[00:00:00] Speaker 00:
Base number 25-5148.

[00:00:03] Speaker 00:
National Council of Non-Profits et al.

[00:00:06] Speaker 00:
versus Office of Management and Budget and Result is bought in its official capacity as Director, Office of Management and Budget of Balance.

[00:00:14] Speaker 00:
Mr. Springer, ready to balance?

[00:00:16] Speaker 00:
There's more than ready at police.

[00:00:18] Speaker 02:
Good morning, Council.

[00:00:19] Speaker 02:
Mr. Springer, please proceed when you're ready.

[00:00:23] Speaker 03:
Good morning, Your Honours, and may it please the Court.

[00:00:25] Speaker 03:
Brian Springer on behalf of the federal government.

[00:00:28] Speaker 03:
Plaintiffs in this case challenged an interim measure that was designed to address the period of transition from one presidential administration to another.

[00:00:36] Speaker 03:
The specific memo at issue was rescinded over a year ago and we're now at a much later time in this presidency.

[00:00:45] Speaker 03:
There would be no conceivable reason to take a materially similar action at this much later time.

[00:00:52] Speaker 03:
Indeed plaintiff's merits arguments in the case depended on the specific features of the rescinded memo and the specific explanation that appeared in that memo.

[00:01:02] Speaker 03:
Plaintiff's claims are moot and they certainly cannot support the preliminary injunction that was entered by the district court.

[00:01:09] Speaker 03:
I'm happy to start with the discussion of mootness, which I think is just positive here and is the one that the court should reach.

[00:01:15] Speaker 03:
As our brief explained, the challenge action here was the OMB memo.

[00:01:21] Speaker 03:
I mean, I think plaintiffs make that clear in their complaint at JA 22.

[00:01:25] Speaker 03:
And that specific action has been rescinded as well.

[00:01:29] Speaker 03:
We've had the passage of time and final decisions have been made about a lot of the money that we're talking about as the presidency has sort of continued.

[00:01:39] Speaker 03:
The whole point of this memo was just to sort of take a first pass and do an initial to have kind of a full review of the money that was going out the door.

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including grants that had gone to plaintiffs and others in the prior administration.

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And when the new administration came in with different priorities, wanted to take a look at the money that was going out the door and to the extent that it could move money around, make a decision about whether to do so.

[00:02:02] Speaker 04:
What about the district court findings that even after the memo was purportedly rescinded, there were still some funding that was frozen

[00:02:15] Speaker 04:
that appeared to be attributable to the memo?

[00:02:19] Speaker 03:
Senator, I think the district court was sort of focused on the wrong question because the question is about what was challenged in the case and what the controversy is that's presented and whether that controversy had a likelihood of recurring.

[00:02:32] Speaker 03:
We fully admit that there were still the executive orders that were in place that said to pause funding in certain circumstances and that the agencies were pausing funding pursuant to those executive orders.

[00:02:44] Speaker 03:
But I think the question, particularly, again, plaintiff's merits arguments, when they're talking about the merits, they are very, very focused on the OMB memo and the specifics of the OMB memo.

[00:02:55] Speaker 03:
Exactly.

[00:02:56] Speaker 04:
Maybe I'm misunderstanding, but I thought that the district court found that there were funding freezes that were still in place after this OMB memo was rescinded.

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that could not be linked to executive orders or other actions and appeared to be, where the OMB memo appeared to be the cause or motivating factor, not withstanding its purported rescission.

[00:03:27] Speaker 04:
Am I wrong?

[00:03:28] Speaker 04:
The district court didn't make such a finding?

[00:03:30] Speaker 03:
Your Honor, I think it is right that the district court did say that there were funding freezes that were continuing, although I think, again, part of the basis- Are you saying that that finding was clear error?

[00:03:39] Speaker 03:
We're not saying that it's clear error that the district court said that there were funding freezes that continued.

[00:03:44] Speaker 03:
I think that is a legitimate thing that the district court found.

[00:03:48] Speaker 03:
In fact, there were such funding freezes going on.

[00:03:50] Speaker 04:
The district court, based on that finding, found that this really wasn't rescinded.

[00:03:56] Speaker 04:
The government was claiming that it was rescinded, but it's not really rescinded.

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And so that's why I'm going to go ahead and adjudicate this and whether there should be a preliminary injunction.

[00:04:11] Speaker 04:
Was that finding clear error?

[00:04:15] Speaker 03:
You know, I mean, a couple of responses to that.

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I mean, I think, first of all, the question that the district court should have asked is whether or not it was likely that the memo was going to be reinstated.

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And I think that is kind of where the district court instead was focusing on what was actually happening.

[00:04:29] Speaker 04:
I mean, I also think that... Why isn't it relevant whether the memo was actually really rescinded?

[00:04:35] Speaker 04:
You can't be moved.

[00:04:38] Speaker 04:
You don't get out of the gates on a mootness argument if the memo really hasn't been rescinded.

[00:04:45] Speaker 03:
I mean, I think there's no dispute that the memo was rescinded.

[00:04:48] Speaker 03:
Of course, the district court thought that there were still funding freezes that were going on, although those could be attributed to the executive orders that were still in place and remained in place that agencies were required to follow to the extent that they could under the law.

[00:05:03] Speaker 03:
I mean, I guess I would also just emphasize that now we are at a much later stage in the case.

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many things have sort of transpired in the interim.

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I think that underscores that at least now, if not at the time that the district court ruled this case is moot.

[00:05:18] Speaker 03:
I think the only reason that we're here now is that the district court, instead of just saying, I'm enjoining OMB from applying this memo, which I think would have been pointless because it had been rescinded, but wouldn't have had a big practical impact,

[00:05:33] Speaker 03:
Instead, what the district court did is it went beyond that and included relief that said, even if OMB could give a fuller explanation or change the timeframes here or did sort of a more robust consideration of reliance interest, that it's still possible that that sort of action would be blocked.

[00:05:53] Speaker 02:
And I think that is what- Is that why the government, like I've been wondering, why does the government care right now?

[00:05:59] Speaker 02:
Because if the memo is rescinded,

[00:06:00] Speaker 02:
And suppose the preliminary injunction just barred the implementation of the memo as the district court construed the memo, because you have another argument, which is that there was a misconstruction of the memo, and it's actually narrower in scope than was assumed.

[00:06:15] Speaker 02:
But let's just take as a given that the district court construed the memo in a maximalist way.

[00:06:24] Speaker 02:
And then the district court enjoins actions based on that memo.

[00:06:29] Speaker 02:
You don't care, right?

[00:06:31] Speaker 03:
I think if all the district court had done is said, you can't apply this memo, we may well not be here.

[00:06:37] Speaker 03:
I don't think that would have had a big impact.

[00:06:39] Speaker 02:
What is the extra that is concerning you?

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I mean, I think in particular, if you look at what the injunction says, it says that you can't sort of reinstate the unilateral non-individualized directives.

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And I think that has led to some confusion about what OMB is allowed to do, particularly because, as I mentioned,

[00:06:57] Speaker 03:
The district court's analysis really focused on the specifics of the OMB memo.

[00:07:01] Speaker 03:
I think the problem that the district court identified was it said that the OMB memo wasn't sufficiently explained, that it provided kind of too short of a time frame, that it didn't adequately consider reliance interest.

[00:07:16] Speaker 05:
Incomplete, right?

[00:07:18] Speaker 05:
Every time you focus on the specific facts and circumstances, that is about the arbitrary and capricious claim.

[00:07:25] Speaker 05:
And you might have a very good argument for those reasons that the arbitrary and capricious claim is moot.

[00:07:31] Speaker 05:
The contrary to law claim is different.

[00:07:35] Speaker 05:
It's simply OMB does not have independent authority to freeze a substantial amount of federal funding.

[00:07:44] Speaker 05:
Why isn't the way to think about this case, the mootness question, whether we have received assurances that OMB is not likely to attempt that again?

[00:07:54] Speaker 03:
I mean, a couple of responses to that.

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I mean, I think first of all, the district court's analysis on the contrary to law claim also depended on the specifics of what OMB did here.

[00:08:03] Speaker 03:
I mean, again, the district court emphasized that this was in its view a freeze of all funding kind of on a moment's notice and without sufficient notice.

[00:08:12] Speaker 03:
But again, I mean, I think for all the reasons that I've discussed this morning, there's still no reason to believe that these plaintiffs

[00:08:19] Speaker 03:
would be subject to the same action again in the future, which is the question that is being asked when we're talking about at least the voluntary cessation doctrine.

[00:08:27] Speaker 05:
If OMB attempts to freeze a substantial amount of federal funding, it seems highly likely these plaintiffs will be affected again.

[00:08:37] Speaker 05:
And if you take more time and give more notice, the arbitrary and capricious claim would be different.

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But the

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Contrary to law claim in the complaint is OMB's statutory authority does not allow it to unilaterally terminate all federal financial assistance programs across the entire government.

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So I think what we would have expected to see is a declaration saying, that's not what we did.

[00:09:01] Speaker 05:
But even if you think we did, OMB will not try to do that again.

[00:09:05] Speaker 05:
And we haven't received that kind of assurance.

[00:09:07] Speaker 03:
I think the prospect that OMB at this point, again, the whole point of this endeavor was as we were transitioning from one presidential administration to another, there was an attempt to look at all the funding that was going out the door.

