First Circuit Affirms APA Reviewability of Mass Agency RIFs and Rejects CSRA Jurisdictional Bar

Introduction

In State of New York v. McMahon, decided June 4, 2025, the United States Court of Appeals for the First Circuit addressed a challenge to a dramatic reduction‐in‐force (“RIF”) at the U.S. Department of Education and related presidential directives to transfer core Department functions elsewhere. Twenty‐one states, followed by five labor organizations and two local school districts, sued Secretary Linda McMahon, President Donald Trump, and the Department of Education in the District of Massachusetts. The plaintiffs sought a preliminary injunction, arguing that the RIF and function‐transfer directives were unconstitutional, ultra vires under the Department’s enabling statute, and arbitrary and capricious in violation of the Administrative Procedure Act (APA). The district court granted the injunction, ordering reinstatement of terminated employees and barring further moves to dismantle the Department. The First Circuit today refused to stay that injunction.

Summary of the Judgment

Chief Judge Barron, writing for a unanimous panel, denied the government’s request for a stay of the district court’s preliminary injunction. Key holdings include:

• The plaintiffs have Article III standing to challenge the RIF and transfer directives because evidence showed the actions already disabled the Department’s ability to perform statutorily mandated functions.
• The APA provides district‐court review of large‐scale RIFs that effectively shut down an agency; the district court did not lack jurisdiction under the Civil Service Reform Act (CSRA) nor under the APA’s “discrete agency action” requirement.
• The RIF and presidential directives were likely ultra vires and arbitrary and capricious because they dismantled entire offices and programs without reasoned explanation, in violation of 5 U.S.C. § 706(2)(A) and the Department’s statutory charter (20 U.S.C. §§ 3401–3510).
• A stay of the injunction would inflict substantial and irreparable harm on the plaintiffs and the public interest by continuing to disable a cabinet‐level department from fulfilling its congressional mandate.

Analysis

Precedents Cited

• Clapper v. Amnesty International USA, 568 U.S. 398 (2013) – standing requires injury that is “certainly impending”; the First Circuit approved the district court’s factual findings showing imminent harm.
• Nken v. Holder, 556 U.S. 418 (2009) – set forth the four‐factor test for stays pending appeal: likelihood of success, irreparable harm, injury to others, and public interest.
• Thunder Basin Coal Co. v. Reich, 510 U.S. 200 (1994) – doctrine of exclusive review under comprehensive statutory schemes; the panel held that CSRA did not preclude district‐court APA review of a mass RIF that dismantles an agency.
• Norton v. Southern Utah Wilderness All., 542 U.S. 55 (2004) – judicial review under APA is proper where agency action is a “discrete agency action”; the court found a RIF can qualify.
• Departamento de Educación v. California, 145 S. Ct. 966 (2025) – irreparable financial injury may justify a stay if the government could not recoup payments; the First Circuit distinguished it on the record showing harms that cannot be later remedied.

Legal Reasoning

The panel applied the Nken four‐factor test to the government’s stay motion:

1. Likelihood of success on the merits:
   • The government failed to show clear error in the district court’s extensive factfinding that the RIF had already made it “effectively impossible” for the Department to fulfill statutory functions.
   • The APA claim was properly before the district court; the CSRA did not provide an exclusive remedy where an agency is being dismantled rather than simply adjudicating individual personnel disputes.
   • The government did not identify any historical bar to equitable reinstatement as a remedy for unlawful agency deconstruction.
2. Irreparable harm:
   • Disabling a cabinet department from carrying out its congressionally assigned duties inflicts irreparable injury on third-party beneficiaries (states, school districts, workers, students).
   • Potential financial outlay to continue paying reinstated employees does not outweigh harm to the public interest in an operational Department.
3. Injury to other parties:
   • Staying the injunction would prolong the RIF’s disabling effects on plaintiffs who rely on Title I grants, student loans, special education services, and research data.
   • These injuries cannot be remedied later by monetary damages or back‐pay because programs may collapse or employees disperse.
4. Public interest:
   • No public benefit arises from permitting an executive strategy to dismantle a department that Congress created and funded.
   • The public interest favors upholding the rule of law, preserving separation of powers, and ensuring that federal agencies can fulfill their statutory missions.

Impact

This decision reinforces several key principles:

• Large‐scale RIFs that cripple an agency’s ability to perform core functions are “agency action” reviewable in federal district court under the APA.
• The CSRA does not preclude APA or constitutional challenges to executive actions that effectively shut down an entire department.
• Courts will scrutinize mass terminations lacking reasoned explanation and regard them as arbitrary and capricious if they dismantle statutory programs without proper process.
• The separation of powers bars the Executive from unilaterally nullifying a cabinet department’s existence or mission through personnel decisions alone.

Complex Concepts Simplified

Administrative Procedure Act (APA)

A federal statute that authorizes judicial review of “agency action” unless explicitly precluded. Affected persons can challenge actions as “arbitrary, capricious, or contrary to law.”

Civil Service Reform Act (CSRA)

A statutory scheme governing federal employment disputes. It provides special procedures for reviewing individual personnel actions, but does not necessarily oust district‐court review of broader executive decisions that dismantle an agency.

Ultra Vires

Latin for “beyond the powers.” An act is ultra vires if it exceeds the authority granted by statute or constitution.

Reduction‐in‐Force (RIF)

A downsizing measure that eliminates positions and terminates employment. Here, nearly half of the Department of Education’s workforce was targeted.

Preliminary Injunction

A temporary court order issued at the outset of litigation to prevent irreparable harm until the merits can be decided.

Conclusion

State of New York v. McMahon establishes that federal courts may enjoin executive efforts to dismantle statutorily created agencies by mass RIFs and that such actions are subject to APA review and must be supported by reasoned explanations. The decision underscores the judiciary’s role in enforcing Congress’s structural and statutory mandates, preserving the rule of law, and protecting third‐party interests when core government services are imperiled. Going forward, executive branch departments must justify any large‐scale personnel cuts that threaten to disable their congressionally mandated functions or face expedited judicial scrutiny.