25-1477
`United States Court of Appeals
`for the First Circuit
`
`
`STATE OF RHODE ISLAND, et al.,
`
` Plaintiffs-Appellees,
`
`v.
`
`DONALD J. TRUMP, in his official capacity, et al.,
`
` Defendants-Appellants.
`
`
`
`On Appeal from the United States District Court
`for the District of Rhode Island
`
`MEMORANDUM OF LAW IN OPPOSITION TO
`MOTION FOR STAY PENDING APPEAL
`
`PETER F. NERONHA
` Attorney General of Rhode Island
`150 South Main Street
`Providence, Rhode Island 02903
`
`ANNE E. LOPEZ
` Attorney General of Hawai‘i
`425 Queen Street
`Honolulu, Hawai‘i 96813
`
`
`LETITIA JAMES
` Attorney General of New York
`28 Liberty Street
`New York, New York 10005
`(212) 416-6347
`
`
`
`Dated: June 9, 2025
`(See signature pages for complete counsel listing.)
`
`Case: 25-1477 Document: 00118297250 Page: 1 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
`TABLE OF CONTENTS
`
`Page
`INTRODUCTION ...................................................................................... 1
`BACKGROUND ........................................................................................ 3
`A. The Dismantling of Three Congressionally Created
`Agencies ..................................................................................... 3
`B. Proceedings in the District Court ............................................. 6
`ARGUMENT ............................................................................................. 9
`I. DEFENDANTS ARE UNLIKELY TO SUCCEED ON THE MERITS
`OF THEIR APPEAL ................................................................................... 9
`A. Defendants’ Jurisdictional Arguments Lack Merit. .............. 10
`1. Plaintiffs have standing .................................................. 10
`2. The Tucker Act does not divest the district court of
`jurisdiction ....................................................................... 12
`
`3. The Civil Service Reform Act does not divest the
`district court of jurisdiction ............................................. 16
`
`B. Defendants’ Actions Are Subject to Review Under the
`Administrative Procedure Act. ............................................... 18
`C. Defendants’ Actions Are Likely Unconstitutional. ................ 22
`II. DEFENDANTS HAVE NOT SHOWN IRREPARABLE INJURY ............ 24
`III. THE REMAINING FACTORS WEIGH STRONGLY AGAINST A STAY ..... 26
`CONCLUSION ........................................................................................ 27
`
`Case: 25-1477 Document: 00118297250 Page: 2 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
`INTRODUCTION
`Defendants are not entitled to the “extraordinary remedy,” Nken v.
`Holder, 556 U.S. 418, 428 (2009), of a stay pending appeal. Plaintiff
`States challenge defendants’ attempts to dismantle three federal agencies—
`the Institute of Museum and Library Services (IMLS), the Minority
`Business and Development Agency (MBDA), and the Federal Mediation
`and Conciliation Service (FMCS)—without congressional approval or any
`reasoned explanation.1 The U.S. District Court for the District of Rhode
`Island (McConnell, J.) issued a preliminary injunction order specifically
`tailored to undo defendants’ unlawful actions and to prevent defendants
`from attempting to unlawfully implement the executive order and dismantle
`
`1 Plaintiffs-appellees are the States of Arizona, California, Colorado,
`Connecticut, Delaware, Hawai‘i, Illinois, Maine, Maryland, Massachusetts,
`the People of the State of Michigan, Minnesota, Nevada, New Jersey,
`New Mexico, New York, Oregon, Rhode Island, Vermont, Washington,
`and Wisconsin. Defendants-appellants are IMLS, MBDA, FMCS, the Office
`of Management and Budget (OMB), Keith E. Sonderling, in his official
`capacity as Acting Director of IMLS, Madiha D. Latif, in her official capacity
`as Deputy Under Secretary of Commerce for Minority Business Development,
`Howard Lutnick, in his official capacity as Secretary of Commerce,
`Gregory Goldstein, in his official capacity as Acting Director of FMCS,
`Russell T. Vought, in his official capacity as Director of OMB, and Donald
`J. Trump, in his official capacity as President of the United States.