[00:09:22] Speaker 03:
I think the likelihood, even as sort of the description that you just gave, the idea that OMB is going to unilaterally attempt to freeze all funds, which again, is plaintiff's characterization.

[00:09:35] Speaker 03:
But even if you accept that characterization, the likelihood that that's going to happen again is not high.

[00:09:40] Speaker 03:
And so there was no reason for the district court to sort of reach that issue and enter this preliminary injunction.

[00:09:45] Speaker 05:
Another way of asking, which seems relevant, is assume the district court was right about the facts.

[00:09:51] Speaker 05:
that OMB issued sort of unilaterally a broad federal funding freeze.

[00:09:56] Speaker 05:
Does the government believe OMB has statutory authority to do that?

[00:10:01] Speaker 03:
I mean, we haven't sort of address that issue because we don't think that is what the OMB memo did here.

[00:10:07] Speaker 03:
But again, I mean, that is the way that plaintiffs are talking about this controversy.

[00:10:11] Speaker 03:
And I think the way the district court thought about this.

[00:10:14] Speaker 03:
And so that is not something that's likely to recur again, which is the question that's being asked when we ask the mootness question.

[00:10:20] Speaker 05:
Right.

[00:10:23] Speaker 05:
I'm thinking about the FBI Fiker case.

[00:10:26] Speaker 05:
I'm not sure I'm pronouncing it correctly.

[00:10:27] Speaker 05:
But the government basically came in and said, based on what we know now, we're not going to relist him for the things we know about today.

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And there's not really a good reason we can think of.

[00:10:38] Speaker 05:
And I think the court unanimously said that doesn't satisfy the burden on voluntary cessation.

[00:10:44] Speaker 05:
There needs to be an affirmative representation that the government will not subject these plaintiffs to this type of action again.

[00:10:52] Speaker 03:
You know, I mean, I guess that's not how I read.

[00:10:54] Speaker 03:
I don't read the case to say that the government has to make such an affirmative representation.

[00:10:58] Speaker 03:
I think it is a very contextual analysis.

[00:11:01] Speaker 03:
And I think here the context of how this dispute arose in the context, particularly of the OMB memo shows that it's unlikely that this is going to occur.

[00:11:11] Speaker 03:
I mean, there's just no conceivable reason for OMB to do this again, because it was all tied to the specifics of changing from one administration to another.

[00:11:20] Speaker 03:
And, you know, plaintiffs had gotten grants

[00:11:22] Speaker 03:
in the prior administration that the new administration with its new priorities wanted to look at and reassess.

[00:11:28] Speaker 02:
So I guess you haven't talked about the Q&A clarification that came about the day after the memo was issued.

[00:11:37] Speaker 02:
So

[00:11:38] Speaker 02:
Why don't you talk about that more?

[00:11:39] Speaker 02:
I guess I'm not understanding because if the way that the case has been interpreted so far, including by the district court, is the maximalist interpretation of the memo, and the government itself said within hours that that's actually not the way to interpret it, then does that bear on the likelihood that the maximalist memo actually that kind of action would be undertaken again?

[00:12:01] Speaker 03:
Senator, I suppose it may show that it's unlikely that that, because again, that's not what OMB thought happened in the first instance.

[00:12:10] Speaker 03:
And I think what OMB saw is that agencies may in some instances have been implementing things too broadly.

[00:12:16] Speaker 03:
So it stepped in very quickly and said, no, what we meant by the memo was that it covers these things and doesn't cover these things.

[00:12:24] Speaker 03:
Just to sort of clarify that and make sure agencies going forward were implementing it correctly.

[00:12:28] Speaker 03:
So I think that could bolster the case to show that the government never thought that this was how broad this was going to be.

[00:12:35] Speaker 03:
But even if you sort of, again, take plaintiffs at their own terms and say that's the controversy that they think they put before the district court and that the district court ruled on, that makes it particularly unlikely that it's going to return.

[00:12:47] Speaker 02:
And it seems to me that bears on the line of questioning that Judge Wilkins had, too, if I'm understanding correctly, which is that even if there was

[00:12:58] Speaker 02:
funding that was frozen based on what you think is an erroneous interpretation of the initial memo, what the challengers obviously think is the only plausible interpretation of the initial memo, then that's just going to take a little time to unwind.

[00:13:13] Speaker 02:
It's just the natural course of things.

[00:13:15] Speaker 02:
And then the clarification comes along the next day.

[00:13:18] Speaker 02:
And it didn't have the immediate effect because there were interpretations in effect that were going to take some time to unwind.

[00:13:26] Speaker 02:
I take it that would your position be any different if the clarification came along and said not that this is what we meant all along.

[00:13:33] Speaker 02:
That's the only fair way to read the initial memo.

[00:13:35] Speaker 02:
What if it said, we recognize there's a lot of confusion.

[00:13:38] Speaker 02:
We didn't word that well.

[00:13:40] Speaker 02:
We actually never meant for it to be interpreted in the way that it is.

[00:13:43] Speaker 02:
We just want to clarify that what we mean to freeze is those programs and activities and funding assistance that's tethered, that intersects with the executive orders.

[00:13:54] Speaker 02:
We never meant to have a temporary, even a temporary freeze of anything beyond that, to the extent that we erroneously indicated that because of the capacious language in the initial memo.

[00:14:07] Speaker 02:
We regret that.

[00:14:08] Speaker 02:
Would your position be any different if that had been what the clarification had said?

[00:14:13] Speaker 03:
I guess I'm not sure that it would be any different.

[00:14:16] Speaker 03:
I think we have the form of it where this memo was issued and only very quickly said what we meant by the memo was this.

[00:14:24] Speaker 03:
We see maybe agencies out in the world are implementing this more broadly than we thought they would.

[00:14:29] Speaker 03:
Just want to clarify that's what we meant by the scope of this memo.

[00:14:33] Speaker 03:
And of course, plaintiffs could challenge,

[00:14:36] Speaker 03:
to the extent that there was sort of a final agency action and a right challenge in the appropriate forum they could challenge you know the pauses of funding by agencies if they thought that there was a problem with some individual pause that was still going on.

[00:14:50] Speaker 03:
I mean again you'd have to sort of check all the boxes that are necessary to get one of those challenges in the court but if there was some specific funding stream or their you know money was was frozen and they thought that

[00:15:01] Speaker 03:
that either under a statute or regulation or something that they were supposed to be paid, they could challenge sort of that follow on decision.

[00:15:09] Speaker 03:
But here, what they're challenging is the OMB memo.

[00:15:12] Speaker 03:
The initial memo.

[00:15:13] Speaker 03:
That's correct, Your Honor.

[00:15:15] Speaker 02:
You briefly said, I think, and then just ran past it to the extent that there's a final agency action.

[00:15:20] Speaker 02:
I didn't understand you to be challenging that there's final agency action here.

[00:15:22] Speaker 03:
So Your Honor, on appeal, we are not challenging that the OMB memo.

[00:15:26] Speaker 03:
You don't join in that argument, right?

[00:15:27] Speaker 05:
That's correct, Your Honor, on appeal.

[00:15:31] Speaker 05:
a few questions about the merits theory, which in some way tie back to moodness.

[00:15:36] Speaker 05:
So I just want to understand the position you're taking.

[00:15:39] Speaker 05:
At times in the brief, it seems to be the assertion that OMB really didn't do anything independently at all.

[00:15:46] Speaker 05:
All it did was implement

[00:15:49] Speaker 05:
things the president had already ordered.

[00:15:51] Speaker 05:
At other times, I know you don't agree with the maximalist version, it seems you're saying OMB has authority to go a little bit further than the president did.

[00:16:01] Speaker 05:
Which of those is it?

[00:16:03] Speaker 03:
I think the right way to think about what happened here was that we had these executive orders that came out very early in the administration that pointed to specific types of, announced certain policies of the United States and pointed to certain types of funding that should be paused if they were implicated.

[00:16:22] Speaker 03:
OMB did in its memo is it clarified that instruction to agencies to say here's what you should be doing and here's the way that this should work and try to sort of get OMB involved because OMB you know is sort of making sure both that the agencies are properly implementing the administration's policies and getting involved in you know let us know if you have questions so we can help you with these budgetary matters

[00:16:46] Speaker 05:
So it sounds like you're saying it's the first thing, that OMB did not direct the freeze of anything that the president had not already directed be frozen.

[00:16:56] Speaker 03:
I think the right way to think about what OMB did is that it said that the same as the way the executive orders described it, if we're talking about funding that's discretionary, then to the extent that it may implicate one of the president's executive orders that you should, and you have the authority under law to do so, then you should freeze that funding so we can have a more fuller review and discussion about whether to move the funding.

[00:17:21] Speaker 02:
That's what I thought the delta is.

[00:17:22] Speaker 02:
The executive orders didn't talk about a temporary freeze, did they?

[00:17:28] Speaker 03:
Your honor, the executive orders did talk about pausing funding.

[00:17:32] Speaker 02:
But was it for a time certain while these were explored?

[00:17:35] Speaker 03:
Your honor, it wasn't for a time certain.

[00:17:37] Speaker 03:
I mean, the OMB memo did clarify sort of some of the timeframes.

[00:17:40] Speaker 03:
Please get back to us within this time and give us this information so that we can have sort of a fuller discussion.

