Labor & Employment Law Daily Wrap Up, REMEDIES, DAMAGES—D. Md.: AmeriCorps must reinstate employees and grants, (Jul 9, 2025)

By Todd Harrison, J.D.

Granting a motion for a preliminary injunction, the court ordered the government to restore AmeriCorps to its status prior to April 15, 2025.

Determining that the plaintiffs in this case were likely to succeed on the merits of their claims, a federal district court in Maryland granted their motion for a preliminary injunction seeking to enjoin the government from taking further action to dismantle AmeriCorps or its operations, and to reinstate employees, return program participants to service, and to restore grants. The court rejected the government’s argument that its jurisdiction was foreclosed by the Tucker Act or through administrative channeling. It further found that the government’s actions to terminate projects, cancel grants, and terminate AmeriCorps employees were clearly reviewable under the APA, as they occurred in a singular time frame and each action was sufficiently discrete to constitute a reviewable agency action (Elev8 Baltimo-re, Inc. v. Corp. for National and Community Service, operating as AmeriCorps, No. MJM-25-1458 (D. Md. July 7, 2025)).

The plaintiffs in this case are a coalition of 14 nonprofit organizations, one labor union, and three individual participants in the AmeriCorps program. The nonprofits operate AmeriCorps programs and receive millions of dollars in grants and subgrants. The union represents a collective bargaining unit of more than 400 AmeriCorps employees throughout the country.

Preliminary injunction. Here, the plaintiffs filed a motion for a preliminary injunction, seeking a court order enjoining the government from taking further actions to dismantle AmeriCorps and to take all necessary steps to return AmeriCorps, its employees, its grantees, and its program participants to their status prior to April 15. Their central claim is that the government has begun dismantling AmeriCorps by slashing resources and abruptly ending the service of participants in violation of the APA, the separation of powers, and the Appointments Clause.

Standing. First, the government challenged the nonprofit plaintiffs’ standing to assert claims and seek injunctive relief based on injuries stemming from the disbursement of national and state grants, as the presumptive recipients of the subgrants made therefrom. The court was not moved by this challenge, noting that the nonprofit plaintiffs were challenging the cancellation of grants and subgrants that they were already receiving—not merely funding they might presumptively receive in the future.

As to injury, the court found that the losses of these grants and subgrants have damaged the nonprofit plaintiffs’ ability to carry out their core missions, and that such injuries were directly traceable to the government’s actions. The court explained that it could redress these harms by enjoining the government’s actions under the APA.

Tucker Act. Next, the government argued that the court lacked jurisdiction over the plaintiffs’ challenges to the termination of grants because the Tucker Act vests exclusive jurisdiction over such claims in the Court of Federal Claims. The court was again unpersuaded.

“At base, the source of the legal rights upon which Plaintiffs base their claims are federal constitutional and statutory provisions,” observed the court. Although the government argued that the plaintiffs’ claims were essentially contractual, the court noted that mere reference to contractual terms is not determinative, and here the plaintiffs’ claims were not founded on individual contracts.

With regard to the essence of the relief sought, the court found that the plaintiffs were seeking equitable relief, not monetary damages based on contractual rights. Thus, the court determined that the Tucker Act did not apply and the plaintiffs’ claims were, instead, subject to the APA’s waiver of sovereign immunity.

Administrative channeling. Turning to the government’s argument that the court lacked jurisdiction over the plaintiffs’ employment-related claims because the CSRA channels these claims to an administrative scheme for relief, the court found that it had jurisdiction because the plaintiffs’ claims were not of the sort Congress intended to channel for review under the CSRA.

The plain text of the CSRA applies only to labor unions and federal employees, explained the court. As such, the claims asserted by the nonprofit and individual plaintiffs in this case would not fall under the CSRA.

Union plaintiff. A more difficult question was whether the union plaintiff’s claims must be channeled through the CSRA. Applying the Thunder Basin factors, the court concluded that all weighed in favor of the union and the court retaining jurisdiction.

