Precedent: A Motion to Dissolve Cannot Backdoor an Untimely Appeal; Dissolution Requires a Significant Intervening Change in Law or Fact (CoC/THUD)

I. Introduction

In National Alliance to End Homelessness v. US Department of Housing and Urban Development, the First Circuit addressed emergency stay requests arising from challenges to HUD’s administration of the federal Continuum of Care (CoC) program under the McKinney-Vento Homeless Assistance Act (MVA). The plaintiffs—(1) a multi-state coalition plus the District of Columbia, and (2) local governments and nonprofit homeless-service providers—alleged that HUD’s late-2025 changes to CoC funding conditions and timelines violated the Administrative Procedure Act (APA) and related legal constraints.

The district court entered preliminary injunctions restoring the “status quo ante” by preventing HUD from rescinding the earlier “24-25 NOFO” framework and by barring HUD from giving effect to later actions replacing it. HUD did not appeal those preliminary injunctions. After Congress enacted the 2026 appropriations law for HUD (THUD), HUD moved to dissolve the injunctions, arguing that THUD eliminated irreparable harm and supported its legal authority. The district court denied dissolution. HUD then appealed that denial and sought an emergency stay pending appeal.

The First Circuit emphasized the narrow procedural posture: the appeal concerned only whether the district court abused its discretion in refusing to dissolve existing preliminary injunctions based on intervening change—not whether the original injunctions were correct.

II. Summary of the Opinion

The First Circuit (Rikelman, J.) denied HUD’s motion for a stay pending appeal. Applying Nken v. Holder, the court held HUD failed to make the required “strong showing” of likely success on the merits because it did not demonstrate the district court abused its discretion in concluding that THUD was not a significant enough change to warrant dissolving the injunctions.

Key holdings included:

  • Scope limitation: HUD could not use an appeal from the denial of dissolution to relitigate defects in the underlying preliminary injunction orders it chose not to appeal.
  • Change-in-circumstances requirement: Dissolution requires a significant intervening change in law or fact; HUD’s reliance on THUD did not compel dissolution.
  • THUD interpretation: THUD did not clearly authorize a “new” late 2025 NOFO overriding the MVA’s deadline, and it was plausibly oriented toward preventing funding disruption rather than endorsing HUD’s December NOFO approach.
  • Continuing irreparable harms: Even with THUD’s stopgap renewals, the record supported ongoing imminent harms from operational upheaval, resource diversion, and program instability if HUD could implement the December NOFO while merits litigation continued.

III. Analysis

A. Precedents Cited

1) Stays pending appeal and the governing equitable test

  • Nken v. Holder: The court anchored its analysis in Nken, underscoring that a stay is an “intrusion” and an “extraordinary remedy,” requiring a four-factor showing, with the first two factors (likely success and irreparable injury) “most critical.” The opinion also used Nken to frame the public-interest inquiry as extending beyond parties to affected populations.
  • Hilton v. Braunskill: Cited through Nken as foundational authority for the stay factors’ articulation.
  • New Jersey v. Trump and Trump v. Int'l Refugee Assistance Project (quoting Barnes v. E-Systems, Inc. Grp. Hosp. Med. & Surgical Ins. Plan): Used to emphasize that courts weigh “interests of the public at large,” here including people affected by homelessness, and assess relative harms broadly.

2) Appellate scope: no “backdoor” appeal of an unappealed injunction

  • Karnoski v. Trump (quoting Gon v. First State Ins. Co.): The central procedural constraint: a party cannot recover an expired opportunity to appeal an injunction by moving to dissolve and then appealing the denial.
  • Hoult v. Hoult: Reinforced that the propriety of the original preliminary injunction is beyond review in an appeal from modification/dissolution; the relevant focus is new circumstances.

