Supreme Court Steps Into Battle on USAID Funding Freeze

By Amanda L. Cole

The Trump administration appealed a lower court’s decision to temporarily unfreeze billions of foreign aid owed to nonprofits and other government partners while the legal proceedings play out. Chief Justice John Roberts stayed the order to release the funding from the United States Agency for International Development (USAID) pending the highest court’s review, with a noon deadline today for nonprofits in the case to respond.

In three separate lawsuits, 10 total nonprofits, along with a few for-profit entities, are challenging the government’s actions surrounding the unraveling of the USAID, an agency that has been dispersing funds to nonprofits and other partners addressing global issues since its founding in 1961.

A recent court decision has allowed President Donald Trump and his administration to resume its efforts to dismantle the agency, while a court decision that applies to two joint cases had mandated USAID resume payments to its grantees and contractors as part of a temporary restraining order granted on Feb. 13. The Trump administration has yet to follow that order, which is on hold pending a Supreme Court decision.

Here’s a look at each USAID lawsuit from their beginnings to the latest rulings and filings.

The Foreign Aid Freeze and Dismantling of USAID

Among Trump’s flurry of executive orders on Inauguration Day was “Reevaluating and Realigning United States Foreign Aid,” which put a 90-day freeze on all of USAID’s funding, including already-awarded grants. The intent behind the pause, according to the Trump administration, is to ensure funding aligns with the president’s “America-first” policies.

Four days later, Secretary of State Marco Rubio issued stop-work orders for all contracts and grants while the review was underway. As a result, nonprofits claimed they and their missions are suffering, according to court documents.

“These actions have generated a global humanitarian crisis by abruptly halting the crucial work of USAID employees, grantees and contractors,” according to court documents for one of the lawsuits. “They have cost thousands of American jobs. And they have imperiled U.S. national security interests.”

The funding freeze has created a ripple effect of thousands of layoffs and furloughed employees for USAID contractors and grantees. In the days following Rubio assuming the role of USAID’s acting administrator on Feb. 3, the Trump administration locked thousands of employees out of computer accounts and put employees on administrative leave as the agency’s headquarters were shuttered, lawyers for various nonprofits alleged in court documents.

Members of Congress have urged the administration to rethink its stance, and those suing have tried to stress the global impact of ending USAID. However, the Trump administration has touted that it has already saved taxpayers $60 billion to date, according to court documents.

The government provided $68 billion in foreign aid in fiscal year 2023, with USAID disbursing more than 60% of that, according to government figures. The Department of State contributes nearly 30% of the total aid. For fiscal year 2024, which ends Sept. 30, 2025, $41 billion had been disbursed as of Dec. 19, 2024.

“USAID provides life-saving food, medicine and support to hundreds of thousands of people across the world,” according to court documents. “Without agency partners to implement this mission, U.S.-led medical clinics, soup kitchens, refugee assistance programs and countless other programs shuddered to an immediate halt.”

3 Lawsuits Against USAID Disbandment and International Aid Freeze

The lawsuits name Trump, Rubio — who is also serving as active ambassador for USAID — as well as the U.S. Department of State, Office of Management and Budget and USAID as defendants. Some lawsuits also name Peter Marocco, director for foreign assistance at the State Department and deputy administrator-designate for USAID; Russell Vought, director of the Office of Management and Budget; Scott Bessent, secretary for the Department of the Treasury; as well as the Department of Treasury.

Each case claims the Trump administration’s policies violate the separation of powers; the Take Care Clause, which limits presidential power; and numerous provisions of the Administrative Procedure Act, which governs federal agencies’ rulemaking and judicial oversight. Each suit has set out to prevent the freeze and shuttering of USAID from remaining in effect during litigation. Here’s an overview of which nonprofits are involved and where each case is so far.

American Federation of Government Employees v. Trump

Public Citizen and Democracy Forward filed the first lawsuit on Feb. 6 on behalf of two Washington, D.C., associations — American Foreign Service Association and American Federation of Government Employees — that represent 800,000 federal employees and 2,000 foreign service members. Oxfam America, a Boston-based nonprofit with a mission to end poverty and inequality globally, joined the suit a week later.

U.S. District Judge Carl J. Nichols issued a temporary restraining order on Feb. 7 — extending it twice through Feb. 21 — but denied an injunction that would have halted the Trump Administration’s plans to wind down USAID during the ongoing legal proceedings.

Lauren Bateman, an attorney for Public Citizen Litigation Group who is working on the case, accepted the judge’s denial, but vowed to fight for an outcome with permanent relief, a sentiment Oxfam America’s leadership reiterated.

