https://www.mass.gov/doc/omb-pi-order/download
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
STATE OF NEW YORK; STATE OF CALIFORNIA; STATE OF ILLINOIS; STATE OF RHODE ISLAND; STATE OF NEW JERSEY; COMMONWEALTH OF MASSACHUSETTS; STATE OF ARIZONA; STATE OF COLORADO; STATE OF CONNECTICUT; STATE OF DELAWARE; THE DISTRICT OF COLUMBIA; STATE OF HAWAII; OFFICE OF THE GOVERNOR ex rel. Andy Beshear, in his official capacity as Governor of the COMMONWEALTH OF KENTUCKY; STATE OF MAINE; STATE OF MARYLAND; STATE OF MICHIGAN; STATE OF MINNESOTA; STATE OF NEVADA; STATE OF NEW MEXICO; STATE OF NORTH CAROLINA; STATE OF OREGON; STATE OF VERMONT; STATE OF WASHINGTON; and STATE OF WISCONSIN,
Plaintiffs,
v.
DONALD TRUMP, in his official capacity as President of the United States; U.S. OFFICE OF MANAGEMENT AND BUDGET; RUSSELL VOUGHT, in his official capacity as Director of the U.S. Office of Management and Budget; U.S. DEPARTMENT OF THE TREASURY; SCOTT BESSENT, in his official capacity as Secretary of the Treasury; PATRICIA COLLINS, in her official capacity as Treasurer of the United States; U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; ROBERT F. KENNEDY, JR., in his official capacity as Secretary of Health and Human Services; U.S. DEPARTMENT OF EDUCATION; LINDA MCMAHON, in her official capacity as Secretary of Education; U.S. DEPARTMENT OF TRANSPORTATION; SEAN DUFFY, in his official capacity as Secretary of Transportation; U.S. DEPARTMENT OF LABOR; VINCE MICONE, in his official capacity as Acting Secretary of Labor; U.S. DEPARTMENT OF ENERGY; CHRIS WRIGHT, in his official capacity as Secretary of Energy; U.S. ENVIRONMENTAL PROTECTION AGENCY; LEE ZELDIN, in his official capacity as Administrator of the U.S. Environmental Protection Agency; U.S. DEPARTMENT OF THE INTERIOR; DOUG BURGUM, in his official capacity as Secretary of the Interior; U.S. DEPARTMENT OF HOMELAND SECURITY; KRISTI NOEM, in her capacity as Secretary of Homeland Security; U.S. DEPARTMENT OF JUSTICE; PAMELA BONDI, in her official capacity as Attorney General of the U.S. Department of Justice; THE NATIONAL SCIENCE FOUNDATION; DR. SETHURAMAN PANCHANATHAN, in his capacity as Director of the National Science Foundation; U.S. DEPARTMENT OF AGRICULTURE; BROOKE ROLLINS, in her official capacity as Secretary of Agriculture; U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT; SCOTT TURNER, in his official capacity as Secretary of Housing and Urban Development; U.S. DEPARTMENT OF STATE; U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT; MARCO RUBIO, in his official capacities as Secretary of State and Acting Administrator of the United States Agency for International Development; U.S. DEPARTMENT OF DEFENSE; PETER HEGSETH, in his official capacity as Secretary of Defense; U.S. DEPARTMENT OF VETERANS AFFAIRS; DOUG COLLINS, in his official capacity as Secretary of Veterans Affairs; U.S. DEPARTMENT OF COMMERCE; HOWARD LUTNICK, in his official capacity as Secretary of Commerce; NATIONAL AERONAUTICS AND SPACE ADMINISTRATION; JANET PETRO in her official capacity as Acting Administrator of National Aeronautics and Space Administration; CORPORATION FOR NATIONAL AND COMMUNITY SERVICE; JENNIFER BASTRESS TAHMASEBI, in her official capacity as Interim Head of the Corporation for National and Community Service; U.S. SOCIAL SECURITY ADMINISTRATION; LELAND DUDEK, in his official capacity as Acting Commissioner of United States Social Security Administration; U.S. SMALL BUSINESS ADMINISTRATION; and KELLY LOEFFLER, in her official capacity as Administrator of U.S. Small Business Administration,
Defendants.
C.A. No. 25-cv-39-JJM-PAS
MEMORANDUM AND ORDER
JOHN J. MCCONNELL, JR., United States District Chief Judge.