[00:17:45] Speaker 02:
I thought your understanding of what the OMB memo intended to do as elucidated by the clarification, the next day Q&A clarification, is that

[00:17:56] Speaker 02:
For a temporary period, something that may implicate the executive orders ought to be frozen.

[00:18:02] Speaker 02:
And then we'll take some time to figure out whether it in fact does implicate the executive orders in a way that's problematic.

[00:18:07] Speaker 02:
And we'll make a more informed decision at that point, whether the freeze is going to continue or not.

[00:18:13] Speaker 02:
But is that my misunderstanding?

[00:18:14] Speaker 03:
No, I think that's right, your honor.

[00:18:15] Speaker 03:
I mean, OMB elaborated on what the process should be so that what agencies were doing was sort of making it a first pass and saying, here are things that we both think that we have the authority to pause and that we think may implicate these orders.

[00:18:28] Speaker 03:
So then there could be a fuller discussion to decide what the final disposition of those funds should be.

[00:18:33] Speaker 02:
And it may not end up being frozen, even if for a temporary period it was, because the clarification said we might even be able to figure this out in a day.

[00:18:40] Speaker 02:
Right.

[00:18:41] Speaker 03:
That's correct, Your Honor.

[00:18:43] Speaker 03:
And there have been now many final decisions that have been made, some of which have been let's terminate this funding and move it to something else.

[00:18:49] Speaker 03:
Some have been to continue to allow the funding to go out the door.

[00:18:54] Speaker 02:
Can I ask why was the initial memo, if it's construed from the government's perspective in the way that the clarification said it ought to be construed, why rescind it?

[00:19:06] Speaker 03:
I mean, I think the reason was just that OMB had seen that there was confusion about how it should be implemented, even with the guidance.

[00:19:15] Speaker 03:
And so it just kind of to make sure that agencies understood they should continue to follow what the executive order suggested, but not to kind of keep the specifics of the OMB memo in place.

[00:19:26] Speaker 03:
I mean, I think that's why it was sort of to try to eliminate some of the confusion that had gone out into the world.

[00:19:35] Speaker 05:
I'm sure my colleagues don't know.

[00:19:37] Speaker 05:
It just seems we're glossing over variability in what the EOs said, right?

[00:19:42] Speaker 05:
There's sort of two dimensions of what happened that are being disputed.

[00:19:45] Speaker 05:
What is the scope of what was frozen and who directed that it be frozen?

[00:19:51] Speaker 05:
So assume that there are, which I think is rather clear, there's some category of funding that the president said review but didn't say pause.

[00:20:03] Speaker 05:
And OMB came in and said, to facilitate the review, immediately pause.

[00:20:09] Speaker 05:
Is that your understanding?

[00:20:11] Speaker 05:
And are you defending that that is lawful?

[00:20:13] Speaker 05:
OMB is adding a temporary freeze to facilitate what the president ordered.

[00:20:21] Speaker 03:
I think what the president ordered in the identified executive orders was a pause of funding to do the review.

[00:20:28] Speaker 03:
And so OMB was just sort of implementing how that should actually play out in practice.

[00:20:32] Speaker 05:
If the facts were what I said, does OMB have authority to do it?

[00:20:36] Speaker 03:
I don't want to get out ahead of what the agency can do.

[00:20:39] Speaker 03:
I think here what we're talking about, and again, this is something that happened a long time ago.

[00:20:45] Speaker 03:
And I think our main objection to what the district court did is it didn't just say, you can't apply this OMB memo that I have found these specific problems with.

[00:20:55] Speaker 03:
Instead, it sort of went beyond that and made it so that there's this open-ended injunction that allows the plaintiffs to come into court and have fights about whether something in the future is too similar to that.

[00:21:06] Speaker 02:
Can you just tell me concretely, give me the concrete circumstance in which the way the injunction is articulated would raise a concern vis-a-vis something that OMB would like to do.

[00:21:21] Speaker 03:
So I don't want to specifically say that this would be prohibited by the injunction, but you could imagine if OMB wanted to issue another memo and instead of the time frame that it had in the initial memo, it did a time frame of one month and it included more explanation.

[00:21:36] Speaker 03:
It also said very clearly, here's our kind of preliminary.

[00:21:40] Speaker 03:
and agencies, you should take into account reliance interests.

[00:21:45] Speaker 03:
I mean, I think that at least the district court's injunction, it's possible that it would cover that and block OMB from doing that if it was sort of the same thing, but just with fuller explanation, even though the only, you know, the real problem that the district court identified was just one about the specifics of this memo, and I just think that's contrary to, you know, how APA review usually works, where you're, you know, directing the relief against.

[00:22:08] Speaker 03:
You're saying you can't apply this agency memo or this agency action to the plaintiffs.

[00:22:14] Speaker 02:
And just to be clear, and because this can bear on many aspects of the case, the hypothetical that you just laid out, you're talking about a memo that would involve a temporary freeze for funding that's tethered that might be bound up in executive orders.

[00:22:30] Speaker 02:
You're not talking about an across the board freeze of all federal financial assistance.

[00:22:35] Speaker 03:
My understanding is that OMB under the memo never had the intention to sort of go beyond that, but I just think there's some, especially because what the district court said was unilateral, non-individualized directives.

[00:22:49] Speaker 03:
It's unclear what we're talking about when we say individualized.

[00:22:52] Speaker 03:
Does that mean it has to be at the grant level?

[00:22:55] Speaker 03:
Does that mean it can be agency specific or sub-agency specific?

[00:22:58] Speaker 03:
I think there's just, or program specific, I just think there's a lot of questions that are left unanswered.

[00:23:04] Speaker 03:
And that is what has created some problems for the government and the reason that we're here to say that this injunction should be vacant.

[00:23:14] Speaker 04:
So let's suppose we were to agree with you that that aspect of the preliminary injunction

[00:23:27] Speaker 04:
Was too broad or should be vacated at this point as far as under what circumstances the government could.

[00:23:35] Speaker 04:
Could reinstate similar memo or guidance.

[00:23:42] Speaker 04:
And we agree with your argument that, you know, this memo has been rescinded.

[00:23:49] Speaker 04:
And basically, if the only remedy that was properly kind of entered by the district court was essentially stop the effectuation of this memo, that's moot.

[00:24:12] Speaker 04:
I guess your position would be that if we were to agree with you and say that the case is moot at this point, if there were ever a situation in the future where one of these plaintiffs had their funding frozen and they believed that

[00:24:34] Speaker 04:
it was attributed to this memo because it wasn't really completely rescinded.

[00:24:41] Speaker 04:
In fact, even though the administration says it was, your position would be that they don't need a preliminary injunction because they could get whatever relief.

[00:24:57] Speaker 04:
If they could establish that their funding was frozen in the future based on the memo that was rescinded,

[00:25:03] Speaker 04:
That's essentially either contempt or a laydown case of arbitrary and capriciousness, so they don't really need an injunction for that.

[00:25:17] Speaker 04:
And so there's really no point in a preliminary injunction going forward at this point.

[00:25:25] Speaker 04:
Is that your position?

[00:25:26] Speaker 03:
To answer, maybe to summarize what you said, I think our position is that particularly at the time that the district court entered this preliminary injunction, it went beyond what it should do and it was over abroad in the respects that we've discussed.

[00:25:38] Speaker 03:
And then I think as to the piece of the injunction that may kind of look more like traditional APA relief in saying that you can't apply this memo to these plaintiffs, because the memo has been rescinded and we're at a very different time in the presidency and the memo was tied to an early stage of the presidency, there's just no need to have that anymore, particularly given that there's no semblance that OMB is gonna reissue a memo like this and really has no reason to at this point.

[00:26:08] Speaker 04:
Has there been, when was the last time the government sought from the district court to reconsider the preliminary injunction or to vacate it?

[00:26:27] Speaker 03:
Your Honor, I think there was some, I think after the preliminary injunction was entered, there was some question and fighting about how broadly it extended, whether it extended beyond or could extend beyond open awards.

[00:26:39] Speaker 03:
Since then, the government has appealed, and so now that the case is on appeal, I mean, I think our view is that we can't ask the district court to vacate the injunction that's on appeal.

[00:26:48] Speaker 03:
But we think both at the time that the district court entered the injunction, but particularly now, this controversy has become moot, and so the injunction should be vacated.

[00:27:00] Speaker 02:
If my colleagues don't have any additional questions at this point, we'll give you a little time for rebuttal.

[00:27:19] Speaker 01:
Smart.

[00:27:21] Speaker 06:
Good morning, your honors, and may it please the court.

[00:27:23] Speaker 06:
Jessica Morton for the Nonprofit Plaintiff Appellees.

[00:27:26] Speaker 06:
I'd like to start with the proper construction of the OMB memo and move on to mootness and scope of relief.

[00:27:33] Speaker 06:
The OMB memo M2513 is perfectly clear.

[00:27:37] Speaker 06:
It is susceptible to only one reasonable construction.

[00:27:40] Speaker 06:
And the Q&A document that the government issued belatedly does not and cannot undermine that one reasonable construction.

[00:27:49] Speaker 02:
So I guess I'm not understanding that construct for the following reason that when you say it cannot because they're just two memos.

[00:27:58] Speaker 02:
So one memo comes along at time one and a second memo comes along several hours later.

