Urban Sustainability Directors Network v. United States Department of Agriculture

majority opinion

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

URBAN SUSTAINABILITY DIRECTORS

NETWORK, et al.,

Plaintiffs, Civil Action No. 25-1775 (BAH)

v. Judge Beryl A. Howell

UNITED STATES DEPARTMENT OF

AGRICULTURE, et al.,

Defendants.

MEMORANDUM OPINION

Plaintiffs, twenty-seven nonprofit organizations involved in agriculture and

ecology-related projects and King County, Washington, were granted preliminary injunctive relief

in August 2025 and June 2026, on their challenge, under the Administrative Procedure Act

(“APA”), 5 U.S.C. § 551 et seq., to the termination of their individual grants awarded by the United

States Department of Agriculture (“USDA”) and several component agencies (collectively,

“defendants”), though such relief was denied as to plaintiffs’ broader challenge to “defendants’

alleged broader ‘policy, pattern, and practice of unlawfully terminating’ en masse ‘hundreds of

grants’ due to changes in agency priorities driven by certain executive orders, notwithstanding the

grants’ fulfillment of the purposes set out in authorizing statutes and appropriations acts.” Urb.

Sustainability Dirs. Network v. U.S. Dep’t of Agric. (USDN I), No. 25-cv-1775 (BAH), 2025 WL

2374528, at *1 (D.D.C. Aug. 14, 2025) (quoting First Am. Compl. (“FAC”) ¶¶ 1-3, 11-31, 46-96,

ECF No. 10). Nearly a year after the original preliminary injunction was entered, defendants filed

a partial motion to dismiss the Second Amended Complaint, pursuant to Federal Rule of Civil

Procedure 12(b)(1) and (6). See Defs.’ Mot. to Dismiss Pls.’ Second Am. Compl. in Part & Mem.

in Supp. Thereof (“Defs.’ Mot.”), ECF No. 93; Second Am. Compl. (“SAC”), ECF No. 83.

Since the original preliminary injunction was awarded in August 2025, production of a

complete administrative record has been halting, necessitating judicial intervention in May 2026,

see Urb. Sustainability Dirs. Network v. U.S. Dep’t of Agric. (USDN II), No. 25-cv-1775 (BAH),

2026 WL 1500832 (D.D.C. May 29, 2026), to clarify defendants’ obligation to supplement the

administrative record and comply with plaintiffs’ discovery requests, given defendants’ blanket

denial of the alleged policy and practice claim. A scheduling order was entered to control the

timing of this record supplementation and discovery as to the claims in this case, but even after

grant of defendants’ requests for four extensions of time to accommodate the filing of the Second

Amended Complaint adding additional plaintiffs, defendants have failed to comply with the

amended deadlines set out in the court-ordered schedules. See Min. Orders (dated June 22, July

1, and July 14, 2026, granting defendants’ first four motions for extensions). Most recently,

defendants moved to vacate the scheduling order altogether, with no timeline proffered to complete

supplementation of the administrative record (“AR”) and comply with discovery requests, see

Defs.’ Mot. to Vacate Disc. Scheduling Order (“Defs.’ Mot. to Vacate”), ECF No. 99; see also

Joint Status Rep. at 8, ECF No. 114 (defendants stating: “Defendants cannot currently provide the

date certain that they can complete production of the AR and responses to Plaintiffs’ discovery

requests.”), to which plaintiffs have responded by cross-moving for sanctions and additional

discovery, see Pls.’ Mot. for Sanctions & Additional Disc. (“Pls.’ Mot.”), ECF No. 101.

For the reasons explained below, defendants’ motion to dismiss is granted in part and

denied in part, and defendants’ motion to vacate the scheduling order, leaving no scheduling order

in place, and plaintiffs’ motion for sanctions are both denied at this juncture.

