No, The Supreme Court Did Not Allow A District Judge To Order The Payment Of $2 Billion In Foreign Aid

The procedural posture of the case is going to result in a Preliminary Injunction, which can then be appealed, before any payments go out that the Government Objects To.

This is a free article that presents a bit of a truncated explanation of the most recent events in the Global Health/AIDS Vaccine cases, which involve a dispute over suspended payments on a multitude of contracts and grants for foreign aid that are paid out by USAID. I wrote a detailed explanation of this case last week. You can read it in this earlier article.

The two cases combined involve about a dozen organizations who are recipients of funds from USAID and/or the State Department for work done abroad. The Trump Administration via an Executive Order ordered a “blanket pause” on payments under all contracts/grants until a review could be conducted to determine if continuing the contract/grant was consistent with changes in U.S. foreign policy. In other words, “climate change” is not a foreign policy priority of the Trump Administration so is not going to be spending billions of dollars in foreign aid to advance the climate change agenda of the Biden Administration.

The Plaintiffs brought suit after they didn’t get money they were expecting because their contracts/grants with USAID were involved in the “blanket pause” of payments. Based on very little information, on February 12 a judge new to the federal bench ruled that the Plaintiffs were likely to prevail because in many instances the funds being withheld were for work already completed and the Plaintiff had incurred substantial costs which were supposed to be reimbursed by the contract/grant funds. In some instances, the only step remaining in the contract/grant process was the disbursement of the funds. But the judge entered a wildly over-broad TRO that would have applied to any contract/grant recipient, including hundreds/thousands who weren’t even before the Court, and about which the Court had no information regarding the status of those contracts/grants. The Trump Administration estimated that as much as $2 billion in funds might be involved.

But the Trump Administration did not appeal that initial TRO. Instead, it relied on some poor draftsmanship in the Order to continue to withhold funds based on alternative justifications that were not foreclosed by the TRO.

A series of disputes then arose over the ensuring two weeks, with the Plaintiffs complaining that the funds were not being disbursed as required by the TRO. The Trump Administration continued to insist that there was no longer a “blanket pause” of funding — the basis for the TRO — it was actively reviewing every contract/grant for compliance with all conditions as allowed under the terms of each such agreement. In other words, it was doing a case-by-case review to release the funds and it was going as fast as possible.

That led to an Order by the Judge on February 25 that all pending disbursements of funds for work done on or before February 13 — the date of the TRO — had to be paid by 11:59 pm on February 26.

THAT is the only Order that the Trump Administration decided to file a Notice of Appeal over and seek a Stay — NOT the original TRO directing it to pay out funds. So, it was the situation as of February 26 that the Administration was not contesting the Order that it pay out the money, it was only contesting the Order that it pay out the money by midnight on February 26.

The is where Chief Justice Roberts entered the dispute at approximately 10:00 pm on February 26 and entered a Stay of the District Judge’s February 25 Order, relieving the Trump Administration of the obligation to comply with the 11:59 pm deadline for payment of funds.

Earlier today, as was widely reported, by a 5-4 vote the Court dissolved the Stay without vacating the TRO directing the Trump Administration to disburse the funds. The Order noted that the deadline applicable to the February 25 Order has now passed, but the proceedings over whether to enter a Preliminary Injunction — same as a TRO but without an expiration date — remain ongoing. In fact, the briefing on that PI was completed on Monday, and a hearing is set for tomorrow — March 6 at 11:00 am.

It is first worth noting that the Court’s Order highlights the very problem I noted above — that the Trump Administration never appealed the TRO: “The present application does not challenge the Government’s obligation to follow that order.”

But the five Justices directed the District Judge to do two things as part of any new Order he might enter: 1) “Clarify what obligations the Government must fulfill to ensure compliance with the TRO”, and 2) give due regard to the feasibility of any compliance timelines.

So, contrary to today’s reporting in the media — on both sides — the Court’s Order today did not back the District Judge’s directive the Trump Administration pay out the $2 billion. The Court told the District Court to fashion a new order — one that “clarifies” what the Trump Administration must do. I suspect that is going to require more out of the District Judge than “Just pay everyone” as was the case with his last Order.

In addition, the Court said no more 36 hour deadlines for compliance — the District Judge must take into consideration the mechanics of getting the funds disbursed.

BUT … and this is a big BUT: The landscape has changed in the 8 days since the Chief Justice stepped in to block the 11:59 pm deadline.

The Trump Administration has notified the District Judge that it has completed its review of all the contracts/grants that were the subject of the initial “blanket pause” that the Plaintiffs and the Court objected to. Having done so, presumably the Trump Administration is now in a position to take a specific position on each contract/grant as to whether continuing them is consistent with the changed foreign policy of the United States.

After the Supreme Court’s decision today, the District Court issued a “Electronic Order” stating as follows:

The parties shall meet and confer and file a joint status report by 11:00 a.m. tomorrow proposing a schedule for Defendants to come into compliance with the Court's temporary restraining order ("TRO") and the Court's February 25, 2025, order enforcing the TRO. The joint status report need not address compliance with the February 25, 2025, order for the period that the order was subject to administrative stay; however, it should address steps taken during all other periods up until the filing of the joint status report and include specificity with respect to milestones and timelines for Defendants coming into compliance thereafter. The parties' proposed schedule should account for the length of time that has passed since the TRO was entered and the feasibility of any compliance timelines.

