Appropriations Changes Do Not Reopen Unappealed Preliminary Injunctions: Dissolution Requires a Significant Intervening Change in Law or Fact

1. Introduction

State of Washington v. U.S. Department of Housing and Urban Development (1st Cir. Apr. 1, 2026) arises from a high-stakes dispute over the federal Continuum of Care (CoC) program, a central funding mechanism Congress created (and HUD administers) to support housing and services for people experiencing homelessness.

Two plaintiff coalitions sued HUD after it attempted a sudden shift in CoC administration through late-2025 Notices of Funding Opportunity (NOFOs) that, according to the plaintiffs, departed from the longstanding “Housing First” model and created severe risk of funding gaps and mass program disruption during winter months. The district court issued preliminary injunctions restoring the prior status quo and barring HUD from implementing the rescission/replacement scheme.

Crucially, HUD did not appeal the preliminary injunctions. Instead, after Congress enacted a 2026 appropriations statute (THUD), HUD moved to dissolve the injunctions, arguing THUD constituted a material change in law and eliminated irreparable harm. The district court denied dissolution. HUD appealed that denial and sought an emergency stay pending appeal.

The First Circuit framed the decisive issue narrowly: whether HUD made a strong showing that the district court abused its discretion by failing to treat THUD as a significant intervening change warranting dissolution—and thus whether HUD was entitled to the “extraordinary remedy” of a stay.

2. Summary of the Opinion

The First Circuit denied HUD’s motion for a stay pending appeal. It held that HUD failed to make the required “strong showing” of likelihood of success on the merits because:

  • The appeal’s scope was limited to whether THUD was a significant intervening change justifying dissolution; HUD could not use the dissolution appeal to attack the unappealed preliminary injunctions.
  • HUD’s argument that the district court inadequately analyzed the December NOFO was not based on “new material” and was also waived because HUD did not raise it in the dissolution motion.
  • THUD did not clearly authorize HUD’s late-issued, disruptive 2025 NOFO approach; and HUD did not show THUD undermined the district court’s independent APA grounds (arbitrary-and-capricious change, reliance interests, notice-and-comment problems, substantive statutory conflicts).
  • Even if THUD reduced some near-term gap risk, the record supported ongoing irreparable harm from accelerated upheaval and resource diversion if the December NOFO were implemented.

The court also rejected HUD’s claimed irreparable harm from being enjoined, emphasizing that an agency is not irreparably harmed by being barred from likely unlawful action.

3. Analysis

3.1. Precedents Cited

A. Standards for stays pending appeal (and the “extraordinary remedy” framing)

  • Nken v. Holder, 556 U.S. 418 (2009): The controlling framework. The court applied Nken’s four factors and emphasized that the first two—(1) likelihood of success and (2) irreparable injury—are “most critical,” and that a stay is not a matter of right but an “intrusion” into ordinary processes. This set the opinion’s demanding posture toward HUD’s emergency request.
  • Hilton v. Braunskill, 481 U.S. 770 (1987): Cited through Nken as part of the stay-factor lineage, reinforcing the traditional equitable balancing.
  • Trump v. Int'l Refugee Assistance Project, 582 U.S. 571 (2017), and Barnes v. E-Systems, Inc. Grp. Hosp. Med. & Surgical Ins. Plan, 501 U.S. 1301 (1991) (Scalia, J., in chambers): Used to confirm that courts weigh harms to both parties and “the interests of the public at large,” supporting the panel’s attention to impacts on homeless individuals and service systems.
  • New Jersey v. Trump, 131 F.4th 27 (1st Cir. 2025): Reinforced that “public interest” extends beyond the litigants, a key point in a case involving widespread reliance on federal homeless-assistance funding.

B. Limits on the scope of appeals from denial of dissolution/modification

  • Karnoski v. Trump, 926 F.3d 1180 (9th Cir. 2019), and Gon v. First State Ins. Co., 871 F.2d 863 (9th Cir. 1989): The court adopted the principle that a party cannot “smuggle” an appeal of an unappealed injunction by later appealing denial of dissolution. This doctrine prevented HUD from relitigating the December 23 preliminary injunction merits indirectly.
  • Hoult v. Hoult, 373 F.3d 47 (1st Cir. 2004), and 16 Wright & Miller's Federal Practice & Procedure § 3924.2 (3d ed. 2025): First Circuit authority and treatise support that the “propriety of the original order” is beyond review on an appeal from a later modification decision, protecting finality and appellate deadlines.

C. Dissolution standards: “significant change in facts or law” and “new material”

  • Concilio de Salud Integral de Loiza, Inc. v. Pérez-Perdomo, 551 F.3d 10 (1st Cir. 2008), and Sprint Commc'ns Co. v. CAT Commc'ns Int'l, Inc., 335 F.3d 235 (3d Cir. 2003): Used to define the movant’s burden on dissolution—showing intervening changes that warrant discontinuation.
  • Sharp v. Weston, 233 F.3d 1166 (9th Cir. 2000): Quoted for focusing review on “new material” presented after the original injunction.
  • Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 15 F.3d 1222 (1st Cir. 1994): Confirmed that dissolution analysis revisits the preliminary-injunction factors in light of genuinely new evidence.

