. . . If audits show misuse (e.g., inflated grants), forcing payments could violate the executive’s duty to execute laws faithfully. . . .
I. Introduction
For forty years, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) governed judicial-executive relations, directing courts to defer to agency interpretations of ambiguous statutes if reasonable. Critics argued this ultimately ceded Article III’s interpretive role to unelected bureaucrats, violating separation of powers. See Philip Hamburger, Is Administrative Law Unlawful? The University of Chicago Press (2014). Last year, in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), the Supreme Court agreed, overruling Chevron to reassert Article III’s mandate that courts—not agencies—“‘decide whether the law means what the agency says.’” Id. at 2261 (quoting Perez v. Mortgage Bankers Assn., 575 U.S. 92, 109 (2015)). Chief Justice Roberts hailed this as a return to constitutional first principles, requiring courts to “exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Id. at 2273.
Yet, as with any seismic shift, Loper’s ripple effects are proving complex. Enter State of New York v. Trump, where Chief Judge John J. McConnell Jr., U.S. District Court for the District of Rhode Island, issued a temporary restraining order (“TRO”) blocking President Trump’s directive to pause federal funding to, among other recipients, twenty-two states and the District of Columbia. No. 1:25-cv-00039-JJM-PAS, Dkt. 50 (D.R.I. Jan. 31, 2025) (“Decision”). Issued barely ten days into the Trump presidency, the TRO raises the specter that Loper’s empowerment of courts tipped the scales too far, inviting judicial overreach into the executive’s Article II sphere of constitutional prerogatives. Loper’s empowerment of judicial authority, absent a countervailing restraint, risks a new imbalance: a judiciary substituting its own discretion for the executive’s in areas where deference—formal or informal—might still be due. The stakes are high. If courts wield Loper as a blunt tool, the separation of powers could tilt anew, this time toward judicial fiat.
II. The Deference Pendulum: From Chevron to Loper
Chevron emerged in 1984 as a pragmatic compromise. Step one: if a statute’s meaning was clear, courts enforced it; step two: if ambiguous, courts deferred to an agency’s reasonable interpretation. Chevron, 467 U.S. at 842-43. Built on assumptions of agency expertise and executive accountability, it empowered agencies like the Environmental Protection Agency or Food and Drug Administration to mold vague laws into actionable policy. Over decades, this fueled an administrative state, with agencies stretching statutory gaps into sweeping regulations—often beyond judicial challenge.
Critics bristled. For example, then-appellate Judge Neil Gorsuch called Chevron a “judge-made doctrine for the abdication of the judicial duty,” noting that “[t]ransferring the job of saying what the law is from the judiciary to the executive unsurprisingly invites the very sort of due process . . . and equal protection concerns the framers knew would arise if the political branches intruded on judicial functions.” Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1152, (10th Cir. 2016). By 2024, the Supreme Court had heard enough. In Loper, a 6-3 majority struck Chevron down, holding it violated the Administrative Procedure Act’s (“APA”) mandate that courts—not agencies—interpret laws. Loper, 144 S. Ct. at 2266-67.
Chief Justice Roberts anchored the ruling in first principles. Chevron’s deference, he wrote, bred instability—agencies could reinterpret laws with each administration—“leaving those attempting to plan around agency action in an eternal fog of uncertainty.” Id. at 2272. Courts must now decide legal questions de novo, using statutory text, structure, and legislative history in place of agency gloss on statutory ambiguities. Id. at 2273. The goal was clear: curb executive overreach resulting from agency rulemaking. Yet Loper’s silence on broader executive discretion and action—beyond statutory construction—left a void. If courts no longer defer to agency statutory interpretation, what of the President’s broader execution of Article II powers? That question looms large in early 2025.
III. State of New York v. Trump: A Post-Loper Test Case
On January 20, 2025, President Trump’s second term kicked off with an OMB directive pausing all federal disbursements to ensure that the spending aligns with “Presidential priorities.” Decision at 3-4. Twenty-two states and D.C. sued, alleging violations of the APA, separation of powers, as well as the Spending and Presentment clauses of the Constitution. Id. On January 31, Judge McConnell granted the states’ requested TRO, ordering funds disbursed according to Congress’s budget while finding the pause likely unlawful. Id. at 11-12.
A. Judge McConnell’s Rationale
Judge McConnell applied the four TRO factors: likelihood of success, irreparable harm, balance of equities, and public interest. Id. at 2-3 (citing Planned Parenthood League v. Bellotti, 641 F.2d 1006, 1009 (1st Cir. 1981)). The cornerstone of his ruling was an analysis of the plaintiffs’ likelihood of success on the merits of their claims, pegged to the Impoundment Control Act (“ICA”). Decision at 3-7 (citing 2 U.S.C. § 683). The ICA requires the President to propose rescission of any specific funding to Congress, and absent approval of the recission within 45 days of its proposal, the funding must flow. Id. at 6 n.3.