The Executive’s categorical freeze of appropriated and obligated funds fundamentally undermines the distinct constitutional roles of each branch of our government. The interaction of the three co-equal branches of government is an intricate, delicate, and sophisticated balance—but it is crucial to our form of constitutional governance. Here, the Executive put itself above Congress. It imposed a categorical mandate on the spending of congressionally appropriated and obligated funds without regard to Congress’s authority to control spending. Federal agencies and departments can spend, award, or suspend money based only on the power Congress has given to them–they have no other spending power. The Executive has not pointed to any constitutional or statutory authority that would allow them to impose this type of categorical freeze. The Court is not limiting the Executive’s discretion or micromanaging the administration of federal funds. Rather, consistent with the Constitution, statutes, and caselaw, the Court is simply holding that the Executive’s discretion to impose its own policy preferences on appropriated funds can be exercised only if it is authorized by the congressionally approved appropriations statutes. Accordingly, based on these principles and the reasons stated below, the Court grants the States’ Motion for Preliminary Injunction. ECF No. 67.
I. BACKGROUND
We begin by restating the American government principles learned during critical civics education lessons in our youth.1 Our founders, after enduring an eight-year war against a monarch’s cruel reign from an ocean away, understood too well the importance of a more balanced approach to governance. They constructed three co-equal branches of government, each tasked with their own unique duties, but with responsibilities over the other branches as a check in order to ensure that no branch overstepped their powers, upsetting the balance of the fledgling constitutional republic. See Kilbourn v. Thompson, 103 U.S. 168, 191 (1880). These concepts of “checks and balances” and “separation of powers” have been the lifeblood of our government, hallmarks of fairness, cooperation, and representation that made the orderly operation of a society made up of a culturally, racially, and socioeconomically diverse people possible.
The three branches of our government—Legislative, Executive, and Judicial—derive their power from the United States Constitution; they function together, and one branch’s power does not supersede that of another. “To the legislative department has been committed the duty of making laws; to the executive the duty of executing them; and to the judiciary the duty of interpreting and applying them in cases properly brought before the courts.” Massachusetts v. Mellon, 262 U.S. 447, 488 (1923); see also Wayman v. Southard, 23 U.S. (10 Wheat.) 1, 46 (1825) (Marshall, C.J.) (“[T]he legislature makes, the executive executes, and the judiciary construes the law”). Importantly, James Madison wrote that this system prevents “[t]he accumulation of all powers, legislative, executive, and judiciary, in the same hands.” The Federalist No. 47, at 301 (C. Rossiter ed. 1961). Such an accumulation and concentration of power would pose an inherent “threat to liberty.” Clinton v. City of New York, 524 U.S. 417, 450 (1998) (Kennedy, J., concurring).
The Legislative branch, consisting of two Houses of Congress elected by the citizens of the states, has the power to levy taxes, finance government operations through appropriations, and to set the terms and conditions on the use of those appropriations. U.S. Const. art. I, §§ 8, 9. Congress also makes laws, and the Constitution prescribes a specific procedure for it to follow involving the agreement of both the House of Representatives and the Senate and presentment of the final bill to the President for signature or veto. U.S. Const. art. I, §§ 1, 7. The President, as head of the Executive Branch, may recommend laws for Congress’s consideration, including those related to spending. U.S. Const. art. II, §§ 1, 3. Once the bill becomes the law, U.S. Const. art. I, § 7, the Constitution imposes on the President a duty to “take Care that the Laws be faithfully executed.” U.S. Const. art. II, § 3. And Article III empowers the Judiciary with the “province and duty ... to say what the law is” in particular cases and controversies. Marbury v. Madison, 1 Cranch 137, 5 U.S. 137, 177 (1803); U.S. Const. art. III, § 2.
Important to this case is how Congress uses its power to authorize spending to support federal programs and activities. One way is through an appropriation, which creates the legal authority to “make funds available for obligation” and to make “expenditure[s]” for the purposes, during the time periods, and in the amounts specified in the law authorizing the appropriations. See 2 U.S.C. § 622(2)(A)(i). An “obligation” is a “definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or a legal duty on the part of the United States that could mature into” such a liability; an “expenditure,” also known as a “disbursement,” is the actual spending of federal funds. U.S. Gov’t Accountability Off., A Glossary of Terms Used in the Federal Budget Process, GAO-05-734SP, at 45, 48, 70 (Sept. 2005), https://www.gao.gov/assets/gao-05-734sp.pdf (“Budget Glossary”).