I. BACKGROUND

The factual background and procedural history in this matter have been described in detail

in three previous decisions, see Urb. Sustainability Dirs. Network v. U.S. Dep’t of Agric. (USDN

III), No. 25-cv-1775 (BAH), 2026 WL 1877821, at *1-4 (D.D.C. June 30, 2026); USDN II, 2026

WL 1500832, at *2-7; USDN I, 2025 WL 2374528, at *2-10, and thus the combined procedural

and factual background described below is limited to information relevant to the three pending

motions.

A. Defendants Terminate Thousands of USDA Grants in March 2025

“This lawsuit was initiated by ‘five nonprofit organizations, Urban Sustainability Directors

Network (“USDN”), Oakville Bluegrass Cooperative (“OBC”), Agroecology Commons (“AC”),

the Providence Farm Collective Corp. (“PFC”), and the Institute for Agriculture and Trade Policy

(“IATP”),’ all of which ‘received federal awards, under various statutorily authorized federal

programs, from the USDA or its components that were unexpectedly terminated’” between March

and July 2025, after the current administration announced changes in policy priorities. USDN II,

2026 WL 1500832, at *2 (quoting USDN I, 2025 WL 2374528, at *2). 1 “‘These programs and the

federal awards supporting them cover a broad range of issues that create jobs and support

community, agricultural, and rural development,’ and ‘the programs range from supporting local

urban forestry, to addressing food insecurity, to incentivizing the adoption of more

environmentally friendly agricultural practices.’” Id. (citation modified) (quoting FAC ¶ 47).

“The parties agree that these terminations were the outgrowth of at least two executive

orders issued by President Trump shortly after he took office for his second term,” USDN I, 2025

AC has two terminated grants at issue: (1) a Community Food Projects Competitive grant approved by USDA’s National Institute of Food and Agriculture; and (2) a Land Access Program grant approved by USDA’s Farm Service Agency. USDN I, 2025 WL 2374528, at *3.

WL 2374528, at *4, namely: (1) Executive Order 14151, “Ending Radical and Wasteful

Government DEI Programs and Preferencing,” which instructed the Director of the Office of

Management and Budget (“OMB”), “assisted by the Attorney General and the Director of the

Office of Personnel Management,” to “coordinate the termination of all discriminatory programs,

including illegal DEI and ‘diversity, equity, inclusion, and accessibility’ (DEIA) mandates,

policies, programs, preferences, and activities in the Federal Government, under whatever name

they appear,” 90 Fed. Reg. 8339, 8339 (Jan. 20, 2025); see USDN III, 2026 WL 1877821, at *2;

USDN II, 2026 WL 1500832, at *2; USDN I, 2025 WL 2374528, at *4; and (2) Executive Order

14222, “Implementing the President’s ‘Department of Government Efficiency’ Cost Efficiency

Initiative,” which instructed agency heads, “in consultation with the agency’s DOGE Team Lead,”

to “review all existing covered contracts and grants and, where appropriate and consistent with

applicable law, terminate or modify (including through renegotiation) such covered contracts and

grants to reduce overall Federal spending or reallocate spending to promote efficiency and advance

the policies of my Administration,” 90 Fed. Reg. 11095, 11095-96 (Feb. 26, 2025); see USDN III,

2026 WL 1877821, at *2; USDN II, 2026 WL 1500832, at *2; USDN I, 2025 WL 2374528, at *4. 2

“To facilitate these executive orders, the [USDA] Secretary released guidance in two

memoranda issued on March 13, 2025.” USDN III, 2026 WL 1877821, at *2. The first

memorandum, “Directive on Conservation and Natural Resources Priorities,” directed that “all

USDA agencies and staff offices that issue awards must conduct an internal review of all active