D. Waiver and issue preservation

  • Cámara de Mercadeo, Industria y Distribución de Alimentos, Inc. v. Emanuelli-Hernández, 72 F.4th 361 (1st Cir. 2023): Emphasized that arguments not raised below cannot be debuted on appeal—supporting the finding that HUD waived its “insufficient analysis of December NOFO” attack.
  • Am. Hosp. Ass'n v. Kennedy, 164 F.4th 28 (1st Cir. 2026): Cited to reject HUD’s new theory that merely “inviting applications” would not harm plaintiffs, because HUD did not properly raise/develop it below.

E. Statutory interpretation methodology

  • Teles de Menezes v. Rubio, 156 F.4th 1 (1st Cir. 2025), and City of Providence v. Barr, 954 F.3d 23 (1st Cir. 2020): Provided the interpretive approach: start with text, plain meaning, structure, and congressional intent—used to reject HUD’s reading of THUD as retroactively authorizing a late “new” FY 2025 NOFO.

F. Status quo and irreparable harm principles

  • Francisco Sánchez v. Esso Standard Oil Co., 572 F.3d 1 (1st Cir. 2009): Used to underscore that preliminary injunctions preserve the status quo pending merits resolution—important given the panel’s concern about destabilizing funding systems mid-litigation.
  • Doe v. Trump, 157 F.4th 36 (1st Cir. 2025): Central to rejecting HUD’s “irreparable harm” claim; it supports the proposition that government is not irreparably harmed by being enjoined from enforcing likely unlawful action.
  • R.I. State Council of Churches v. Rollins, 158 F.4th 304 (1st Cir. 2025), and Akebia Therapeutics, Inc. v. Azar, 976 F.3d 86 (1st Cir. 2020): Cited for the practical consequence that failure on likelihood-of-success largely dooms a stay request, and for evaluation of harms.

G. Distinguishing purely economic harms from structural/community harms

  • Charlesbank Equity Fund II v. Blinds To Go, Inc., 370 F.3d 151 (1st Cir. 2004): HUD invoked this to argue harms were not independent; the panel distinguished it as a contract/damages context, contrasting it with non-compensable disruption to housing stability and service ecosystems.

H. HUD’s citation to high-level separation-of-powers harm

  • Trump v. CASA, Inc., 606 U.S. 831 (2025): HUD relied on this to argue it is irreparably harmed when blocked from effectuating enacted statutes. The panel found the premise missing because HUD could effectuate THUD via the existing 24-25 NOFO and because being barred from likely unlawful conduct is not irreparable harm.

3.2. Legal Reasoning

A. The opinion’s core procedural rule: dissolution appeals cannot resurrect an expired appeal

The most consequential move in the opinion is jurisdictional/prudential: it polices the boundary between (1) an appeal from an injunction and (2) an appeal from denial of a later motion to dissolve that injunction. By invoking Karnoski v. Trump, Gon v. First State Ins. Co., and Hoult v. Hoult, the court reaffirmed that:

  • A party that declines to appeal an injunction cannot later use dissolution proceedings as a backdoor to re-litigate the injunction’s original merits.
  • Review is confined to whether the district court abused its discretion given genuinely new law or facts.

This framing is not merely technical. It preserves the integrity of appellate deadlines and prevents strategic sequencing: comply with an injunction while the appeal period runs, then attempt a reset through a dissolution motion.

B. Waiver as an independent barrier

Even if the scope limitation did not apply, the panel held HUD’s “the district court didn’t analyze the December NOFO” argument was waived because it was not presented in the motion to dissolve. This reinforces a practical litigation lesson: a dissolution motion must squarely present the asserted defect as part of the “changed circumstances” theory, not as an after-the-fact appellate repackaging.

C. Why THUD was not the “significant change” HUD claimed

HUD’s dissolution theory depended on THUD being a “game changer” in two ways: (1) it purportedly authorized/validated HUD’s ability to proceed with a FY 2025 NOFO issued long after the MVA’s timeline, and (2) it supposedly eliminated irreparable harm by ensuring renewals.

The panel rejected the first through close textualism and structural reading:

  • THUD’s text did not say “new” FY 2025 NOFO. Section 244 referenced awards under “a fiscal year 2025 notice of funding opportunity” but did not amend the MVA’s deadline or retroactively authorize a late-issued replacement.
  • The 24-25 NOFO plausibly already is the FY 2025 NOFO. The panel emphasized its title (“FY 2024 and FY 2025 Continuum of Care Competition”) and its design to govern 2025 funding contingent on appropriations.
  • THUD’s structure suggested continuity, not disruption. Section 244’s renewal scheme and direction to keep projects operating at “substantially the same levels” aligns with anti-gap continuity.
  • THUD’s 2026 Tier 1 floor (≥60%) cuts against HUD’s 30% cap. While formally about 2026, the panel treated this as a contextual signal that Congress was not endorsing the December NOFO’s direction.

