Further Court Action Taken on OMB Pause Memo  

February 3, 2025

Two court cases were filed last week regarding the Office of Management and Budget’s (OMB’s) federal memorandum M-25-13 (OMB Memo) which attempted to “temporarily pause all activities related to obligation or disbursements” of federal financial assistance that may be implicated by the recently issued Presidential Executive Orders (EOs). The most recently filed case resulted in a temporary restraining order (TRO) that prohibits the administration from taking any action relating to the OMB Memo and the EOs. As such, Federal agencies currently cannot pause or freeze any awards or obligations based on the OMB Memo or the EOs. 

The first case was filed on Tuesday, January 28 in the federal district court in the District of Columbia (D.C.) against OMB by a group of nonprofits and nonprofit associations. The judge in that case issued an “administrative stay” which directed OMB to refrain from implementing the OMB Memo solely with respect to the disbursement of Federal funds under all open awards. The stay was issued to give the court time to consider the request for a TRO and was limited in scope. The stay specifically noted that it did not affect the OMB Memo as it pertains to the “issuance of new awards”, or other relevant federal agency actions implicated by the EOs. In other words, federal agencies could not pause the disbursement of Federal funds under open awards but could continue reviewing awards to determine alignment with the administration’s priorities as set forth in the EOs. The stay is in place until 5pm Eastern time today, February 3, 2025. The TRO hearing occurred at 11am today, February 3.  

The second case was filed in a federal district court in Rhode Island by a number of state attorney generals against OMB, Donald Trump as President, and the acting heads of many federal agencies. The judge in that case issued a TRO effective immediately that required a notice be sent to all “agencies and their employees, contractors and grantees by Monday, February 3, 2025 at 9 am with the attached order.” All grantees should have received the notice and TRO via their Grants Solutions accounts.  

The TRO will stay in effect until the court issues a further order. The court is currently working with the parties to schedule a preliminary injunction hearing. Among other issues, the TRO specifically addresses the confusion around the OMB’s January 29th rescission of the OMB Memo. The notice explains that the TRO establishes the following: 

1. Federal agencies cannot pause, freeze, impede, block, cancel, or terminate any awards or obligations on the basis of the OMB Memo, or on the basis of the President’s recently issued EOs. 
2. The prohibition in the TRO applies to all awards, obligations and future federal financial assistance and not just to those awards involving the States that filed the TRO request or to those federal agencies specifically named in the TRO request. 
3. Federal agencies may continue to exercise their own authority and discretion under the current legal framework to pause awards or obligations, provided that any action taken complies with all notice and procedural requirements in the authorizing statutes, regulations and award terms and is not based on the OMB Memo or the EOs. 

The TRO provides a helpful overview of last week’s events and gives insight into the legal framework under which executive actions are reviewed.  

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