Congress has enacted multiple statutes that affirm its control over federal spending. First, the “purpose statute,” 31 U.S.C. § 1301(a), states that “[a]ppropriations shall be applied only to the objects for which the appropriations were made except as otherwise provided by law,”—that is, funds can be used only for the purposes that Congress has designated. Second, the Antideficiency Act prevents agencies from obligating or spending funds absent congressional appropriation. 31 U.S.C. § 1341. Finally, the Congressional Budget and Impoundment Control Act of 1974, 2 U.S.C. §§ 681 et seq. (“ICA”), permits the Executive Branch to “impound” (or decline to spend) federal funds only under a very small set of highly circumscribed conditions.
This case also involves the actions of agencies in receipt of statutorily appropriated federal funding. “When an executive agency administers a federal statute, the agency’s power to act is ‘authoritatively prescribed by Congress.’” City of Providence v. Barr, 954 F.3d 23, 31 (1st Cir. 2020) (quoting City of Arlington v. FCC, 569 U.S. 290, 297 (2013)). “It is no exaggeration to say that ‘an agency literally has no power to act ... unless and until Congress confers power upon it.’” City of Providence, 954 F.3d at 31 (quoting La. Pub. Serv. Comm’n v. FCC, 476 U.S. 355, 374 (1986)). In this case, there are specific statutory provisions instructing federal agencies to provide the States with categorical or formula grants where money is allocated on the basis of enumerated statutory factors such as population or the expenditure of qualifying state funds. ECF No. 114 ¶ 93. Several examples of these formula grants involve funding for Medicaid (42 U.S.C. § 1396(a), highway (23 U.S.C. § 104(a)(1), (b), (c)), special education services (the Individuals with Disabilities Education Act (“IDEA”), 20 U.S.C. §§ 1400 et seq.), for mental health and substance abuse treatment (42 U.S.C. §§ 300x(a), 300x-7(a), 300x-21(a), 300x-33(a)), power and heating for low-income residents, (the Low-Income Home Energy Assistance Program (“LIHEAP”), 42 U.S.C. § 8621(a)), the Infrastructure Improvement and Jobs Act (“IIJA”) (Pub. L. No. 117-58, 135 Stat. 429 (2021)) and Inflation Reduction Act (“IRA”) (Pub. L. No. 117-169, 136 Stat. 1818 (2022)) for projects ranging from highways, to broadband access, to pollution reduction, to increasing the reliability of the electric grid, and clean water. These statutes direct the agencies to make grants to states for enumerated purposes in accordance with congressional policies.
With this backdrop, the Court moves to the Executive actions that spurred this lawsuit.
A. The President’s Executive Orders and OMB Memorandum M-25-13
The President issued a series of Executive Orders (“EOs”) in his first eight days of office, directing federal agencies to pause and review funding in connection with his policy priorities—specifically relating to:
• “terminating the Green New Deal” and requiring an immediate pause on disbursement of funds appropriated under the IRA or IIJA (“Unleashing EO”), ECF No. 68-1;
• pausing funding programs relating to “removable or illegal aliens” (“Invasion EO”), ECF No. 68-3;
• identifying “diversity, equity, inclusion, accessibility” programs, in an effort to “Ending Radical and Wasteful Government DEI Programs and Preferencing” (“DEI EO”), ECF No. 68-2;
• ending federal funding of gender ideology (“Gender EO”), to ensure that research or educational grants to medical institutions do not include federal funds for transgender medical care (“Gender-Affirming Care EO”), ECF Nos. 68-5, 65-8; and
• pausing federal foreign aid that is not in line “with the foreign policy of the President of the United States” (“Foreign Aid EO”). ECF No. 68-6.
On January 27, 2025, the Office of Management and Budget’s (OMB) Acting Director, Matthew J. Vaeth issued OMB Memorandum M-25-13 (“OMB Directive”), entitled “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs” to executive departments and agencies’ heads. See ECF No. 68-9. The OMB Directive instructed federal agencies to “complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders.” Id. at 2. Then, the OMB Directive mandated that, in the interim of the comprehensive analyses, “Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the Executive Orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI [diversity, equality, and inclusion], woke gender ideology, and the green new deal.” Id. Agencies had until February 10, 2025 to submit to the OMB “detailed information on any programs, projects, or activities subject to this pause.” Id. The OMB Directive further noted that the pause would continue “until OMB has reviewed and provided guidance” to the agencies in relation to the information submitted to the OMB. Id. The pause was set to “become effective on January 28, 2025, at 5:00 PM.” Id.
