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Gov Uscourts DCD 276842 1 0

The document is a legal complaint filed by several nonprofit organizations against the Office of Management and Budget (OMB) and its Acting Director, Matthew Vaeth, regarding a memorandum that mandates a temporary pause on federal financial assistance programs. The plaintiffs argue that this memorandum lacks legal justification and threatens the operations of numerous grant recipients who rely on federal funding. They seek a temporary restraining order to maintain the status quo until the court can review the legality of OMB's actions.

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0% found this document useful (0 votes)
5K views20 pages

Gov Uscourts DCD 276842 1 0

The document is a legal complaint filed by several nonprofit organizations against the Office of Management and Budget (OMB) and its Acting Director, Matthew Vaeth, regarding a memorandum that mandates a temporary pause on federal financial assistance programs. The plaintiffs argue that this memorandum lacks legal justification and threatens the operations of numerous grant recipients who rely on federal funding. They seek a temporary restraining order to maintain the status quo until the court can review the legality of OMB's actions.

Uploaded by

Aaron Parnas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
You are on page 1/ 20

Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 1 of 20

UNITED STATES DISTRICT COURT


FOR THE DISTRICT OF COLUMBIA

NATIONAL COUNCIL OF
NONPROFITS,
1001 G Street NW, Suite 700 East
Washington, D.C. 20001,

AMERICAN PUBLIC HEALTH


ASSOCIATION,
800 I Street NW
Washington, D.C. 20001,

MAIN STREET ALLIANCE,


909 Rose Avenue
North Bethesda, Md. 20852,

and

SAGE,
305 7th Avenue, 15th Floor
New York, N.Y. 10001,

Plaintiffs,

v.

OFFICE OF MANAGEMENT AND Case No.


BUDGET,
725 17th Street, N.W.
Washington, D.C. 20503,

and

MATTHEW VAETH, in his official


capacity as Acting Director, Office of
Management and Budget
725 17th Street, N.W.
Washington, D.C. 20503,

Defendants.
COMPLAINT
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 2 of 20

Just yesterday evening, reports surfaced that the Acting Director of the Office of

Management and Budget issued a memorandum entitled “Temporary Pause of Agency

Grant, Loan, and Other Financial Assistance Programs.” Memo M-25-13 (hereinafter

“the Memo”). 1 The Memo purports to require every federal agency to temporarily pause

“all activities related to obligation or disbursement of all Federal financial assistance, and

other relevant agency activities that may be implicated by [President Trump’s] executive

orders, including, but not limited to, financial assistance for foreign aid, nongovernmental

organizations, DEI, woke gender ideology, and the green new deal”—effective today at

5:00 p.m. Memo M-25-13 at 2. In practice, the Memo purports to eradicate essentially all

federal grant programs. Acting Director Vaeth’s only stated basis for doing so is his

belief that “[f]inancial assistance should be dedicated to advancing Administration

priorities,” and that “[t]he use of Federal resources to advance Marxist equity,

transgenderism, and green new deal social engineering policies is a waste of taxpayer

dollars that does not improve the day-to-day lives of those we serve.” Id. at 1.

This Memo—made public only through journalists’ reporting, with barely twenty-

four hours’ notice, devoid of any legal basis or the barest rationale—will have a

devastating impact on hundreds of thousands of grant recipients who depend on the

inflow of grant money (money already obligated and already awarded) to fulfill their

missions, pay their employees, pay their rent—and, indeed, improve the day-to-day lives

of the many people they work so hard to serve.

1
A copy of the Memo is available online at:
https://www.washingtonpost.com/documents/deb7af80-48b6-4b8a-8bfa-
3d84fd7c3ec8.pdf.