[00:28:04] Speaker 02:
If the second memo says what it says, it can undo the first memo because it's just another memo.

[00:28:11] Speaker 02:
It's just telling the world

[00:28:13] Speaker 02:
There was a first memo out there, and you're going to resist a little bit the way I'm going to spend this out, but just bear with me for a second.

[00:28:21] Speaker 02:
The first memo, causing a lot of confusion.

[00:28:24] Speaker 02:
There's people who are writing stuff in the press.

[00:28:26] Speaker 02:
There's a lot of consternation about this.

[00:28:30] Speaker 02:
We realize that.

[00:28:31] Speaker 02:
Let's just...

[00:28:32] Speaker 02:
clarify this a little bit more, we're going to let you know that what we really mean by this is it's only a temporary freeze for that line of funding that's implicated in the executive orders.

[00:28:47] Speaker 02:
That's all we mean.

[00:28:48] Speaker 02:
At that point, is there any doubt that that's

[00:28:51] Speaker 02:
The first memo kind of doesn't even matter at that point, because the second memo is telling you what the first memo means.

[00:28:57] Speaker 02:
So the fact that the first memo might have been construed in a particular way, and you might be right that that's the best understanding of it.

[00:29:04] Speaker 02:
Let's just say I give you that.

[00:29:05] Speaker 02:
That's the best understanding of it.

[00:29:06] Speaker 02:
The second memo comes along and just says, yeah, are bad.

[00:29:10] Speaker 02:
But really what we mean is this.

[00:29:12] Speaker 02:
At that point, why isn't that just the operative understanding going forward?

[00:29:17] Speaker 06:
Three responses, Your Honor.

[00:29:18] Speaker 06:
So first, had the government really thought we made a mistake, everyone is confused.

[00:29:24] Speaker 06:
What they could have done instead of issuing the Q&A is simply rescind memo M2513 and issued a new memo that says we're replacing it with this new memo that outlays what we really meant instead of adding this Q&A gloss.

[00:29:38] Speaker 06:
And they didn't choose to do that.

[00:29:40] Speaker 02:
Second.

[00:29:41] Speaker 02:
Well, finish the first two.

[00:29:44] Speaker 02:
Finish the next two.

[00:29:45] Speaker 06:
Sure, Your Honor.

[00:29:46] Speaker 06:
So also, as a matter of logic, the Q&A read really just doesn't make sense because the entire point of the original memo is that OMB is ordering a pause so that the agencies can then determine in the interim, is the word they use, during the pause what actually falls in the executive orders.

[00:30:09] Speaker 06:
And so the pause is to facilitate that determination.

[00:30:13] Speaker 06:
And if you're only pausing what is already in the executive orders, it skips that step in the order of operations.

[00:30:21] Speaker 06:
That's really not possible to operationalize in the way that this is actually working here.

[00:30:28] Speaker 02:
And the third one is?

[00:30:30] Speaker 06:
I think this is really analogous to our deference, Your Honor.

[00:30:33] Speaker 06:
We know from Kaiser that you only interpret, only defer to an agency interpretation.

[00:30:39] Speaker 02:
So that again, I understand all these three points I do as to, and they bear on the best understanding of the first memo when it was issued.

[00:30:48] Speaker 02:
But our deference, for example, we're talking about a regulation and then an interpretation that comes along, not a second regulation.

[00:30:53] Speaker 02:
Here's two memos.

[00:30:55] Speaker 02:
And so I don't even if that's the best understanding of the first memo, the one that you outlined, and I'll just give you that.

[00:31:01] Speaker 02:
And it may be that the second memo, you might be right.

[00:31:03] Speaker 02:
That boy, does it even make sense to have a temporary freeze?

[00:31:08] Speaker 02:
When if it's the scope is similar to the underlying thing anyway, that that may be right too.

[00:31:13] Speaker 02:
But that's just what the second memo did.

[00:31:15] Speaker 02:
It just did.

[00:31:16] Speaker 02:
And so even if the second memo kind of doesn't make a lot of sense in terms of its scope, and I think there's arguments that it might, but even if it didn't, it is just what the government says we meant to do all along.

[00:31:25] Speaker 02:
Suppose the second memo was issued 15 minutes after the first one.

[00:31:30] Speaker 06:
Well, Your Honor, sorry, were you, were you finished?

[00:31:32] Speaker 02:
Yeah, I mean, I think I am, but would we still be saying the same, actually change it.

[00:31:37] Speaker 02:
Suppose the second memo were just an attachment to the first one.

[00:31:41] Speaker 06:
Well, Your Honor, I think I respectfully push back on the idea that being a second memo, it's titled a Q&A.

[00:31:48] Speaker 06:
It seems to me clearly giving an interpretation of that first memo, rather than being a second command.

[00:31:54] Speaker 06:
The first is a clear directive.

[00:31:57] Speaker 06:
It uses the word must.

[00:31:58] Speaker 02:
I think I understand all that, but I don't understand why it matters that it's a Q&A as opposed to a memo.

[00:32:03] Speaker 02:
I guess my only point is,

[00:32:05] Speaker 02:
that as far as the legal significance of the two instruments, neither one of them is on a different plane than the other one.

[00:32:12] Speaker 02:
They're both just guidances.

[00:32:14] Speaker 02:
They both just tell, it's an internal executive branch document.

[00:32:18] Speaker 02:
The one says, here's what I need you to do, all you agencies.

[00:32:21] Speaker 02:
And then the second one says, actually, here's what I need you to do.

[00:32:25] Speaker 02:
Suppose that the second one even just says,

[00:32:28] Speaker 02:
You know, the first one, we just, we totally sent the wrong signal.

[00:32:33] Speaker 02:
I don't even know what we were thinking.

[00:32:34] Speaker 02:
That was just really, really misleading.

[00:32:37] Speaker 02:
What we really mean is this.

[00:32:40] Speaker 02:
At that point, isn't there, it doesn't, it's not like the second one can't cancel the first one.

[00:32:46] Speaker 02:
Of course it can because it's just the OMB telling executive branch agencies what to do.

[00:32:50] Speaker 02:
And they're just saying, actually, here's what we want you to do.

[00:32:53] Speaker 06:
Respectfully, Your Honor, I think the first memo is a clear directive, and the second really is an explanation of OMB's later post-hoc rationalization, having seen the consternation that this caused.

[00:33:09] Speaker 02:
I'm sorry to keep belaboring it, but I don't understand why that matters, because isn't the second one pretty clear?

[00:33:16] Speaker 06:
I don't think it is, Your Honor.

[00:33:18] Speaker 02:
On whether the funding that needs to be stopped

[00:33:21] Speaker 02:
is only the funding that's bound up with the executive orders.

[00:33:24] Speaker 02:
How could it be more clear?

[00:33:25] Speaker 02:
Is this a freeze on all federal financial assistance?

[00:33:28] Speaker 02:
No, the pause does not apply across the board.

[00:33:30] Speaker 02:
At least on that respect, it seems clear.

[00:33:33] Speaker 06:
Your Honor, I understand completely what you're saying there.

[00:33:36] Speaker 06:
But I do think the order of operations that the original memo puts forward is still pervades the Q&A.

[00:33:43] Speaker 06:
In J62, the second page of it, it says the guidance is establishing the process for the agencies to work with OMB to determine quickly whether it's inconsistent with the EOs.

[00:33:54] Speaker 06:
A pause could be as short as a day.

[00:33:56] Speaker 06:
And this still implies to me that the

[00:34:01] Speaker 06:
pause is for the purpose as in memo 13 of determining whether or not it actually does fall within the EOs or not.

[00:34:10] Speaker 06:
And so I just don't see a way to operationalize the Q&A that is not consistent with memo 13.

[00:34:16] Speaker 06:
And that's how all the agencies really understood it.

[00:34:20] Speaker 06:
At JA23, there's an email from NSF that was sent after the Q&A saying it's pausing everything because of the OMB memo.

[00:34:31] Speaker 02:
So then what would have happened?

[00:34:32] Speaker 02:
And by the way, none of this suggests that this was at all clear in the time that this was happening.

[00:34:38] Speaker 02:
I mean, I think there was a lot of understandable confusion, and probably this is not

[00:34:43] Speaker 02:
you know, the best way to conduct business with agencies that one is supervising at OMB probably given the consternation and confusion that was caused.

[00:34:52] Speaker 02:
So I'm not suggesting that.

[00:34:54] Speaker 02:
But in terms of the operative effect of this, what if this was in the original memo?

[00:35:01] Speaker 02:
This was just an attachment to the original memo.

[00:35:03] Speaker 02:
Is there, it's a weird way to do it.

[00:35:05] Speaker 02:
I grant you that.

[00:35:08] Speaker 06:
I didn't interrupt you, I'm sorry.

[00:35:09] Speaker 02:
But would that just be, everybody would know that the original memo isn't a freeze across the board, because the attachment says that.

[00:35:17] Speaker 02:
So we have to go forward on an understanding.

[00:35:19] Speaker 02:
There may be still some confusion about its exact parameters.

[00:35:22] Speaker 02:
That happens all the time in internal executive branch stuff.

[00:35:24] Speaker 02:
That's when you get on the phone and talk to OMB, as apparently this document indicates it already happened in some instances.

[00:35:31] Speaker 02:
And wouldn't that be pretty clear that it's not an across the board freeze?

