Overview
- A three-judge First Circuit panel led by Chief Judge David J. Barron largely affirmed a district court order blocking the administration’s sweeping suspension of agency funding.
- The challenged pause arose from a January 2025 OMB memo directing agencies to halt federal financial assistance while reviewing alignment with policy goals targeting DEI-related and climate programs.
- The court described the freeze, affecting up to about $3 trillion, as a categorical action lacking case-by-case legal assessment.
- The panel reversed the portion of the injunction that required agencies to make payments to the suing states, citing Supreme Court guidance that money-recovery claims belong in the U.S. Court of Federal Claims.
- Although OMB later withdrew the memo, litigation over its effects continues, and a separate D.C. case brought by nonprofits and trade groups resulted in a similar injunction.