WASHINGTON — The 1st Circuit Court of Appeals on Tuesday declined to block a lower court’s order that requires the Trump administration to unfreeze funding for grants and loans.

The?two-page ruling?follows the U.S. Justice Department asking the appeals court to halt a temporary restraining order from Chief Judge John J. McConnell Jr. of the U.S. District Court in Rhode Island.

“We are confident the District Court will act with dispatch to provide any clarification needed with respect to, among other things, the defendants’ contention that the February 10 Order ‘bars both the President and much of the Federal Government from exercising their own lawful authorities to withhold funding without the prior approval of the district court,’” the appeals court wrote.

OMB memo

The case began in late January when the Office of Management and Budget released?a two-page memo instructing departments and agencies across the federal government to halt funding on trillions of dollars in grants and loans.

The memo quickly became the subject of?two separate lawsuits.

This case,?State of New York v. Trump, was filed by Democratic attorneys general from New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, North Carolina, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Wisconsin and the District of Columbia.

McConnell?issued a temporary restraining order in late January, blocking the Trump administration from implementing the funding freeze envisioned in the OMB memo, even though OMB had rescinded the memo after the judge in the other case issued an administrative stay.?

One week later, on Feb. 7, the Democratic attorneys general?filed an emergency request with McConnell, alleging the Trump administration wasn’t following along with his ruling and asking the district court to enforce the temporary restraining order.

McConnell issued a ruling Monday, requiring the Trump administration to unfreeze all of the grant and loan funding that would have been halted by OMB’s original two-page memo.

McConnell also wrote the Trump administration must “restore withheld funds” connected to the bipartisan infrastructure law and the so-called Inflation Reduction Act, the climate change, health care and tax package that Democrats passed when they held unified control of government.

President Donald Trump called for funding from those two laws to be halted in his?executive order?on “Unleashing American Energy.”

The Department of Justice?appealed the district court’s rulings to the 1st Circuit Court of Appeals, located in Boston, Massachusetts.??

DOJ denied

The appeals court released its ruling on Tuesday, denying the Justice Department’s motion for an administrative stay “without prejudice.”

The appeals court wrote that “parties may file any further memoranda in support of their positions on the motion for a stay pending appeal in this court by” 5 p.m. Eastern on Thursday.

The Justice Department wrote in its?request for an administrative stay?to the circuit court that the “district court’s order represents an extraordinary usurpation of the President’s Executive Power.”

“At a minimum, this Court should clarify that the district court’s order is unlawful to the extent that it (a) extends beyond the since-rescinded OMB guidance, (b) prevents agencies from exercising whatever authority they possess under their organic statutes and regulations to delay or freeze funding, and (c) prevents the President from exercising the discretion that is committed to him under Article II of the Constitution,” the Justice Department wrote.

The Democratic attorneys general responded in?a 17-page brief?to the circuit court that the DOJ’s assertion the temporary restraining order “intrudes deeply into the prerogatives of the Executive Branch …is badly flawed.”

“The ‘rule of law,’ id., does not permit federal agencies to impose blanket freezes of funds on policy grounds without regard to whether they have any authority to do so under the applicable statutes and grant terms and where, indeed, Congress has required those funds to be spent, as the district court correctly explained.”

Emergency motion

The Justice Department filed a?five-page emergency motion with the district court following the appeals court’s decision, asking for a ruling before 11 a.m. on Wednesday.

DOJ lawyers wrote they wanted the district court to “address the court of appeals’ expectation that ‘the District Court will act with dispatch to provide any clarification needed with respect to, among other things, the defendants’ contention that the February 10 Order ‘bars both the President and much of the Federal Government from exercising their own lawful authorities to withhold funding without the prior approval of the district court.’”

DOJ also asked the district court to clarify if the Trump administration can “permissibly withhold certain FEMA funding.”

“In short, FEMA seeks to withhold Shelter and Services Program (SSP) funding based on concerns regarding the program,” DOJ wrote.

That program “funds nonfederal entities providing food, shelter, transportation, and supportive services to noncitizen migrants released from Department of Homeland Security (DHS) custody,” according to a?report from the nonpartisan Congressional Research Service.

Congress approved $650 million for the program in the last full-year spending bill for the Department of Homeland Security, in order to alleviate “overcrowding in [CBP] short-term holding facilities.”

Last updated 7:36 p.m., Feb. 11, 2025