Labor & Employment Law Daily Wrap Up, PROCEDURE—D. Md.: Court grants in part motion by states for preliminary injunction to reverse dismantling of AmeriCorps, (Jun 9, 2025)

By Ronald Miller, J.D.

Failure to adhere to a notice-and-comment rulemaking requirement is an action not “made in ‘observance of procedure required by law.’”

A federal district court in Maryland granted a motion for a preliminary injunction sought by 24 states and the District of Columbia to bar the defendants from dismantling AmeriCorps. Before AmeriCorps could make significant changes to service delivery, it first had to engage in notice-and-comment rulemaking. Because the agency did not do so, the states have shown a likelihood of success that the agency actions were contrary to law, arbitrary and capricious, and without observance of procedures required by law, in violation of the APA. Further, the abrupt mass program closure and the exiting of AmeriCorps members without notice-and-comment rulemaking caused adverse effects to concrete interests that cannot be remedied by a final judgment (State of Maryland v. Corporation for National and Community Service, operating as AmeriCorps, No. DLB-25-1363. (D. Md. Jun. 5, 2025)).

The Corporation for National and Community Service, operating as “AmeriCorps,” is a federal agency that “administer[s] the programs established under the national service laws.”

AmeriCorps operates national service programs and funds service programs operated by states, local governments, nonprofits, and universities.

National Civilian Community Corps. The AmeriCorps statute also authorizes the creation of the National Civilian Community Corps (NCCC). The NCCC is a full-time, residential service program for young adults who work on projects involving disaster relief, home construction, and trail maintenance. AmeriCorps directly oversees the NCCC program, but NCCC members are not considered federal employees except for the limited purposes of work-related injuries and tort liability. Other AmeriCorps programs include VISTA, the Volunteer Generation Fund, research grants and Days of Service grants.

Congressional appropriations. AmeriCorps programs are funded by annual congressional appropriations. In Fiscal Year 2024, Congress appropriated $975,525,000. In addition to appropriating funds, Congress included an “administrative provision[]” for Fiscal Year 2024 that “[AmeriCorps] shall make any significant changes to program requirements, service delivery or policy only through public notice and comment rulemaking.” For Fiscal Year 2025, Congress appropriated the same amounts “under the authority and conditions” of the Fiscal Year 2024 appropriations act.

Dismantling of AmeriCorps. On February 11, 2025, President Donald J. Trump issued Executive Order 14210, “Implementing the President’s ‘Department of Government Efficiency’ Workforce Optimization Initiative.” On February 26, President Trump issued Executive Order 14222, “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency Initiative.”

AmeriCorps informed its employees on April 8 that it was taking steps to comply with the Workforce Optimization Order by initiating, among other things, a deferred resignation program and a reduction in force of “up to 50 percent or more. On April 15, the agency ordered all members of the National Civilian Community Corps to leave their assigned posts pending their termination from the program. The next day, AmeriCorps placed 85 percent of its staff on administrative leave. In the following days, AmeriCorps reduced its workforce from more than 700 employees to 116 employees. On April 25, AmeriCorps terminated over 1,000 grants for AmeriCorps-funded programs across the country, ordered those programs closed, and forced the exit of roughly 30,000 volunteers working on the programs.

APA violations. On April 29, 24 states and the District of Columbia filed a complaint against AmeriCorps and the interim agency head alleging three violations of the Administrative Procedure Act (APA). The states alleged that the defendants acted contrary to law, without observance of procedure required by law, and arbitrarily and capriciously. They claim that AmeriCorps violated the APA by reducing AmeriCorps staffing and cutting funds appropriated by Congress to carry out the national service laws, by failing to engage in notice-and-comment rulemaking, by failing to provide advance notice of a change in agency service priorities, and by failing to provide impacted award recipients with an opportunity to be heard.

The states also raised a constitutional claim, alleging that the defendants acted in violation of the separation of powers principle, and an ultra vires claim, alleging that the defendants acted in excess of the scope of their authority.