B. The States’ Suit, the OMB Directive’s Rescission, and the TRO
On January 28, the “States”—comprising twenty-two states and the District of Columbia—brought suit against the President and the heads of numerous federal executive departments and agencies, arguing that their actions to implement the OMB Directive violated: (1) the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq. (Counts I, II); (2) the Separation of Powers (Count III); and the Spending, Presentment, Appropriations, and Take Care Clauses of the U.S. Constitution (Counts IV, V). ECF No. 1. Additionally, the States immediately moved for a temporary restraining order (“TRO”) to “restrain the Defendants from enforcing the OMB Directive’s directive to ‘pause all activities related to obligation or disbursement of all Federal financial assistance.’” ECF No. 3 at 3 (citing OMB Directive at 2). That same day, the U.S. District Court for the District of Columbia issued an administrative stay on the OMB Directive until it could hold a hearing on a separate motion for a TRO from coalitions of nonprofit organizations. See Nat’l Council of Nonprofits v. Off. of Mgmt. & Budget, No. CV 25-239 (LLA), 2025 WL 314433 (D.D.C. Jan. 28, 2025).
The next day, a hearing for the TRO motion was set for 3:00 p.m. (Hearing Notice Jan. 29, 2025) and the Defendants entered an appearance. ECF No. 39. But shortly before the hearing, the Defendants filed a notice stating that the OMB rescinded the OMB Directive and that the Plaintiffs’ claims and request for prospective relief were now moot. ECF No. 43. Nonetheless, the Court preceded with the TRO hearing at the States’ request. During the hearing the States argued against mootness, presenting White House Press Secretary Karoline Leavitt’s post-rescission announcement on X (formerly Twitter) stating that the federal funding freeze was not rescinded and that the President’s EOs remained in full force and effect. See Minute Entry Jan. 29, 2025; ECF No. 44; see also ECF No. 68-126 (screenshot of the Press Secretary’s X announcement). Feeling inclined to grant a TRO based on the evidence before it, the Court requested that the States submit, and the Defendants respond, to a proposed TRO order (Minute Entry Jan. 29, 2025)—a request the parties promptly complied with, see ECF Nos. 46, 49.
Based on the Press Secretary’s announcement—along with supplemental evidence showing continued enforcement of the OMB Directive—the Court determined that the OMB Directive’s rescission was “in name only” and that the “substantive effect of the directive carries on.” ECF No. 50 at 10. Thus, the Court found that the OMB Directive’s rescission did not moot the States’ claims and ultimately issued a TRO on January 31. See id. at 11-12. The TRO provided that the Defendants: “shall not pause, freeze, impede, block, cancel, or terminate [their] compliance with awards and obligations . . . to the States . . . except on the basis of the applicable authorizing statutes, regulations, and terms” and shall be enjoined from “from reissuing, adopting, implementing, or otherwise giving effect to the OMB Directive . . ..” Id.2
C. TRO Enforcement Order, The Defendants’ Appeal, And The Preliminary Injunction Hearing
A few days after the Court issued the TRO, it set an expedited briefing schedule on the States’ Motion for a Preliminary Injunction. See Text Order, Feb. 3, 2025. Then, on February 6, the Court extended the TRO’s duration, for good cause, until it could rule on the preliminary injunction motion. See Text Order, Feb. 6, 2025. A day later, the States filed an emergency motion to enforce the TRO, pointing to evidence that their access to federal funds was still being denied.3 See ECF No. 66. Based on the evidence, the Court determined that there were “pauses in funding [that] violate[d] the plain text of the TRO” and granted the States’ Motion, ordering the Defendants to end any federal funding pauses and take steps to carry out the TRO during its pendency. ECF No. 96 at 3-4.
Soon after the Court granted the States’ emergency enforcement motion, the Defendants appealed to the First Circuit the Court’s: (1) TRO; (2) order extending the TRO’s duration, and: (3) order enforcing the TRO. ECF No. 98 at 1. The Defendants sought a stay of the Court’s orders from the First Circuit, including an immediate administrative stay. Id. The Defendants also filed a motion to stay, requesting the Court to stay its orders pending appeal. ECF No. 100. Ultimately, the First Circuit denied the Defendants’ motion for an administrative stay (ECF No. 106 at 2), the Court denied the Defendants’ motion to stay (ECF No. 111), and the Defendants then voluntarily dismissed their appeal. ECF Nos. 121, 122. In the meantime, the States amended their complaint. ECF No. 114.