“No matter [Feb. 21’s] result — the fact remains that the dismantling of USAID and U.S. foreign assistance is cruel and illegal,” Abby Maxman, president and CEO of Oxfam America, said in a statement. “We look forward to the next opportunity to uphold the immeasurable value of U.S. foreign assistance.”

AIDS Vaccine Advocacy Coalition v. United States Department of State and Global Health Council v. Donald J. Trump

Filed Feb. 10, the second lawsuit also comes from Public Citizen, which is representing Baltimore-based Journalism Development Network, a nonprofit supporting 70 nonprofit investigative centers and regional news organizations across the world, and New York City’s AIDS Vaccine Advocacy Coalition, a nonprofit whose mission is to develop and deliver HIV prevention options.

The next day, Arnold & Porter Kaye Scholer filed a separate lawsuit on behalf of a group of various government partners. That group includes these five nonprofits:

Global Health Council, a Washington, D.C., membership alliance whose members administer global health programs.
Management Sciences for Health, an Arlington, Virginia-based Global Health Council member.
Small Business Association for International Companies, a Raleigh, North Carolina, membership organization that promotes small businesses to U.S. agencies providing foreign assistance.
HIAS, a faith-based nonprofit based in Silver Spring, Maryland, that helps refugees relocate.

American Bar Association, Chicago-based membership organization for the legal profession.

Due to similarities, both cases were assigned to U.S. District Judge Amir H. Ali, who issued a temporary restraining order against the USAID funding freeze on Feb. 13. Despite that order, the Trump administration, in a Feb. 18 filing, admitted it had circumvented the court’s order.

Both nonprofits in the first case attempted to work with USAID to retrieve their funds, but neither had success. An anonymous USAID employee shared in court documents that she had been instructed in the days after the judge issued the temporary restraining order to terminate numerous grants and contracts.

Andrew Sullivan, publisher for the Journalism Development Network, said he believes his organization is being unfairly targeted. Waste.gov, a password-protected site that is reporting what the Trump administration deems as wasteful projects, allegedly claimed his organization used “$20 million for strengthening transparency and accountability through investigative reporting program, which used the Organized Crime and Corruption Reporting Project (OCCRP) as its implementing partner. The OCCRP was cited four times in the whistleblower letter that led to the Russiagate impeachment.”

Marocco, in a Feb. 18 court filing, identified seven areas where USAID was actively terminating thousands of grants and contracts, including those the Trump administration believes:

Address diversity, equity, inclusion and accessibility.
Have an “unnecessary reliance” on third-parties with accountability issues.
Are operational expenses and/or general waste.
Are not related to “USAID’s core mission or delivery of life-saving aid.”
Involve a regime change, “civic society” or “democracy promotion.”
Address sustainability and climate change.
Are inconsistent with presidential directives.

The judge, reiterating his temporary restraining order on Feb. 20, informed the government that while he is not preventing the Trump administration from taking action on specific contracts within their respective contractual terms, his earlier ruling ordered the Trump administration to lift the blanket freeze of grants and contracts that existed prior to Jan. 20.

“By enjoining defendants and their agents from implementing any directives to undertake such blanket suspension, the court was not inviting defendants to continue the suspension while they reviewed contracts and legal authorities to come up with a new, post-hoc rationalization for the en masse suspension,” the judge wrote in his Feb. 21 decision. “... To the extent defendants have continued the blanket suspension, they are ordered to immediately cease it and to take all necessary steps to honor the terms of contracts, grants, cooperative agreements, loans and other federal foreign assistance awards that were in existence as of Jan. 19, 2025, including but not limited to disbursing all funds payable under those terms.”

The decision included a requirement to comply before midnight yesterday, but the government indicated that would not be enough time to disburse nearly $2 billion, per a filing requesting a stay to the temporary restraining order while it appealed Ali’s order with the Court of Appeals for the D.C. Circuit. Both the appeal and the request for a stay that were filed this week were denied on Wednesday, with the judge in the latter instance noting a stay would be contrary to the order’s purpose.

Also on Wednesday, Sarah M. Harris, acting U.S. solicitor general, asked the Supreme Court to take the case. Chief Justice Roberts stayed the temporary restraining order Wednesday, requesting filings by noon today.

In a response to the government's appeal to the Supreme Court today, lawyers for the nonprofits and other government contractors and grantees cited that their clients had laid off and furloughed employees, face financial ruin and even physical threats in conflict areas.

"The government’s continued noncompliance with the district court’s [temporary restraining order] forced one respondent to lay off 110 employees yesterday," the lawyers said, according to court documents. "Another will default on severance obligations, triggering civil liability and potential regulatory enforcement, if it does not receive payment for past work by today. Meanwhile, many of those who depend on respondents’ programming face starvation, disease and death."