Administrative Law – Administrative Procedure Act – Statutory Authority

Listen to this article

The district court lacked jurisdiction over what were essentially contract-based claims under the Tucker Act and that Plaintiffs’ separation-of-powers/ultra vires theories failed to meet the strict standards for nonstatutory review.

We vacated and remanded injunctions that had blocked the federal government from suspending or terminating dozens of environmental and agricultural grants in early 2025.

Plaintiffs, nonprofit organizations and local governments, had received 38 grants funded largely through the Inflation Reduction Act (IRA), the Infrastructure Investment and Jobs Act (IIJA), and the American Rescue Plan Act. After President Trump issued a series of executive orders directing agencies to pause, review, and in some cases terminate grants tied to environmental justice, equity, and cost-efficiency priorities, agencies suspended or ended many of these awards. Plaintiffs sued, alleging violations of the Administrative Procedure Act (APA), several statutes, and the Constitution.

The district court granted broad relief. It permanently enjoined the government under the APA from freezing or terminating 32 grants and ordered immediate restoration of funding. It also issued a preliminary injunction on plaintiffs’ nonstatutory “ultra vires” and separation-of-powers claims, again requiring funding to resume. The government appealed, and we stayed the injunctions pending review.

We held that the district court abused its discretion in issuing both injunctions. First, the district court lacked jurisdiction over the APA claims because the relief ordered was, in substance, contractual. Although styled as statutory and constitutional challenges, the plaintiffs sought reinstatement of specific grants and payment of funds—relief that amounts to specific performance of government contracts. Under the Tucker Act, claims “founded upon” contracts with the U.S. fall within the exclusive jurisdiction of the Court of Federal Claims, and the APA’s waiver of sovereign immunity does not extend to orders enforcing contractual payment obligations. Relying heavily on recent Supreme Court decisions in Department of Education v. California and National Institutes of Health v. American Public Health Association, we found no meaningful difference between those cases and this one. Accordingly, we vacated the permanent injunction restoring grant funding under the APA.

Second, we rejected the preliminary injunction based on Plaintiffs’ nonstatutory review and constitutional theories. Although Plaintiffs framed their claims as separation-of-powers and Presentment Clause violations, we held that, under Dalton v. Specter, claims alleging that executive officials exceeded statutory authority are statutory, not constitutional, and therefore must satisfy the strict limits of ultra vires review. That doctrine applies only when the government acts clearly beyond its delegated powers and contrary to a specific statutory prohibition. Here, while the relevant statutes appropriate large sums for environmental and agricultural programs, they do not specifically require that these particular plaintiffs receive funding or forbid the government from suspending or terminating their grants. Absent such a clear statutory command, Plaintiffs were unlikely to succeed on an ultra vires theory.

Vacated and remanded.

The Sustainability Institute v. Trump (Lawyers Weekly No. 001-030-26, 31 pp.) (Allison Jones Rushing, J.) Appealed from the U.S. District Court for the District of South Carolina, at Charleston (Richard Mark Gergel, J.) ARGUED: Sean R. Janda, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants. Kimberley Hunter, SOUTHERN ENVIRONMENTAL LAW CENTER, Chapel Hill, North Carolina, for Appellees. ON BRIEF: Brett A. Shumate, Assistant Attorney General, Daniel Tenny, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Bryan P. Stirling, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, South Carolina, for Appellants. Irena Como, Nicholas S. Torrey, Carl T. Brzorad, Spencer Gall, SOUTHERN ENVIRONMENTAL LAW CENTER, Chapel Hill, North Carolina; Graham Provost, Elaine Poon, Jonathan Miller, PUBLIC RIGHTS PROJECT, Oakland, California; Mark Ankcorn, Senior Chief Deputy City Attorney, CITY OF SAN DIEGO, San Diego, California, for Appellees. Gerson Smoger, SMOGER & ASSOCIATES, P.C., Dallas, Texas; Robert S. Peck, CENTER FOR CONSTITUTIONAL LITIGATION, P.C., Washington, D.C., for Amicus Supporting Petition for Initial Hearing En Banc United States Senator Sheldon Whitehouse. Elizabeth B. Wydra, Brianne J. Gorod, Brian R. Frazelle, Miriam Becker-Cohen, Nina Henry, CONSTITUTIONAL ACCOUNTABILITY CENTER, Washington, D.C., for Amicus Constitutional Accountability Center. Adriana S. Kosovych, New York, New York, Paul DeCamp, Kathleen Barrett, EPSTEIN, BECKER & GREEN, P.C., Washington, D.C., for Amicus Professor Tobias Barrington Wolff. U.S. Court of Appeals for the Fourth Circuit