On Monday, The Federalist ran its second in-depth article covering the lawfare against President Trump’s efforts to implement his American-first mission. ” In Your Guide To The Lawsuits Challenging A President’s Power To Fire Executive Officials”, The Federalist provided a comprehensive analysis of the dispute launched against the Trump Administration challenging the president’s fire of executive branch leaders.
Yesterday’s article provides a strong dive for a minute category of lawsuits possible to quickly attain the Supreme Court, particularly challenges to the Trump Administration’s funding freezes and terminations, and the federal government’s failure to pay for previous work performed under grants and contracts.
Claims falling within this bottle include, in chronological get by meeting of processing:
State of New York v. Trump, in which more than 20 blue state and the District of Columbia sued the Trump Administration, challenging the funding freezes.
National Council of Nonprofits v. Office of Management and Budget, in which organizations of non-profit businesses sued the Trump Administration, challenging money freezes.
Amica Center for Immigration Rights v. United States Department of Justice, in which nine contractors providing “legal entry programs” for foreigners sued the Department of Justice, challenging a stop-work purchase freezing their money.
American Federation of Government People v. Trump, in which two organisations sued the Trump Administration, challenging the reported destroying of USAID by, among other things, the delaying of grants and contracts.
AIDS Vaccine Advocacy Coalition v. United States Department of State, in which two non-profits sued the Department of State, challenging the USAID money ice.
Global Health Council v. Trump, in which various non-profits and organizations of non-profits sued the Trump Administration, challenging the USAID money ice.
United States Conference of Catholic Bishops v. United States Department of State, in which the United States Conference of Catholic Bishops sued the Department of State, challenging the Trump Administration’s ice of funding for migrant service.
State of California v. U. S. Department of Education, in which eight blue states sued the Department of Education, challenging its dismissal of offers.
State of New Mexico v. Musk, in which fourteen blue state sued Elon Musk, hard, among other things, funding freezes and abortions he presumably implemented.
National Association of Diversity Soldiers in Higher Education v. Trump, in which an institution of school variety officials, the City of Baltimore, and people sued the Trump Administration, challenging the dismissal of La grants.
Pacito v. Trump, in which several non-profits and people sued the Trump Administration, challenging the ice of offers for refugees and ice of attendance for migrants.
The Legal Issues
While there is not a perfect overlap of issues or claims, these lawsuits in general challenge several of President Trump’s executive orders ( “EOs” ) directing various federal agencies to freeze, review, and terminate various federal grants and contracts that conflict with the Trump Administration’s policies and priorities and the agencies ‘ efforts to implement those EOs.
Several lawsuits also challenged an Office of Management and Budget directive providing,” 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”. That OMB directive provided it was effective on January 28, 2025, at 5: 00 p. m., however, it was rescinded on January 29, 2025.
The Plaintiffs in these cases typically allege multiple legal theories, seeking to halt the Trump Administration’s freeze and, in many cases, the later termination of the grants and contracts. The most prevalent legal claims presented include the following:
Violation of Constitutional Separation of Powers: This claim alleges the Trump Administration exceeded its Article II authority by refusing to spend money appropriated by Congress.
Violations of the Administrative Procedure Act: Many of the complaints allege multiple Administrative Procedure Act ( APA ) claims. The APA requires federal agencies to follow specific procedures in issuing what are called “final agency actions”. This federal statute allows individuals injured by a final agency action to sue in federal court under certain circumstances when the final agency action is, among other things, “arbitrary and capricious”, adopted without the requisite notice, or is “in violation of law”.
The lawsuits identified above rely heavily on APA claims, alleging the directives by OMB and various agencies constitute “final agency action”. While various directives are arguably “final agency action” — something far from clear — appellate courts are unlikely to conclude that a decision by an agency to cancel individual grants or contracts is a “final agency action”. And without a “final agency action”, there is no APA claim.
The lawsuits identified above nonetheless argue that freezes and terminations of grants and contracts are final agency action and that the Trump Administration violated the APA because the funding freezes or terminations are “arbitrary and capricious”, adopted without the requisite notice, and “in violation of law”. In arguing the Trump Administration acted “in violation of law”, the complaints generally allege supposed violations of the separation of powers. Other complaints allege the funding freezes or terminations violate the Impoundment Control Act and thus are “in violation of law”, thereby creating an APA claim.
