Supreme Court Rules on Trump Administration’s Payment to USAID Contractors
The Supreme Court recently made a significant ruling in a case involving the Trump administration and contractors for the U.S. Agency for International Development (USAID). In a 5-4 decision, the court upheld the authority of a federal judge to require the administration to pay $2 billion to contractors, though it did not mandate immediate payment. The ruling came after the Justice Department filed an emergency application to block an order by U.S. District Judge Amir Ali, who had demanded the government unfreeze funds that President Donald Trump placed on hold through an executive order. The court’s decision effectively delayed action on the case for a week, during which time the contractors remained unpaid.
The Supreme Court’s unsigned order acknowledged that the deadline for immediate payment set by Judge Ali had already passed, and the case is now proceeding in the district court, with additional rulings expected. The court instructed Ali to clarify what obligations the government must meet to comply with a temporary restraining order issued on February 13. The order also suggested that Ali consider the feasibility of any compliance deadlines. A hearing on the matter is scheduled for Thursday.
Dissent from Conservative Justices
Four conservative justices dissented from the denial of the Justice Department’s application, with Justice Samuel Alito writing a strong dissent. Alito expressed concern that Judge Ali was exercising "unchecked power to compel the government to pay out … $2 billion taxpayer dollars." He added, "I am stunned," reflecting his dismay at the court’s decision not to intervene. Joining Alito in the dissent were Justices Clarence Thomas, Neil Gorsuch, and Brett Kavanaugh. The government had argued that it was unable to comply with Ali’s order, which required payment by last Wednesday night.
The projects affected by the payment freeze include critical foreign aid initiatives, such as the installation of irrigation and water pumping stations in Ukraine, waterworks upgrades in Lagos, Nigeria, the supply of medical equipment in Vietnam and Nepal, and measures to combat malaria in Kenya, Uganda, Ghana, and Ethiopia. These programs are now at risk due to the lack of funding, with contractors unable to continue their work or pay their employees.
Trump Administration’s Review of USAID Spending
The Trump administration has been actively reviewing USAID’s spending, with the goal of downsizing the federal government. This effort has included cutting thousands of programs, worth up to $60 billion, as part of a broader strategy to reduce the agency’s activity. While these cuts are set to be challenged in court, they were not directly at issue in the Supreme Court’s decision. Chief Justice John Roberts issued an administrative stay last week, temporarily halting Judge Ali’s ruling while the Supreme Court considered the case.
The underlying lawsuit was filed by nonprofits and businesses that receive USAID funding to provide foreign aid services. Unions representing USAID workers also filed their own lawsuit. Contractors allege that the government’s abrupt actions have left them without payment for work already completed, violating the Administrative Procedure Act. Judge Ali had initially blocked part of a Trump executive order requiring a re-evaluation of foreign aid, ruling that the order could not be used to terminate funding across the board. However, officials were still allowed to conduct case-by-case reviews.
Two weeks later, Ali ordered the government to make immediate payments for certain completed contracts, prompting the administration to appeal. Acting Solicitor General Sarah Harris argued that while the government is committed to paying legitimate claims for completed work, Judge Ali did not have the authority to order specific payments. Plaintiffs, however, emphasize the urgency of the situation, noting that contractors are being forced to lay off employees and face legal consequences for unpaid bills. One organization reportedly laid off 110 workers last week, while another faces legal exposure for failing to pay severance. Contractors in foreign countries, including Ukraine, Georgia, and Nigeria, are also at risk due to unpaid bills, which could jeopardize their safety.
In their filing with the Supreme Court, lawyers for the contractors argued that the court had no jurisdiction to intervene at such an early stage in the litigation. They also accused the Trump administration of "openly flouting" Judge Ali’s temporary restraining order for nearly two weeks. The case highlights the ongoing legal battles over the Trump administration’s efforts to reshape the federal government and its international aid programs. As the case proceeds, the Supreme Court’s decision to allow the district court to continue its review ensures that the issue will remain a contentious and high-stakes legal showdown.