The panel rejected the second (irreparable harm eliminated) through a record-based, operational understanding of homelessness services:

  • Even temporary “certainty” for a few months does not eliminate harm from immediate operational decisions (leases, staffing, referrals, admissions) that depend on forward funding expectations.
  • Implementing a new NOFO process would impose immediate burdens and destabilization, including the diversion of scarce administrative capacity—especially given THUD’s requirement to issue a separate 2026 NOFO by June 1, 2026.

D. Independent APA grounds remained untouched

The panel further reasoned that even if THUD arguably affected one sub-issue (timeliness under the MVA), HUD failed to show how THUD undermined the district court’s other independent APA holdings—particularly the “arbitrary and capricious” problems (policy reversal without adequate explanation; failure to consider reliance interests; new conditions without required notice and comment) and other substantive conflicts the district court identified with the MVA. As a result, THUD could not carry HUD’s burden to show the injunction’s foundation had materially collapsed.

E. Nken factors: failure on likelihood-of-success largely ends the inquiry

Applying Nken v. Holder, the panel held HUD did not make the necessary “strong showing” on likelihood of success, which “doomed” the stay request. Still, it addressed the remaining factors and concluded:

  • HUD’s irreparable harm theory failed because HUD could still award funds under the 24-25 NOFO and because an injunction against likely unlawful conduct is not cognizable irreparable harm (Doe v. Trump).
  • Harm to plaintiffs and the public would be substantial: program closures, staff layoffs, cessation of referrals, and risk of people losing housing—harms not readily remedied after final judgment.

3.3. Impact

A. Litigation strategy and appellate procedure

The decision reinforces a hard procedural boundary: if an agency (or any litigant) does not timely appeal a preliminary injunction, it cannot later leverage a motion to dissolve—and an appeal from its denial—to reopen the underlying injunction’s merits. This encourages prompt appellate review and discourages strategic delay.

B. Appropriations statutes as “changed law” for dissolution

The ruling signals that a later appropriations act will not automatically qualify as the kind of “significant change in law” that warrants dissolution unless it clearly alters the governing legal framework or directly moots the injunction’s operative harms. A statute aimed at continuity (avoiding funding gaps) may, in context, support preserving injunctive status quo rather than dismantling it.

C. Administrative governance of homelessness programs

Substantively (even though the merits were not fully before the panel), the opinion’s equitable analysis reflects judicial sensitivity to the operational reality of homelessness systems: compressed, uncertain funding rules can cause immediate downstream harms (referrals halted, admissions frozen, staffing and leases destabilized) even before funds actually lapse.

D. Public interest framing in structural social programs

By invoking New Jersey v. Trump and the public-interest component of Nken, the court reaffirms that in programmatic litigation, “public interest” includes the lived consequences for beneficiaries—not just governmental administrative preferences.

4. Complex Concepts Simplified

  • NOFO (Notice of Funding Opportunity): The government’s formal announcement explaining how to apply for grants, what criteria will be used, and when decisions will be made.
  • TRO vs. Preliminary Injunction: A TRO is short-term emergency relief; a preliminary injunction is longer-lasting interim relief meant to preserve the status quo until final judgment.
  • Voluntary cessation (mootness doctrine): A defendant cannot automatically moot a case by stopping challenged conduct if it can easily resume it later.
  • APA “arbitrary and capricious” review: Courts can set aside agency actions that lack reasoned explanation, ignore important aspects of the problem, or fail to account for serious reliance interests.
  • Notice and comment: Many agency policy changes must be proposed publicly with an opportunity for public input before adoption.
  • Stay pending appeal: A request to pause the effect of a court order while an appeal is considered; it is exceptional relief governed by the four-factor test in Nken v. Holder.
  • Motion to dissolve an injunction: A request to end an existing injunction because circumstances have materially changed; it is not an opportunity to relitigate issues that could have been raised on direct appeal.
  • Waiver: If a party does not raise an argument at the proper time in the lower court, it generally cannot raise it for the first time on appeal.

5. Conclusion

The First Circuit’s decision is a procedural and equitable roadmap for injunction practice in large-scale administrative litigation. Its central rule is that an appeal from denial of dissolution is confined to genuinely “new material” and cannot be used to revive an unappealed injunction challenge. On the merits of the stay request, the court held HUD failed to show that THUD was a sufficient intervening change in law or fact to make the district court’s refusal to dissolve an abuse of discretion, and failed to justify the extraordinary remedy of a stay under Nken v. Holder.

Beyond procedure, the opinion underscores how courts assess “irreparable harm” and “public interest” where federal funding rules intersect with essential housing stability: disruption can be immediate, system-wide, and not later repairable—supporting injunctive preservation of the status quo while legality is adjudicated.