The Impoundment Control Act requires the president to send a” special message” to Congress detailing any proposed “deferral of budget authority”. A “deferral of budget authority” includes: ( 1 ) “withholding or delaying the obligation or expenditure of budget authority… provided for projects or activities”, or ( 2 ) “any other type of Executive action or inaction which effectively precludes the obligation or expenditure of budget authority …”.
Under the Impoundment Control Act, the president may only defer spending ( 1 )” to provide for contingencies”, ( 2 )” to achieve savings made possible by or through changes in requirements or greater efficiency of operations”, or ( 3 )” as specifically provided by law”.
While several of the lawsuits allege violations of the Impoundment Control Act, that federal statute does not create a right for American citizens to sue to enforce the law. Further, the Impoundment Control Act does not guarantee specific grantees the right to the appropriations: So long as the Trump Administration spends the appropriated funds for the designated purpose by the end of the fiscal year or complies with the requirements of that statute by then, there would be no violation of the Impoundment Control Act.
Ultra Vires Conduct: Several of the lawsuits also argue the funding freezes and contract or grant terminations are ultra vires, meaning in excess of the Defendants ‘ authority, whether it be the president’s Article II authority or the authority the various federal agencies have to spend the money appropriated by Congress.
While these legal theories differ in some respects, at the bottom they all rest on the premise that the Trump Administration cannot freeze or terminate contracts or grants.
Some Additional Legal Points
In defending against this litigation, the Trump Administration, beyond arguing there is no final agency action, relies on its sovereign immunity.
Sovereign immunity bars a federal court from entering a damage award against the government, absent its consent. And in the case of grants or contract disputes, the federal government has consent to litigation only in a specialized court which has exclusive jurisdiction to hear such disputes, called the Court of Claims. Thus, any dispute over whether the Trump Administration has wrongfully failed to pay on grants or contracts, or improperly terminated a grant or contract, must be brought in the Court of Claims — and not a federal district court. Accordingly, the Trump Administration argues, the district courts lack jurisdiction to consider the Plaintiffs ‘ claims in the above lawsuits. That remains true, the president argues, regardless of the legal theories on which the plaintiffs rely, such as the APA.
A few more legal niceties merit mention:
Temporary Restraining Orders: In the majority of the cases identified above, the Plaintiffs immediately after filing the complaints sought a” Temporary Restraining Order” to enjoin the Trump Administration from freezing or withholding funds. To obtain a temporary restraining order ( TRO ), the Plaintiffs must satisfy a stringent standard, establishing a strong likelihood of success on their legal claims and that they will suffer irreparable harm if the Defendants are not immediately restrained.
Several judges entered TROs against the Trump Administration, but some of those went beyond “maintaining the status quo”, and purported to order the Trump Administration to act ( as opposed to not act ) by, for instance, unfreezing grants or paying on grants. Such an order is in actuality an “injunction” and not a TRO. That matters because TROs are generally not appealable, while an injunction can be immediately appealed.
A TRO is, as the name says, “temporary”. Courts must then promptly hold a hearing on a Motion for a preliminary injunction to decide whether to issue an injunction pending resolution of the case on the merits of the claim. To prevail on a preliminary injunction, Plaintiffs must again show a likelihood of success on the merits, that they will suffer irreparable harm, and that the potential harm to them outweighs the harm to the government. A preliminary injunction can be appealed immediately.
Additionally, the party enjoined may seek a stay from the courts, putting the injunction on hold during the pendency of the appeal. Courts will only grant a stay if the party’s appeal has a strong likelihood of success.
Against this backdrop, then, here is a summary of the current litigation.
In this case more than 20 blue states and the District of Columbia sued the Trump Administration in a federal district court in Rhode Island, challenging the president’s EOs and the OMB directive freezing federal awards. Even after recission of the OMB directive, presiding Judge John J. McConnell, Jr. entered a TRO directing the Trump Administration to unfreeze the funding and to pay the contracts and grants due, but allowing for agencies to cancel grants, as allowed by law.
