Background
On the first day of his second term, President Trump issued Executive Order 14154, directing agencies to pause disbursements of funds appropriated under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act while reviewing programs for consistency with the administration’s energy policies. The Office of Management and Budget and National Economic Council followed with a memorandum instructing agencies to pause funds supporting programs potentially implicated by those policies.
Six nonprofit organizations sued OMB, the NEC director, and five federal agencies under the Administrative Procedure Act. They alleged that categorical freezes prevented recipients and subrecipients from accessing previously awarded funding and forced organizations to reduce hiring, furlough or lay off employees, curtail work, and abandon planned projects. The District of Rhode Island entered a preliminary injunction broadly barring non-individualized freezes of awarded IIJA and IRA funds and directing steps to restore access to withheld awards.
The Court’s Holding
The First Circuit affirmed most of the preliminary relief. It agreed that the nonprofit grant recipients and subrecipients had sufficiently shown Article III standing against the agencies administering their awards and against the OMB defendants whose memorandum allegedly caused the freezes. The National Council of Nonprofits also could rely on associational standing for identified members affected by USDA, EPA, DOE, and Interior, but it had not identified an affected member establishing standing against HUD.
The court rejected the government’s principal challenges to the nonprofits’ likelihood of success and upheld the injunction except for paragraph 3 of the district court’s April 15, 2025 order, which it vacated. Addressing the relief’s breadth after the Supreme Court’s decision in CASA, the First Circuit held that CASA did not itself resolve the distinct remedial authority supplied by Section 705 of the APA. Given the government’s limited arguments, it failed to show that Section 705 categorically barred the order’s nonparty reach, although the court did not definitively resolve the full extent of Section 705’s non-postponement authority.
Key Takeaways
- Nonprofits showed likely standing where categorical funding freezes allegedly blocked direct grants or predictably prevented subgrantees from receiving federal funds.
- A voluntary membership organization with identifiable members need not establish additional “indicia of membership” to assert associational standing, but it must identify an affected member for each defendant it sues.
- The Supreme Court’s restriction on universal injunctions in CASA did not, by itself, foreclose broad interim relief under Section 705 of the APA.
Why It Matters
The decision leaves largely intact preliminary protection against categorical suspension of already-awarded IIJA and IRA assistance, while narrowing one portion of the district court’s order. It also distinguishes traditional universal injunctions from interim remedies authorized by the APA.
For future APA litigation, the opinion indicates that Section 705 may support relief extending beyond named plaintiffs when needed to preserve the status quo or rights pending review. But the First Circuit deliberately left unresolved the precise limits of that authority, preserving the issue for fuller consideration in a later case.