[00:35:35] Speaker 06:
I don't think so, Your Honor.

[00:35:36] Speaker 06:
I think it's helpful to be clear that what we're talking about is not sort of edge questions, whether something is near an EO or not.

[00:35:43] Speaker 06:
But the district court found that all of the evidence the plaintiffs put forward was about catastrophic freezes that were totally untethered to the executive orders.

[00:35:55] Speaker 06:
the preliminary relief hearing, the district court asked the government to explain which executive order was responsible for all the pauses.

[00:36:02] Speaker 06:
And the government was not able to do that because as the district court properly understood, the issue here are these freezes happening across the board separate from the executive orders.

[00:36:13] Speaker 02:
I think there's a lot to that.

[00:36:14] Speaker 02:
And I think probably it was the case that a lot of people understandably read the initial memo and feared that it meant an across the board freeze.

[00:36:23] Speaker 02:
And I guess that's why I keep coming back to the Q&A the next day that just said, and it was regrettable, all the confusion that was causing has real world consequences.

[00:36:32] Speaker 02:
So I don't mean to minimize that in the least.

[00:36:34] Speaker 02:
But as of the second day, when this clarification, the Q&A issues, that understandable understanding just seems to me that it's not on the table because OMB is just telling everybody that's not the way to construe it.

[00:36:49] Speaker 06:
I don't think the OMB was saying that clearly.

[00:36:51] Speaker 06:
I think we can know that because it's not just a fear.

[00:36:54] Speaker 06:
This is actual harm that happened because the agencies universally implemented the freeze in the way that was properly understood from the original memo and, in fact, did not unfreeze funding until after the court had entered its TRO.

[00:37:09] Speaker 06:
Some of our clients didn't get their funds until February 4th or February 6th or even February 7th.

[00:37:15] Speaker 06:
And so there's no evidence that I'm aware of in the record that

[00:37:19] Speaker 06:
any agency understood the Q&A to be operative.

[00:37:23] Speaker 06:
They were still acting at the behest of the must directive in M2513.

[00:37:29] Speaker 06:
And so what were really challenging is what happened.

[00:37:34] Speaker 06:
And there's certainly possible an alternative universe where they had immediately recognized a mistake and clarified it.

[00:37:41] Speaker 06:
They could have issued a memo that

[00:37:44] Speaker 06:
rescinded M2513 and made clear the scope that they wanted to, they could have fought off with the agencies.

[00:37:50] Speaker 06:
When the court entered its preliminary relief, it said, send a notice to the agencies and make clear that they understand they should no longer be freezing funds at the behest of the M2513.

[00:38:01] Speaker 06:
And OMB could have certainly done that on its own if they had truly wanted the narrower Q&A version.

[00:38:08] Speaker 06:
But they didn't take any of those steps.

[00:38:10] Speaker 02:
Do you think the case would be different if instead of

[00:38:14] Speaker 02:
saying, is this a freeze on all federal financial systems?

[00:38:16] Speaker 02:
No, the policy is not applied across the board.

[00:38:18] Speaker 02:
If the OMB had said, to the extent the memo has been construed in that fashion, it's rescinded.

[00:38:28] Speaker 06:
Had it been rescinded and then truly rescinded and there was not a suggestion of voluntary cessation as we have here, I think it would be different, Your Honor.

[00:38:36] Speaker 06:
Had OMB done something much more concrete than the Q&A?

[00:38:41] Speaker 04:
Can I ask you a question, please?

[00:38:45] Speaker 04:
On mootness, if based on the government's representation that this memo, well, you know, they've not just a representation, they've issued a directive saying that it's been rescinded.

[00:39:03] Speaker 04:
and then they come to our report and say the case is moot because the memo is rescinded.

[00:39:11] Speaker 04:
The government at this point, if we were to declare the case moot, if they would ever act essentially pursuant to this memo to freeze funding, they'd be subject to contempt, subject to all sorts of sanctions,

[00:39:32] Speaker 04:
God help him, if I were the district court and that were to happen.

[00:39:39] Speaker 04:
So why do you need a preliminary injunction?

[00:39:44] Speaker 06:
Well, you're on a couple of points on that.

[00:39:46] Speaker 06:
So just to be clear at the outset, the preliminary relief we have here really is the only thing that has meaningfully changed since we were litigating a year ago.

[00:39:55] Speaker 06:
And that is what is keeping this harm at bay.

[00:39:58] Speaker 06:
And we have significant evidence in the record.

[00:40:00] Speaker 06:
This is a 289, 293 and 296 that

[00:40:05] Speaker 06:
our clients and their members will be in imminent irreparable harm the minute the freeze were to kick back in.

[00:40:13] Speaker 06:
We saw in the record, this is around J231, that even one day of a freeze caused some of our clients' members to have to stop.

[00:40:23] Speaker 04:
That assumes that they would do it again.

[00:40:27] Speaker 04:
And what I'm saying to you is, why would we presume that they would do that freeze again based on this memo when they have represented to the district court and our court that the memo has been rescinded?

[00:40:45] Speaker 04:
And the minute that that happened,

[00:40:48] Speaker 04:
I would think that the district judge would have whatever officials responsible for any freeze to be in her courtroom and tell them to bring their toothbrushes because there may not be going back home after the hearing if that's what had happened.

[00:41:08] Speaker 04:
So why do you need an injunction?

[00:41:10] Speaker 06:
Well, just to clarify the standard, your honor, I heard the government, I think, say that we haven't shown a likelihood this might occur.

[00:41:17] Speaker 06:
And that's really not the standard here.

[00:41:19] Speaker 06:
The government bears the burden on newness and the voluntary cessation area, which we have here.

[00:41:25] Speaker 06:
a formidable burden under FICRA, and they have to show that it's absolutely clear it will not recur.

[00:41:32] Speaker 06:
And I would submit that the government has not made that showing.

[00:41:34] Speaker 06:
They have not submitted any evidence at all.

[00:41:37] Speaker 06:
As Judge Garcia pointed out, in FICRA, the government submitted a declaration, and that still was not sufficient in FICRA.

[00:41:44] Speaker 06:
But they haven't even done that here.

[00:41:47] Speaker 06:
I heard some statements from counsel that there was no- Can I just ask what

[00:41:52] Speaker 05:
Concretely, if we declare the case as moot, what are you concerned will recur?

[00:41:59] Speaker 06:
Well, Your Honor, if the court were to think the case is moot, then we would very much request that the court not vacate the judgment below under a monsoon-wearing main corp.

[00:42:08] Speaker 06:
I think that would be inappropriate for equitable reasons, particularly given the voluntary nature of the mootness here.

[00:42:17] Speaker 06:
If, in particular, the court were to vacate the preliminary roof below, given mootness, then I think that would eliminate all of the options that Judge Wilkins was talking about, the district court to continue enforcing it.

[00:42:36] Speaker 05:
What is the concern?

[00:42:37] Speaker 05:
Is the concern that OMB will again impose a broad-based freeze on all federal funding as you construed the OMB memo?

[00:42:49] Speaker 06:
It is, Your Honor.

[00:42:50] Speaker 06:
OMB has certainly not shied away from continued interest in funding freezes.

[00:42:55] Speaker 06:
We have some examples at pages 46 and 47 of our brief that lay out some statements from the director about potential freezes they're considering.

[00:43:04] Speaker 06:
And the salient point is that we have no evidence that the government won't do this again.

[00:43:11] Speaker 06:
It's really their burden to show that they won't recur.

[00:43:13] Speaker 06:
And they've put nothing in the record to meet that burden.

[00:43:16] Speaker 05:
So I think, not saying I find this persuasive, but what they have said is, with this case involved, what the district court's judgment addresses is a broad-based freeze on all federal funding.

[00:43:29] Speaker 05:
Here are the reasons you shouldn't think that will recur.

[00:43:33] Speaker 05:
We never meant to do that.

[00:43:35] Speaker 05:
Two is, today, we're not arguing we can do that.

[00:43:41] Speaker 05:
And they said today, there's no conceivable reason

[00:43:45] Speaker 05:
that we would do that again in the future.

[00:43:47] Speaker 05:
And it's not obvious to me that a freeze of a more specific program would be the kind of thing, which are examples of what you have cited in your brief, would be the kind of thing that would keep the question that's framed by this case alive, which is very much tethered to the breadth of the funding freeze.

[00:44:08] Speaker 05:
So why shouldn't we be asking,

[00:44:11] Speaker 05:
What is the reason to think OMB will attempt to freeze all or nearly all federal funds again?

[00:44:19] Speaker 06:
Well, Your Honor, I don't think it's surprising that OMB has not threatened to take an action that they are currently barred from taking by this order.

[00:44:27] Speaker 06:
But I do think that the government has said in court they don't plan to do this.

[00:44:33] Speaker 06:
But that's not really the standard under FICRA.

[00:44:36] Speaker 06:
It's not the standard they have to put forward some evidence.

[00:44:38] Speaker 06:
And if the court truly believed that this case had been moot, they could have done what they did in national endowment for democracy.

[00:44:45] Speaker 06:
the United States, which is case number 255361, where the government asked this court to hold their appeal in advance and remain at the district court so they could put forward a motion to dismiss for mootness.

[00:44:57] Speaker 06:
They could have asked the district for that here, and they haven't done so.

[00:45:01] Speaker 06:
They haven't put forward any evidence that this is absolutely clear.

