Supreme Court Upholds Trial Court Order Requiring Foreign Aid Payments

On March 5, 2025, the US Supreme Court denied the Government’s application to vacate a federal trial-court order directing the Government to issue roughly US$2 billion in foreign-aid funds for work completed before February 13, 2025. The single-paragraph, unsigned order—which was issued by Chief Justice Roberts as well as Justices Sotomayor, Kagan, Barrett, and Jackson—does not contain any analysis but may bode well for other lawsuits seeking to enforce the Government’s obligation to honor its contractual duties.

This order arises from two related lawsuits brought by foreign-aid contractors and grantees challenging the Trump Administration’s freeze of Congressionally appropriated foreign-aid funds at USAID and the State Department. The plaintiffs argued that this funding freeze violated the Administrative Procedure Act (“APA”) and the constitutional separation of powers, and was ultra vires. On February 13, DC District Court Judge Amir Ali entered a temporary restraining order (“TRO”) preventing the Government from suspending or withholding disbursements of foreign-aid funds and from issuing or enforcing contract terminations or stop-work orders.

When the Government failed to take steps to comply with the February 13 order, Judge Ali issued an order on February 25 that the Government pay a portion of the paused disbursements—those owed for work already completed before the February 13 order was issued—by 11:59 pm on February 26. The Government appealed this February 25 enforcement order to the DC Circuit and sought a stay pending appeal from Judge Ali, who denied it. The DC Circuit dismissed the appeal, holding that it lacked jurisdiction to review a TRO, and the Government sought an administrative stay of the enforcement order from the Supreme Court, which granted it on February 26.

On March 5, 2025, the Supreme Court issued the order denying the Government’s request to vacate Judge Ali’s February 25 order requiring it to comply with the terms of the TRO. This order is limited in scope and does not address the merits of the underlying TRO. The Plaintiffs have moved for a preliminary injunction, the hearing for which was held on March 6, 2025. The 5-4 Supreme Court majority noted that, “[g]iven that the deadline in the challenged order has now passed, and in light of the ongoing preliminary injunction proceedings, the District Court should clarify what obligations the Government must fulfill to ensure compliance with the temporary restraining order, with due regard for the feasibility of any compliance timelines.”

In dissent, Justice Alito (joined by Justices Thomas, Gorsuch, and Kavanaugh) argued that the Court should have vacated—or, at a minimum, stayed—Judge Ali’s February 25 order. Justice Alito first argued that this order should have been construed as an appealable preliminary injunction rather than a TRO, such that the DC Circuit had jurisdiction to consider it. Justice Alito then argued that the Court should have at least stayed the February 25 order until the Government was able to file a certiorari petition. Justice Alito contended that the Government was likely to prevail on the merits of its argument that the district court lacked jurisdiction to enter the February 25 order because the relief it ordered—payment of funds due under a contract—was barred by sovereign immunity. (Justice Alito suggested that the “proper remedy” for these outstanding payments would be a Tucker Act suit in the US Court of Federal Claims.) Justice Alito also expressed concern that the District Court’s enforcement order was overly broad insofar as it ordered payment of all funds past due (a total of US$2 billion) instead of funds due to the Plaintiffs (a total of US$250 million). Lastly, Justice Alito argued that the Government would suffer irreparable harm if forced to comply with the district court’s enforcement order because it would likely be unable to recover funds after it disbursed them.

At the March 6 preliminary-injunction hearing, Judge Ali ordered the Government to issue certain payments to the Plaintiffs by Monday, March 10 at 6 pm ET. In the coming days/weeks, Judge Ali will issue a clarifying order setting a new deadline for the Government to release the remaining foreign-aid payments incurred before February 13. Judge Ali is also likely to grant Plaintiffs’ request for a preliminary injunction. The Government will likely appeal such an injunction to the DC Circuit (and potentially seek emergency relief from the Supreme Court).  

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Anton Metlitsky, an O’Melveny partner licensed to practice law in the District of Columbia and New York; Jennifer B. Sokoler, an O’Melveny partner licensed to practice law in New York; Meaghan VerGow, an O’Melveny partner licensed to practice law in the District of Columbia and New York; L. Nicole Allan, an O’Melveny associate licensed to practice law in California; David Cohen, an O’Melveny counsel licensed to practice law in New York; Carly Reed, an O’Melveny associate licensed to practice law in California and the District of Columbia; and Joshua Revesz, an O’Melveny counsel licensed to practice law in the District of Columbia, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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