First, precluding district court jurisdiction over the union’s claims would foreclose meaningful judicial review as the administrative bodies at issue lack the authority to adjudicate the plaintiffs’ APA and constitutional claims. Second, the union’s APA and constitutional claims are wholly collateral to the CSRA’s review provisions. Third, the APA and constitutional claims lie beyond the expertise of the MSPB and the FLRA, as the union’s claim were distinct from the individual employment-related disputes those agencies were created to handle.

Channels presently unavailable... Last, the court noted that, even if Congress intended to channel the plaintiffs’ claims, the administrative channels may be presently unavailable due to the firing of two Senate-confirmed members of the MSPB and the agency’s Special Counsel.

For the aforementioned reasons, the court found that the plaintiffs were likely to succeed in establishing that their claims were not subject to channeling to administrative review under the CSRA and that the court retained jurisdiction.

APA jurisdiction. Before addressing the merits of the plaintiffs’ APA claims, the court had to first determine whether the claims fell within the scope of the APA’s “basic presumption of judicial review.” The government contended that these claims did not challenge a discrete agency action but were, instead, a nonjusticiable programmatic challenge. The court did not agree.

Although the plaintiffs described the actions they were challenging collectively as a “dismantling” of AmeriCorps, they made clear showing that this “dismantling” consisted of several discrete agency actions, including a sweeping of cancellation of approximately $400 million in AmeriCorps grants and a mass termination of more than 600 AmeriCorps employees.

These actions all occurred within a period of less than two weeks and reflected a final and categorical decision on the part of the government either to eliminate or reduce to a significant degree AmeriCorps’ ability to operate as required by statute, said the court. As such, the plaintiffs were likely to succeed in establishing the court’s jurisdiction to review the agency actions challenged in this suit.

APA merits. Turning to the merits of the plaintiffs’ APA claims, the court determined that they were likely to succeed on their claim that AmeriCorps’ failure to engage in notice-and-comment rulemaking before taking the actions at issue in this case was not in accordance with the law.

Because the mass termination of AmeriCorps grants, program participants, and employees constitute “significant changes to... service delivery,” under the 2024 and 2025 Appropriations Acts, these actions could only have been made through notice-and-comment rulemaking, said the court. Further, because the government did not engage in any notice-and-comment rulemaking process before taking the actions challenged here, the plaintiffs demonstrated a likelihood of success that these actions were contrary to law, arbitrary and capricious, and without observance of procedures required by law, in violation of the APA.

Irreparable harm. Next, the court addressed the issue of irreparable harm. It found that the individual plaintiffs established irreparable harm because, among other things, they lost access to high-quality training, work experience, and networking opportunities as a result of the government’s actions.

As to the nonprofit plaintiffs, they were able to show irreparable harm through the fact that staff layoffs would result in them being unable to carry out their critical activities, the reallocation of funds would divert resources away from core activities, damage to their reputations, and the long-term impact on the communities which they serve.

Finally, with regard to the union, it showed that it faced irreparable harm as an organization as losing 88 percent of its dues would make it “nearly impossible” to continue operating.

Equities, public interest. In considering the balance of the equities and public interest, the court found that the balance weighed in favor of a preliminary injunction. The government’s likely unlawful agency actions have jeopardized or resulted in the closure of AmeriCorps funded programs throughout the country. In addition, the government’s actions have deprived AmeriCorps participants of irreplaceable training and educational opportunities.

“The public interest in maintaining the services delivered through AmeriCorps grants and programs and the work performed by AmeriCorps employees is clear and outweighs any harm to Defendants that would result from a wrongfully imposed preliminary injunction,” concluded the court, granting the motion for a preliminary injunction.

The case is No. MJM-25-1458.

Judge: Maddox, M.

Attorneys: Abbe D. Lowell (Lowell and Associates) for Elev8 Baltimore, Inc. Ryan Underwood, U.S. Department of Justice, for Corp. for National and Community Service.

Companies: Elev8 Baltimore, Inc.

Cases: RemediesDamages Labor UnionsMembers Procedure PublicEmployees MarylandNews