Finding no such recission request by the President, Judge McConnell ruled that the President cannot unilaterally withhold funding based on Presidential “prerogative.” Id. at 6-7 (citing then Judge Kavanaugh’s decision In re Aiken Cnty., 725 F.3d 255, 261 n.1 (D.C. Cir. 2013) (“[A] President sometimes has policy reasons (as distinct from constitutional reasons . . . ) for wanting to spend less than the full amount appropriated by Congress for a particular project or program. But in those circumstances, even the President does not have unilateral authority to refuse to spend the funds.”)).
APA precedent appears to fortify Judge McConnell’s analysis. Federal agencies act only with congressional authority. See City of Arlington v. FCC, 569 U.S. 290, 297 (2013). Unilateral actions beyond congressional mandate are illegal ultra vires acts. See Decision at 5-6 (citing City of Providence v. Barr, 954 F.3d 23, 31(1st Cir. 2020)). Judge McConnell stressed Article I’s appropriations power—Congress directs spending, not the executive. Id. at 6. He thus rejected the administration’s “Presidential priorities” justification as “constitutionally flawed,” tying executive duty to congressional will rather than viewing the pause as a valid exercise of the “take care” duty. Id.; see U.S. Const. art. II, § 3.
The threat of irreparable harm was vividly portrayed in the Decision: the states described disrupted highways, childcare, veteran care, and disaster relief (e.g., Hurricane Helene aid in North Carolina). Id. at 7-9. Judge McConnell emphasized disruptions to these perceived liberty interests over the potential monetary harm to the Treasury, echoing Justice Kennedy’s concurrence in Clinton v. City of New York, 524 U.S. 417, 449-50 (1998). Id. at 9 (“Liberty is always at stake when one or more of the branches seek to transgress the separation of powers”). In the court’s view, the equities favored the states—disbursing obligated funds burdened the executive less than leaving states scrambling after 24 hours’ notice of the OMB directive. Id. at 9-10. According to Judge McConnell, the public interest required uninterrupted services. Id. A mootness defense—that OMB had effectively rescinded the directive—failed; White House and agency actions showed that the pause persisted. Id. at 10-11.
B. Strengths and Vulnerabilities
Although not cited in his Decision, Judge McConnell’s analysis arguably gains some traction from the Supreme Court’s decision in Train v. City of New York, 420 U.S. 35 (1975) where President Nixon’s directions to defer certain appropriated funds under the Federal Water Pollution Control Act were held invalid. Id. at 47 (“The . . . letter of the President and the Administrator’s consequent withholding of authorized funds cannot be squared with the statute”). Judge McConnell’s separation-of-powers analysis presents a certain logic: Article I vests appropriations in Congress, and the ICA affords the President some discretion in reviewing congressional appropriations while imposing procedural restraints on the impoundment of spending. See 2 U.S.C. § 683. The judge’s harm and equity findings rest on measurable effects—billions in grants stalled. Decision at 7-9.
Yet cracks emerge. Judge McConnell’s “worst-case scenario” assumption—due to the pause’s “breadth and ambiguity”—allowed him to deflect executive claims of waste, fraud, and abuse in the scheduled payments. Id.at 4 (“The Court must act in these early stages of the litigation under the ‘worst case scenario’ because the breadth and ambiguity of the Executive’s action makes it impossible to do otherwise”). Press reports, such as those emerging in early 2025, suggest initial audits tied to the administration’s Department of Government Efficiency (“DOGE”) have uncovered severe misuse and possible fraud in government expenditures. If credible, rooting out waste, fraud, and abuse fits neatly within the President’s constitutional “take care” duties, which extends well beyond the court’s recited Presidential policy priorities. See U.S. Const. art. II, § 3.
Forcing the payments thus risks funding fraud, a public interest harm that Judge McConnell sidesteps. Decision at 9-10. In this context, the TRO’s scope—compelling countless unaudited payments to the states—creates a pragmatic conundrum: the executive can’t seek ICA rescission without first auditing the payments, yet the executive must disburse the funds now, complicating later recovery. Id. at 11-12. The court’s dismissal of the administration’s asserted “Presidential priorities” as irrelevant presupposes executive bad faith or arbitrary conduct rather than judicial deference to legitimate stewardship pursuant to constitutional duty. Id. at 6.
