Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—D.C. Circuit stays its own stay, ‘effectively requires the government to pay out over $25 million in disputed grants’, (May 9, 2025)

By Brandi O. Brown, J.D.

The litigation stems from the executive order announcing the elimination of the United States Agency for Global Media.

In two related orders issued by the en banc D.C. Circuit earlier this week, that appeals court has revisited motions for stay pending appeal filed by the U.S. government in disputes over both personnel actions and grants that had been promised to the Middle East Broadcasting Network (MBN), Radio Free Asia (RFA), and several other federally funded broadcast networks but taken away as the result of an executive order.

In the per curiam order issued on May 3, 2025, a divided D.C. Circuit had granted the government’s motion for a partial stay pending appeal of a preliminarily injunction issued by a federal district court that had required the United States Agency for Global Media (USAGM), which oversees six federally funded broadcast networks, to restore its employees and contractors to their status prior to the issuance of EO. It also had ordered the government to restore the grants.

In the May 3 order, the D.C. Circuit had explained that the district court likely lacked jurisdiction to do either of those things and partially granted the government’s motion for a stay. In that order, the court noted that absent a stay, USAGM would be forced to imminently pay out some $15 million to RFA and MBN, which they intended to immediately spend. The prior order noted that because the district court did not require the plaintiffs to post any injunction bond, USAGM could not recover these funds even if it should prevail on appeal.

Staying the stay. In one of the two related orders (a separate order was also issued regarding Docket No. 25-5158 and is covered separately in this issue of Labor and Employment Law Daily), the en banc court this week ordered that parts of the May 3, 2025, order were administratively stayed pending further order, including in No. 25-5144 staying provision (2) of the district court’s preliminary injunction filed April 22, 2025; in No. 25-5150, staying the district court’s preliminary injunction filed April 25, 2025; and in No. 25-5151, staying the district court’s preliminary injunction filed April 25, 2025. The court further ordered, by its own motion, that its May 7, 2025, order entered in No. 25-5158 was to be administratively stayed pending further order of the court.

“The purpose of this administrative stay is to give the court sufficient opportunity to consider the emergency petitions and should not be construed in any way as a ruling on the merits of those petitions,” the order states.

Dissenting statements. Judges Katsas and Rao penned separate dissenting statements, which were attached to the order.

In Judge Katsas’s dissent, he wrote that “the putative administrative stay entered by the en banc Court... effectively requires the government to pay out over $25 million in disputed grants.” In addition to equitable and procedural considerations covered by Judge Rao’s dissent, which Judge Katsas joined, Judge Katsas added that another consideration also cut “strongly” against the stay—that the “government is likely to succeed on the merits of the underlying appeals.” Judge Katsas is of the opinion that the district court did not have jurisdiction to consider the claims made by RFA, MBN, and RFE/RL.

Judge Rao, in a much briefer dissenting statement, asked “When is an administrative stay not an administrative stay? When it forces the government to release over $25 million in grant funds with no hope of recovery, even if the government ultimately prevails on the merits, as it is likely to do here.” She describes the “‘administrative stay’ entered by the en banc majority” as “highly unusual” and argues that the court’s “gambit stretches [its] en banc standards and is an abuse of the court’s remedial discretion.”

Judge Pillard’s concurring statement. In a separate order, Judge Pillard concurred with the court’s decision, apparently responding to the concerns raised by Judges Katsas and Rao. “In short, while there is harm to the government from unblocking the district court’s injunctions, there is also harm to the networks from blocking injunctive relief. The networks have no source of funding other than their monthly allotments. The undisputed record evidence is that they cannot exist much longer without that funding. In that context, suspending all payments to the networks would not maintain the status quo.”

“How, then, to compare the competing assertions of irreparable harm in deciding whether to enter an administrative stay?” Judge Pillard notes, in this regard, that the government is not arguing that it is entitled to keep the funding, only that the litigation should proceed in the Court of Claims. “The administrative stay has the consequence of requiring the government to distribute the networks’ past-due funding to prevent their imminent collapse while we consider the government’s jurisdictional argument.”

The dockets are Nos. 25-5150, 25-5151, and 25-5158.

News: LitigationNewsTrends WhiteHouseNews Layoffs GovernmentContracts