Good evening:
The federal judge in DC overseeing the nonprofit coalition lawsuit granted a TRO in favor of the plaintiffs in their lawsuit regarding the OMB funding pause. (I had previously referred to the 1/28 administrative stay in this case as a TRO, but that was incorrect, though now we have the TRO). This is on top of the order issued by the Rhode Island federal judge on Friday in the state-AG lawsuit.
The court in this case rejected the mootness argument based on OMB's recission of the memo. On this score, the court mentions that the defendants "have not convincingly shown they will refrain from resuming the challenged activity in the future... As evidenced by the White House Press Secretary's statements..." The court further explains:
By rescinding the memorandum that announced the freeze, but "NOT . . . the federal funding freeze" itself, id., it appears that OMB sought to overcome a judicially imposed obstacle without actually ceasing the challenged conduct. The court can think of few things more disingenuous. Preventing a defendant from evading judicial review under such false pretenses is precisely why the voluntary cessation doctrine exists. The rescission, if it can be called that, appears to be nothing more than a thinly veiled attempt to prevent this court from granting relief
The court then found the plaintiffs were likely to succeed on the merits of their claims that the defendants' conduct violated the APA. First, the court found that the memo constituted final agency action. Next, the court found the OMB's actions were arbitrary and capricious under the APA. The court explained;
But furthering the President's wishes cannot be a blank check for OMB to do as it pleases. The APA requires a rational connection between the facts, the agency's rationale, and the ultimate decision. Defendants have offered no rational explanation for why they needed to freeze all federal financial assistance-with less than twenty-four-hours' notice-to "safeguard valuable taxpayer resources. If Defendants intend to conduct an exhaustive review of what programs should or should not be funded, such a review could be conducted without depriving millions of Americans access to vital resources. As Defendants themselves admit, the memorandum implicated as much as $3 trillion in financial assistance. That is a breathtakingly large sum of money to suspend practically overnight. Rather than taking a measured approach to identify purportedly wasteful spending, Defendants cut the fuel supply to a vast, complicated, nationwide machine-seemingly without any consideration for the consequences of that decision. To say that OMB "failed to consider an important aspect of the problem" would be putting it mildly.
The court also explains that the defendant's have potentially "run roughshod over a 'bulwark of the Constitution' by interfering with Congress's appropriation of federal funds and therefore likely violated the separation of powers. Here the court notes:
Congress has exercised its plenary power to give meaning to the Appropriations Clause and "reinforce [its] control over appropriated funds." Id. In 1982, Congress enacted the "Purpose Statute," which requires the appropriation of federal funds in accordance with "the objects for which . . . [they] were made." 31 U.S.C. § 1301(a). Any "reappropriation and diversion of the unexpended balance of an appropriation for a purpose other than that for which [it] originally was made" is treated "as a new appropriation." Id. § 1301(b). Related laws expressly prohibit the Executive Branch from encroaching on Congress's appropriations power. See id. §§ 1341, 1350. Most notably, the Impoundment Act of 1974, 2 U.S.C. § 681 et seq., lays out specific procedures whenever the President wishes to suspend appropriations that have already been enacted.
The court found that plaintiffs were also likely to suffer irreparable harm if the freeze went into effect and that the balance of equities and public interest heavily favor granting the request.
s far as relief, the court granted the TRO and ordered:
Defendants are enjoined from implementing, giving effect to, or reinstating under a different name the directives in OMB Memorandum M-25-13 with respect to the disbursement of Federal funds under all open awards; it is further ORDERED that Defendants must provide written notice of the court's temporary restraining order to all agencies to which OMB Memorandum M-25-13 was addressed. The written notice shall instruct those agencies that they may not take any steps to implement, give effect to, or reinstate under a different name the directives in OMB Memorandum M-25-13 with respect to the disbursement of Federal Funds under all open awards. It shall also instruct those agencies to release any disbursements on open awards that were paused due to OMB Memorandum M-25-13; it is further ORDERED that this Order shall apply to the maximum extent provided for by Federal Rule of Civil Procedure 65(d)(2) and 5 U.S.C. §§ 705 and 706.
I read this as a TRO against the defendants as to all federal funds, not just as to these plaintiffs. The defendants had tried to argue in this DC case that the RI case was a TRO as to "all awards or obligations, not just those involving the Plaintiff states." The DC judge rejected their argument that the court therefore did not need to grant a TRO here as the court would have no control over the duration or scope of the RI court's TRO.
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