However, after the Plaintiffs filed a motion to enforce the TRO, Judge McConnell entered an order directing the Trump Administration to pay all the grants and contracts. Judge McConnell would later walk back his order, again recognizing that Trump Administration could cancel grants and contracts if based on individualized assessments.
Last week, Judge McConnell converted the TRO into a preliminary injunction, holding the plaintiff states had a likelihood of success on the merits of their APA claims, reasoning the Trump Administration acted in violation of the Impoundment Control Act and had acted arbitrarily and capriciously in freezing funding. The federal judge then entered an injunction enjoining the Defendants “from pausing, freezing, blocking, canceling, suspending, terminating, or otherwise impeding the disbursement of appropriated federal funds to the States under awarded grants, executed contracts, or other executed financial obligations”, where” the federal government imposes or applies a categorical pause or freeze of funding appropriated by Congress”. Judge McConnell also denied the Trump Administration’s request for a stay.
Of note: This injunction appears to allow the Trump Administration to terminate contracts and grants based on an individualized assessment.
The Trump Administration has already appealed Judge McConnell’s preliminary injunction order to the First Circuit Court of Appeals and requested an emergency stay of that injunction. Briefing on the stay is underway, with the final reply brief not due until March 20, 2025.
National Council of Nonprofits v. Office of Management and Budget:
This case, like State of New York v. Trump, challenged the OMB Directive that ordered agencies to freeze federal funding. The Plaintiffs in this case — several organizations representing nonprofits — sued in a federal court in D. C., seeking a TRO.
Judge Loren L. AliKhan granted the Plaintiffs a TRO, and later a preliminary injunction, concluding the Plaintiffs had a likelihood of success on their arbitrary and capricious APA claim. The preliminary injunction enjoined the Trump Administration from freezing, on a “non-individualized” basis, the disbursement of federal funds” under all open awards”. Significantly, in issuing her decision, Judge AliKhan stressed the Plaintiffs only sought to “prevent Defendants from ordering or implementing unilateral, blanket pauses across the entire federal funding apparatus”. Accordingly, the injunction does not prevent the Trump Administration from cancelling grants or contracts on an individualized basis.
That limitation may explain why the Trump Administration has not yet appealed Judge AliKhan’s preliminary injunction. The Trump Administration also seems to believe the injunction does not limit its ability to institute a blanket pause of grants or contracts under which services have yet to begin: Currently, the Plaintiffs in this case are seeking clarification from Judge AliKhan on the meaning of “open awards”, and whether that includes grants approved but not yet undertaken.
Amica Center for Immigration Rights v. United States Department of Justice:
In Amica Center, nine subcontractors sued the Department of Justice after the Trump Administration ordered the contractor to issue a stopwork order that froze the funding of these subgrants who provided legal informational service to aliens. The Trump Administration later rescinded the stopwork order. Nonetheless, the Plaintiffs continued to seek injunctive relief, which the Trump Administration opposes, arguing that the APA claims fail on the merits and in any event the Plaintiffs cannot establish an imminent harm because the stopwork order was rescinded. A hearing on the preliminary injunction motion is set for March 17, 2025.
American Federation of Labor &, Congress of Industrial Organizations v. Department of Labor:
Two unions representing employees of USAID sued the Trump Administration for allegedly illegally dismantling USAID. This lawsuit challenged a variety of actions related to USAID, including the placing on leave, or firing of, USAID employees. The Plaintiffs, however, also challenged the freeze and canceling of various grants and contracts and sought a TRO and preliminary injunction to restore the “funding pursuant to the terms of all grants, cooperative agreements, and contracts, consistent with the terms of the agreements and any relevant statutes and regulations. .”.
Judge Carl Nichols originally entered a TRO, but limited his order to restraining the Trump Administration from firing foreign USAID employees, given concerns over their safety. Judge Nichols later denied the Plaintiffs a preliminary injunction, concluding there was no clear violation of law and no imminent harm. Neither the TRO or preliminary injunction opinions addressed the Plaintiffs ‘ challenges to the termination of the grants or contracts, leaving those issues for further proceedings.