`
`Case: 25-1477 Document: 00118297250 Page: 3 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 2
`the agencies again during the pendency of this case. This Court should
`decline to stay the preliminary injunction.
`First, defendants are unlikely to succeed on the merits of their
`appeal. Defendants barely defend the legality of their actions, instead
`raising arguments against judicial review of t hose actions. Defendants
`contend that plaintiffs lack standing, that plaintiffs’ claims are precluded
`by statute, that defendants’ actions are unreviewable under the Adminis-
`trative Procedure Act (APA), and that defendants’ statutory violations
`cannot give rise to a constitutional claim. The district court rejected each
`of these arguments and defendants identify no error in the district court’s
`thorough, well-reasoned opinion.
`Second, defendants cannot show irreparable harm from an order
`that seeks to undo and to prevent futur e unlawful action. And they do
`not meaningfully dispute the evidence of irreparable harm that plaintiffs
`have experienced and would continue to experience absent injunctive
`relief. For similar reasons, the public interest is best served by ensuring
`that the agencies continue to function in accordance with statutory and
`constitutional mandates while this litigation proceeds.
`Case: 25-1477 Document: 00118297250 Page: 4 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 3
`BACKGROUND
`A. The Dismantling of Three Congressionally Created Agencies
`This case involves three federal agencies, each of which serve
`critical and statutorily mandated functions.
`First, IMLS supports museums and libraries across the United
`States by disbursing federal funds and providing other forms of technical
`assistance. See 20 U.S.C. §§ 9121-9165, 9171-9176. (Compl. ¶ 56 (Apr. 4,
`2025), ECF No. 1. ) Second, MBDA is responsible for facilitating the
`growth of minority businesses through various forms of assistance. See
`15 U.S.C. §§ 9522, 9523(a)(1)-(3). (Compl. ¶ 89.) Finally, FMCS is respon-
`sible for “assist[ing] parties to labor disputes in industries affecting
`commerce to settle such disputes through conciliation and mediation.” 29
`U.S.C. § 173(a). For the 2025 fiscal year, Congress appropriated $294,800,000
`to IMLS, $68,250,000 to MBDA, and $53,705,000 to FMCS. See Full-Year
`Continuing Appropriations and Extensions Act 2025 §§ 1101(a)(2), (8),
`Pub. L. No. 119-4, 139 Stat. 9 (2025).
`On March 14, 2025, just one day before signing the Continuing
`Appropriations Act, the President issued an executive order that directed
`seven federal agencies, including IMLS, MBDA, and FMCS, to dramatically
`Case: 25-1477 Document: 00118297250 Page: 5 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 4
`curtail their operations . See Exec. Order No. 14,238, Continuing the
`Reduction of the Federal Bureaucracy § 2(a) (Mar. 14, 2025), 90 Fed. Reg.
`13043 (“Reduction EO”). The agencies were ordered to eliminate all “non-
`statutory components and functions . . . to the maximum extent consistent
`with applicable law,” and to “reduce the performance of their statutory
`functions and associated personnel to the minimum presence and function
`required by law.” Id. The order also instructed OMB to deny the agencies
`authorization to spend federal funds for any functions beyond the
`minimum required by statute. See id. § 2(c). All of the targeted agencies
`were required to report within one week that they had achieved “full
`compliance” with the Reduction EO. Id. § 2(b).
`Before the Reduction EO, IMLS had a staff of approximately
`seventy-seven employees. (Compl. ¶ 65.) Within weeks, IMLS’s staff was
`cut to “a skeleton crew” of twelve. (Id. ¶ 69.) The agency told employees
`that the agency would be “stripped down to the studs” (ECF No. 3-40 ¶ 6),
`and notified state librarians that “all [IMLS] staff are going to be placed
`on administrative leave” (Compl., Ex. B (Mar. 31, 2025), ECF No. 1-2). In
`just one day, IMLS terminated over 1,000 grants— each termination
`Case: 25-1477 Document: 00118297250 Page: 6 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 5
`containing a generic statement citing the Reduction EO as its justifica-
`tion. (See ECF No. 35-3 ¶ 5.)
