The administration’s efforts to effectively dismantle the foreign aid agency led contractors to file suit claiming they’re owed money.
WASHINGTON — The Supreme Court on Wednesday backed a federal judge’s power to order the Trump administration to pay $2 billion to U.S. Agency for International Development contractors but did not require immediate payment.
In doing so, the court on a 5-4 vote rejected an emergency application filed by the Justice Department after U.S. District Judge Amir Ali issued a series of rulings demanding the government unfreeze funds that President Donald Trump put on hold with an executive order.
The court delayed acting on the case for a week. In the meantime, the contractors have not been paid.
In an unsigned order, the court said that Ali’s deadline for the immediate payment had now passed and the case is already proceeding in the district court, with more rulings to come.
As such, Ali “should clarify what obligations the government must fulfill” in order to comply with a temporary retraining order issued Feb. 13, the court said. Ali should consider “the feasibility of any compliance deadlines,” the court added.
Ali had already scheduled a hearing for Thursday, and after the Supreme Court order, he also asked the government to file a status report on how it will comply with his earlier order.
Four conservative justices dissented from the denial of the application, with Justice Samuel Alito writing that Ali did not have “unchecked power to compel the government to pay out … 2 billion taxpayer dollars.”
“I am stunned,” Alito added.
The other dissenters were Justices Clarence Thomas, Neil Gorsuch and Brett Kavanaugh.
The government had said it was unable to comply with Ali’s order earlier this week that the $2 billion in payments be made by last Wednesday night.
Specific projects affected by the payment freeze include the installation of new 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.
In the meantime, the administration has worked frantically to review all of USAID’s existing spending. It recently concluded that assessment, confirming a decision to cut thousands of programs — the bulk of the agency’s activity — worth up to $60 billion.
Those actions are also set to be challenged, but were not at issue at the Supreme Court.
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Chief Justice John Roberts issued an administrative stay last week, putting the lower court judge’s ruling on hold while the Supreme Court decided the next steps.
The underlying lawsuit was brought by nonprofits and businesses that receive USAID funding to provide foreign aid services. Unions representing USAID workers filed their own lawsuit.
Upon taking office, Trump and his ally Elon Musk have taken aggressive actions to downsize the federal government, with USAID one of the major targets. Last Thursday, USAID staff who lost their jobs were clearing out their desks at the Washington, D.C., office while supporters gathered outside.
But in acting so abruptly, the government left contractors out of pocket for work already completed, the contractors alleged. Among other things, they said in their lawsuit that the government had failed to follow the correct course under a law called the Administrative Procedure Act.
Ali originally issued his temporary restraining order that blocked part of a Trump executive order requiring a re-evaluation of foreign aid. The judge ruled that the executive order could not be relied upon as a reason to terminate foreign aid funding across the board, although that did not prevent officials from carrying out a case-by-case review.
Two weeks later, Ali issued a new order saying the government needed to make immediate payments for certain completed contracts, prompting the administration to appeal.
Acting Solicitor General Sarah Harris told the Supreme Court in the government’s filing that while “the government is committed to paying legitimate claims for work that was properly completed,” Ali did not have the authority to order that specific payments be made.
Plaintiffs have said it is urgent that the payments be made, with contractors being forced to lay people off and those working in foreign countries, including Ukraine, Georgia and Nigeria, potentially fearing for their safety because of unpaid bills.
In their filing at the Supreme Court, lawyers for the contractors said one organization laid off 110 workers last week as a result of the nonpayment while another faces legal exposure for failing to pay severance.
The lawyers said the Supreme Court had no jurisdiction to get involved at such an early stage in the litigation. They also argued that the Trump administration has for almost two weeks “openly flouted” the temporary restraining order issued by Ali.
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