On May 6, the states moved for a stay under the APA, and a preliminary injunction. They asked the court to vacate the termination of NCCC members, the decision to place on administrative leave and subsequently institute a RIF for AmeriCorps staff, and the termination of AmeriCorps-funded programs in the states. The defendants opposed the motion and requested that the court stay any order granting relief for seven days.

Jurisdiction. Before turning to the merits, the court addressed jurisdictional questions. Do the states challenge a final agency action subject to judicial review; do the states have standing to bring their APA claims; and do the states’ claims belong in this court or in the United States Court of Federal Claims.

Final agency action. The states allege that the mass termination of the AmeriCorps grant-funded programs and the removal of NCCC members from service were arbitrary and capricious, contrary to law, and without observance of procedure required by law. The court was required to determine whether these agency actions were within the scope of the APA’s “basic presumption of judicial review.” The APA allows for judicial review of “final agency action for which there is no other adequate remedy in a court.” Whether there is a final agency action is a jurisdictional question in the Fourth Circuit. “To constitute ‘final agency action’ within the meaning of Section 704, the challenged action must have two characteristics. First, the challenged action must be ‘circumscribed and discrete.’... Second, the ‘agency action’ must be ‘final.’”

Discrete agency action. The states challenged the “dismantling” of AmeriCorps. This challenge is essentially a broad programmatic attack that is not subject to judicial review. However, the states identified two discrete agency actions that are ripe for judicial review: (1) the mass closure of 1,031 AmeriCorps programs; and (2) the removal of all NCCC members from service.

Mass program closure. Grant termination letters informed grant recipients that their funding was terminated, that VISTA members were removed, and that AmeriCorps members must be exited from the program due to “program closure.” These letters advised: “This is a final agency action and is not administratively appealable.” The defendants suggested that the states must separately challenge each individual grant termination as distinct final agency actions. The court disagreed.

The court noted that the decision to terminate grant funding and close over 1,000 AmeriCorps programs on the same day and for the same reason, a “shift in AmeriCorps priorities,” was “categorical in nature” and was not based on an individualized assessment of the grant terms or the grantee’s adherence to applicable regulations or statutes. The vague reason for grant terminations also suggested that the agency did not base its program closure decisions on its assessment of the services provided under each award. Thus, the mass closure of AmeriCorps programs is a discrete agency action that is ripe for judicial review under the APA.

Removal of NCCC members. The decision to exit NCCC members from the NCCC program also was a discrete agency action. This blanket decision to remove all NCCC members from service was categorical in nature.

Finality. Agency action is “final” when two conditions are met: (1) “the action must mark the ‘consummation’ of the agency’s decisionmaking process;” and (2) “the action must be one by which ‘rights or obligations have been determined,’ or from which ‘legal consequences will flow.’” “To meet [the second] requirement, a party must demonstrate that the challenged act had ‘an immediate and practical impact,’ or ‘alter[ed] the legal regime’ in which it operates.”

The decision to close AmeriCorps programs was a final agency action. The termination letters said as much. The program closures “had ‘an immediate and practical impact’” on the states—grantees no longer receive funding or the service of AmeriCorps and VISTA members.

As to the decision to remove all NCCC members from service, this too was final. The agency’s decision-making process was complete, and all NCCC members were exited from the program. The action marked the consummation of the agency decision-making process. Thus, the decision to remove all NCCC members from service also satisfied the second Bennett prong, Bennett v. Spear, 520 U.S. 154 (1997).

Agency discretion. “The APA prohibits judicial review of actions committed to agency discretion by law.” The agency argues that implementation of the NCCC is committed to agency discretion and is not subject to judicial review under the APA.

