The US District Court for the District of Rhode Island and the US District Court for the District of Columbia both have issued Temporary Restraining Orders (TROs) enjoining the Government from enforcing the Office of Management and Budget’s (OMB) January 27, 2025, memorandum M-25-13, “Temporary Pause of Agency Grant, Loan, and Other Financial Assistance Programs” (OMB Memo). One TRO extended its reach to funding freezes under Executive Orders. It is unclear whether the TROs have affected the Trump Administration’s actions with respect to domestic federal assistance programs.

The Administration has taken very public steps to shut down foreign federal assistance by dismantling the US Agency for International Development (USAID) and related funding programs.  On February 3, 2024, the White House posted a message on whitehouse.gov alluding to its active dismantling of USAID, stating “Under President Trump, the waste, fraud, and abuse ENDS NOW.”

DC District Court TRO

A previous Fox Blog tracked the developments surrounding the OMB Memo in the DC District Court.  On January 28, 2025, the Court issued an administrative stay pausing the implementation of the OMB Memo’s funding freezes to review if issuing a TRO was appropriate.  The Trump Administration ostensibly rescinded the OMB Memo on January 29, 2025, but publicly declared that the funding freeze was still in effect.

On February 3, 2025, after both sides briefed their positions and presented oral arguments, the Court granted the TRO requested by the plaintiffs.  The Court rejected the Administration’s argument that the case was moot because “[t]he rescission, if it can be called that, appears to be nothing more than a thinly veiled attempt to prevent this court from granting relief.”  Key to the Court’s rationale was that certain plaintiffs were still being impacted (i.e., denied owed funding) based on the OMB Memo and that the Administration was publicly sending mixed messages regarding whether the OMB Memo really was “rescinded.”

Rhode Island District Court TRO

The Rhode Island TRO, which was issued on January 31, 2025, states that “Federal agencies cannot pause, freeze, impede, block, cancel, or terminate any awards or obligations on the basis of the OMB Memo, or on the basis of the President’s recently issued Executive Orders.”  It is important to note that this TRO explicitly applied to funding restrictions based on Executive Orders in addition to the OMB Memo. Thus, to the extent the Administration is relying on an Executive Order as authorization to suspend federal assistance, the Rhode Island TRO prohibits such action.

The Rhode Island District Court seemed to draft its TRO to survive appellate scrutiny.  In that opinion, Chief Judge McConnell cited to an opinion drafted by Justice Kavanaugh in 2013 while serving on the Court of Appeals for the DC Circuit.  Justice Kavanaugh’s opinion supported the position that the President does not have authority to unilaterally refuse to spend funds appropriated by Congress.  Rather, the President must “propose the rescission of funds, and Congress then may decide whether to approve a rescission bill.” 

What Comes Next?

Neither TRO will settle matters surrounding the OMB Memo, as one (or both) of the Federal cases will likely continue to a full trial and/or appellate review.  For federal contractors and grantees caught in limbo, these TROs theoretically should return the law to a pre-OMB Memo status quo.  However, given the Trump Administration’s bold executive actions thus far and the uncertainty regarding the ongoing litigation, Federal contractors and grantees should prepare for the possibility that funding could be restricted (or cut off) indefinitely.  The Government Contracts team at Fox can help guide you through the uncertainty.