A federal appeals court Wednesday ruled that only the Government Accountability Office can sue the Trump administration over blocking foreign aid, an opinion that carries implications for cities, states and nonprofits that have filed lawsuits challenging the administration's moves to withhold their federal funds.
The case focused on the Trump administration's authority to withhold funding already appropriated by Congress, an action known as impoundment, which the administration has taken several times since taking office in January. Bond-issuing entities have filed
The 2-1 ruling from the three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit said that under the Impoundment Control Act of 1974, only the Government Accountability Office, which is the congressional watchdog run by the U.S. comptroller general, can sue when the president withholds or freezes funds already appropriated by Congress.
The
President Trump on his first day in office froze the foreign aid by executive order, prompting the lawsuit from the Global Health Council and other nonprofits, who sued under the Administrative Procedure Act and the U.S. Constitution. Trump has also repeatedly frozen various federal funds and grants for states, cities and other bond-issuing entities, an action that's closely followed in the municipal bond market as potentially affecting credit quality.
The D.C. appellate panel said the plaintiffs lacked standing to bring the case and may "not bring a freestanding constitutional claim if the underlying alleged violation and claimed authority are statutory." The Impoundment Control Act precludes the APA, the court said.
"Instead, the Comptroller General may bring suit as authorized" by the Impoundment Control Act, the majority wrote. "Accordingly, we vacate the part of the district court's preliminary injunction involving impoundment."
Judge Florence Pan dissented, saying Trump's freezes have set off "constitutional alarm bells."
"The court's holding that the grantees have no constitutional cause of action is as startling as it is erroneous," Pan wrote.
The Impoundment Control Act lays out various steps by which a president can withhold funds appropriated by Congress, including the ability of Congress, through the GAO, to sue if funds are withheld illegally.
The GAO has already ruled several times that withholding funds violated the impoundment law. That includes a May GAO decision that said the move to
The plaintiffs said they would seek an appeal. The ruling marks a "significant setback for the rule of law and risks further erosion of basic separation of powers principles," said Lauren Batemen of the Public Citizen Litigation Group in a statement.
The White House claimed the ruling as a "big win."
"Radical left-wing groups have been abusing the court system in an attempt to seize control of U.S. foreign policy from the President," the Office of Management and Budget
The case now heads back to the district court and potentially to the U.S. Supreme Court.