Here, the decision to remove all NCCC members from service was not committed to agency discretion by law. When appropriating funds for necessary expenses for AmeriCorps to carry out in Fiscal Year 2024 and 2025, Congress allocated roughly $37.7 million to the NCCC. Further, Congress has required that when AmeriCorps makes “any significant changes to program requirements, service delivery or policy,” it must do so through notice-and-comment rulemaking. Congress has specifically authorized the NCCC’s creation, established requirements for its operation, allotted a specific amount to the NCCC in annual appropriations acts, and set parameters for when AmeriCorps can make changes to “program requirements, service delivery or policy.” Congress has, therefore, “circumscribe[d] agency discretion.”

The removal of all NCCC members from service was not committed to agency discretion by law. It is subject to the court’s review under the APA.

Standing. According to the states, the agency violated the APA by failing to engage in notice-and-comment rulemaking required by law. Here, the states bring several APA claims. In each of these claims, the states assert they have been injured by one or more of the following agency actions: (1) the mass closure of AmeriCorps programs; (2) the termination of NCCC members from service; and (3) the placement of 85 percent of AmeriCorps staff on administrative leave and the subsequent reduction in force.

The court determined that the states have standing to challenge the agency’s decision to close over 1,000 AmeriCorps programs. The loss of federal funding for grants awarded to state service commissions and state instrumentalities and the loss of AmeriCorps and VISTA members working on those programs are concrete injuries caused by agency action. The states have standing to challenge the mass closure of AmeriCorps programs.

Termination of NCCC members. In addition, the states have standing to challenge the removal of NCCC members from service. At least two plaintiff states have been concretely injured by the agency’s April 15 decision to terminate all NCCC members from service. NCCC members were deployed to the western part of North Carolina to support the state’s Hurricane Helene recovery effort. Michigan planned to deploy an NCCC team in April to some of the Michigan communities hit hardest by a March 2025 ice storm in Northern Michigan but had to abandon this plan as a result of the demobilization of NCCC members across the country.

The removal of NCCC members from these states is causally connected to a non-speculative increase in demand for state disaster relief services. Thus, there is a non-speculative and imminent threat of an increased reliance on state disaster relief services due to the mass removal of NCCC members in at least some of the plaintiff states who relied on NCCC members for disaster relief assistance. At least North Carolina and Michigan have standing to challenge the decision to remove all NCCC members from service.

Reductions in agency staff. However, the states do not have standing to challenge AmeriCorps’s decisions to place 85 percent of agency staff on administrative leave and to institute a RIF. The states expressed concerns that the reduction in AmeriCorps staff will cause delays in the grant application and approval processes. They also asserted that several of them already have felt the effects of the reduction in AmeriCorps staff.

However, these alleged harms did not satisfy the injury-in-fact requirement for standing. The anticipated delay in adjudicating grant applications because of the loss of AmeriCorps staff, on its own, is not a concrete harm. The anticipated harms are “too speculative to satisfy the well-established requirement that threatened injury must be ‘certainly impending.’”

Redressability. Even if the states could establish injury-in-fact, they have not established that the court could redress their injuries from the RIF. “To satisfy the redressability element of standing, a plaintiff ‘must show that it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.’” If the Court were to find in favor of the states on their claims that the staffing reductions violated the APA (or the separation of powers) and to order the reinstatement of the terminated AmeriCorps staff, the court could not tell the agency how to prioritize agency needs or direct the day-to-day operations of the staff. Thus, the states have not established their injuries resulting from the staffing reduction would be redressed by reinstating the terminated AmeriCorps staff.

Jurisdiction over state claims. The parties disputed whether this court or the Court of Federal Claims has jurisdiction over the states’ claims. Through the APA, the United States has consented to suit in the U.S. district courts by a person “suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action.”

Source of rights. Whether the states’ claims are at their “essence” contract claims depends on: (1) “the source of the rights” upon which the states base their claims; and (2) “the type of relief sought (or appropriate).” In the states’ view, the source of their rights are federal statutes. In the defendants’ view, the source of the rights are the terminated grants. The court found that the sources of the states’ rights on which they based their claims were federal statutes, not the grants. The states alleged that AmeriCorps did not comply with the notice-and-comment rulemaking requirement in the 2024 Appropriations Act and the 2025 Appropriations Act. The grant terms are simply not relevant to this case at all.