`Following the Reduction EO, MBDA placed nearly all of its staff on
`administrative leave and notified employees that it was “abolishing all
`the” forty-nine positions in the agency. (ECF No. 35-4 ¶ 4; Compl. ¶ 96.)
`Left virtually without staff, MBDA (i) terminated all preexisting grant
`awards, (ii) ceased posting new grant solicitations, (iii) stopped collecting
`data or engaging in required communications with MBDA centers , and
`(iv) could not staff a regional office for each region of the country as
`required by statute. 15 U.S.C. § 9502(e)(2)(A) . (See ECF No. 3 -41 ¶¶ 9-
`14.)
`Similarly, FMCS placed nearly all of its employees on administrative
`leave after the Reduction EO, and announced that it would cease “all Public
`Sector work” as of April 18, 2025. (Compl. ¶¶ 130, 134; ECF No. 1-4.)
`Case: 25-1477 Document: 00118297250 Page: 7 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 6
`B. Proceedings in the District Court
`In April 2025, plaintiff States filed this action and moved for a
`preliminary injunction to enjoin defendants’ implementation of the
`Reduction EO.2
`In support, p laintiffs submitted dozens of declarations explaining
`the steps that defendants have taken to dismantle IMLS, MBDA, and
`FMCS, and cataloguing how States have been or will be harmed in
`consequence. For example, the drastic cuts at IMLS resulted in the
`termination of grants to numerous States (see ECF Nos. 3-3, 3-4, 3-34);
`disrupted state library programs (ECF No. 3 -3); jeopardized plaintiffs’
`abilities to hire and pay staff (ECF Nos. 3-3, 35-1); and delayed important
`state projects (ECF No. 35 -6). Similarly, many States reliant on MBDA
`grants had their grants terminated, which inflicted harm such as displacing
`students and staff (ECF Nos. 3-11 ¶¶ 16-17); halting essential programs
`(ECF No. 3-12 ¶¶ 20-22); and impeding contractual responsibilities (ECF
`No. 3 -10 ¶¶ 16-17). Finally, eliminating FMCS’s public-sector services
`harmed plaintiff States, including by preventing States from using FMCS
`
`2 Plaintiffs initially moved for a temporary restraining order, which
`was converted to a preliminary injunction. (See ECF No. 31.)
`Case: 25-1477 Document: 00118297250 Page: 8 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 7
`to resolve ongoing labor disputes (ECF No. 3 -26 ¶ 21); making future
`work stoppages in the States more likely (ECF No. 44 -2 ¶ 15); and
`frustrating State laws and collective bargaining agreements that require
`use of FMCS services (ECF No. 3-39 ¶ 7).
`Following briefing and oral argument, the district court concluded
`in a thorough forty -nine-page decision that plaintiffs were entitled to a
`preliminary injunction to prevent defendants from dismantling the three
`agencies at issue. (See Mem. & Order (Mem.) (May 6, 2025), ECF No. 57.)
`The district court found that plaintiffs had standing (see id. at 11), that
`the claims were ripe for judicial review (id. at 12-14), and that the court
`had jurisdiction over plaintiffs’ claims, including where those claims
`implicated grant disbursements (id. at 14 -18) and mass reductions in
`force (id. at 18-21). On the merits, the district court ruled that defendants’
`actions were reviewable under the APA (id. at 21-26), were likely arbitrary
`and capricious (id. at 26-31), contrary to law (id. at 31-39), and unconstitu-
`tional (id. at 39-40). The district court also held that plaintiffs established
`irreparable harm (id. at 41-45) and that the balance of the equities and
`public interest weighed in favor of injunctive relief (id. at 46-47).
`Case: 25-1477 Document: 00118297250 Page: 9 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 8
`The district court entered a preliminary injunction order that
`incorporated revisions to the wording of the order proposed by each side.