[00:45:05] Speaker 06:
It will not recur.

[00:45:09] Speaker 02:
Facet of that that I think bolsters the hypo, at least that that which is that we never meant to do this in the 1st place is the clarification.

[00:45:20] Speaker 02:
The Q and a, you mean, yeah, the kids started the Q and a, yeah.

[00:45:24] Speaker 02:
Because.

[00:45:25] Speaker 02:
there was an understandable interpretation by hypothesis that there was an across the board freeze.

[00:45:32] Speaker 02:
And then the interpretation comes along the next day.

[00:45:34] Speaker 02:
And it's, there's a little bit of confusion about exactly when it happened.

[00:45:37] Speaker 02:
I mean, there was, I think the philosophy was filed at around noon, then sounds like you all got the, the Q and A at around 1 30.

[00:45:43] Speaker 02:
So who knows exactly what came first?

[00:45:45] Speaker 02:
I'm not going to try to deconstruct that.

[00:45:47] Speaker 02:
And I don't know that anybody knows that, but there were kind of roughly a lot of stuff was happening at around the same time, totally understandably given the

[00:45:54] Speaker 02:
rampant confusion.

[00:45:56] Speaker 02:
But that's a fact about the world is that the OMB did issue that clarification that conveys that this was never meant to be an across-the-board freeze to begin with.

[00:46:07] Speaker 02:
That seemed like it could bear on whether there's going to be an effort to do an across-the-board freeze again.

[00:46:16] Speaker 02:
That's kind of proof positive that it was never meant to be one to begin with.

[00:46:20] Speaker 06:
Well, Your Honor, the district court judge considered those arguments in district court and weighed them with the evidence that all of the agencies had, in fact, continued a broad freeze and determined that first, the conduct, as we understand them, on 2513, had not ceased, and that to the extent it had, it was voluntary cessation.

[00:46:40] Speaker 06:
Those factual findings deserve deference to the clear error standard.

[00:46:44] Speaker 02:
But I don't know that the district court, first of all, didn't talk about internal moodness.

[00:46:48] Speaker 02:
And second of all, I think it may well be true.

[00:46:53] Speaker 02:
And the district court was operating under really extenuating circumstances and completely understandably handled the case in the manner it did, especially at the initial stages when nobody had a real handle on what was going on.

[00:47:07] Speaker 02:
But in terms of the effect of the Q&A, it could be that

[00:47:13] Speaker 02:
Because there was a misinterpretation, and maybe it was the executive order supplementing that, that led to an across the board freeze or a too broad a freeze in some quarters, it takes a little while for that to unwind.

[00:47:25] Speaker 02:
And then it did ultimately.

[00:47:28] Speaker 02:
That just seems kind of maybe in the natural course of things.

[00:47:30] Speaker 02:
It's very unfortunate that that happened, that there was an overage.

[00:47:35] Speaker 02:
and probably based on the way that the memo was articulated in the first place.

[00:47:38] Speaker 02:
But would it that be the reason, couldn't that be a reason that it took, I mean, are you suggesting that actually the second, the clarification was always meant to be a ruse and that actually the government didn't mean what it said and what it really meant was that there should be an across the board freeze and that every agency should continue acting as if there's across the board freeze, even though we've sent a Q and A that says there's not.

[00:48:03] Speaker 06:
Your Honor, the fact that the memo is, in my view and in the view of all the agencies administering it, quite clear, I think is probative of what the original intent was.

[00:48:14] Speaker 06:
And to the extent that the government really believed that the Q&A is all they had ever intended to do, they could have simply put a declaration in court to that effect, explaining this.

[00:48:27] Speaker 06:
They could have asked to remand and made that factual finding more clear.

[00:48:32] Speaker 02:
And of course they rescinded the memo, the first memo of this next day anyway, and we're talking about things that happened two days in succession.

[00:48:37] Speaker 02:
So at that point, I think they're thinking whatever we met by the Q&A, that's been superseded by the fact that the underlying memo is rescinded.

[00:48:46] Speaker 06:
Of course, Your Honor.

[00:48:47] Speaker 06:
And then the freeze continued after that.

[00:48:49] Speaker 06:
There is evidence that the press secretary put forward that was not rescinded at all.

[00:48:54] Speaker 06:
And so in the wake of all of that... And what do you think?

[00:48:56] Speaker 02:
Is it your view then that either the rescission or the clarification were not real?

[00:49:03] Speaker 06:
I think that the rescission itself was at best immaterial and clearly not abided by.

[00:49:12] Speaker 06:
And I think the district court said at worst an attempt to manipulate the court's jurisdiction.

[00:49:17] Speaker 06:
And I think the district court was well within its discretion to understand.

[00:49:20] Speaker 02:
But apart from the court's jurisdiction, I just mean in the real world, do you think that the rescission

[00:49:26] Speaker 02:
actually wasn't a rescission that the government, that OMB rescinded it, but they were really, there was a wink, wink, nod, nod to other agencies that yes, we've rescinded it, but you know, you should still continue to freeze the funds.

[00:49:39] Speaker 02:
Honestly, I'm not trying to engage in some kind of gross characterization.

[00:49:45] Speaker 02:
I'm just wondering what you really think the effect of the rescission and for that matter, the Q&A was.

[00:49:50] Speaker 06:
Well, I think, Your Honor, that the press secretary's tweet that it was not a rescission with not in all caps was clear that it was not a rescission and that the agency is continuing to freeze after that tweet and after the purported rescission made clear that the agencies understood it that way as well.

[00:50:08] Speaker 06:
And had OMB thought that's wrong, it really was a true rescission, there was more that OMB could have done.

[00:50:15] Speaker 06:
For example, sending a notice to the agencies directing them quite

[00:50:19] Speaker 06:
clearly to release any funds that they had frozen under their interpretation of memo 2513 and they did not do so.

[00:50:27] Speaker 02:
So then what's the bottom line then on the rescind?

[00:50:30] Speaker 02:
Do you think it actually was rescinded or not?

[00:50:33] Speaker 06:
I think it was purported to be rescinded, but I do not think it was a valid rescission.

[00:50:37] Speaker 06:
I think that the voluntary cessation doctrine fully applies here.

[00:50:41] Speaker 05:
But that would mean that you think if the PI goes away, then the original memo would just sort of immediately spring back to life.

[00:50:50] Speaker 05:
But you know, now a year on, that's certainly not what would happen, right?

[00:50:56] Speaker 05:
There would need to be some more affirmative action from OMB to reinstate it.

[00:51:00] Speaker 06:
I don't know whether that's the case, Your Honor, because after the purported rescission, the agencies continue to implement those phrases in a broad categorical way.

[00:51:08] Speaker 05:
What's the latest evidence?

[00:51:10] Speaker 05:
Like how far after?

[00:51:11] Speaker 05:
I know there was evidence of that for 48 hours, several days.

[00:51:16] Speaker 05:
But it was all from February.

[00:51:18] Speaker 06:
Um so there's there's several.

[00:51:20] Speaker 06:
So um there's you know the EPA EPA sent an email the day after the purported precision specifically referencing memo M2513.

[00:51:29] Speaker 06:
This is at JA76.

[00:51:31] Speaker 06:
Um we have evidence that there were still freezes as of January 30th and 31st and then our um some of our clients members only got their funds on February 4th, 6th, and 7th.

[00:51:44] Speaker 06:
The last one is at JA309.

[00:51:46] Speaker 05:
So um go ahead.

[00:51:49] Speaker 05:
I was just trying to explore whether it seems like after a week or two, nobody was relying on the OMV memo anymore.

[00:52:01] Speaker 05:
There's no evidence of that.

[00:52:02] Speaker 05:
Obviously, we have a TRO and then a PI, so it's hard to sort it out.

[00:52:09] Speaker 05:
Go ahead.

[00:52:10] Speaker 06:
The TRO was entered on February 3rd, I believe.

[00:52:13] Speaker 06:
And so it's my understanding that all the evidence we had through January 31st that the freeze was continuing.

[00:52:21] Speaker 06:
And we saw the freeze start to thaw after the TRO.

[00:52:25] Speaker 06:
And the funds coming in on the 4th, 5th, and 6th and 7th was in response to the TRO itself and not in response to purported precision.

[00:52:34] Speaker 02:
Maybe I misunderstood your position on moodness, but I thought your entire brief

[00:52:39] Speaker 02:
The reason you think the case is not mooted is because of voluntary cessation, because of the voluntary cessation doctrine that the government has met its burden to show that it wouldn't redo it.

[00:52:49] Speaker 02:
But I guess it sounds like what you're saying now is there may never have been a cessation to begin with.

[00:52:55] Speaker 06:
Both of those, Your Honor.

[00:52:56] Speaker 06:
So I think there never was a cessation at all, and that to the extent there was, the voluntary cessation doctrine would apply.

[00:53:03] Speaker 02:
So then, so your position is that the recession like we shouldn't actually actually, we shouldn't take the decision as a given.

[00:53:08] Speaker 02:
It wasn't even a decision.

[00:53:11] Speaker 02:
It was not.

[00:53:14] Speaker 02:
What was it?

[00:53:14] Speaker 02:
It was just a.

[00:53:16] Speaker 06:
I think under a late law, the district court made a factual finding that it had not in fact been rescinded, which deserves deference under the clear error standard.

