State of Washington v. U.S. Department of Housing and Urban Development

Summary

Twenty-two states, the District of Columbia, and a coalition of cities, counties, and homelessness nonprofits sued HUD to block its November 2025 restructuring of the Continuum of Care (CoC) program. The CoC program, authorized under the McKinney-Vento Homeless Assistance Act as amended in 2009, funds ~7,000 projects providing permanent housing, rapid rehousing, and services for homeless individuals — prioritizing Housing First principles. HUD's November NOFO capped Tier 1 permanent-housing renewals at 30% (down from 90%), added substance-abuse and sobriety preconditions, and departed in multiple ways from statutory criteria and decades of practice. The District of Rhode Island issued preliminary injunctions against the NOFO; HUD did not appeal. Two months later HUD released a modified 'December NOFO' and moved to dissolve the injunctions citing Congress's 2026 appropriations law. The district court denied the motion and HUD appealed, seeking an emergency stay. Applying the Nken stay factors, the First Circuit (Judge Rikelman writing) denied the stay. HUD failed to make a strong showing of likelihood of success: the district court's conclusions that the December NOFO continued the same statutory violations (disregarding the Housing First framework, MVA's permanent-housing renewal priority, and notice-and-comment requirements) were entitled to deference on this narrow motion-to-dissolve posture. HUD also could not show irreparable harm to itself — its 'sovereignty' arguments failed where the injunction merely prevented enforcement of unlawful actions — while the plaintiffs submitted uncontested evidence that a stay would force shuttering of housing programs, layoffs, and homelessness for vulnerable residents including families, elderly, and domestic-violence survivors.

Structured facts

Parties

Petitioner/Appellant: U.S. Department of Housing and Urban Development; Scott Turner, Secretary
Respondent/Appellee: State of Washington + 21 other states/DC; National Alliance to End Homelessness + cities, counties, and nonprofits

Jurisdiction

federal — First Circuit on appeal from the District of Rhode Island (stay pending appeal)

Statutes cited

McKinney-Vento Homeless Assistance Act, 42 U.S.C. §§ 11301-11408, 42 U.S.C. §§ 11381, 11382, 11383, 11386a, 11386b, 11386c, Consolidated Appropriations Act, 2024, Pub. L. No. 118-42, Full-Year Continuing Appropriations and Extensions Act, 2025, Pub. L. No. 119-4, Administrative Procedure Act, 5 U.S.C. § 706

Issue

Whether HUD has made a strong showing, under Nken, that it is likely to succeed in overturning the district court's denial of its motion to dissolve preliminary injunctions against its November/December NOFOs.

Holding

No. HUD failed to show (1) likelihood of success on the merits of the motion-to-dissolve appeal; (2) irreparable harm to itself; or (3) that the balance of equities and public interest favor a stay. Stay denied.

Outcome

stay denied

Vote

unanimous panel (Gelpí, Montecalvo, Rikelman)

Majority author

Judge Rikelman

Key facts

• The 2024-25 NOFO authorized by Congress streamlined the application process for fiscal years 2024 and 2025.
• HUD missed the statutory three-month NOFO deadline after Congress's March 2025 appropriations.
• On November 13, 2025, HUD issued a new NOFO that rescinded the 2025 portion of the 24-25 NOFO, capped Tier 1 renewal at 30%, and added sobriety/services preconditions.
• The District of Rhode Island granted preliminary injunctions in two consolidated cases.
• HUD did not appeal the injunctions; instead it issued a December NOFO and moved to dissolve the injunctions citing the 2026 appropriations law.
• District court denied the motion to dissolve; HUD appealed and sought an emergency stay.

Reasoning

Under Nken, a stay requires strong showings across four factors. On the merits: the district court properly denied the motion to dissolve because the December NOFO reproduced substantive features of the November NOFO that violated statutory criteria (Housing First, permanent-housing renewal priority, notice-and-comment). HUD's attempt to argue that the 2026 appropriations law changed the legal landscape was not a 'significant change' justifying dissolution. Irreparable harm: HUD had no sovereign interest in enforcing unlawful actions; it declined to appeal the original injunctions which severely undercut any urgency. Equities and public interest: the plaintiffs' record of immediate, uncontested harms — housing-program shutdowns, layoffs, lost provider relationships, and residents falling back into homelessness during winter — massively outweighed any alleged HUD injury.

Implications

The decision is a significant appellate check on federal agency attempts to unilaterally restructure major social-welfare programs mid-cycle. Four implications. First, for federal housing policy: the November/December NOFO restructuring appears stalled for at least the duration of the underlying litigation; providers and state and local grantees can rely on status-quo funding flows while the courts consider the merits. Second, on agency-action doctrine: the panel applies Nken's 'strong showing' requirement rigorously, signaling that agencies cannot leverage late-stage reorganizations to overcome adverse injunctive orders they chose not to appeal. Third, for APA litigation strategy: state AG coalitions and service-provider nonprofits can pair preliminary-injunction wins with aggressive opposition to agency 'dissolution' motions — a two-step strategy that proved highly effective here. Fourth, for other federal programs facing similar agency restructurings (SNAP, Medicaid waivers, Title X, ESSA), plaintiffs can model complaints on the Washington/NAEH template and target statutory-criteria violations plus Housing First-analogue evidence-based-practice disruptions. The unanimous panel and detailed fact-findings make the decision an authoritative First Circuit statement on the Nken framework, Motion 60(b) dissolution standards, and administrative-state checks on federal agency unilateralism. It will be widely cited.

Related cases

• Nken v. Holder, 556 U.S. 418 (2009) — stay-pending-appeal factors
• Hilton v. Braunskill, 481 U.S. 770 (1987) — balance of equities in stays
• Karnoski v. Trump, 926 F.3d 1180 (9th Cir. 2019) — motion-to-dissolve standard of review
• Hoult v. Hoult, 373 F.3d 47 (1st Cir. 2004) — deference to district court on dissolution
• R.I. State Council of Churches v. Trump, 158 F.4th 301 (1st Cir. 2026) — recent First Circuit stay analysis
• Charlesbank Equity Fund II v. Blinds To Go, Inc., 370 F.3d 151 (1st Cir. 2004) — distinguished on irreparable harm

Practical guide

For state AG coalitions and nonprofits challenging federal agency restructuring: (1) combine a preliminary-injunction record with evidence of on-the-ground, non-hypothetical harms (provider layoffs, client exits, lost federal leverage) — the Washington plaintiffs' record here was decisive; (2) if the agency declines to appeal a preliminary injunction, oppose any later dissolution motion vigorously by highlighting the waived appeal and the lack of changed circumstances; (3) build the statutory-compliance argument on specific text (e.g., 42 U.S.C. § 11386b's permanent-housing prioritization and notice-and-comment requirement). For federal agencies and DOJ: do not assume motion-to-dissolve is a substitute for a timely appeal — Nken's 'strong showing' standard is rigorous, especially where the agency chose not to challenge the original injunction. For local homelessness programs (Continuums): continue operating under pre-November NOFO assumptions for the interim; document program-operation plans reliant on injunction-protected funding. For state housing finance agencies: coordinate closely with state AG offices and service-provider nonprofits to maintain the evidentiary record supporting continued injunctive relief. For housing-policy scholars: the decision is a useful data point on the limits of executive-branch discretion over congressionally authorized formula-and-priority programs.

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