`The order directed defendants to, among other things, (i) reverse actions
`taken to implement the Reduction EO with respect to the three agencies;
`(ii) restore employees and personal service contractors who were involun-
`tarily placed on leave or terminated due to the Reduction EO’s implementa-
`tion; and (iii) resume processing, disbursing, and paying funds to recipients
`in plaintiff States that were stalled or terminated because of the Reduction
`EO. (See ECF No. 60.)
`Defendants moved for a stay pending appeal in the district court,
`relying on purportedly new information not previously presented to the
`district court. (See ECF No. 63 .) The district court denied defendants’
`motion, explaining that the injunction was entered after all parties had
`the opportunity “to comment and to propose edits,” was “narrowly limited
`to only the statutory and constitutional violations” shown, and “simply
`required the Defendants to follow Congressionally mandated programs
`and funding.” (Order at 6-7 (June 5, 2025), ECF No. 67.)
`Case: 25-1477 Document: 00118297250 Page: 10 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 9
`ARGUMENT
`To obtain a stay pending appeal, the defendants must: “(1) make a
`strong showing that they are likely to succeed on the merits in their
`appeal; (2) show that they will be irreparably injured absent a stay;
`(3) show that issuance of the stay will not substantially injure the other
`parties interested in the proceeding; and (4) show that the stay would
`serve the public interest.” New York v. Trump, 133 F.4th 51, 65 (1st Cir.
`2025) (quotation and alteration marks omitted). Of the four factors, the
`first two —likelihood of success and irreparable injury—“are the most
`critical.” Id. at 66 (quotation marks omitted). Defendants have failed to
`show that any of the four factors favor a stay.
`I. D
`EFENDANTS ARE UNLIKELY TO SUCCEED ON THE MERITS
`OF THEIR APPEAL
`Contrary to defendants’ contention, plaintiffs have standing, and
`neither the Tucker Act nor the Civil Service Reform Act (CSRA) bars
`plaintiffs’ claims. As for the merits of plaintiffs’ claims, defendants argue
`that they have not engaged in a reviewable agency action, but do not even
`attempt to rebut plaintiffs’ showing that their actions are contrary to law
`and arbitrary and capricious. And although defendants dispute the scope
`Case: 25-1477 Document: 00118297250 Page: 11 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 10
`of the injunction, they themselves requested the precise language to
`which they now object, and do not propose alternative relief sufficient to
`redress plaintiffs’ injuries.
`A. Defendants’ Jurisdictional Arguments Lack Merit.
`1. Plaintiffs have standing
`To demonstrate Article III standing, plaintiff s must show that
`(i) they suffered an injury in fact, (ii) likely caused by the defendants, and
`(iii) likely redressable by judicial relief. Wiener v. MIB Grp., Inc., 86 F.4th
`76, 84 (1st Cir. 2023). Here, the unrefuted evidence demonstrated that
`plaintiffs receive critical funds and services directly from IMLS, MBDA,
`and FMCS, and that d efendants’ actions have resulted in numerous
`actual and imminent injuries to plaintiffs, including the loss of awarded
`funding, the termination of trusted mediation services critical to resolv-
`ing public-sector labor disputes, and disruptions in state library services.
`(Mem. at 13-14, 41-45.)
` Defendants’ arguments against standing before this Court (Mot. at
`7-9) differ from the ones they made below (see ECF No. 41), and in any
`event ignore the district court’s factual findings . The overwhelming
`record evidence disproves the assertion (Mot. at 8) that plaintiffs’ injuries
`Case: 25-1477 Document: 00118297250 Page: 12 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 11
`are “abstract,” Raines v. Byrd, 521 U.S. 811, 829 (1997), or “divorced from
`any concrete harm,” Spokeo, Inc. v. Robins, 578 U.S. 330, 341 (2016). The
`challenged actions caused (among other things) the Maine State Library
`to close its doors for two weeks (ECF No. 44 -1 ¶¶ 9-10), threatened to
`displace employees and students in Hawai‘i (ECF No. 3-11 ¶¶ 16-17), and
`“dramatically increased the risk of an imminent work stoppage —with
`life-and-death consequences —at the busiest medical center in” Rhode
`Island (ECF No. 44 -2 ¶ 15). Plaintiffs thus do not assert generalized
`grievances (Mot. at 8) about the separation of powers, but cite concrete
`harms caused by defendants ’ actions. And defendants “have submitted
`no evidence to support a contrary” factual finding. Somerville Pub. Schs.