2
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 3 of 20

Although the Trump Administration is at liberty to “advanc[e] [its] priorities,” it

must do so within the confines of the law. It has not. The Memo fails to explain the

source of OMB’s purported legal authority to gut every grant program in the federal

government; it fails to consider the reliance interest of the many grant recipients,

including those to whom money had already been promised; and it announces a policy of

targeting grant recipients based in part on those recipients’ First Amendment rights and

with no bearing on the recipients’ eligibility to receive federal funds.

Given the few hours that remain before federal grantees are thrown into disarray,

Plaintiffs file this Complaint and seek a temporary restraining order to maintain the status

quo until the Court has an opportunity to more fully consider the illegality of OMB’s

actions.

Parties

1. Plaintiff National Council of Nonprofits (“NCN”) is the largest network

of nonprofit organizations in North America, with more than 30,000 organizational

members. National Council of Nonprofits (“NCN”) supports nonprofits in advancing

their missions by identifying emerging trends, sharing proven practices, and promoting

solutions that benefit charitable nonprofits and the communities they serve.

2. Plaintiff American Public Health Association (“APHA”) is a

nonpartisan, non-profit organization that champions the health of all people and all

communities; strengthens the profession of public health; shares the latest research and

information; promotes best practices; and advocates for public health issues and policies

grounded in scientific research. APHA represents more than 23,000 individual members,

who reside in all 50 states, the District of Columbia, and Puerto Rico, and also has 52

3
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 4 of 20

state and regional affiliates. APHA is the only organization that combines a 150-year

perspective, a broad-based member community, and the ability to influence federal policy

to improve the public’s health.

3. Plaintiff Main Street Alliance (“MSA”) is a national network of small

businesses, which represents approximately 30,000 small businesses across the United

States. MSA helps small business owners realize their full potential as leaders for a just

future that prioritizes good jobs, equity, and community through organizing, research,

and policy advocacy on behalf of small businesses. MSA also seeks to amplify the voices

of its small business membership by sharing their experiences with the aim of creating an

economy where all small business owners have an equal opportunity to succeed. MSA’s

small business members compete for and receive various forms of what is broadly

defined as “federal financial assistance,” including funding in the form of grants, loans,

and loan guarantees. Members also benefit directly from other recipients of federal

financial assistance being able to purchase goods and services from them as a result of

federal programs.

4. Plaintiff SAGE is a New York nonprofit corporation. SAGE is dedicated

to improving the lives of lesbian, gay, bisexual, and transgender adults.

5. Defendant OMB is a federal agency with responsibility for overseeing the

management of federal financial assistance, including by establishing policies and

requirements. See 31 U.S.C. §§ 503(a), 504. It is a component of the Executive Office of

the President and maintains a headquarters in Washington, D.C.

6. Defendant Matthew Vaeth is the Acting Director of OMB. He is sued in

his official capacity.

4
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 5 of 20

Jurisdiction and Venue

7. This Court has subject matter jurisdiction over this action pursuant to 28

U.S.C. § 1331, because this action arises under federal law, specifically the

Administrative Procedure Act, 5 U.S.C. § 701, et seq.

8. Venue is proper in this district pursuant to 5 U.S.C. § 552(a)(4)(B) and 28

U.S.C. § 1391(e), because at least one of Defendants is headquartered in Washington,

D.C. and a substantial part of the events or omissions giving rise to Plaintiff’s claims

occurred here.

Legal Framework

9. The Office of Management and Budget has the authority to “establish

governmentwide financial management policies for executive agencies.” 31 U.S.C. §§

503(a), 504. That authority, given by Congress to the Deputy Director for Management

and the Office of Federal Financial Management, includes the authority to “[p]rovide

overall direction and leadership to the executive branch on financial management matters

by establishing financial management policies and requirements.” Id. § 503(a)(2).

10. Pursuant to that authority, OMB published in 2013 a notice of proposed

rulemaking to revise and streamline guidance related to federal financial assistance.

11. In 2014, it published what is now known as the OMB Guidance for

Federal Financial Assistance (“OMB Guidance” or “Guidance”) at title 2 of the Code of

Federal Regulations (“CFR”). 79 Fed. Reg. 75867.

