In a significant legal ruling, Judge Ali has issued a temporary restraining order, effectively blocking a key component of President Trump's executive order to freeze foreign aid for 90 days. The judge emphasized that without this temporary injunctive relief, the already considerable harm caused by the freeze is likely to escalate.
Judge Ali has prohibited top officials in the Trump administration, including Secretary of State Marco Rubio and OMB Director Russell Vought, from executing any contract cancellations or stop-work orders initiated after Trump's inauguration. This injunction will remain in effect as litigation continues.
The ruling challenges a central component of Trump's Day One executive orders, which aimed to halt foreign aid abruptly. Judge Ali concluded that the administration's actions appeared "arbitrary and capricious," lacking consideration for the ramifications on businesses that had been awarded aid prior to the inauguration.
"There is nothing arbitrary and capricious about executive agencies conducting a review of programs," Judge Ali noted. However, he criticized the administration for failing to explain why an immediate suspension of appropriated foreign aid was necessary.
Lawyers representing contractors have described extensive damage and disruption due to the freeze and cancellation of thousands of ongoing contracts funded by USAID foreign assistance dollars. A list of over 200 canceled foreign aid contracts, provided by the administration at the judge's request, underscores the extent of the impact.
Attorney Stephen Wirth highlighted the dire consequences during a 90-minute conference-call hearing, noting that businesses are closing, employees are being terminated, and critical supplies such as food and medication are going to waste.
The legal representatives for the contract and grant recipients emphasized the widespread damage, affecting not just international entities but also U.S.-based businesses that partner with them. They warned that many organizations might not survive the 90-day aid freeze.
Another attorney argued that shutting down billions in government spending and forcing foreign aid partners out of business requires clear congressional authorization due to its significant political, social, and economic implications.
In defense of the executive order, DOJ attorney Eric Hamilton argued that the steps taken under presidential direction were not subject to challenge under the Administrative Procedure Act (APA), which permits courts to block "arbitrary and capricious" actions by federal agencies.
However, Judge Ali dismissed this expansive interpretation of executive power, warning that it could place agency actions beyond judicial review and undermine the APA. "Defendants’ argument... would allow the President and agencies to simply reframe agency action as orders or directives originating from the President to avoid APA review," he wrote.
This ruling marks the second legal obstacle faced by the Trump administration's efforts to defund and dismantle USAID. Recently, U.S. District Judge Carl Nichols blocked the administration from placing thousands of workers on administrative leave and cutting off their access to government systems, a hold he extended for another week.