Plaintiffs also point to two other executive orders as driving the grant termination decisions at issue: “Executive Order 14173, ‘Ending Illegal Discrimination and Restoring Merit-Based Opportunity,’ 90 Fed. Reg. 8,633, 8,634 (Jan. 31, 2025), which instructs agency heads to ‘excise references to DEI and DEIA principles . . . from Federal acquisition, contracting, grants, and financial assistance procedures,’ and Executive Order 14154, ‘Unleashing American Energy,’ 90 Fed. Reg. 8,353, 8,353-54, 8,357 (Jan. 29, 2025), which instructed agencies to ‘immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022’ and review grants for ‘consistency with the’ new policy of prioritizing domestic energy production,” USDN II, 2026 WL 1500832, at *2 n.1 (quoting USDN I, 2025 WL 2374528, at *4 n.2).

awards” to ensure “that the Department does not fund programs or organizations that promote or

take part in climate change or environmental justice initiatives that are either contrary to law or to

the Department’s policy objectives” and “that all awards are free from fraud, abuse, and

duplication” by terminating such grants “in whole or in part or otherwise modified to minimize

the scope of the Department’s obligations.” USDA Secretary’s Memorandum 1078-003 (Mar. 13,

2025), https://perma.cc/CE9Y-LCFH; see USDN III, 2026 WL 1877821, at *2; USDN II, 2026

WL 1500832, at *3; USDN I, 2025 WL 2374528, at *5.

The second memorandum released that day, “Directive on Departmental Grant and

Cooperative Agreement Priorities,” defined as a priority “ensuring that the Department’s grants,

cooperative agreements, and other similar arrangements, including mutual interest agreements . . .,

do not support programs or organizations that promote or take part in diversity, equity, and

inclusion (‘DEI’) initiatives or any other initiatives that discriminate on the basis of race, color,

religion, sex, national origin, or another protected characteristic” and stated that grants inconsistent

with this priority “shall, to the extent permitted by applicable law, be terminated, in whole or in

part, or otherwise modified in accordance with any applicable regulations and notice and

procedural requirements in the relevant award, agreement, or other instrument.” USDA

Secretary’s Memorandum 1078-004 (Mar. 13, 2025), https://perma.cc/36P6-E7M9; see USDN III,

2026 WL 1877821, at *2; USDN II, 2026 WL 1500832, at *3; USDN I, 2025 WL 2374528, at *5.

The five original plaintiffs received letters terminating their grants “before and in the months

following the issuance of the Secretary’s March 13, 2025, memoranda.” USDN I, 2025 WL

2374528, at *5.

B. Five Plaintiffs Are Granted Preliminary Injunctive Relief in August 2025

“The original plaintiffs pursued administrative appeals of their grant terminations, but

anticipating that no relief would be forthcoming from the agency, USDN, OBC, and AC filed a

complaint before this Court on June 5, 2025, and after being joined by PFC and IATP, filed

the . . . first amended complaint on June 24, 2025.” USDN III, 2026 WL 1877821, at *3 (citation

modified) (quoting USDN II, 2026 WL 1500832, at *3). They alleged that “[i]n an apparent effort

to effectuate the President’s sweeping Executive Orders in as quick a manner as possible regardless

of the legality of their conduct, Defendants adopted the policy, pattern, and practice at issue here,

terminating awarded grants without individualized review but rather based on vague allegations

that the projects were not aligned with the President’s newly stated goals of eliminating funding

for DEI and climate initiatives—without any effort to determine whether the projects could be

brought into line.” USDN II, 2026 WL 1500832, at *3 (alteration in original) (quoting FAC ¶ 132).

“Consequently, plaintiffs sought both vacatur of the termination of their own awards and relief

enjoining defendants ‘from giving effect to or maintaining award terminations of . . . all other[

awards] enacted pursuant to Defendants’ policy, pattern, and practice.’” Id. (alteration and ellipsis

in original) (quoting FAC at 61 (Requests for Relief)).

“Two days later, on June 26, 2025, plaintiffs sought a preliminary injunction challenging

‘a widespread policy and practice of unlawfully terminating hundreds of grants issued to nonprofit

organizations, farmers, ranchers, universities, cities, and states,’ through ‘minimally edited,

boilerplate form letters.’” USDN III, 2026 WL 1877821, at *4 (citing Pls.’ Mot. for Prelim. Inj.

