than June 1, 2026."
140 Stat. at 400. Given that THUD became law on February 3, 2026,
this timing largely aligns with the MVA's three-month deadline.
And HUD makes no argument that by setting June 1 (as opposed to
May 3) as the deadline for issuing a 2026 NOFO, Congress implicitly
repealed the MVA deadline altogether or retroactively authorized
HUD to issue a 2025 NOFO six months late.
Rather than authorizing a new 2025 NOFO, THUD appears to
be aimed at avoiding funding gaps. For example, Section 244's
text not only authorizes renewals for homeless-assistance projects
set to expire but also requires HUD to adjust grant award amounts
"to enable renewal projects to operate at substantially the same
- 32 - levels." § 244, 140 Stat. at 423 (emphasis added). As we read
THUD, the apparent thrust of the statute is to promote funding
continuity, not disruption.
Further, certain provisions of THUD undermine HUD's
position that Congress has endorsed the December NOFO. See City
of Providence, 954 F.3d at 31 (explaining that "useful indicators
of congressional intent" can be found in surrounding provisions).
Critically, in establishing guidelines for the 2026 application
cycle, the statute requires HUD to distribute funds by selecting
projects "totaling not less than 60 percent of the [CoC] annual
renewal demand" for Tier 1 funding. 140 Stat. at 399 (emphasis
added). This requirement is at odds with the December NOFO, which
sets a significantly lower cap of 30 percent on Tier 1 funding.
But even if we were to accept HUD's position that THUD
waived the three-month deadline in the MVA for issuing the 2025
NOFO, that still would not be enough for HUD to make a strong
showing that the district court abused its discretion in denying
the motion to dissolve. In issuing the preliminary injunctions,
the court cited multiple legal grounds for concluding that the
November and December NOFOs were likely contrary to federal law;
the MVA's three-month deadline was just one of those grounds. For
example, the court also held that HUD's actions in rescinding the
24-25 NOFO and issuing the November NOFO likely violated several
substantive requirements under the MVA, including Congress's
- 33 - "prioritization of permanent housing and renewal stability" and
its "formula-based allocations scheme." Notably, HUD did not
contest these legal conclusions at the preliminary injunction
stage, and it did not argue in its motion to dissolve that THUD
undermined these conclusions.
The district court further held that HUD's actions were
likely arbitrary and capricious in violation of the APA, as HUD
had departed from longstanding policy and failed to consider the
significant reliance interests of key stakeholders in doing so on
a truncated timeline. And the court concluded that HUD likely
erred in adopting "sweeping new grant conditions without required
notice and comment." Each of these conclusions constituted an
independent basis for the district court's ruling that the
plaintiffs were likely to succeed on the merits of their APA
claims. And none are at issue in this appeal.12
In sum, HUD has argued that THUD undermined only one
aspect of the district court's APA analysis: the impact of the
MVA's three-month deadline. That means we have no occasion to
evaluate the rest of the district court's APA analysis. See
Karnoski, 926 F.3d at 1198; Hoult, 373 F.3d at 53. Thus, we
conclude that HUD has failed to make a strong showing that the
12 HUD may, of course, challenge these conclusions to the extent they are reflected in the district court's final judgment. But as of now, the summary judgment motions are still pending, and the district court has not yet issued its final ruling.
- 34 - district court likely abused its discretion in declining to
dissolve the preliminary injunctions because of THUD's impact on
the plaintiffs' APA claims.
2. THUD's Impact on the Plaintiffs' Irreparable Harm
HUD also argues that the district court should have
dissolved the preliminary injunctions because THUD eliminates any
risk of "immediate, irreparable harm" to the plaintiffs. It
maintains that THUD's provision for staggered grant renewals
effectively ensures that the plaintiffs will not face a funding
gap before July 1, 2026, alleviating their need for interim relief
while this case proceeds.13
The plaintiffs vigorously dispute HUD's argument.
Relying on evidence they submitted in opposition to HUD's motion
to dissolve, they maintain that they would face irreparable harm
if HUD were permitted to begin implementing the December NOFO in
the coming weeks, even with THUD in place. And the district court
agreed with the plaintiffs in denying the motion to dissolve.