IV. Loper’s Unintended Legacy: Judicial Overreach in the Executive Sphere
A. The Post-Loper Shift
Loper aimed to curb agency overreach into judicial power, not executive power writ large. See Loper, 144 S. Ct. at 2273. Chevron deference applied to statutory gaps in clarity, not operational executive actions like funding pauses. See Chevron, 467 U.S. at 842-43. Yet Judge McConnell’s TRO is suggestive of a judiciary emboldened beyond statutory interpretation into real-time command of executive authority. By ordering immediate payments to the states while effectively barring executive review of those obligations, the court engages in executive function, not just judicial review. Decision at 11-12. If the pause earnestly sought to curb waste, fraud, and abuse—a plausible Article II role of the executive—Judge McConnell’s “worst-case” leap then presumed arbitrariness, at best, or illegality, at worst, rather than lawful executive discretion in furtherance of constitutional “take care” duties. Id. at 4-6.
This reflects an unintended consequence of Loper: courts, freed from deference, may reflexively override reasonable executive discretion, even in operational gray zones where the executive is better suited to “take care” than a court relying on selective evidence presented by the administration’s adversaries. Before 2024, courts following Chevron might have deferred to agency audit procedures in view of ambiguities in the lawfulness of congressional appropriations. Post-Loper, they needn’t—and Judge McConnell arguably brushed aside evidence of fraud, waste, and abuse to mandate immediate executive action. If audits show misuse (e.g., inflated grants), forcing payments could violate the executive’s duty to execute laws faithfully. See U.S. Const. art. II, § 3. Judge McConnell’s abruptness in issuing a TRO—rushing disbursement—hints at Loper’s dark side: courts oversteering into Article II terrain.
B. The Case for Restraint—and a Missed Opportunity
This case presents a compelling question—should judicial deference persist when the executive acts reasonably within its constitutional sphere? Not Chevron’s statutory interpretation kind of deference, but a practical buffer recognizing legitimate Article II functions—like establishing a finite pause of spending to enable review of possible waste, fraud, and abuse. Given recent revelations of misused government funds, Judge McConnell’s haste in prioritizing strict compliance with the ICA risks fraudulent disbursement of taxpayer funds over alleged and yet unproven state harm.
Some judicial deference might have prioritized reasonable executive prudence over reflexively equating an investigative pause with unlawful impoundment. Loper’s majority thus might view this as overreach and seize the opportunity to clarify that ending Chevron did not unleash judicial dominion over the Executive Branch. See Loper, 144 S. Ct. at 2288, Gorsuch, J., concurring (“To be sure, this Court has also long extended ‘great respect’ to the ‘contemporaneous’ and consistent views of the coordinate branches about the meaning of a statute's terms”).
Judge McConnell had, but missed, an opportunity to defer to the Executive Branch while guarding against the court’s perceived harms: narrow the TRO to “essential” programs—such as disaster relief, childcare, and veteran care—rather than requiring all state payments to proceed unchecked. See Decision at 8-9. The states’ broad request—demanding all payments, from transportation to research funding—invited a blunt order. But the court could have pushed plaintiffs to prioritize. Such an approach would balance immediate needs (e.g., hurricane relief) against executive review of other non-essential funding (e.g., planning grants), while providing some deference to legitimate Article II stewardship. By opting for all-or-nothing, Judge McConnell missed an opportunity to temper Loper’s edge, while addressing immediate potential harms.
This isn’t idle theory. A narrower TRO could have allowed the executive to substantially finish its audits, seek ICA rescission for suspect funds, and avoid irreversible payouts. Instead, the TRO forces immediate executive action, potentially funding fraud while hobbling later correction—a practical flaw in the exercise of judicial review incidental to Loper’s ending of Chevron deference.
V. Conclusion
Unrestrained, Loper could spawn more TROs like this—swift, broad, and dismissive of reasonable executive action. President Trump’s agenda, ripe for legal clashes, will likely accelerate these confrontations between the branches of government. Courts must wield Loper with care, respecting Article II unless illegality or arbitrariness is unequivocal. Here, a tailored TRO—essential funds only—shows how. Without it, judicial dominion threatens to supplant legitimate and reasonable exercises of Article II power, echoing Chevron’s tilt in reverse.
The First Circuit, or Supreme Court, could recalibrate this, ensuring Loper restores balance instead of swapping one imbalance for another. In view of Loper, restraint—if not deference—is vital to preserve separation of powers. In this instance, narrowing relief to essential disbursements might have accommodated those concerns. As courts navigate this post-Chevron world, they must temper their newfound power with restraint and deference—not to agency gloss on ambiguous laws, but to constitutional boundaries—lest the pendulum swing too far.
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