1st U.S. Circuit Court of Appeals upholds injunction blocking U.S. President Donald Trump's funding freeze
Change
The 1st U.S. Circuit Court of Appeals largely upheld a March 2025 injunction that blocks a categorical freeze on up to $3 trillion in federal grants and loans, while narrowing the order by removing the portion that required agencies to immediately disburse funds to states.
Why it matters
Federal agencies can no longer apply a blanket pause to broad categories of federal financial assistance and must assess funding obligations on a program-by-program basis that accounts for recipients' reliance interests. Claims seeking payment of withheld funds now face procedural limits because courts with monetary-jurisdiction must handle those money claims rather than injunction-only forums.
Implications
- • Federal agency chief financial officers and grants officers must halt plans for blanket funding pauses and undertake documented, program-level legal reviews that record recipients' reliance interests, or their funding decisions risk being enjoined by courts.
- • State attorneys general must pursue monetary claims for withheld federal funds in courts that have jurisdiction over money damages rather than relying on injunctions in the 1st U.S. Circuit, or their claims may be dismissed on jurisdictional grounds.
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