The U.S. Supreme Court has proven its mettle in its first important confrontation with the Trump administration — barely. By a 5-4 vote, the court upheld an order by a federal judge requiring the government pay some $2 billion owed to contractors for work they’d completed for the U.S. Agency for International Development.
The decision effectively repudiated President Donald Trump’s unlawful executive order that froze all foreign aid spending. The court’s four most conservative justices dissented. But Chief Justice John Roberts and Justice Amy Coney Barrett joined the three liberal justices to stand up for the rule of law.
The background to the court’s decision is an executive order Trump signed on his first day in office. The Reevaluating and Realigning United States Foreign Aid order called for a “90-day pause in United States foreign development assistance for assessment of programmatic efficiencies and consistency with United States foreign policy.”
Apart from the obvious stupidity of an across-the-board freeze on aid that includes programs like Ebola prevention and detection, the main legal issue with the order is that the president can’t unilaterally suspend funding allocated by Congress.
As I explained at the time, that’s called “impoundment”— and it isn’t allowed except under the limited terms of the Impoundment Act of 1974, which permits a 45-day pause if accompanied by an explanation to Congress. The Trump administration openly flouted the law by failing to meet these requirements.
Understandably, businesses and nonprofits that do work under contract with USAID and the State Department sued.
The suit that made it to the Supreme Court was brought by U.S.-based contractors who were owed money for work they had completed before Trump took office on Jan. 20. These were the most appealing plaintiffs possible since they were clearly under the jurisdiction of the U.S. courts and were only asking to be paid what was already due to them.
The DC District Court judge who got the case, Biden appointee Amir Ali, agreed with the plaintiffs that the freeze was unlawful as applied to them.
Interestingly, the lower court based its finding not on the Impoundment Act but on the Administrative Procedure Act. That law says government agencies can’t act in a way that is “arbitrary and capricious,” but must have (and provide) good reasons for their actions.
In essence, the judge ruled that the plaintiffs were likely to win their case because the across-the-board freeze was irrational. Ultimately, the judge issued a temporary restraining order blocking the agencies from withholding the payments they owed based on the executive order.
The Trump administration didn’t comply with the order and instead went to the Supreme Court, asking it to stay the lower court’s order.
In its decision, the majority rejected the administration’s request, and told the district court to “clarify what obligations the Government must fulfill to ensure compliance with the temporary restraining order, with due regard for the feasibility of any compliance timelines.”
Consistent with its usual practice in relation to emergency applications, the majority did not explain its reasoning. So, it didn’t denounce the Trump administration’s refusal to follow the law — at least this time.
By upholding the lower court’s order, however, the majority implicitly endorsed the lower court’s logic, which is that the Trump administration can’t end-run the existing legal order to do whatever it wants. That’s the message we need now — and we got it.
That’s the good news. The bad news is that four justices disagreed. Justice Samuel Alito, who wrote the dissent, pronounced himself “stunned” by the outcome.
