The First Circuit Court of Appeals affirmed in part and vacated in part a preliminary injunction that blocked certain federal agencies from categorically freezing the processing and payment of funds appropriated under the Inflation Reduction Act or the Infrastructure Investment and Jobs Act. As a threshold matter, the court found that both the individual nonprofit plaintiffs and the National Council of Nonprofits, which premised its standing on the standing of its members, had standing for their Administrative Procedure Act (APA) claims, though the court said the National Council of Nonprofits could not assert claims against the Department of the Housing and Urban Development (HUD) because it did not identify members who received financial assistance from HUD. The First Circuit then rejected the federal government’s arguments that the plaintiffs impermissibly split their claims between two proceedings, that they did not challenge a “final agency action” that was subject to judicial review, and that the challenged actions were “committed to agency discretion by law” and were therefore not subject to judicial review. In addition, the First Circuit found that the district court did not err in determining that the plaintiffs were likely to succeed on their claim that the challenged actions were arbitrary and capricious. The First Circuit further found that the plaintiffs showed that the effects of the loss of funding were irreparable harms and that the federal government did not show that the district court abused its discretion when it found that the equities favored the plaintiffs. Although the First Circuit affirmed the grant of “universal” injunctive relief that provided relief to nonparties, the court concluded that the court’s directive requiring monetary payments exceeded the court’s authority under the APA.

Nonprofit organizations' lawsuit challenging the Trump administration's freezing of funding under the Inflation Reduction Act and the Infrastructure Investment and Jobs Act.

Woonasquatucket River Watershed Council v. U.S. Department of Agriculture

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First Circuit Affirmed Preliminary Injunction that Blocked Categorical Freeze of Federal Funds but Said Court Lacked Authority to Order Monetary Payments

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United States of America

Rhode Island

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First Circuit Affirmed Preliminary Injunction that Blocked Categorical Freeze of Federal Funds but Said Court Lacked Authority to Order Monetary Payments

Policy instrument

Impacted group

Greenhouse gas

Economic sector

Finance