Type of relief sought. “To determine whether a plaintiff seeks primarily injunctive relief such that a district court has jurisdiction over his claim, courts must look to the ‘essence’ of the complaint and whether the relief requested is ‘not... an incident of, or collateral to, a monetary award.’”

Here the essence of the complaint and requested relief is equitable, not monetary. The states did not request any monetary damages. Instead, they sought declaratory and prospective injunctive relief. Specifically, they sought a declaration “that the decision to dismantle AmeriCorps and actions taken to effectuate it are unlawful and/or unconstitutional because they violate the APA and/or the United States Constitution.”

The appropriate relief here is enjoining the agency actions that were “significant changes” to “program requirements, service delivery or policy” made without public notice-and-comment rulemaking in violation of Congress’s instructions in its annual appropriations for the agency. Thus, the court concluded that the states’ APA claims were not, in “essence,” contract claims. Moreover, the Tucker Act does not provide the states with an adequate remedy, since the Court of Federal Claims cannot award the prospective relief that the states requested.

Preliminary injunction. Here, the court concluded that the states are likely to succeed on the merits of their APA claim that the agency’s failure to engage in notice-and-comment rulemaking before closing AmeriCorps programs and ending the service of NCCC members was not in accordance with the law.

“Generally, an agency decision is arbitrary and capricious if ‘the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.’”

Likelihood of success. A violation of a notice-and-comment rulemaking requirement can run afoul of the APA in three ways. An agency acts “contrary to law” when it fails to engage in notice-and-comment procedures “explicitly required” by Congress. Failure to adhere to a notice-and-comment rulemaking requirement is an action not “made in ‘observance of procedure required by law.’” In the act appropriating AmeriCorps funding for Fiscal Year 2024, Congress says: “[AmeriCorps] shall make any significant changes to program requirements, service delivery or policy only through public notice and comment rulemaking.”

The same is true for the agency’s decision to remove NCCC members from service. NCCC members providing disaster relief services were pulled out of service projects, and planned service initiatives have been cancelled. These two agency actions—individually and collectively—constitute “significant changes to... service delivery.”

By law, the agency could only make those changes through public notice-and-comment rulemaking. Because the agency did not do so, the states have shown a likelihood of success that the agency actions were contrary to law, arbitrary and capricious, and without observance of procedures required by law, in violation of the APA.

Irreparable harm. To establish irreparable harm from the notice-and-comment violation, the states must show that the agency actions, taken without engaging in notice-and-comment rulemaking, detrimentally affected their concrete interests and that, without an injunction, their injuries cannot be adequately remedied by a final judgment. The court concluded that the states made that showing.

The states have shown that AmeriCorps and VISTA members cannot be easily replaced by other personnel. Thus, the states have been “deprived of the ability to have their comments considered prior to” the termination of AmeriCorps programs and that “threatens... to shutter operations” and the “‘very existence’ of at least some of the... plaintiffs’ [programs].” Further, the sudden mass grant termination, without any prior notice, has forced many of the states to scramble to fill gaps in services, to deal with the fallout of the mass exiting of members, and to close out the grants they administer.

In sum, the abrupt mass program closure and the exiting of AmeriCorps members without notice-and-comment rulemaking are causing adverse effects to concrete interests that cannot be remedied by a final judgment.

The states also have shown irreparable harm from the removal of NCCC members from service. NCCC members provide non-discretionary services that the states will have to provide in their absence. The states cannot simply pause their current and forthcoming disaster response efforts. Thus, the states have established that they likely will suffer irreparable harm if the agency actions are not enjoined.

The case is No. DLB-25-1363.

Judge: Boardman, D.

Attorneys: Ezra Kautz, U.S. Department of Justice, for State of Maryland. Keith Michael Jamieson, Office of the Attorney General, for State of Delaware. Pierce Anon, U.S. Department of Justice, for the Corporation for National and Community Service.

Cases: Procedure AgencyNews MarylandNews GCNNews