12. The Guidance specifically requires federal agencies to “implement” the

Guidance “in codified regulations unless different provisions are required by Federal

statute or are approved by OMB.” 2 C.F.R. § 200.106.

5
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 6 of 20

13. Since 2014, OMB has twice updated its Guidance—both times after

providing a notice and comment period. See 85 Fed. Reg. 49506 (2020); 89 Fed. Reg.

30046 (2024).

Factual Allegations

14. On January 27, 2025, Matthew J. Vaeth, Acting Director of the Office of

Management and Budget, issued the Memo, titled “Temporary Pause of Agency Grant,

Loan, and Other Financial Assistance Programs.”

15. The Memo directs each federal agency to “complete a comprehensive

analysis of all of their Federal financial assistance programs to identify programs,

projects, and activities that may be implicated by any of the President’s executive

orders.”

16. The Memo states that, during their assessment, all federal agencies “must

temporarily pause all activities related to obligation or disbursement of all Federal

financial assistance, and other relevant agency actions that may be implicated by the

executive orders, including, but not limited to, financial assistance for foreign aid,

nongovernmental organizations, DEI, woke gender ideology, and the green new deal”

(emphasis in original).

17. According to the Memo, “Federal financial assistance includes: (i) all

forms of assistance listed in paragraphs (1) and (2) of the definition of this term at 2 CFR

200.1; and (ii) assistance received or administered by recipients or subrecipients of any

type except for assistance received directly by individuals.”

18. The relevant portions of 2 C.F.R. 200.1 defining “federal financial

assistance” broadly encompass all “[a]ssistance that recipients or subrecipients receive or

6
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 7 of 20

administer in the form of” “grants,” “loans,” “loan guarantees,” and “insurance,” among

other things.

19. The Memo specifically carves out Medicare or Social Security benefits.

20. Agencies are also directed to “pause all activities associated with open

NOFOs, such as conducting merit review panels.” NOFO stands for “notice of funding

opportunity” and refers to a formally issued announcement of the availability of federal

funding.

21. The OMB Memo orders that the “pause” take effect on January 28, 2025

at 5 p.m. The OMB Order does not provide an end date for the pause.

22. Agencies are required to report by February 10, 2025 to OMB “detailed

information on any programs, projects or activities subject to this pause. Each agency

must pause (i) issuance of new awards; (ii) disbursement of Federal funds under all open

awards; and (iii) other relevant agency actions that may be implicated by the executive

orders, to the extent permissible by law, until OMB has reviewed and provided guidance

to your agency with respect to the information submitted.”

23. Agencies are also directed to “for each Federal financial assistance

program: (i) assign responsibility and oversight to a senior political appointee to ensure

Federal financial assistance conforms to Administration priorities; (ii) review currently

pending Federal financial assistance announcements to ensure Administration priorities

are addressed, and, subject to program statutory authority, modify unpublished Federal

financial assistance announcements, withdraw any announcements already published,

and, to the extent permissible by law, cancel awards already awarded that are in conflict

with Administration priorities, and; (iii) ensure adequate oversight of Federal financial

7
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 8 of 20

assistance programs and initiate investigations when warranted to identify

underperforming recipients, and address identified issues up to and including cancellation

of awards.”

24. The scope of paused funds includes any “implicated by” six executive

orders issued by President Trump since January 20:

a. Executive Order, “Ending Radical and Wasteful Government DEI Programs

and Preferencing” (January 20, 2025), which provides for termination of all

“equity-related” grants. See https://www.whitehouse.gov/presidential-

actions/2025/01/ending-radical-and-wasteful-government-dei-programs-and-

preferencing/

b. Executive Order “Defending Women from Gender Ideology Extremism and

Restoring Biological Truth to the Federal Government” (January 20, 2025),

which provides that “[f]ederal funds shall not be used to promote gender

ideology. Each agency shall assess grant conditions and grantee preferences

and ensure grant funds do not promote gender ideology.” See

https://www.whitehouse.gov/presidential-actions/2025/01/defending-women-

from-gender-ideology-extremism-and-restoring-biological-truth-to-the-

federal-government/.