Eventually, after an expedited briefing period, the Court held a hearing on the preliminary injunction motion where the States presented evidence of the categorical pause in funding and the harms resulting. The Defendants did not rebut any of that evidence or introduce any evidence of their own but instead simply argued against the States’ Motion on other grounds. At the close of the arguments, the Court reiterated that the TRO was in full force and effect and took the States’ Motion for Preliminary Injunction under advisement.
II. STANDARD OF REVIEW
“A request for a preliminary injunction is a request for extraordinary relief.” Cushing v. Packard, 30 F.4th 27, 35 (1st Cir. 2022). “To secure a preliminary injunction, a plaintiff must show ‘(1) a substantial likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) a favorable balance of hardships, and (4) a fit (or lack of friction) between the injunction and the public interest.’” NuVasive, Inc. v. Day, 954 F.3d 439, 443 (1st Cir. 2020) (quoting Nieves-Marquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir. 2003)). In evaluating whether the plaintiffs have met the most important requirement of likelihood of success on the merits, a court must keep in mind that the merits need not be “conclusively determine[d];” instead, at this stage, decisions “are to be understood as statements of probable outcomes only.” Akebia Therapeutics, Inc. v. Azar, 976 F.3d 86, 93 (1st Cir. 2020) (partially quoting Narragansett Indian Tribe v. Guilbert, 934 F.2d 4, 6 (1st Cir. 1991)). “To demonstrate likelihood of success on the merits, plaintiffs must show ‘more than mere possibility’ of success–rather, they must establish a ‘strong likelihood’ that they will ultimately prevail.” Sindicato Puertorriqueño de Trabajadores, SEIU Local 1996 v. Fortuño, 699 F.3d 1, 10 (1st Cir. 2012) (per curiam) (quoting Respect Maine PAC v. McKee, 622 F.3d 13, 15 (1st Cir. 2010)).
III. DISCUSSION
A. Jurisdiction
The Defendants assert that the Court lacks jurisdiction to enter preliminary relief in this case because: (1) the OMB Directive’s rescission renders the States’ claims—or at least their request for preliminary relief—moot; and (2) the States have not established standing to challenge the OMB Directive. See ECF No. 113 at 11-22. The Court will address each argument in turn.
1. Mootness
The Defendants contend that the States’ claims here are directed only against the OMB Directive, and thus the rescission of the OMB Directive renders the States’ claims moot. Id. at 11. They assert that the States’ allegations of ongoing harms, such as continued funding freezes, do not stem from the challenged OMB Directive but from actions that are not challenged in the States’ Complaint. Id. at 13. Those purportedly unchallenged actions that the Defendants suggest are the true basis for the States’ ongoing harms are: (1) independent agency decisions not based on the OMB Directive; and (2) the issuance of OBM Memorandum M-25-11 (the “Unleashing Guidance”)—which directed agencies to immediately pause certain disbursement of funds appropriated under the IRA and the IIJA.4 Id. at 14-15.
The OMB Directive’s rescission does not render the States’ claims moot. The voluntary cessation doctrine precludes a finding of mootness in this case. The voluntary cessation doctrine gives rise to a mootness exception when the following two-part test is met: (1) the defendant voluntarily ceased the challenged conduct to moot the plaintiff’s case; and (2) there is a reasonable expectation that the defendant will repeat the challenged conduct after the lawsuit’s dismissal. Lowe v. Gagné-Holmes, 126 F.4th 747, 756 (1st Cir. 2025) (citing Bos. Bit Labs, Inc. v. Baker, 11 F.4th 3, 9 (1st Cir. 2021)). Here, there was a rescission of the challenged OMB Directive, see ECF No. 68-12, but as the Court has previously found, the evidence suggests that the OMB Directive’s rescission was in name only and “may have been issued simply to defeat the jurisdiction of the courts.” ECF No. 50 at 10. The Court made this finding, in part, based on a statement from the White House Press Secretary after the OMB Directive’s rescission, stating:
This is NOT a rescission of the federal funding freeze. It is simply a rescission of the OMB memo. Why? To end any confusion created by the court’s injunction. The President’s EO’s on federal funding remain in full force and effect, and will be rigorously implemented.5
ECF No. 68-126; ECF No. 50 at 10-11. The Defendants’ contentions that the sole goal of that statement was “ending confusion” and “focusing agencies on the legal effect of the President’s recent Executive Orders” are unavailing. ECF No. 113 at 16. The Press Secretary’s statement reflects that the OMB Directive’s rescission was a direct response to a court-issued stay against the OMB Directive so that the challenged federal funding freeze could continue without any judicially-imposed impediment. Therefore, the Defendants’ voluntary rescission of the OMB Directive was a clear effort to moot legal challenges to the federal funding freeze announced in the OMB Directive.