The record certainly supports the district court's
conclusion. It indicates that CoC funding recipients face a
fundamental timing problem: They must make long-term decisions
today -- such as renewing leases, retaining personnel, and
13As a reminder, THUD provides for automatic funding renewals in the first quarter of 2026, and HUD has represented that it will automatically renew funding set to expire in the second quarter as well.
- 35 - accepting new residents -- based on projections of funding months
down the road. Because they anticipate losing funding under the
December NOFO, CoC recipients would be forced to "close[]
or . . . prepar[e] to" close their programs immediately if HUD
were permitted to implement that NOFO now, even if that NOFO were
ultimately ruled invalid at final judgment. See Francisco Sánchez
v. Esso Standard Oil Co., 572 F.3d 1, 19 (1st Cir. 2009) ("[T]he
purpose of a preliminary injunction is to preserve the status quo
before the merits have been resolved.").
HUD nonetheless insists that simply "invit[ing]
applications under the new NOFO" would not risk any irreparable
harm to the plaintiffs. Critically, HUD failed to raise this point
in its stay motion to the district court, and it is thus waived.
See Am. Hosp. Ass'n v. Kennedy, 164 F.4th 28, 36 (1st Cir. 2026)
(declining to consider arguments not developed in a motion for a
stay in the district court). But in any event, the record reflects
that given their severe resource constraints, CoC funding
recipients would face immediate, irreparable harm from the
diversion of resources required to respond to two separate CoC
funding competitions within a two-month period (that is, the
December NOFO that HUD seeks to open in early April 2026, and the
fiscal year 2026 NOFO that, under THUD, must be released by June 1,
2026). See 140 Stat. at 400.
- 36 - Thus, HUD has not made a strong showing that it is likely
to succeed on the merits of its appeal challenging the district
court's denial of its motion to dissolve. And for that reason
alone, its stay request is doomed. See R.I. State Council of
Churches v. Rollins, 158 F.4th 304, 312 (1st Cir. 2025) ("If the
government fails to make a strong showing that it is likely to
succeed on the merits, 'the remaining elements are of little
consequence.'" (quoting Akebia Therapeutics, Inc. v. Azar, 976
F.3d 86, 92 (1st Cir. 2020))).
C. Remaining Stay Factors
We nevertheless briefly address HUD's arguments on the
remaining three Nken stay factors. HUD claims that it faces
irreparable harm absent a stay because after April 1, 2026, it
will be unable to meet the July 1, 2026 award deadline established
by THUD for the third and fourth quarters. As a result, HUD
maintains that the preliminary injunctions prevent it from
"effectuating [a] statute[] enacted by representatives of [the]
people," amounting to irreparable harm. (Quoting Trump v. CASA,
Inc., 606 U.S. 831, 861 (2025).)
HUD's argument fails for multiple reasons. First, as we
have explained, the preliminary injunctions do not prevent HUD
from awarding CoC funds under a 2025 NOFO, as contemplated by THUD.
Indeed, HUD may readily award funds pursuant to the 24-25
- 37 - NOFO -- which is a 2025 NOFO -- and thus "effectuat[e]" the
funding schedule provided under THUD.
Second, although HUD cannot enforce the December NOFO
while the litigation proceeds, irreparable harm does not arise
from a preliminary injunction that prohibits an agency from taking
action that is likely unlawful. See Doe v. Trump, 157 F.4th 36,
79 (1st Cir. 2025), petition for cert. filed, No. 25-899 (U.S.
Jan. 30, 2026). The district court found that HUD likely violated
the APA in issuing the December NOFO. Because HUD failed to
challenge much of the court's APA analysis in its motion to
dissolve, we must accept the court's conclusions on those issues
for the purposes of this appeal. See Karnoski, 926 F.3d at 1198;
Hoult, 373 F.3d at 53. We thus find no basis to conclude that HUD
would be irreparably harmed absent a stay.