[00:53:30] Speaker 06:
And I'm certainly in no way asking the court to make a finding of

[00:53:37] Speaker 06:
of bad faith on anyone's part.

[00:53:38] Speaker 06:
But I do think that the district court's finding that it had not, in fact, ceased or that to the extent that they're, you take the decision for what it's worth, that it was the bond whose association doctrine applies, both deserve deference here as alternative options.

[00:53:54] Speaker 02:
Can I just ask one last question about the tweet, which is the government's interpretation of that is that it's actually not contrary to the rescission because what it was saying is the OMB memo has been rescinded, but there's still whatever funding freeze remains in effect by virtue of the executive orders.

[00:54:21] Speaker 02:
So it's consistent actually with the government's understanding because the OMB memo was rescinded.

[00:54:28] Speaker 02:
That doesn't mean there's no longer any funding freeze anywhere because the executive orders themselves called for funding freezes in certain respects.

[00:54:37] Speaker 02:
And that's what the tweet was about is that that doesn't mean there's no longer any funding freeze.

[00:54:40] Speaker 02:
The funding freeze is still in effect by virtue of whatever the executive orders did.

[00:54:45] Speaker 02:
And you think that interpretation

[00:54:48] Speaker 02:
Why do you think that interpretation can't be the way to interpret it?

[00:54:52] Speaker 06:
Well, Your Honor, I think it's at least equally and more plausible to interpret it as the district court did.

[00:54:59] Speaker 06:
And the district court, in making these findings, giving a plausible interpretation deserves deference.

[00:55:04] Speaker 06:
And I think two points on the tweet.

[00:55:06] Speaker 06:
So first, not to parse it too closely, but it is called the federal funding freeze, which is quite different from separate funding freezes per the EOs.

[00:55:15] Speaker 06:
And the reference executive orders is really consistent with how the original memo works.

[00:55:21] Speaker 06:
because it is, as I understand it, I think is OMB put forward in the original memo, really created to permit time for the agencies to determine what falls under these various executive orders.

[00:55:37] Speaker 06:
And so it's a way to implement those orders.

[00:55:41] Speaker 06:
And so I think the district court was quite right to understand that as consistent with the district court's reading of MO 2513.

[00:55:50] Speaker 04:
Did the district court make a finding that the memo wasn't really rescinded, or did the district court make a finding that it was rescinded, that there were some agencies that, you know, were slow to comply with the rescission or slow to kind of get the memo, so to speak, that it had been rescinded?

[00:56:18] Speaker 06:
I don't have the exact language of a podium, Your Honor, but my recollections of the district court concluded that it was, you know, that the purported decision was at best sort of a non-entity and at worst an attempt to manipulate the court's jurisdiction.

[00:56:35] Speaker 06:
I don't think those are the precise words that she used.

[00:56:37] Speaker 06:
But I don't believe the district court made any finding that this was just slow to turn back on, but really, you

[00:56:44] Speaker 06:
understood properly that all of the agencies were behaving in the same way consistent with M2513, the district court cited, I believe, the commerce case and said, I don't have to be naive whenever all the agencies are undertaking something in the same exact way at the same exact time, that that is really probative of what is really happening here.

[00:57:04] Speaker 05:
I think to be fair, weren't all of those statements, all of that was taken as evidence that the OMB memo was intended to be broad.

[00:57:13] Speaker 05:
Not that it was a distinct issue, whether it was rescinded.

[00:57:17] Speaker 05:
That's why Judge Ali Khan was looking to agency's reaction in the first instance to bolster the idea that this was a freeze on all federal financial assistance.

[00:57:28] Speaker 06:
She certainly was, Your Honor.

[00:57:29] Speaker 06:
And I don't have perfect recollection whether she re-upped those findings in the mootness section analysis as well.

[00:57:36] Speaker 06:
But the district court certainly did find the voluntary cessation doctrine applied here.

[00:57:41] Speaker 05:
So I have one last set of questions.

[00:57:44] Speaker 05:
It's about how you understand the injunction.

[00:57:46] Speaker 06:
Yes, Your Honor.

[00:57:47] Speaker 05:
So I'll admit that when I read

[00:57:53] Speaker 05:
You may not reinstate under a different name the unilateral non-individualized directives in OMB memorandum M2513.

[00:58:00] Speaker 05:
I actually find that incredibly clear.

[00:58:04] Speaker 05:
She's just written an opinion that says, I read the OMB memo to freeze all federal funds.

[00:58:11] Speaker 05:
So this is ordering them not to freeze all federal funds again.

[00:58:14] Speaker 05:
That's right, Your Honor.

[00:58:17] Speaker 05:
But when you then think about mootness,

[00:58:24] Speaker 05:
You know, the best indication, I think I asked this question earlier, what's the best indication that the government is going to try again to freeze all federal funds, which is all this case is about?

[00:58:38] Speaker 05:
And I think we have, they have an affirmatively disclaimed an intent to do that.

[00:58:45] Speaker 05:
OMB, as recently as last, you know, in the past few months, has done more targeted freezes.

[00:58:53] Speaker 05:
Is there any other reason to think they will again freeze all federal funding?

[00:59:00] Speaker 06:
I think given that they bear the burden to show that, the fact that they've put forward no evidence whatsoever, is it self-proprietive, Your Honor?

[00:59:09] Speaker 06:
Just to amplify not only Judge Garcia, but also the First Circuit has reviewed that language and in the face of similar vagueness objections from the government and also found it to be clear, I think footnote seven of the district court's order further amplifies the clarity of what the opinion of what the court is ordering and just to

[00:59:30] Speaker 06:
clarify one of Judge Wilkins' questions earlier.

[00:59:34] Speaker 06:
The government, to my knowledge, did not ask for any clarification to this report.

[00:59:38] Speaker 06:
The government is correct that there was some briefing about the scope of the order.

[00:59:42] Speaker 06:
That was at a part of the plaintiffs.

[00:59:45] Speaker 06:
We were asking for an understanding of what open awards meant, but the government did not actually ask to clarify at any point in the last year.

[00:59:55] Speaker 05:
But I think your answers to me mean, if tomorrow OMB announces

[01:00:01] Speaker 05:
I've given it some more thought.

[01:00:03] Speaker 05:
We are instituting a new 30-day pause of all federal funding, tied specifically and explicitly without any ambiguity to Green New Deal and DEI projects.

[01:00:15] Speaker 05:
You'd have to say that's not even covered by this injunction, right?

[01:00:21] Speaker 06:
Well, Your Honor, I think that that would be a different case, depending on how it's worded, if it is as narrowly tailored as you suggest.

[01:00:29] Speaker 06:
I do think that the

[01:00:32] Speaker 06:
The district court statutory authority arguments would be similar in that new case, or district court statutory authority conclusions would be similar in that new case.

[01:00:40] Speaker 05:
I don't know if you can help me with this, but there's a very bizarre artificiality to this case, which is all anyone disagrees about on the merits is, did OMB order the freeze of some funds or all funds?

[01:00:54] Speaker 05:
If it's all funds, everyone agrees or no one's arguing otherwise that it was unlawful.

[01:00:58] Speaker 05:
And if it is just some funds, you haven't advanced any argument

[01:01:03] Speaker 05:
that it was unlawful.

[01:01:04] Speaker 05:
And so the whole thing turns on the interpretation of this memo that's been rescinded.

[01:01:10] Speaker 06:
Your Honor, respectfully, I don't think it is an artificial case, because we know what actually happened.

[01:01:17] Speaker 05:
And the government has- You could think it's moot while also thinking the district court and the plaintiffs did all exactly the right things, but that a year later, after all the dust has settled, it's hard to see what maintaining this injunction does to protect your clients if it's only against a new, broad federal funding freeze.

[01:01:38] Speaker 05:
It seems like it would be

[01:01:40] Speaker 05:
There's just no reason to think they'll do that.

[01:01:43] Speaker 06:
Well, Your Honor, they haven't put forward any evidence that they aren't going to.

[01:01:47] Speaker 06:
And they're trying very hard in support of this appeal to make sure they have the ability to do so again.

[01:01:53] Speaker 06:
And I think in West Virginia, the EPA, the report noted that

[01:02:02] Speaker 06:
Having vigorously defended legitimacy of their approach was probative in that understanding of mootness and that the passage of time itself is also not independently sufficient.

[01:02:14] Speaker 06:
I think in FICRA, they cite parents involved as

[01:02:18] Speaker 06:
declining to dismiss a case's moot five years after an alleged voluntary cessation.

[01:02:23] Speaker 06:
And so in light of the fact that the government is still contending through this appeal that has the right to do this and that they haven't put forward.

[01:02:33] Speaker 05:
That's the oddity that I was trying to get at.

[01:02:36] Speaker 05:
And it is not obvious that it leads to it being moved.

[01:02:38] Speaker 05:
But when you say this, you mean a broad federal funding freeze.

[01:02:42] Speaker 05:
And they are not arguing they can do that.

[01:02:44] Speaker 05:
That's the oddity.

[01:02:45] Speaker 05:
And maybe you're right that it's not moot, because they have not given affirmative representations.

[01:02:50] Speaker 05:
They won't do it again.

[01:02:52] Speaker 05:
But this is not the Clean Power Plan, and they're defending the legality of generation shifting.

[01:02:58] Speaker 05:
They're saying, we never meant to do generation shifting in the first place.

