On Tuesday, the district court in Rhode Island, following the lead of numerous other recent court decisions[*], enjoined further implementation of the "funding freeze" announced in Executive Order 14,154 ("Unleashing American Energy"), which directed all federal agencies to "immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (IRA) or the Infrastructure Investment and Jobs Act (IIJA)."
The opinion by district judge McElroy - a Trump appointee, as it happens - is well-written and well-reasoned - worth reading, I think, within the whirlwind of court decisions flying this way and that out there. From the introductory summary:
The Nonprofits[**] argue that the Government—in summarily freezing billions of dollars in IIJA and IRA funding—ran afoul of three Administrative Procedure Act ("APA") provisions: its requirement that agency actions (1) are not "arbitrary and capricious," (2) are not "in excess" of the authority that Congress granted the agencies, and (3) are not otherwise contrary to law. The Nonprofits now move for a preliminary injunction—a temporary court order requiring the agencies to turn the funding spigots back on, at least while their case is pending.
The Nonprofits' Motion is GRANTED…. [T]he Court holds that the Nonprofits have demonstrated a strong likelihood of success on two of their three APA claims. First, they have adequately shown at least three ways that the sudden, indefinite freeze of all already-awarded IIJA and IRA money was arbitrary and capricious: it was neither reasonable nor reasonably explained, and it also failed to account for any reliance interests. Second, the broad powers that OMB, the NEC Director, and the five Agencies assert are nowhere to be found in federal law.
The Agencies likely possess narrower powers related to individualized funding pauses and terminations, but in cases of vast economic and political significance—like this one—the Supreme Court has urged lower courts to be skeptical of agencies' sweeping claims of power. That is to say: those narrower powers cannot justify the broad exercise of authority that OMB, the NEC Director, and the Agencies asserted here. . . .
