New Administration Outlook: Court Grants Partial Temporary Restraining Order on Executive Order Halting Foreign Aid

On Thursday, February 13, the U.S. District Court for the District of Columbia issued a partial temporary restraining order in response to lawsuits challenging Executive Order 14169, which paused all congressionally appropriated foreign assistance funding. The cases, brought by the AIDS Vaccine Advocacy Coalition and the Global Health Council, highlight the severe impact of the order on American businesses and nonprofits engaged in foreign assistance work.

The Executive Order, titled "Reevaluating and Realigning United States Foreign Aid," was issued on January 20, 2025, by President Trump. It directed an immediate halt to U.S. foreign development assistance, pending a comprehensive review by the Office of Management and Budget ("OMB") and the Secretary of State. This abrupt suspension affected numerous organizations reliant on federal grants and contracts for their operations, leading to program shutdowns, employee furloughs, and, in some cases, complete closures.

Court's Findings

The court, presided over by Judge Amir H. Ali, found that the plaintiffs demonstrated a likelihood of irreparable harm due to what the court described as a "blanket suspension" of funds. The court noted that the suspension disrupted existing contracts and agreements, causing financial distress and threatening the core missions of the affected organizations. The plaintiffs provided evidence of layoffs, program closures, and halted humanitarian efforts, underscoring the existential threat posed by the funding freeze.

Judge Ali also indicated that the plaintiffs are likely to succeed on the merits of their claims, which include allegations of arbitrary and capricious action in violation of the Administrative Procedure Act ("APA") and constitutional violations related to the separation of powers and the Take Care Clause. In one particularly noteworthy passage, Judge Ali observed:

Here, the stated purpose in implementing the suspension of all foreign aid is to provide the opportunity to review programs for their efficiency and consistency with priorities. However, at least to date, Defendants have not offered any explanation for why a blanket suspension of all congressionally appropriated foreign aid, which set off a shockwave and upended reliance interests for thousands of agreements with businesses, nonprofits, and organizations around the country, was a rational precursor to reviewing programs. The most Defendants offer is the possibility that some of the abruptly terminated contracts might have had clauses which allowed termination in certain circumstances; however, as noted, Defendants have acknowledged that they implemented a blanket suspension that was not based on the presence or consideration of such contractual terms. To be sure, there is nothing arbitrary and capricious about executive agencies conducting a review of programs. But there has been no explanation offered in the record, let alone a "satisfactory explanation … including a rational connection between the facts found and the choice made," as to why reviewing programs—many longstanding and taking place pursuant to contractual terms—required an immediate and wholesale suspension of appropriated foreign aid.

Also noteworthy was Judge Ali's response to an argument—in fact, the principal argument—made by President Trump's Department of Justice that the president's actions are beyond the reach of any judicial review:

At the Court's hearing, Defendants' principal argument was that the State Department's and USAID's actions taken to implement a blanket suspension of appropriated foreign aid funds should not be considered "agency action" within the meaning of the APA. Defendants observe that the President's own actions are not reviewable under the APA because the President is not an "agency."… It follows, they say, that an agency's actions implementing Presidential directives should not be considered agency action. At least at this juncture, that argument does not appear persuasive. Defendants do not ground their argument in the text of the APA, which specifically defines "agency" to include "each authority of the Government of the United States." 5 U.S.C. § 551(1). While it is true that implementation of the blanket suspension of appropriated funds took place in accordance with Presidential policy and priorities, as agency action routinely does, the relevant directive of the Secretary of State and subsequent determinations of agency heads have immediate effect and constitute the action under review, without any further action by the President. And Defendants' argument, at least as it has been articulated to date, proves too much—it would allow the President and agencies to simply reframe agency action as orders or directives originating from the President to avoid APA review.

(Emphasis added)

Had the Department of Justice succeeded in convincing Judge Ali that the president's Executive Orders were beyond judicial review, this would have had fundamental constitutional implications regarding the unilateral authority of the executive and separation of powers.

Temporary Relief Granted

Although the court did not enjoin the Executive Order itself or the president, it granted a narrower injunction against specific actions by the U.S. Department of State, USAID, and OMB. The restrained defendants, which include the State Department, are temporarily prohibited from enforcing sections of the State Department's memorandum and directives that implement the Executive Order's suspension of foreign aid. This includes preventing the obligation or disbursement of funds for contracts and grants existing as of January 19, 2025.

The court emphasized the need for tailored relief, rejecting the plaintiffs' requests for what the court perceived as overly broad proposals that would dictate specific operational details or personnel decisions. The restrained defendants are required to take necessary steps to comply with the order and provide written notice to affected contract and grant recipients.

Going Forward

This ruling marks yet another critical juncture in the ongoing legal battles over the president's Executive Orders, this time with significant implications for U.S. foreign aid policy and the organizations that depend on it. This decision underscores the importance of balancing executive authority with the need to protect established reliance interests and humanitarian missions.

DWT's government contracts counseling and litigation group will continue tracking these developments as they unfold.