3) Standard for dissolving/altering preliminary injunctions: intervening change

  • Concilio de Salud Integral de Loiza, Inc. v. Pérez-Perdomo (quoting Sprint Commc'ns Co. v. CAT Commc'ns Int'l, Inc.): Supplied the First Circuit’s dissolution standard: the movant must show an intervening change in law or fact warranting discontinuation.
  • Sharp v. Weston: Cited via Karnoski for evaluating dissolution appeals “in light of the new material.”
  • Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp.: Confirmed that a district court considering dissolution should assess new evidence’s effect on the preliminary injunction factors.

4) Waiver/forfeiture on appeal and preservation of arguments

  • Cámara de Mercadeo, Industria y Distribución de Alimentos, Inc. v. Emanuelli-Hernández: Supported the rule that arguments debuted on appeal cannot overturn the district court’s decision.
  • Am. Hosp. Ass'n v. Kennedy: Applied to stay practice specifically: failure to raise a point below can waive it on appeal in the stay context.

5) Statutory interpretation methodology

  • Teles de Menezes v. Rubio and City of Providence v. Barr: Provided the interpretive frame: start with statutory text, apply ordinary meaning, read text in structure and surrounding provisions to effectuate congressional intent.

6) Preserving status quo and assessing irreparable harm

  • Francisco Sánchez v. Esso Standard Oil Co.: Used for the proposition that preliminary injunctions preserve the status quo before the merits are resolved.
  • R.I. State Council of Churches v. Rollins (quoting Akebia Therapeutics, Inc. v. Azar): Emphasized that absent likely success, remaining stay elements carry little weight.
  • Trump v. CASA, Inc.: HUD invoked it for the notion that inability to effectuate a statute can be irreparable harm; the court distinguished the premise because HUD could effectuate THUD via the 24-25 NOFO and because the injunction barred likely unlawful action.
  • Doe v. Trump: Cited for a key equitable principle: the government is not irreparably harmed by an order barring likely unlawful conduct.
  • Charlesbank Equity Fund II v. Blinds To Go, Inc.: HUD cited it to downplay harms; the court distinguished it as a damages-adequacy contract case, unlike the non-monetizable and immediate harms associated with homelessness and service disruption.

B. Legal Reasoning

1) The court’s “decisive issue” is procedural and narrow

The opinion’s most consequential move is its disciplined insistence on appellate posture. Because HUD did not appeal the original preliminary injunctions, the First Circuit treated them as fixed for purposes of the stay request. That choice forced the case into a stricter channel: HUD had to show the district court abused its discretion by refusing dissolution in light of THUD’s enactment, i.e., that THUD constituted a “significant change in facts or law.”

2) THUD was not a “game changer” on legality

HUD argued THUD contemplated awards under a “fiscal year 2025” NOFO and implicitly validated its ability to issue a new 2025 NOFO late. The court rejected that reading primarily through text-focused interpretation:

  • HUD already had a “fiscal year 2025” NOFO: the 24-25 NOFO was titled to cover both FY 2024 and FY 2025 and contained separate year-based contingencies and processes. Thus, the injunction did not prevent HUD from acting under a 2025 NOFO at all.
  • Absence of authorizing language: Section 244 refers to awards made under “a fiscal year 2025 notice of funding opportunity,” but does not say “new,” does not amend the MVA, and does not retroactively alter the MVA’s deadline for issuing NOFOs.
  • Structure and purpose: THUD’s renewal scheme was read as continuity-oriented (avoiding funding gaps and maintaining projects at “substantially the same levels”), not as endorsing disruptive selection criteria.
  • Contextual conflict: THUD’s 2026 guidance required a Tier 1 renewal cap “not less than 60 percent,” undermining any inference that Congress blessed HUD’s 30 percent Tier 1 approach in the December NOFO.

Equally important, the court emphasized that—even if THUD affected one deadline-related argument—HUD did not show it undermined the district court’s other APA rationales (e.g., arbitrary-and-capricious departure from policy, reliance interests, notice-and-comment concerns, and other statutory conflicts). Because those rationales independently supported the preliminary injunctions and were not properly reopened in a dissolution appeal, THUD did not compel dissolution.