[01:03:01] Speaker 05:
Why are we here?

[01:03:03] Speaker 05:
So, sorry, that's not a question.

[01:03:06] Speaker 06:
No, I mean, as your honor points out, if they have no, if we all have the same understanding of what the preliminary relief actually prohibits and the government does not have any intention of.

[01:03:19] Speaker 06:
of undertaking those actions.

[01:03:20] Speaker 06:
It's hard for me to understand why we're here at this appeal and also why they haven't taken the very simple steps of putting forward a declaration or other evidence that they do not in fact intend to redo another federal funding freeze.

[01:03:34] Speaker 04:
Thank you.

[01:03:35] Speaker 04:
So help me understand if we were to say that this case is based on

[01:03:46] Speaker 04:
The finding that the preliminary injunction only enjoins a unilateral, non-individualized directive from OMB to freeze funds, and an understanding that the government has no intention of

[01:04:12] Speaker 04:
government represents that that was not what they intended to do in the first place.

[01:04:17] Speaker 04:
But putting that aside, they're given no intention that they're going to do that again.

[01:04:24] Speaker 04:
And based on that, we find this moot.

[01:04:35] Speaker 04:
If the government were to then do another unilateral funding freeze, at that point, judicial estoppel, I think, would kick in with respect to whether or not

[01:05:02] Speaker 04:
the preliminary injunction should just be reinstated, that was vacated.

[01:05:10] Speaker 04:
So I guess I'm just trying to understand why you still need the preliminary injunction because one way or the other, them asking us to moot the case

[01:05:31] Speaker 04:
They're either going to have to do, not do what they say that they're not going to do, or the minute they do it, essentially what would happen would be a motion to reinstate the injunction based on their actions, and they'd be in the same world of trouble.

[01:06:01] Speaker 04:
as they would have been in had they violated the injunction and it had stayed in effect.

[01:06:09] Speaker 04:
Like, what more do you get from, or why isn't that the way that that would play out?

[01:06:18] Speaker 06:
Well, Your Honor, I think this conversation really goes to who bears the burden of potential wrongdoing.

[01:06:25] Speaker 06:
And under the scenario that Your Honor laid out, if the government were to succeed here and then go into the thing they've said they don't want to do, then we would have to rush into court again.

[01:06:37] Speaker 06:
And during that time, we've shown in this case that even a very, very brief eminent freeze was causing irreparable harm to our clients.

[01:06:47] Speaker 04:
I mean, you'd have to rush in the court if we just affirm the injunction.

[01:06:52] Speaker 04:
I mean, if they were to take some action in the future to freeze funds, I mean, it's not self-executing.

[01:07:01] Speaker 04:
You would have to execute for your clients by going in and seeking contempt or whatever.

[01:07:09] Speaker 06:
I do think there's a difference, Your Honor, between the government and being new.

[01:07:13] Speaker 06:
um under a court order and and simply, you know, um having to worry about explaining themselves to district court if the court order had been vacated.

[01:07:23] Speaker 06:
Um but but again, you know, it's not our burden to show we still need this injunction.

[01:07:28] Speaker 06:
The law is very clear.

[01:07:29] Speaker 06:
It's the government's burden to show that has become moot and they have not put forward any evidence that enables it to meet that burden.

[01:07:37] Speaker 04:
Well, there's there's mootness and then there's also like, you know,

[01:07:42] Speaker 04:
Equitable relief and preliminary injunctions are meant to be not meant to last forever, right?

[01:07:51] Speaker 04:
And at some point, a preliminary injunction outlives its usefulness.

[01:08:01] Speaker 04:
And so even if it doesn't technically meet the mootness standard for their voluntary cessation,

[01:08:10] Speaker 04:
It would seem to me that as a court of appeals, one option we have is to just say, well, there's really no need for this anymore.

[01:08:21] Speaker 04:
And equitable relief, you balance all of these things.

[01:08:25] Speaker 04:
And as we balance all of these things, maybe the balance now is different than it was in February of last year, a year ago.

[01:08:38] Speaker 06:
With respect, your honor, two points there.

[01:08:40] Speaker 06:
So first of all, nothing has changed in the passage of time.

[01:08:45] Speaker 06:
The Q&A, the purported decision, they all had happened before the district court issued its order.

[01:08:51] Speaker 06:
I think that goes to my second point, which is that

[01:08:53] Speaker 06:
The balancing is really in the discretion of the district court judge.

[01:08:58] Speaker 06:
And so if there's a question of whether it's become moot now, I think the most appropriate course is to remand the district court to make those factual findings and do that balancing in the first instance.

[01:09:13] Speaker 06:
But regardless, if the court does find its moot, we really do think that there's no need to vacate under monsoon wear.

[01:09:20] Speaker 02:
Make sure colleagues don't have additional questions.

[01:09:23] Speaker 02:
Thank you, Council.

[01:09:24] Speaker 06:
Thank you.

[01:09:28] Speaker 02:
Your springer will give you three minutes for rebuttal.

[01:09:34] Speaker 03:
Thank you, Your Honors.

[01:09:36] Speaker 03:
Excuse me.

[01:09:36] Speaker 03:
I think the discussion with the other side and the focus on the specifics of what the memo said or didn't say and what happened a year ago just underscores that this controversy has become moot and that the district court went beyond resolving the particular controversy that was before it.

[01:09:54] Speaker 03:
So I think that's an important point that sort of comes out in the discussion.

[01:09:57] Speaker 03:
And I would just say, I mean, I think we think that this injunction should be vacated.

[01:10:03] Speaker 03:
In an absolute minimum, the court should clarify it the way that Judge Garcia explained the injunction to apply just to across the board funding freezes.

[01:10:12] Speaker 03:
I mean, I think that is something that is very clearly moot, but that sort of clarification I think would have gone a long way if it had been something that the district court had done.

[01:10:22] Speaker 03:
I mean, our real worry here is that OMB obviously has significant statutory authority in this area and the way that the injunction is phrased

[01:10:32] Speaker 03:
There's some fear of it interfering with things that OMB is permissibly able to do, particularly because, again, the district court's analysis was really focused on the particulars of this memo, the specific contours of the memo, and the specific explanation that appeared in the memo.

[01:10:48] Speaker 03:
So, I mean, I think that's really the fear that was generated here.

[01:10:51] Speaker 03:
So we do think that the injunction should be vacated, but at a minimum, it should be clarified.

[01:10:56] Speaker 05:
So that last piece, I don't understand.

[01:10:58] Speaker 05:
The district court's opinion was very much about this

[01:11:01] Speaker 05:
memo and how it viewed this memo.

[01:11:03] Speaker 05:
And it's very clear about how it viewed the memo.

[01:11:06] Speaker 05:
It viewed it as a freeze on all federal funding.

[01:11:09] Speaker 05:
So you've represented that there's not been any consideration of anything like that.

[01:11:15] Speaker 05:
So I don't understand what the fear is.

[01:11:17] Speaker 05:
If you

[01:11:19] Speaker 03:
I mean, I think there's just language in the injunction in particular.

[01:11:24] Speaker 03:
I mean, particularly discussion, I think, as we discussed earlier about non-individualized directives.

[01:11:29] Speaker 03:
It's not just saying, again, the usual relief to enter in a case like this is one that says you can't apply this memo or this agency action to the plaintiffs.

[01:11:38] Speaker 03:
And what the district court said was you can't reinstate under a different name the unilateral non-individualized directives.

[01:11:44] Speaker 03:
I think there are questions about what it means to do non-individualized directives.

[01:11:49] Speaker 03:
I do think, again, we do think that this injunction should be vacated, particularly because the case has become moot.

[01:11:55] Speaker 03:
But at an absolute minimum, the court could clarify that that is just meant to prohibit across the board freezes, which again, I think the other side has admitted is what the controversy was here about.

[01:12:08] Speaker 03:
And that's the thing that's also not very likely to occur.

[01:12:12] Speaker 02:
I'm not saying you had to do it, but you could have gone to the district court and asked for that clarification.

[01:12:17] Speaker 03:
Your honor, I think we were engaged in a bunch of different, we have other cases that are going on and we wanted to make sure that we got the right clarification.

[01:12:28] Speaker 03:
I think at the time, things were very fast moving and there were decisions that were being made about what to do.

[01:12:34] Speaker 03:
And so there was a decision made that we should appeal just because we were worried about.

[01:12:40] Speaker 03:
I mean, and obviously we're also now at a very different stage than we were even six or seven months ago where there have been sort of final decisions that have been made that have kind of decreased the practical effects of the case.

[01:12:54] Speaker 05:
But you're not able to say OMB has no intention of initiating another broad federal funding freeze.

[01:13:08] Speaker 05:
You can only say you can't think of a good reason they would.

[01:13:11] Speaker 03:
Your honor, I don't see any reason that OMB would do that, particularly not for the lifespan of this case, which is we're up here on a preliminary injunction.

[01:13:20] Speaker 03:
I obviously don't want to get ahead of what a future agency can do, and we just want to be sure that this isn't interfering with permissible things that OMB is allowed to do pursuant to its clear statutory authority here.

[01:13:35] Speaker 02:
Thank you, counsel.

[01:13:36] Speaker 02:
Thank you to both counsel.

[01:13:37] Speaker 02:
We'll take this case under submission.