c. Executive Order, “Protecting the American People Against Invasion,”

(January 20, 2025), which directs the Attorney General and the Secretary of

Homeland Security to review all “contracts, grants, or other agreements

providing Federal funding to non-governmental organizations supporting or

providing services” to immigrants without legal status, and to pause

8
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 9 of 20

disbursement of funds pending the results of the review. See

https://www.whitehouse.gov/presidential-actions/2025/01/protecting-the-

american-people-against-invasion/.

d. Executive Order “Reevaluating and Realigning United States Foreign Aid,”

(January 20, 2025), which pauses all disbursements of development assistance

funds to foreign countries and implementing organizations for 90 days. See

https://www.whitehouse.gov/presidential-actions/2025/01/reevaluating-and-

realigning-united-states-foreign-aid/.

e. Executive Order “Unleashing American Energy” directs all agencies to pause

the disbursement of funds appropriated through the Inflation Reduction Act of

2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act

(Public Law 117-58). See https://www.whitehouse.gov/presidential-

actions/2025/01/unleashing-american-energy/. Further guidance issued by

OMB clarified this only applied to funds related to energy policy. See

https://www.whitehouse.gov/briefings-statements/2025/01/omb-memo-m-25-

11/

f. Executive Order “Enforcing the Hyde Amendment” states that “it is the policy

of the United States, consistent with the Hyde Amendment, to end the forced

use of Federal taxpayer dollars to fund or promote elective abortion” and

revokes two previous executive orders. See

https://www.whitehouse.gov/presidential-actions/2025/01/enforcing-the-hyde-

amendment/. This order directs the Director of OMB promulgate guidance

implementing the order. Id.

9
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 10 of 20

25. The Memo’s stated justification for the cessation of funding is that

“[f]inancial assistance should be dedicated to advancing Administration priorities,” and

that “[t]he use of Federal resources to advance Marxist equity, transgenderism, and green

new deal social engineering policies is a waste of taxpayer dollars that does not improve

the day-to-day lives of those we serve.”

Memo M-25-13 Is Final Agency Action Subject to the Court’s Review

26. The Administrative Procedure Act authorizes judicial review of final

agency action. 5 U.S.C. § 704.

27. Final agency actions are those (1) that “mark the ‘consummation’ of the

agency’s decisionmaking process” and (2) “by which rights or obligations have been

determined, or from which legal consequences will flow.” Bennett v. Spear, 520 U.S.

154, 178 (1997) (quotation marks omitted).

28. The Memo marks the consummation of OMB’s decisionmaking process

because it announces the agency’s decision to immediately suspend the obligation or

disbursement of all federal financial assistance.

29. The Memo is an action by which rights or obligations have been

determined or from which legal consequences will flow because it purports to stop

lawfully authorized obligations and disbursements that would be paid pursuant to valid

federal grants.

30. Memo M-25-13 therefore is final agency action subject to this Court’s

review under the APA.

10
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 11 of 20

Plaintiffs’ Injuries

31. Plaintiff NCN is committed to pursuing a more civil and just society,

embedding diversity, equity, and inclusion throughout its organization and in the ways

that it carries out its mission. One of the ways it works towards that mission is by

providing nonprofit organizations with the resources needed to operate more effectively,

efficiently, and ethically, including by advising nonprofits on available grant programs

and advocating for increases in federal funding of such programs. For example, NCN has

successfully advocated for a mandate requiring governments to cover the indirect costs

for nonprofits delivering community services with federal funding, and for $50 billion in

forgivable Paycheck Protection Program loans for nonprofits’ COVID-19 relief, resulting

in more than 200,000 nonprofits receiving funding and the protection of an estimated 6.2

million jobs in the sector.