3) THUD did not eliminate irreparable harm as a matter of record

HUD framed THUD as curing imminent harm by ensuring interim renewals. The court, however, accepted the district court’s factual assessment (supported by declarations) that irreparable harm persisted in forms not solved by temporary renewal mechanics:

  • Operational and planning harms now: providers must decide immediately whether to keep staff, renew leases, accept referrals, and operate programs based on future funding expectations.
  • Destabilization from competition churn: implementing the December NOFO would force resource-diverting competition efforts alongside an imminent 2026 NOFO process required by THUD, compounding administrative burdens and risking service gaps.
  • Non-compensable harms to vulnerable populations: displacement into homelessness and breakdown of service networks cannot be made whole by later merits victory.

4) The remaining Nken equities favored denial

Because HUD failed on likelihood of success, the stay was “doomed” under the circuit’s reading of Nken. Still, the panel addressed the remaining factors:

  • HUD’s claimed irreparable injury: the court found no persuasive showing because (a) HUD could effectuate THUD via the 24-25 NOFO, and (b) an injunction barring likely unlawful action is not irreparable harm to the government.
  • Substantial injury to others and public interest: the record supported immediate and predictable harm to programs and to people facing homelessness if HUD could proceed with the December NOFO.

C. Impact

1) Procedural discipline: dissolution is not an appellate “reset button”

The opinion strengthens a practical procedural rule in high-stakes public-law litigation: if an agency (or other party) elects not to appeal an injunction, it cannot later use a motion to dissolve—and an appeal from its denial—to re-argue the original injunction’s asserted defects. This channels disputes into timely appeals and discourages strategic delay.

2) Appropriations riders and implied authorization arguments

The court’s approach signals skepticism toward reading appropriations provisions as silently rewriting substantive statutory constraints or retroactively waiving deadlines absent clear textual direction. That interpretive posture may influence future cases where agencies claim that appropriations language “ratifies” contested administrative maneuvers.

3) Irreparable harm in homelessness/housing administration cases

The decision treats service continuity, planning stability, and reliance interests as core components of irreparable harm—particularly where vulnerable populations face immediate risk of displacement. This can shape how courts evaluate injunctions in social-services funding disputes, where harm is often operational, cascading, and not easily monetized.

4) Incentives for agencies during litigation

The opinion implicitly discourages agencies from attempting to moot emergency relief through short-term withdrawals while reserving the right to reinstate similar policies, and then relying on later developments to loosen injunctions without addressing the underlying APA concerns.

IV. Complex Concepts Simplified

  • NOFO (Notice of Funding Opportunity): HUD’s document that sets application rules, deadlines, and selection criteria for federal grant funding.
  • TRO vs. preliminary injunction: a TRO is an emergency, short-term order; a preliminary injunction is longer-lasting interim relief designed to preserve the status quo while the case is decided.
  • “Voluntary cessation” mootness doctrine: a case does not become moot just because a defendant temporarily stops challenged conduct, especially if it reserves the right to restart it.
  • Motion to dissolve an injunction: a request to lift an existing injunction because something material changed after it was entered (a new law, new facts, etc.).
  • Stay pending appeal: an order pausing the effect of a lower court’s ruling while an appeal is ongoing. Under Nken v. Holder, it is extraordinary and requires a strong showing.
  • “Abuse of discretion” review: a deferential appellate standard. The appellant must show the district court made a serious error of judgment or relied on improper factors, not merely that the appellate court would have decided differently.
  • Waiver/forfeiture: if a party fails to raise an argument in the district court (or in a timely appeal), appellate courts often will not consider it later.

V. Conclusion

The First Circuit’s decision denies HUD’s requested stay because HUD did not demonstrate a strong likelihood of success in appealing the denial of dissolution. The opinion establishes and reinforces two tightly linked principles: (1) an unappealed preliminary injunction cannot be attacked indirectly through a later dissolution appeal; and (2) dissolution requires a significant intervening change in law or fact, which THUD did not supply on this record and text.

Beyond procedure, the opinion underscores that courts evaluating interim relief in homelessness-program funding disputes will attend to real-world reliance interests and service continuity harms—harms that are immediate, difficult to unwind, and central to the public interest.