Major Development: D.C. Circuit Court of Appeals Declines Full Panel Rehearing in USAID Financing Case

The D.C. Circuit Court of Appeals has surprised me: Contrary to expectations, late on Thursday, they denied the plaintiffs’ petition for a rehearing en banc (by the full court) in the USAID funding case. This follows a somewhat stunning win for the Trump administration on the matter two weeks ago, when a three-judge panel of the court vacated lower court injunctions regarding USAID funding. 

In that prior 2-1 decision, the appellate court held: 

The district court erred in granting that relief because the grantees lack a cause of action to press their claims. They may not bring a freestanding constitutional claim if the underlying alleged violation and claimed authority are statutory. Nor do the grantees have a cause of action under the APA because APA review is precluded by the Impoundment Control Act (ICA). And the grantees may not reframe this fundamentally statutory dispute as an ultra vires claim either. Instead, the Comptroller General may bring suit as authorized by the ICA. Accordingly, we vacate the part of the district preliminary injunction involving impoundment.

Unsurprisingly, the plaintiffs in the consolidated cases filed a petition for rehearing en banc and sought a stay of the decision. And, as noted in my prior reporting on this, things somewhat stalled out at that point, prompting the Trump administration to take its case back to the Supreme Court in light of a looming deadline regarding FY 2025 appropriations.