32. Many of NCN’s members rely on federal grants and financial assistance to

serve their missions, from supporting research and services to those with cancer and other

serious diseases, to assisting people in escaping domestic violence, to providing mental

health care and suicide hotlines. Federal grants and financial assistance are the lifeblood

of operations and programs for many of these nonprofits, and even a short pause in

funding—which, for many NCN members, is already in the pipeline—could deprive

people and communities of their life-saving services. Nonprofits often make budget

decisions two to five years in advance, and they make business decisions based on

expected cash inflow just as any for-profit enterprise would: making staffing decisions,

setting organizational priorities, providing essential services and programs, and

identifying and working towards fundraising goals. They rely on federal funds to fund

11
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 12 of 20

entire programs, including salaries. Halting this funding would lead to pauses of

important community programs, food and safety assistance, and lifesaving research,

among other things: even a short pause could be devastating, decimating organizations,

costing lives, and leaving neighbors without the services they need.

33. Plaintiff APHA has long received federal grants and funds to carry out its

mission and to ensure that the federal government has the benefit of APHA’s and its

members’ expertise and research. APHA also often receives federal funds to regrant

funds to provide technical and other assistance to essential community-based programs.

For example, one of APHA’s programs established The National Council for

Environmental Health and Equity, which provides community-based organizations

working to advance environmental justice with grants, and is supported by the CDC.

APHA’s members also rely on a range of federal grants and financial assistance: for

example, the Prevention and Public Health Fund is a federal program that provides

sustained investments in prevention and public health programs to improve health and

reduce public and private health care costs.

34. Should the Memo take effect, it would take a wrecking ball to APHA’s

public health programs that receive federal financial assistance and grants, as well as to

the thousands of programs across the nation on which APHA’s members rely.

35. The Memo also harms APHA by seeking to force it to abandon, as a

condition of federal funding, its viewpoints and beliefs that working to achieve equity in

health status is essential not only to APHA’s own mission but to the discipline of public

health itself. The Memo therefore chills APHA’s research, work, expression, and speech.

12
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 13 of 20

36. Plaintiff MSA helps small business owners realize their full potential as

leaders for a just future that prioritizes good jobs, equity, and community through

organizing, research, and policy advocacy on behalf of small businesses. The Memo’s

language about equity, however, makes clear that continued receipt of federal financial

assistance will hinge on what position small businesses take on politically charged issues

such as gender and environmental policy—chilling that speech and curtailing MSA’s

mission.

37. MSA’s small business members compete for and receive various forms of

federal financial assistance, including funding in the form of grants, loans, and loan

guarantees. In fact, the majority of MSA’s members receive some form of this assistance.

38. The Memo’s halt to the funding on which MSA’s members rely will harm

them significantly. As one example, MSA has members that operate child care centers in

reliance on the Child Care & Development Block Grant program administered by the

Office of Child Care within the Department of Health and Human Services, which is the

primary federal funding source to help families with low incomes access child care.

Halting payments under that program will significantly harm not only those MSA

members, but also customers who will no longer be able to afford to pay for child care

absent the grant program.

39. For another example, some MSA members rely on loans administered by

the Small Business Administration under Section 7(a) of the Small Business Act, which

provides SBA-guaranteed loans to small businesses that lack adequate access to capital

on reasonable terms and conditions. The continued availability of these funds, and the

disbursement of loan proceeds already committed, is vital for the continued financial

13
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 14 of 20

well-being of the recipients. Halting this funding would throw small businesses into

chaos, with a direct harm to their bottom lines, and, in some cases, resulting in the closure

of the business.

40. Plaintiff SAGE operates through a variety of programs, including, for

example, the National Resource Center on LGBTQ+ Aging, which has as its goal to

provide ongoing and sustainable resource development, technical assistance, education,

and training that supports networks in providing services to LGBTQ+ older adults and

their caregivers. The National Resource Center on LGBTQ+ Aging was established in

2010 through a grant from the Department of Health and Human Services Administration

for Community Living (“ACL”), which provided approximately 74% of the project’s

funding.