This Minute Order is drafted as if time has stood still for 8 days, and the Trump Administration has done nothing. But the Administration advised the Court on March 3 that during the period of time it has been busy doing exactly what it said it would be doing during the “blanket pause” — making decisions about each individual contract/grant tied to USAID and the State Department. And it has:

As a result, and consistent with the TRO, the agencies have been “expeditiously examining each USAID and State foreign assistance award on an individual basis and through a multi-step process to determine whether … USAID and State will” terminate funding under independent authority…. State and USAID have now completed their review of all funding instruments and determined, on an individualized basis, either to retain or terminate each instrument under the terms of the funding instrument and independent legal authority…. The AVAC Plaintiffs’ reply declaration confirms receipt of such terminations….

Agency leadership explains that all funding instruments, including those of Plaintiffs, have been individually reviewed and either have been retained (with funding to continue) or have been terminated (with funding to permanently cease).

This action by the Trump Administration was expressly allowed by the District Court in its February 20 Order enforcing the TRO:

The TRO does not preclude Defendants from undertaking a good-faith, individualized assessment of a contract or grant and, where the terms or authority under law allows, taking action with respect to that particular agreement consistent with any procedures required (including, for example, notice to contracting parties).

If I were running the case for DOJ, by the 11:00 am deadline on March 6 I would report to the District Court the specific contracts that are being retained with funding to continue — along with the payment of the funds that have been withheld. In fact, I would report to the Court that the process for disbursing those funds has already begun.

As for the terminated contracts/grants, whatever remedies those entities might have are not contract claims, and jurisdiction for such claims is in the Federal Court of Claims.

The only issue then left open are the payments not made for work already done at the time the Court entered its February 25th Order enforcing the TRO.

In in Order denying a later motion to stay the TRO, the District Court quoted its directive as follows:

“[T]o the extent Defendants have continued the blanket suspension, they are ordered to immediately cease it and to take all necessary steps to honor the terms of contracts, grants, cooperative agreements, loans, and other federal foreign assistance awards that were in existence as of January 19, 2025, including but not limited to disbursing all funds payable under those terms.”

The original TRO was entered on February 12 and the Order enforcing the TRO was entered on February 25, 2025. “Compliance” with the two Orders would require payment up through February 13. As noted in the quote from the Government Reply above, termination notices were sent on the terminated contracts/grants on February 26, 2025.

The Trump Administration could authorize payments for work done up through February 13 on the terminated contracts/grants, but ONLY for those involving the named Plaintiffs, not the entire universe of entities holding the contracts/grants.

Even if the District Judge were to impose a Preliminary Injunction on this far larger class of potential claimants, the Supreme Court told him to take into consideration the feasibility issues with regard to the time for compliance. That is likely a period of weeks, not days.

Any such Preliminary Injunction would be subject to an appeal and a Motion for Stay immediately upon it being entered. The Supreme Court’s Order today shows that there are already 4 likely votes among the Justices to overturn any Injunction on jurisdictional grounds. The Government’s Opposition to the Preliminary Injunction Motion raises both sovereign immunity and a lack of statutory jurisdiction as barriers to the District Court granting any preliminary relief. The District Judge will have to be very certain that his analysis of his jurisdiction will carry the other five votes or this is going to be a very short-lived Preliminary Injunction.

But, just as significantly, the Order today lets the Circuit Court of Appeals know there are already four votes likely finding the District Court lacks jurisdiction. If the District Judge enters a sweeping Preliminary Injunction the Trump Administration is certain to file an immediate appeal and a Motion to Stay the Injunction. Then the issue will be in the hands of the Appeals Court with the three judge panel knowing there are four votes already to reverse the District Judge if the Appeals Court does not stay the Injunction.

All of this will happen before the mechanics of disbursing the funds are worked out, and a single dollar the Trump Administration doesn’t want to pay out leaves the Treasury.

The one variable that does exist is if the District Judge decides to extend his TRO beyond March 10 at the end of the hearing tomorrow on the Preliminary Injunction. Suppose the Judge says he needs another 10 days to go through all the evidence submitted by the parties and then draft his Order on whether to issue a Preliminary Injunction. But, during the same hearing, he gives the Trump Administration only to March 16 — 10 days — to comply with the TRO and pay out the funds as directed, which the Supreme Court’s Order would seemingly authorize.

In that circumstance I would expect the DOJ to file a Notice of Appeal, this time challenging head-on the authority of the District Court to order the Executive branch to pay out funds. This would be the challenge that it did not make previously — as was noted by the Supreme Court’s Order today. In that circumstance, the “gamemanship” of the District Judge to try and force the payments to be made while seeking to avoid creating an appealable order would be obvious, and I would expect the Appeals Court to act.

So, today’s Supreme Court Order — as a practical matter — has no meaningful effect on the Trump Administration’s options. The process itself created the 8 day window within which the Administration was able to complete the review process that was going to happen under the “blanket pause,” and it can now announce its decisions and intentions to the District Court. This should dramatically narrow the issues — and the amounts in dispute — and lead to either no Preliminary Injunction being imposed, or a much narrower Injunction than might have been the case without the intervention by the Chief Justice last week.

At the end of these “procedures” the Trump Administration should be in the position it seeks to be in — with only USAID/State Department contracts/grants it approves of, and any disgruntled entities with canceled contracts/grants forced to take their complaints to the Federal Court of Claims.