`v. McMahon, No. 25-1495, 2025 WL 1576570, at *2 (1st Cir. June 4, 2025).3
`
`3 To be sure, a district court in the Fourth Circuit has held that
`plaintiff States lack standing to challenge an agency’s staff reductions
`based on alleged future harm. See Maryland v. Corporation for Nat’l &
`Cmty. Serv., No. 25-cv-01363, 2025 WL 1585051, at *20-22 (D. Md. June
`5, 2025). Plaintiffs disagree that the harm alleged in that case was specula-
`tive or attenuated. But, in any event, the district court here made detailed
`factual findings based on “ compelling evidence illustrating that the
`harms stemming from the dismantling of IMLS, MBDA, and FMCS are
`already unfolding or are certain to occur.” (Mem. at 13-14.) While Maryland
`noted that a nonspecific challenge to agency dismantling is not subject to
`judicial review, here plaintiffs are challenging “a discrete, categorical
`(continued on the next page)
`Case: 25-1477 Document: 00118297250 Page: 13 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 12
`Equally meritless is d efendants’ conclusory objection that the
`preliminary injunction “awards relief plaintiffs lack standing to pursue.”
`Mot. at 8 -9. Defendants identify no such relief. Moreover, d efendants’
`complaints about the purported breadth of the order ring hollow because
`the district court “accepted all the Defendants’ suggestions for ensuring
`that the injunction was narrowly drafted.” (Order at 3 n.2.)
`2. The Tucker Act does not divest the district court
`of jurisdiction
`Contrary to defendants’ contention (Mot. at 12-15), the Tucker Act
`does not divest federal courts of jurisdiction to hear plaintiffs’ claims. As
`the district court properly found, the Supreme Court’s brief emergency-
`docket order in Department of Education v. California , 145 S. Ct. 966
`(2025), “does not render [the district court] an improper forum ” for
`plaintiffs’ APA claims. (Mem. at 15.)
`California is not a ruling on the merits, see Merrill v. Milligan, 142
`S. Ct. 879, 879 (2022) (Kavanaugh, J., concurring), and did not purport
`to disturb well-settled law channeling contract disputes to the Court of
`
`policy” (Mem. at 22) —similar to the actions that Maryland found “ripe
`for judicial review,” 2025 WL 1585051, at *13.
`Case: 25-1477 Document: 00118297250 Page: 14 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 13
`Federal Claims. (Mem. at 15-16.) Before California and now, a claim falls
`within the Tucker Act’s exclusive jurisdiction if it “is at its essence a
`contract claim.” See Megapulse, Inc. v. Lewis, 672 F.2d 959, 967 (D.C. Cir.
`1982); California v. U.S. Dep’t of Educ., 132 F.4th 92, 96 -97 (1st Cir.
`2025). The “longstanding test” for evaluating a claim’s essential character
`under the Tucker Act hinges on (i) “the source of the rights upon which
`the plaintiff bases its claims” and (ii) “the type of relief sought.” Crowley
`Gov’t Servs., Inc. v. Gen. Servs. Admin. , 38 F.4th 1099, 1106 (D.C. Cir.
`2022). As California reiterated, “a district court’s jurisdiction ‘is not barred
`by the possibility’ that an order setting aside an agency’s action may
`result in the disbursement of funds.” 145 S. Ct. at 968 (quoting Bowen v.
`Massachusetts, 487 U.S. 879, 910 (1988)).
