Judge Cites ‘Chaos’ in Blocking Trump’s Grant-Funding Freeze (1)

A federal judge issued a long-term block on the Trump administration’s plan to freeze grants, loans and other payments, extending a temporary order and criticizing US officials for actions that were “irrational, imprudent, and precipitated a nationwide crisis.”

US District Judge Loren AliKhan’s order issued in Washington Tuesday bars agencies from executing “unilateral, non-individualized” funding cut-offs that implicated potentially trillions of federal dollars. The nonprofit groups that sued showed they faced the risk of “economically catastrophic” effects without the block, even though the Office of Management and Budget swiftly rescinded the original January memo that kicked off the legal fight.

The Trump administration “cannot pretend that the nationwide chaos and paralysis from two weeks ago is some distant memory with no bearing on this case,” the judge wrote.

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AliKhan and US District Chief Judge John McConnell in Rhode Island previously granted temporary restraining orders blocking the funding freeze while they weighed whether to impose longer-term injunctions. McConnell heard arguments last week in a case filed by Democratic state attorneys general and hasn’t ruled yet. Temporary restraining orders usually can’t be appealed, but preliminary injunctions can.

A Justice Department spokesperson did not immediately respond to a request for comment.

Skye Perryman, president of Democracy Forward, which is representing the nonprofits, said in a statement that AliKhan’s injunction “will allow our clients to continue to provide services to people across this country. We are pleased that the court issued this ruling, halting the Trump administration’s lawless attempt to harm everyday Americans in service of a political goal.”

AliKhan wrote that her order applied to funding for grants and other awards that already had been approved. She barred the administration not only from carrying out the freeze ordered in the rescinded OMB memo, but also from reinstating it “under a different name.”

After OMB withdrew the memo, White House Press Secretary Karoline Leavitt posted on social media that the administration was not rescinding the freeze itself and that Trump’s executive orders related to federal funding would be “rigorously implemented.”

AliKhan wrote that while courts normally give the government “a presumption of good faith,” she would not give the administration that benefit “when the government says one thing while expressly doing another,” citing Leavitt’s post.

“And it will not reward parties who change appearances without changing conduct,” the judge wrote.

The Justice Department had asked the judge to order the nonprofits to post a bond of an unspecified amount if she granted the injunction, arguing that the government should have a way to recoup at least some of the money at issue if it later won on appeal. AliKhan denied that request.

“In a case where the government is alleged to have unlawfully withheld trillions of dollars of previously committed funds to countless recipients, it would defy logic — and contravene the very basis of this opinion — to hold Plaintiffs hostage for the resulting harm,” she wrote.

The case is National Council of Nonprofits v. Office of Management and Budget, 25-cv-239, US District Court (District of Columbia).

(Updated with comment from Democracy Forward in the sixth paragraph.)

To contact the reporter on this story:
Zoe Tillman in Washington at ztillman2@bloomberg.net

To contact the editors responsible for this story:
Sara Forden at sforden@bloomberg.net

Elizabeth Wasserman, Steve Stroth

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