AIDS Vaccine Advocacy Coalition v. United States Department of State:
Two non-profits, AIDS Vaccine Advocacy Coalition ( AVAC ), and Journalism Development Network, Inc., sued the Trump Administration in a D. C. federal court, challenging the USAID funding freeze. This case was consolidated with Global Health Council v. Trump, which presented similar challenges on behalf of other non-profit organizations or associations.
Global Health Council v. Trump:
This case was consolidated with AIDS Vaccines, and presented similar challenges to the USAID funding freeze on behalf of numerous non-profit organizations and/or associations.
In the consolidated AIDS Vaccine and Global Health cases, presiding Judge Amir H. Ali entered a TRO prohibiting the Trump Administration from” suspending, pausing, or otherwise preventing the obligation or disbursement of appropriated foreign-assistance funds in connection with any contracts, grants, cooperative agreements, loans, or other federal foreign assistance award, ..”. However, the TRO expressly provided” that nothing in this order shall prohibit the Restrained Defendants from enforcing the terms of contracts or grants”.
Plaintiffs would later file multiple motions to enforce Judge Ali’s TRO, claiming the government had yet to pay for work already completed and that the Trump Administration had begun to cancel grants. The Trump Administration countered that it was in the process of reviewing the work completed to ensure payments were due under the terms of the grants and further that the TRO allowed it to terminate contracts and grants pursuant to the terms of those agreements.
Judge Ali sided with the Plaintiffs and ordered the Trump Administration to pay some$ 2 billion in grants within 36 hours, prompting the Chief Justice John Roberts to enter an administrative stay to that order. The Supreme Court, however, refused to consider the Trump Administration’s challenge to the TRO, with the high court instead directing Judge Ali to identify the specific grants to be paid.
A four-justice dissent authored by Justice Samuel Alito expressed shock at the Court’s decision, explaining the TRO should be stayed because a single judge likely lacked jurisdiction to order the federal government to dole out$ 2 billion. The dissent proves informative because it lays out a basis for overturning all of the lower court decisions ordering the payments of grants or contracts— and shows at least four justices agree with the reasoning.
Specifically, Justice Alito explained that the APA’s waiver of sovereign immunity did not likely extend to claims that” closely resemble ] ] a compensatory money judgment”, such as those at issue in the case. Rather, as the dissent explained,” the proper remedy for an agency’s recalcitrant failure to pay out may be to ‘ seek specific sums already calculated’ and ‘ past due’ in the Court of Federal Claims”.
Since then, Judge Ali has entered a preliminary injunction against the Trump Administration, finding first the initial freeze in spending was arbitrary and capricious in violation of the APA. Accordingly, Judge Ali enjoined the Trump Administration from “giving effect to any terminations, suspensions, or stopwork orders issued between January 20, 2025, and February 13, 2025, for any grants, cooperative agreements, or contracts for foreign assistance”. He further ordered the Defendants not to “withhold payments or letter of credit drawdowns for work completed prior to February 13, 2025”.
Judge Ali then held the Plaintiffs had a strong likelihood of success on their APA claims premised on the Trump Administration’s purported violation of the Impoundment Control Act and separation of powers. Here, the federal judge reasoned that Congress appropriated federal funds for specific purposes and the president lacked authority to cancel such funding. Accordingly, he further enjoined the Defendants from “unlawfully impounding congressionally appropriated foreign aid funds”, and ordered the Trump Administration to “make available for obligation the full amount of funds that Congress appropriated for foreign assistance programs in the Further Consolidated Appropriations Act of 2024”.
The Trump Administration is likely to file an appeal to the D. C. circuit and has requested an immediate stay. On appeal, the Trump Administration is then likely to reiterate the analysis Justice Alito presented in his dissent, namely that the federal government did not waive sovereign immunity in the APA for claims to pay compensatory damages on grants and contracts. Rather, any such claim must go to the federal Court of Claims.
On the second point, the Trump Administration is likely to stress that the injunction is an improper “follow the law injunction” — which it is, for it merely says the Trump Administration has to make funds available, as appropriated. Congress, however, did not appropriate any funds for awards to these specific Plaintiffs. Nor is the fiscal year for which the appropriations Congress made over. Thus, it is unclear how this injunction requires the Trump Administration to do anything it wasn’t already required to do already.