As for the risk of substantial injury to the interested
parties and where the public interest lies, HUD has failed to
dispute many of the "immediate, predictable" harms that would flow
to the plaintiffs and their constituents if the preliminary
injunctions were lifted.14 R.I. State Council of Churches, 158
In its motion filed in our Court, HUD made a single argument 14
that a stay would not cause irreparable harm to the plaintiffs. Above, we addressed this irreparable harm argument as part of our analysis of whether HUD has made a strong showing of likelihood of success on the merits of its appeal. Although Nken's third prong requires us to evaluate only if harm to interested parties will be "substantial[]," not irreparable, we construe HUD's argument
- 38 - F.4th at 316. Nor can it do so on this record. To recap, the
plaintiffs submitted uncontested evidence that allowing HUD to
enforce the December NOFO would wreak havoc: In anticipation of
potential funding cuts, housing programs and support services
would be ended or drastically curtailed, personnel would be laid
off, and relationships with local housing and service providers
would be ruined.
And of course, the plaintiffs submitted ample evidence
that any implementation of the December NOFO would be immediately
destabilizing and disastrous for their constituents. One
CoC-funded program in Massachusetts that administers housing for
nearly 600 formerly homeless households reported that it would
"not continue running [its] program" if HUD proceeded with the
December NOFO "due to the [funding] uncertainty" that it threatens.
Other housing organizations similarly stated that they would not
"add new participants now if they w[ould] need to end programs in
mere months." And another nonprofit in Tennessee that serves
domestic-violence survivors reported that it would "hav[e] to stop
providing services as of June 30, 2026," if the December NOFO were
implemented before then. These on-the-ground warnings, and the
dozens of others documented in the record, demonstrate that a stay
liberally in conducting our analysis under Nken's equitable factors. 556 U.S. at 434 (quoting Hilton, 481 U.S. at 776).
- 39 - would have immediate and "devastating impacts" on the plaintiffs
and the people they serve.
HUD's only response to this evidence is to argue that
the identified harms are not "independent" from the plaintiffs'
claims on the merits and thus should be discounted. We fail to
see how that is so. The harms -- such as the shuttering of housing
organizations, loss of relationships with housing and service
providers, and loss of one's housing -- would manifest from a stay
irrespective of the legality of the December NOFO.
HUD's citation to Charlesbank Equity Fund II v. Blinds
To Go, Inc. does not persuade us otherwise. See 370 F.3d 151 (1st
Cir. 2004). In that case, we concluded that an investment fund
seeking a preliminary injunction failed to "show a meaningful risk
of irreparable harm" in a breach of contract suit. Id. at 162.
The plaintiff cited only the defendant's use of its funds, and the
related "risk that [it] w[ould] be left with nothing," as the harm
that it would suffer absent relief. Id. at 162-63 (first
alteration in original). We held that harm insufficient because
it could be readily cured through an award of money damages. See
id. at 163.
To start, Charlesbank is off-point because the plaintiff
there had the burden to show that it would suffer irreparable harm,
whereas the third and fourth Nken stay factors require us to
consider only any "substantial[]" harm to the plaintiffs and the
- 40 - "interest[s]" of the "public." 556 U.S. at 434 (quoting Hilton,
481 U.S. at 776). Indeed, under Nken, it is HUD that must
demonstrate that it will be irreparably harmed without a stay.
See id.
In any event, the landscape of this case is worlds apart
from that in Charlesbank. The record here is replete with evidence
that dissolving the injunctions would result in wide-ranging and
severe consequences as the litigation plays out. And those harms
would not be readily curable after the fact; indeed, a final
judgment in the plaintiffs' favor would offer little solace to
those residents who may be forced into homelessness in the interim.
In sum, the record paints a disturbing picture of the
harms that would flow to the plaintiffs, their constituents, and
the public from issuing a stay. Conversely, HUD does not face
irreparable harm from injunctions "bar[ring] enforcement of an
unlawful" NOFO. Doe, 157 F.4th at 79. Thus, we conclude that HUD
has failed to show that the remaining Nken factors support the
extraordinary relief of a stay.
IV. CONCLUSION
For all these reasons, we deny HUD's motion for a stay
pending appeal.
- 41 -