41. SAGE also receives additional grant funds from ACL to build a new

online hub, SAGEYou, which is funded exclusively through this federal appropriation.

SAGEYou will centralize LGBTQ+-friendly and elder-accessible content addressing

disparities such as social isolation, mental health challenges, physical health disparities,

and financial insecurity, to improve aging outcomes for LGBTQ+ older adults.

SAGEYou is scheduled for a soft launch in May 2025 and a hard launch in June 2025. If

this funding is lost, the project will no longer exist. This have a detrimental impact on the

mental health and overall well-being of millions of LGBTQ+ older adults across the

United States (particularly those residing in rural and underserved areas who already face

significant barriers to accessing critical services and supports). Further, the cutoff of

funding for SAGEYou jeopardizes multiple staff positions and SAGE’s ability to

continue meeting its obligations to contractors which it has already retained.

14
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 15 of 20

42. SAGE reasonably fears that its future receipt of federal financial

assistance will depend on SAGE’s past and future exercise of its First Amendment rights

of free speech and association rather than on neutral criteria.

Claims for Relief

Count One
Violation of the Administrative Procedure Act—706(2)(A)
Arbitrary and capricious

43. Plaintiffs restate and reallege all paragraphs above as if fully set forth

here.

44. Under the APA, a court shall “hold unlawful and set aside agency action

… found to be arbitrary, capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2)(A).

45. The OMB Order is arbitrary and capricious in multiple respects.

46. First, the Order fails even to acknowledge the catastrophic practical

consequences that an immediate, across-the-board freeze on federal grant programs will

produce, let alone to provide a reasonable explanation why those consequences could

possibly be warranted merely to conduct a review of which ones “may be implicated by

any of the President’s executive orders.” To say that the OPM Order “entirely failed to

consider an important aspect of the problem,” see Motor Vehicle Mfrs. Ass’n of U.S., Inc.

v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983), where it did not even

recognize the obvious and immediate nationwide harm and disruption it will occasion is

to dramatically understate the extent to which the Order is arbitrary and capricious.

47. Second, and relatedly, the Order fails to account for the substantial

reliance interests in the ordinary processes of federal grantmaking that the Order wipes

15
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 16 of 20

away in an effort to freeze all financial assistance. “When an agency changes course … it

must be cognizant that longstanding policies may have engendered serious reliance

interests that must be taken into account,’’ and the failure to do so is arbitrary and

capricious. DHS v. Regents of the Univ. of California, 591 U.S. 1, 30 (2020) (internal

quotation marks and citation omitted).

48. Third, the Order fails to articulate why the review of existing grant

programs that it envisions requires an immediate cessation of all grant programs,

notwithstanding the immense disruption that will cause, and why that review could not

simply be conducted while existing obligations and disbursements continue as normal.

Count Two
Administrative Procedure Act–706(2)(B)
Contrary to the First Amendment

49. Plaintiffs restate and reallege all paragraphs above as if fully set forth

here.

50. Under the APA, a court shall “hold unlawful and set aside agency action

… found to be … contrary to constitutional right, power, privilege, or immunity.” 5

U.S.C. § 706(2)(B).

51. The Memo purports to pause all disbursements through federal financial

assistance programs pending a “review” to determine whether they are “consistent with

the President’s policies” as expressed in several executive orders, such as one announcing

that “[f]ederal funds shall not be used to promote gender ideology.” The Memo further

indicates that the review should identify recipients of federal funding that “advance

Marxist equity, transgenderism, and green new deal social engineering policies.”

16
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 17 of 20

52. Memo M-25-13 makes clear that recipients of federal funding who are

determined to have expressed or advocated for—or perhaps even merely associated

themselves with—political, personal, and moral viewpoints disfavored by the

administration will not receive further funding through federal financial assistance

programs. For them, the “pause” is anything but.

