A federal judge on Friday permanently blocked the Trump administration from moving ahead with a set of controversial spending cuts aimed at dramatically scaling back several federal agencies.
The case was brought by Rhode Island, leading a coalition of states challenging efforts to defund and “gut” four agencies responsible for library services, business development programs, and mediation functions, according to a 58-page complaint filed earlier this year.
Back in May, Chief U.S. District Judge John J. McConnell Jr., an appointee of Barack Obama, issued a preliminary injunction that halted the proposed cuts. That order required agency officials to rehire key staff and contractors and to distribute congressionally approved grants, among other steps.
Since then, Department of Justice attorneys repeatedly tried to narrow or pause the impact of the injunction—including a recent attempt to put the case on hold during the government shutdown. Each effort failed.
In his new ruling, McConnell sided definitively with the plaintiff states, concluding that the Trump administration “acted without constitutional or statutory authority” when it tried to implement the reductions.
In a 47-page memorandum and order, the judge described the dispute as part of a broader effort by the administration “to dismantle federal agencies.”
“By now, the question presented in this case is a familiar one: may the Executive Branch undertake such actions in circumvention of the will of the Legislative Branch?” he wrote. “In recent months, this Court—along with other courts across the country—has concluded that it may not. That answer remains the same here.”
The original lawsuit focused on funding cuts to three agencies, and early court orders applied only to those three. After the states amended their complaint to add a fourth agency, Friday’s decision extended full relief to all four.
The states’ claims rested largely on the Administrative Procedure Act (APA), the federal law that governs how agencies must act. Ruling on competing motions for summary judgment, McConnell explained that the plaintiffs had obtained a vacatur—essentially invalidating—the executive order signed by President Donald Trump that launched the funding cuts.
“Because Defendants’ actions were ‘arbitrary and capricious’ and ‘contrary to law,’ the Court concludes that the proper remedy is to vacate those actions in their entirety,” he wrote, using two key APA standards for reviewing agency behavior.
Under the APA, “arbitrary and capricious” actions are those that go too far while sidestepping required procedures. Conduct that is “contrary to law” similarly violates statutory limits and forms part of the same framework courts use to evaluate agency decisions.
McConnell reiterated findings from his earlier injunction, noting that “Congress mandated certain staffing requirements” and assigned the agencies specific responsibilities so they could carry out their statutory duties.
“Defendants have acted ‘contrary to law’ because they have made it impossible for the agency to continue to perform its statutory duties,” the court said, applying this reasoning to each defendant agency.
The judge also leaned on a report from the Government Accountability Office (GAO), part of the Trump administration’s own oversight structure. According to the court’s summary, the GAO concluded that one agency had “unlawfully withheld funds that Congress had appropriated” in violation of the Impoundment Control Act (ICA), which governs how the executive branch may delay or cancel spending that Congress has already approved.
“Defendants also acted unlawfully when they failed to follow the procedures set forth in the ICA for rescinding or deferring funds appropriated to each agency,” McConnell wrote.
He found that the agencies bypassed mandatory ICA procedures and emphasized that “contrary to law” encompasses violations of any applicable statute, not just those an agency directly administers.
“Also important to note—for the purposes of this claim—that contrary to law ‘means, of course, any law, and not merely those laws that the agency itself is charged with administering,’” the order continued. “The Court therefore finds that Defendants’ actions in implementing the Reduction [executive order] were ‘not in accordance with law’ and must be set aside.”
McConnell further identified constitutional problems with the cuts.
“[T]he President has no statutory authority to cancel appropriations passed by Congress or abolish federal agencies created by Congress,” he wrote. “Accordingly, the Court finds that Defendants violated the Constitution’s Take Care Clause and the Separation of Powers doctrine.”
Beyond overturning the administration’s actions, the judge granted forward-looking relief to ensure that money keeps flowing to the states and their programs. He issued a permanent injunction barring the agencies “from taking any future actions to implement, give effect to, comply with, or carry out the directives contained in” Trump’s executive order.
In weighing the harms each side might face if they lost, McConnell acknowledged that the agencies could suffer “some harm” if they were compelled to disburse funds that could not later be recovered. But he concluded that the states’ injuries would be far more severe without the funding.
He highlighted a range of concrete consequences:
- Public libraries in New Mexico, New Jersey, Maine, and Oregon could be forced to close branches, freeze hiring, or end programs that promote literacy and support learning.
- State universities in Hawai‘i, Maryland, and Arizona might have to cut student programming, default on contracts, or lay off employees.
- Labor and mediation entities in Rhode Island, Illinois, and Minnesota could face work stoppages and unresolved negotiations in key disputes.
- Agencies in Michigan, New York, and Wisconsin might lose access to research-based, community-specific expertise they rely on to assist unhoused individuals.
Taken together, McConnell wrote, the states’ losses “are far more than merely economic or speculative,” underscoring his decision to permanently block the administration’s cuts.