United States Conference of Catholic Bishops v. United States Department of State:
In this case, the United States Conference of Catholic Bishops ( USCCB) challenged the Trump Administration’s freeze of grants and contracts related to the provision of refugee services. As in the other cases, the USCCB alleged various violations of the APA. District court judge Trevor McFadden denied the USCCB a TRO. And on Tuesday, Judge McFadden denied the USCCB’s Motion for a Preliminary Injunction.
In denying the USCCB’s Motion for a Preliminary Injunction, Judge McFadden reasoned that the “motion is, at its core, seeking a purely contractual remedy”. All such” contract disputes with the Government must be resolved by the Court of Federal Claims”. Judge Trevor McFadden then explained in denying the USSCB an injunction.
The Trump Administration will likely next move to dismiss the lawsuit on this basis, namely that the district court lacks jurisdiction over the breach of contract claims.
Late Wednesday, the USCCB filed an appeal of the denial of its motion for a preliminary injunction in the D. C. Circuit Court of Appeals.
State of California v. U. S. Department of Education:
Eight blue states sued the Department of Education, alleging its termination of grants previously awarded under the Teacher Quality Partnership ( TQP ) Program and the Supporting Effective Educator Development ( SEED ) Grant Program were arbitrary and capricious and in violation of law, and thus in violation of the APA. The Department of Education countered that because the dispute concerns the termination of contracts, the states cannot maintain an APA claim but must instead sue in the Court of Federal Claims.
Presiding Massachusetts district court Judge Myong J. Joun disagreed, and on Monday granted the Plaintiffs a TRO, ordering the Defendants to “immediately restore Plaintiff States to the pre-existing status quo prior to the termination under all previously awarded TQP or SEED grants for recipients in Plaintiff States”, and further barring any efforts to terminate, suspend, or withhold any funds approved or obligated for those grants.
The TRO, however, also appeared to allow for termination of grants based on an individualized basis, by providing:” Individual TQP and SEED grant for recipients in Plaintiff States”, could be terminated” to the extent the final agency action is consistent with the Congressional authorization and appropriations, relevant federal statute, including the requirements of the APA, the requirements of the relevant implementing regulations, the grant terms and conditions, and this Court’s Order”.
How a such a termination could be consistent with” this Court’s Order”, is unclear, because the Court’s Order suggested all terminations were barred as violative of the APA.
The Trump Administration has already filed an appeal to the First Circuit Court of Appeals and requested an immediate stay. Yesterday, the First Circuit denied an immediate stay but directed the Plaintiffs to respond to the stay request by 5: 00 p. m. today, with the Department of Education filing any response by Friday at 5: 00 p. m. The Court stated it would rule expeditiously once the briefing was completed.
The First Circuit order also directed the Plaintiffs to address the Department of Education’s argument that “if recipients in the plaintiff States are given access to the funds, nothing prevents them from drawing down the funds”, that” there is a significant risk of grantees attempting to withdraw tens of millions of dollars on canceled grants”, and that there would be “limited ability to recover those disbursed funds”. This request for briefing suggests the Court of Appeals has concerns about the possible harm to the Trump Administration.
This lawsuit, filed by fourteen blue states against Elon Musk, argues that Musk is acting as a “principal officer” in violation of the Appointments Clause of Article II of the U. S. Constitution. The Appointments Clause requires the president to seek the advice and consent of the Senate before appointing principal officers — in other words, Senate confirmation.
The Plaintiffs maintain that because Musk was not confirmed by the Senate, Musk lacks authority to institute various firings and, as relevant to this discussion, spending freezes and grant and contract terminations. However, as the government counters, Musk lacks ultimate authority to freeze or terminate grants and therefore, the Plaintiffs ‘ lawsuit lacks merits.
The district court rejected Plaintiffs ‘ motion for a TRO, concluding they failed to show they were likely to suffer an imminent harm from any of Musk’s allegedly illegal conduct. Then, last week, Musk filed a motion to dismiss the case, arguing that he is not a principal officer and thus the Plaintiffs ‘ lawsuit should be thrown out.