Nor have the Defendants met their heavy burden of illustrating that it is “‘absolutely clear that the allegedly wrongful behavior could not reasonably be expected to recur.’” Brown v. Colegio de Abogados de Puerto Rico, 613 F.3d 44, 49 (1st Cir. 2010) (quoting Friends of the Earth, Inc. v. Laidlaw Env’t Servs. (TOC), Inc., 528 U.S. 167, 189 (2000)). The Defendants purport that a reinstatement of the challenged OMB Directive, absent an injunction, is a fear that is “wholly speculative given the existence of the President’s Executive Orders which separately address the President’s priorities.” ECF No. 113 at 16. But nothing suggests that the OMB voluntarily abandoned the OMB Directive because they believed that: (1) the President’s EOs, alone, sufficiently instructed agencies on how to implement the President’s priorities; or (2) the OMB Directive was deficient or exceeded the Defendants’ constitutional or statutory authority. See ECF No. 68-12 (recission without explanation). Rather, as explained above, the Press Secretary’s statement reflects that the OMB Directive’s rescission was in direct response to litigation that impeded the execution of a federal funding freeze. Thus, the rationale underlying the OMB Directive’s rescission makes it unreasonable to conclude that the Defendants will not reinstate the challenged funding freeze absent an injunction from this Court. Accordingly, the States’ challenges are not moot based on the OMB Directive’s rescission.
Next, the Defendants claim that the States’ request for preliminary relief is moot because, by rescinding the OMB Directive, the Defendants have “voluntarily provided the prospective injunctive relief that the States sought in their Complaint.” ECF No. 113 at 17. Since the Defendants’ submission of their Opposition to the States’ Motion for Preliminary Injunction, the States have filed an Amended Complaint that clarifies the scope of their claims and requests for relief. See ECF No. 114. The States request that the Court preliminarily enjoin the Agency Defendants from implementing “the Federal Funding Freeze” “effectuated through EOs, the Unleashing [Guidance], the OMB Directive, and other agency actions . . ..” Id. ¶ 246. The States’ request for a preliminary injunction makes clear that they are challenging a pause on federal funding that was implemented under not only the OMB Directive, but also to the EOs incorporated therein and other agency actions such as the OMB’s issuance of the Unleashing Guidance. Thus, the rescission of the OMB Directive does not provide the States with all the prospective relief they have requested.6 Accordingly, the States’ preliminary injunction request is not moot.
2. Standing
The Defendants assert that the States lack standing to challenge the OMB Directive, particularly with respect to claims based on funding streams that “(1) are not within the scope of the OMB Memo; (2) are not managed by any of the Defendant agencies; or (3) benefit other States or third parties that are not plaintiffs in this case.” ECF No. 113 at 18-19. “To have standing, a plaintiff must ‘present an injury that is concrete, particularized, and actual or imminent; fairly traceable to the defendant’s challenged behavior; and likely to be redressed by a favorable ruling.’” Dep’t of Com. v. New York, 588 U.S. 752, 766 (2019) (quoting Davis v. Fed. Election Comm’n, 554 U.S. 724, 733 (2008)). The Defendants contend that the States seek to bring five claims against “thousands of various agency funding streams,” and thus must demonstrate standing for each claim against each funding stream. ECF No. 113 at 18. But the States’ claims are not against funding streams.7 Rather, the States’ claims focus on the Defendants’ actions, which seek to inhibit access to obligated funds indefinitely and indiscriminately—without reference to statute, regulations, or grant terms.
The States have introduced dozens of uncontested declarations illustrating the effects of the indiscriminate and unpredictable freezing of federal funds, which implicate nearly all aspects of the States’ governmental operations and inhibit their ability to administer vital services to their residents.8 These declarations reflect at least one particularized, concrete, and imminent harm that flows from the federal funding pause—a significant, indefinite loss of obligated federal funding. And such a harm is fairly traceable to the Defendants’ conduct via their acts to implement a widespread federal funding pause under the OMB Directive, the EOs incorporated therein, and the Unleashing Guidance. Granting this Motion in the States’ favor will more than likely redress their injuries because it would inhibit the abrupt, indefinite pause of obligated federal funds on which the States rely to administer vital services to their residents. Accordingly, the States have the requisite standing to challenge the federal funding freeze.
Now that the Court has jumped over these initial hurdles, it moves to resolution of the States’ preliminary injunction motion.
