Cases & Developments

Order granting Plaintiffs’ request for a Temporary Restraining Order (TRO). Plaintiffs, State of New York, California, Illinois, Rhode Island, New Jersey, Massachusetts, Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawai’i, Maine, Maryland, Michigan, Minnesota, Nevada, North Carolina, New Mexico, Oregon, Vermont, Washington, and Wisconsin allege the Office of Management and Budget’s (OMB) Memorandum M-25-13 violates the Administrative Procedure Act (APA) as Congress has not delegated any unilateral authority to the Executive to indefinitely pause all federal financial assistance without considering the statutory and contractual terms governing the grants. Plaintiffs contend OMB’s actions violate separation of powers because the Executive has overridden Congress’ judgments by refusing to disburse already-allocated funding for many federal grant programs. Plaintiffs further allege the Memorandum violates the Spending Clause, presentment appropriations, and taking care clauses, and if allowed to proceed, the Memorandum would cause irreparable harm to highway planning and construction, childcare, veteran nursing care funding, special education grants, state health departments, and current disaster relief efforts. Ruling in favor of plaintiffs, the Court wrote “by trying to impose certain conditions on this funding, the Executive has acted contrary to the law and in violation of the APA.” The Court reasoned “Congress has not given the Executive limitless power to broadly and indefinitely pause all funds that it has expressly directed to specific recipients and purposes and therefore the Executive’s actions violate the separation of powers.” While OMB rescinded the Memorandum, the Court noted that the TRO is still a necessity as the White House Press Secretary wrote on X “the President’s [Executive Orders]’s on federal funding remain in full force and effect and will be rigorously implemented.” The Court stated that “based on the Press Secretary’s unequivocal statement and the continued actions of executive agencies, the Court will find that the policies in the OMB Directive that the States challenge here are still in full force and effect and thus the issue presented in the States’ TRO motion are not moot.” In granting the TRO the Court ordered defendants to not pause, freeze, impede, block, cancel, or terminate compliance with awards and obligations to provide federal financial assistance to the States and that defendants must not impede the States’ access to such awards and obligations, except on the basis of the applicable authorizing statutes, regulations, and terms.  

Memorandum for Heads of Executive Departments and Agencies. The Office of Management and Budget (OMB) published M-25-13, requiring Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements. Agencies are required to complete a comprehensive analysis of all of their Federal financial assistance programs that may be implicated by any of the President’s executive orders. Further, the Memorandum ordered a temporary pause of all activities related to obligation or disbursement of all Federal financial aid and other relevant agency activities that may be implicated by the executive orders. The temporary pause was set to go into effect January 28, 2025, at 5 p.m. and required agencies to submit their comprehensive analysis of their use of funds no later than February 10, 2025. OMB also published an FAQ and Instructions for Federal Financial Assistance Program Analysis to help agencies abide by the Memorandum. Following an administrative stay on the Memorandum granted on January 28, 2025, the Memorandum was subsequently rescinded on January 29, 2025.