`Here, the district court correctly found (Mem. at 16) that plaintiffs’
`claims do not arise from a contract dispute. A close review of plaintiffs’
`complaint and the record confirms the district court’s conclusions. The
`legal rights on which plaintiffs base their claims “exist [ed] prior to and
`apart from rights created under” grant agreements or any other contract
`with the federal government. See Crowley, 38 F.4th at 1107 (quotation
`marks omitted). Moreover, the challenged grant terminations comprised
`Case: 25-1477 Document: 00118297250 Page: 15 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 14
`only one facet of defendants’ demolition campaign at the agencies. With
`respect to FMCS, plaintiffs’ harms did not stem from grant terminations
`at all but from eliminating agency programs and dismantling key agency
`functions. (See ECF Nos. 3-32, 3-45.) Likewise, the harms from gutting
`MBDA manifested primarily in the agency’s inability to perform its
`statutory functions, service existing MBDA centers, and issue new grant
`solicitations. (See ECF Nos. 3 -10, 3-11, 3-41.) And grantmaking aside,
`IMLS could no longer perform research and data collection as required
`by statute. (See Compl. ¶ 83.)
`That plaintiffs cite grant terminations as one component of harm
`does not transform this action into a contract dispute and thereby deprive
`the district court of jurisdiction it otherwise has. See Megapulse, 672 F.2d
`at 968; Crowley, 38 F.4th at 1106-07. Whatever the grant terms stipulate,
`defendants do not assert that they can (or do) supplant the statutory and
`constitutional duties underpinning plaintiffs’ claims. See Widakuswara
`v. Lake, No. 25-5144, 2025 WL 1288817, at *10 (D.C. Cir. May 3) (Pillard,
`J., dissenting from grant of stay), stay pending appeal denied, 2025 WL
`1521355, at *1 (D.C. Cir. May 28, 2025) (en banc) ( the government “has
`not made the requisite ‘strong showing’ of a likelihood of success” on its
`Case: 25-1477 Document: 00118297250 Page: 16 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 15
`Tucker Act argument “substantially for the reasons explained by Judge
`Pillard”). Moreover, defendants do not dispute that the Court of Federal
`Claims would be incapable of affording plaintiffs the equitable relief they
`seek, or that plaintiffs’ constitutional claims are properly before the federal
`courts.
`Unsurprisingly, defendants cite no case applying California to oust
`a district court of jurisdiction over claims similar to those that plaintiffs
`assert. The cases defendants cite (Mot. at 13) involve claims expressly
`framed as breaches of contract, Boaz Hous. Auth. v. United States , 994
`F.3d 1359, 1363 (Fed. Cir. 2021), or, equivalently, “turn[ ] entirely on the
`terms of a contract,” Albrecht v. Committee on Emp. Benefits of Fed. Rsrv.
`Emp. Benefits Sys. , 357 F.3d 62, 69 (D.C. Cir. 2004) . By contrast, t he
`district court’s holding accords with a growing number of district courts
`in this Circuit t o analyze California and reject the broad interpretation
`that defendants advance.4
`
`4 See, e.g., Association of Am. U nivs. v. Department of Energy, No.
`25-cv-10912, 2025 WL 1414135, at *6 (D. Mass. May 15, 2025); Massachusetts
`v. Kennedy, No. 25 -cv-10814, 2025 WL 1371785, at *7 -9 (D. Mass. May
`12, 2025); see also Maryland, 2025 WL 1585051, at *27.
`Case: 25-1477 Document: 00118297250 Page: 17 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 16
`3. The Civil Service Reform Act does not divest the
`district court of jurisdiction
`Defendants are also wrong to argue (Mot. at 15-17) that the CSRA
`precludes the district court from ordering the reinstatement of agency
`personnel to remedy plaintiffs’ harms. The CSRA provides an avenue for
`“federal employees” who seek to challenge an employment decision. Mot.
`at 15-16. See Somerville Pub. Schs., 2025 WL 1576570, at *4. The district
`court correctly concluded that the CSRA does not bar plaintiffs’ claims .
`(See Mem. at 18 -20.) Plaintiffs did not ask the court to review the
`propriety of employment actions; they alleged that defendants used mass
`terminations as a tool to dismantle the agencies.