National Association of Diversity Officers in Higher Education v. Trump:
In this lawsuit, an organization of college diversity officers, the City of Baltimore, and others sued the Trump Administration, challenging the termination of DEI grants in a Maryland federal court. District court Judge Adam Abelson entered a preliminary injunction barring federal agencies from pausing, freezing, canceling or terminating any awards or obligations or changing any of the obligations based on Trump Administration EOs concerning DEI initiatives.
The Trump Administration has appealed that order to the Fourth Circuit and has also sought a stay. Judge Abelson denied the Trump Administration’s motion to stay the injunction. The Trump Administration also filed a motion to stay pending appeal in the Fourth Circuit and briefing has been completed, with the federal appellate court yet to have decided the motion.
In Pacito, several non-profit organizations which reveive funding to provide services for refugees sued the Trump Administration, challenging the freeze on their grants. Relatives of individuals seeking admission to the United States as refugees also joined this lawsuit as plaintiffs, challenging the Trump Administration’s freeze on the admission of refugees. That aspect of the case involves different issues and precedent and will be discussed in a later article.
On the funding issues, Washington state federal district court Judge Jamal Whitehead granted Plaintiffs a TRO and then a preliminary injunction, concluding they had a likelihood of success on their APA claims. The court reasoned that Congress had appropriated funds with the expressed purpose of helping refugees and that therefore the Trump Administration could not freeze or terminate the grants. Accordingly, the court enjoined the Trump Administration from” suspending or implementing the suspension of the relevant refugee funds, or withholding reimbursements for work previously performed”.
The Trump Administration appealed to the Ninth Circuit Court of Appeals and filed an emergency motion for a stay, arguing the trial court lacks authority to force the Trump Administration to admit refugees or to pay on contracts or grants. Briefing on the stay will continue through March 18, 2025.
After appealing the preliminary injunction order, the Trump Administration terminated the various refugee-support service grants that it had previously frozen. Because the preliminary injunction only enjoined the Trump Administration from suspending the grants and not terminating them, the Plaintiffs amended their complaint and sought a supplemental injunction to require the Trump Administration to rescind the terminations.  ,
The Trump Administration countered that the Plaintiffs must pursue any claim related to the grant terminations in the federal Court of Claims, which is what the judge in the USCCB case discussed above held. The district court in this case has yet to rule on the supplemental motion.
What’s Next
While these cases remain in the early stages of litigation, given that several courts have entered injunctions commanding the Trump Administration to pay on grants and contracts, and to not terminate other awards, it is likely the appellate courts, or the Supreme Court, will intervene in the short term to address the fundamental issue of jurisdictions. Specifically, the appellate courts and eventually the U. S. Supreme Court will need to address whether federal district courts have jurisdiction to enter injunctions requiring the payment of grants and contracts for claims premised on the APA or the constitution.
The four-justice dissent in AIDS Vaccine suggests the answer is “no”, and that instead such claims must be brought in the federal Court of Claims. And here, it is important to note that the other Supreme Court justices did not conclude otherwise but merely denied the application for a stay of the TRO. ( As explained above, TROs are typically not appealable. ) But now that the lower courts have entered preliminary injunctions that are immediately appealable, the Supreme Court is likely to step in — if the appellate courts don’t put a halt to the judiciary’s micromanagement of the executive branch.
Margot Cleveland is an investigative journalist and legal analyst and serves as The Federalist’s senior legal correspondent. Margot’s work has been published at The Wall Street Journal, The American Spectator, the New Criterion, National Review Online, Townhall.com, the Daily Signal, USA Today, and the Detroit Free Press. She is also a regular guest on nationally syndicated radio programs and on Fox News, Fox Business, and Newsmax. Cleveland is a lawyer and a graduate of the Notre Dame Law School, where she earned the Hoynes Prize—the law school’s highest honor. She later served for nearly 25 years as a permanent law clerk for a federal appellate judge on the Seventh Circuit Court of Appeals. Cleveland is a former full-time university faculty member and now teaches as an adjunct from time to time. Cleveland is also of counsel for the New Civil Liberties Alliance. Cleveland is on Twitter at @ProfMJCleveland where you can read more about her greatest accomplishments —her dear husband and dear son. The views expressed here are those of Cleveland in her private capacity.