53. Because Memo M-25-13 conditions the continued receipt of billions of

dollars or more in federal funding on recipient’s exercise of their First Amendment rights

of free expression and association, it is regulated by the First Amendment.

54. Because Memo M-25-13’s conditions burden core political speech and

association rights, and expressly discriminates based on viewpoint, it is subject to strict

scrutiny.

55. Because Memo M-25-13 is not “the least restrictive means of achieving a

compelling state interest,” see Americans for Prosperity Found. v. Bonta, 594 U.S. 595,

607 (2021) (internal quotation marks and citation omitted), it flunks strict scrutiny.

Count Three
Administrative Procedure Act–706(2)(C)
In Excess of Statutory Authority

56. Plaintiffs restate and reallege all paragraphs above as if fully set forth

here.

57. Under the APA, a court shall “hold unlawful and set aside agency action

… found to be … in excess of statutory jurisdiction, authority, or limitations, or short of

statutory right.” 5 U.S.C. § 706(2)(D).

58. Pursuant to statute, OMB’s is directed to provide “overall direction and

leadership,” “review agency budget requests for financial management systems and

17
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 18 of 20

operations,” “oversee, periodically review, and make recommendations to heads of

agencies,” “provide advice to agency heads,” “settle differences that arise among

agencies regarding the implementation of financial management policies,” and

“communicate with” State and local governments and “foster the exchange … of

information concerning financial management standards, techniques, and processes.” 31

U.S.C. § 503(a).

59. OMB instead directs federal agencies to implement its guidance. See 2

C.F.R. § 200.106.

60. OMB’s direct statutory authority does not allow it to unilaterally terminate

all federal financial assistance programs across the entire government.

61. OMB’s action was therefore in excess of its statutory authority and

unlawful.

Prayer for Relief

WHEREFORE, plaintiffs pray that this Court:

a. Declare unlawful and set aside Memo M-25-13 as arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law under 5 U.S.C.

§ 706(2)(A), contrary to constitutional right, power, privilege, or immunity

under 5 U.S.C. 706(2)(B), and in excess of statutory jurisdiction, authority, or

limitations, or short of statutory right under 5 U.S.C. 706(2)(C);

b. Issue a temporary restraining order and preliminary injunction barring the

OMB and all of its officers, employees, and agents from taking any steps to

implement, apply, or enforce Memo M-25-13;

18
Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 19 of 20

c. Order Defendants to file a status report with the Court within 24 hours of

entry of a temporary restraining order, and at regular intervals thereafter,

confirming the regular disbursement and obligation of federal financial

assistance funds and reporting all steps that OMB and its officers, employees,

and agents have taken to comply with the Court’s temporary restraining order;

d. Issue a permanent injunction barring the OMB and all of its officers,

employees, and agents from taking any steps to implement, apply, or enforce

the Memo;

e. Award Plaintiffs their costs, reasonable attorney’s fees, and other

disbursements as appropriate; and

f. Grant such other relief as the Court deems necessary, just, and proper.

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Case 1:25-cv-00239 Document 1 Filed 01/28/25 Page 20 of 20

Dated: January 28, 2025 Respectfully submitted,

/s/ Jessica Anne Morton


Jessica Anne Morton (DC Bar No. 1032316)
Kevin E. Friedl* (Admitted only in New
York; practice supervised by D.C. Bar
members)
Kaitlyn Golden (DC Bar No. 1034214)
Robin F. Thurston (DC Bar No. 1531399)
Skye L. Perryman* (D.C. Bar No. 984573)
Will Bardwell (D.C. Bar No. 90006120)
Democracy Forward Foundation
P.O. Box 34553
Washington, D.C. 20043
(202) 448-9090
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected].

*motion to appear pro hac vice forthcoming

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