`As the district court noted, accepting defendants’ preclusion
`argument under the CSRA would mean foreclosing all meaningful judicial
`review over all claims about agency action that involve personnel
`decisions (Mem. at 19). See American Fed’n of Gov’t Emps., AFL -CIO v.
`Trump, No. 25 -cv-3698, 2025 WL 1358477, at *15 (N.D. Cal. May 9,
`2025). Defendants do not dispute this result, but suggest it counsels in
`favor of preclusion. See Mot. at 17. That position is “contrary to common
`sense,” Community Legal Servs. in E. Palo Alto , No. 25-2808, 2025 WL
`1393876, at *3 (9th Cir. May 14, 2025) , and “patently absurd,” Wiley v.
`Case: 25-1477 Document: 00118297250 Page: 18 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 17
`Kennedy, No. 2:25-cv-227, 2025 WL 1384768, at *11 (S.D. W. Va. May 13,
`2025). This Court has rejected the “self-defeating” notion that the CSRA
`was “intended to bar every challenge to an unlawful effort by the
`Executive to shut down a statutorily created agency by summarily firing
`its employees en masse . . . except for those specific challenges that the
`terminated employees themselves may choose to bring.” Somerville Pub.
`Schs., 2025 WL 1576570, at *4.
`Additionally, it is undisputed that plaintiffs’ claims do not call for
`any expertise relevant to adjudging employee grievanc es under the
`CSRA. (Mem. at 20.) And plaintiffs’ claims are “‘wholly collateral’ to
`CSRA’s review provisions” because they “invoke constitutional and
`administrative questions” about the agencies’ authority (or lack thereof)
`to dismantle themselves. (Id. at 20-21.) See Thunder Basin Coal Co. v.
`Reich, 510 U.S. 200, 212-13 (1994).
`
`
`Case: 25-1477 Document: 00118297250 Page: 19 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 18
`B. Defendants’ Actions Are Subject to Review Under the
`Administrative Procedure Act.
`A rational agency action must offer , at minimum, “genuine
`justifications for important decisions,” so that they “can be scrutinized by
`courts and the interested public.” Dep artment of Com. v. New York , 588
`U.S. 752, 785 (2019). As the district court correctly found, defendants’
`implementation of the Reduction EO likely violated the APA because it
`(i) gutted the agencies without offering any reasoned explanation, and (ii)
`violated multiple federal statutes through which Congress allocated
`specific functions and funds to the agencies . (See Mem. at 31-39.) This
`“was not a close call.” (Order at 3.) Defendants do not defend these actions
`on the merits but contend that the actions should escape judicial review.
`Defendants waived these arguments by failing to make them in their stay
`motion before the district court, and the arguments are meritless in any
`event.
`First, defendants are wrong in comparing this suit to the kind of
`“programmatic” challenge dismissed by the Supreme Court in Lujan v.
`National Wildlife Federation, 497 U.S. 871 (1990). See Mot. at 10. This
`action properly challenges defendants’ “adoption of a discrete, categorical
`policy” implemented “across the board” at each agency, as the district
`Case: 25-1477 Document: 00118297250 Page: 20 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 19
`court found. (Mem. at 22.) That policy sought to effectuate the Reduction
`EO through large-scale elimination of agency operations. Like in Somerville
`Public Schools, defendants here fail to explain why the relevant actions
`fail to constitute “discrete agency action under the cases that they cite. ”
`2025 WL 1576570, at *6 (quotation marks omitted). Indeed, Lujan itself
`recognized that if an agency applied “some particular measure across the
`board,” then it could “of course be challenged under the APA.” 497 U.S.
`at 890 n.2. Although defendants argue that their implementation efforts
`“involve[d] countless operational decisions” (Mot. at 10), this Court has
`rejected “the proposition that the APA bars a plaintiff from challenging a
`number of discrete final agency actions all at once,” New York, 133 F.4th
`at 68.
