Health Law Daily Wrap Up, GENERAL HEALTH CARE NEWS—D.R.I.: Preliminary injunction granted; HHS must reinstate $11B while case moves through courts, (May 20, 2025)
Organizations Mentioned:State of California | U.S. Department of Health and Human Services | U.S. Department of Justice
“HHS never claimed any failure on part of the States to comply with their grant agreements,” the court noted.
States that had their health care funding cut by the Trump Administration in March prevailed in their motion for a preliminary injunction before the U.S. District Court for the District of Rhode Island. A temporary restraining order (TRO) was granted in April that also favored the states. The preliminary injunction allows for the reinstatement of $11B in funding from HHS while the case proceeds through the courts. The funding was cut for states in March 2025 and the reason given was that the COVID-19 emergency had ended. The district court found for the states on all counts considered, noting that the states were likely to prevail in their claims that the Administrative Procedure Act (APA) was violated, that the public health funding decision by the Trump Administration without a hearing likely ran contrary to the states’ statutory rights, and that separation of powers principles were violated (State of Colorado v. HHS, No. 1:25-cv-00121-MSM-LDA (D.R.I. May. 16, 2025)).
APA. The states argued that the APA was violated in two ways—HHS overstepped its statutory authority when it determined that congressionally appropriated funds were no longer necessary, and HHS acted contrary to law in terminating the grants “for cause.” The district court agreed, noting, “If Congress intended to charge HHS with such a determination, it would have done so at some point—like in June 2023, when it went line-by-line and rescinded some COVID-era funding but left other funding in place.”
Appropriations. Congress allocated large sums of money to HHS through six appropriation acts. HHS was to distribute funds to the states by allocating certain amounts of the appropriated money to the Centers for Disease Control and Prevention (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA). The district court found that without that hearing prior to termination, HHS’s public health funding decision for SAMHSA and its implementation ran contrary to the states’ statutory rights and did not follow the procedure set forth by Congress in 42 U.S.C. § 300x-55(a)-(e). The states also showed a strong likelihood of success in proving that the CDC terminations were contrary to law.
Arbitrary and capricious. HHS acted arbitrarily and capriciously when it applied “for cause” terminations, the court found, because contrary to statutory and regulatory authority, HHS never claimed any failure on the part of the states to comply with their grant agreements. HHS relied only on the end of the pandemic as “cause” to terminate the funds, despite that being “contrary to statutory and regulatory authority and inconsistent with Congress’s directive that the funds remain available beyond the pandemic.”
Separation of powers. The court also found that the government’s unilateral determination that the funds were no longer needed based on the end of the pandemic violated core separation-of-powers principles since Congress made its directives clear in the appropriations statutes and again when it chose not to rescind the funds in June 2023. As a result, the states demonstrated a strong likelihood of success on the merits of their claim that HHS’s actions violated the separation of powers under the U.S. Constitution, according to the court.
Irreparable harm. The states argued that without the funding and the preliminary injunction, irreparable harm would result from limiting the states’ ability to protect public health, the elimination of health care services, and the lack of funds for public health infrastructure. The states also showed how many employees were to lose their jobs due to the lack of funding. The court found that those and other consequences made the case for irreparable harm that justified the issuance of the preliminary injunction.
The case is No. 1:25-cv-00121-MSM-LDA.
Judge: McElroy, M.
Attorneys: David Moskowitz, Colorado Department of Law, for State of Colorado. Julia Harvey, RI Department of Attorney General, for State of Rhode Island. Crystal Adams, Office of The Attorney General, for State of California. Leslie J. Kane, U.S. Department of Justice, for U.S. Department of Health and Human Services and Robert F. Kennedy, Jr.
Companies: U.S. Department of Health and Human Services
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