`Second, defendants’ actions constituted “final agency action” subject
`to judicial review under the APA because they marked the “consummation
`of [defendants’] decisionmaking process” and produced “legal consequences”
`for the parties. Bennett v. Spear, 520 U.S. 154, 177-78 (1997) (quotation
`marks omitted) . The unrefuted evidence established that defendants
`adopted policies to severely curtail the agencies’ operations by eliminat-
`ing staff and ending services. (Mem. at 23-26.) These sweeping actions
`Case: 25-1477 Document: 00118297250 Page: 21 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 20
`had legal consequences for the States , which lost access to critical
`programs, grants, and services. (See id. at 26.) And it is undisputed that
`the challenged actions would leave the agencies unable to expend their
`statutory appropriations. Just as this Court found final agency action in
`funding freezes initiated across the federal government pursuant to an
`executive order, see New York, 133 F.4th at 68, so too here defendants’
`actions implementing the Reduction EO represent final agency action.
`Contra Mot. at 11.
`Contrary to defendants’ post hoc characterizations ( id.), the
`challenged actions implementing the Reduction EO were unequivocal
`statements constituting final agency action . (See, e.g., ECF No. 35 -5 at
`11 (“IMLS hereby terminates your grant in its entirety”); ECF No. 35-4
`at 4 (MBDA employee ’s position “will be eliminated and you will be
`separated from the federal service”) ; ECF No. 1 -4 at 2 (FMCS will not
`accept new public sector cases “[e]ffective [i]mmediately”).) Once an agency
`expresses a definitive position that compels conformance, it forfeits “the
`Case: 25-1477 Document: 00118297250 Page: 22 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 21
`benefit of postponed judicial review.” Ciba-Geigy Corp. v. U.S. Env’t Prot.
`Agency, 801 F.2d 430, 436 (D.C. Cir. 1986).5
`Third, defendants argue for the first time in this stay motion that
`the district court should have analyzed plaintiffs’ APA claims as seeking
`to “compel agency action unlawfully withheld” (Mot. at 17 (quoting 5
`U.S.C. § 706(1))). See id. at 17-19. This Court should follow its “settled
`practice not to address previously unraised arguments absent the most
`extraordinary circumstances.” Somerville Pub. Schs., 2025 WL 1576570,
`at *6 (quotation marks omitted). In any event, defendants are incorrect.
`Plaintiffs’ APA claims are not limited to the agencies’ failure to perform
`statutorily mandated functions. (See Mem. at 31, 35 -39.) Moreover,
`plaintiffs’ challenge is based on affirmative steps defendants took to
`implement the Reduction EO, not on subsequent omission of particular
`
`5 Defendants assert that certain grants were voluntarily restored
`before the preliminary injunction order was entered. Mot. at 11. Defendants
`fail to explain why these piecemeal actions justify a stay of the preliminary
`injunction in its entirety. “[A] defendant’s voluntary cessation of putatively
`illegal or unconstitutional conduct will not moot a case, unless the defendant
`meets the formidable burden of showing that it is absolutely clear the
`allegedly wrongful behavior could not reasonably be expected to recur.”
`In re Fin. Oversight & Mgmt. Bd. , 16 F.4th 954, 961-62 (1st Cir. 2021)
`(quotation marks omitted). Defendants do not come close to meeting that
`burden here, even as to the grants that were restored.
`Case: 25-1477 Document: 00118297250 Page: 23 Date Filed: 06/09/2025 Entry ID: 6727301
`
`
`
`
`
`
`
` 22
`action. See Norton v. S. Utah Wilderness All. , 542 U.S. 55, 62 (2004)
`(explaining the difference between “failure to act” and “denial”).
`Even if defendants were right that § 706(1) applied, the same result
`obtains. The district court identified multiple statutory commands that
`defendants’ actions likely violated, including each agency’s appropriations
`statutes. (See Mem. at 31-39.) Defendants have never attempted to argue
`otherwise—effectively conceding the unlawfulness of their actions. So,
`whether framed as a series of unlawful actions