(“Pls.’ PI Mot.”), ECF No. 14, and quoting Pls.’ Statement of P. & A. in Supp. of Their Mot. for

a Prelim. Inj. (“Pls.’ PI Mem.”) at 1-2, ECF No. 14-1). “Simultaneously, plaintiffs sought ‘an

order from this Court allowing them to conduct limited expedited discovery,’ reasoning that

‘Defendants have not publicly divulged the processes by which they arrived at mass, formulaic

terminations of grant awards across multiple programs and subagencies using the same alleged

justification,’ so ‘[u]nlike rulemakings and administrative adjudications, there is no published

administrative record of Defendants’ mass terminations, and any ad hoc administrative record

offered by Defendants will shed little, if any, light on the scope.’” USDN II, 2026 WL 1500832,

at *2 (alteration in original) (quoting Pls.’ Mot. for Expedited Disc. & Statement of P. & A. in

Supp. at 1-2, ECF No. 15). Importantly, at the preliminary injunction hearing held on August 6,

2025, defendants assured the Court that the “administrative record would go into the reasoning

behind the termination of plaintiffs’ grants” and that “if [plaintiffs] think the administrative record

is incomplete, they can file a motion to supplement it at that time.” Hr’g Tr. (Aug. 6, 2025) at

66:24-67:3, ECF No. 36.

The preliminary injunction order issued about one week later “preliminarily set aside and

vacated under the APA” the terminations of plaintiffs’ six individual grants but otherwise denied

plaintiffs’ preliminary injunction relief as to the alleged policy of “perfunctory, unreasoned

terminations” due to “the difficulties of identifying on the current record the specific grant

terminations that are part of the en masse implementation of that policy.” USDN I, 2025 WL

2374528, at *27, *39. Plaintiffs “demonstrated a likelihood of success in showing that all five of

their already terminated grants were terminated arbitrarily and capriciously.” Id. at *34.

Explaining that “[a]n agency action is considered ‘arbitrary and capricious’ if the agency has

‘relied on factors which Congress has not intended it to consider, entirely failed to consider an

important aspect of the problem, offered an explanation for its decision that runs counter to the

evidence before the agency, or is so implausible that it could not be ascribed to a difference in

view or the product of agency expertise,’” id. (quoting Motor Vehicles Mfrs. Ass’n, Inc. v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)), the Court went on to observe that “[t]his

requirement for a ‘reasoned explanation’ means that when an agency is changing its policy, the

agency must demonstrate recognition of that change and provide ‘good reasons for the new policy,’

and those reasons must be especially strong where the ‘prior policy has engendered serious reliance

interests’ or where the ‘new policy rests upon factual findings that contradict those which underlay

its prior policy,’” id. (quoting FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515-16 (2009)).

Applying these legal standards to the circumstances described in terminating plaintiffs’ grants, the

Court determined that the “grant terminations clearly lacked sufficient explanation” because “[t]he

termination letters offered only vague and conclusory reasoning with no consideration of reliance

interests, dispelling any assumption that the agency conducted an individualized review” and, even

though the grant letters expressed that “the grant is not consistent with agency priorities, no letter

explains why the particular grant is not consistent with the cited priorities and why the change in

priorities justifies terminating an awarded grant on which plaintiffs have substantially relied.” Id.

(emphasis in original).

As further support for preliminary injunctive relief, the Court found plaintiffs’ claim that

the grant terminations violated the APA as contrary to law had a likelihood of success, but at the

same time rejected their arguments that the terminations violated their rights under the Due Process

Clause. Specifically, USDN and AC were found to “have demonstrated a likelihood of success on

the merits of their claim that defendants violated the APA by acting contrary to statute in

terminating their grants.” Id. at *31. As the D.C. Circuit observed, “an agency does not have the

authority to ‘decline to follow a statutory mandate or prohibition simply because of policy

objections.’” Id. (quoting In re Aiken County, 725 F.3d 255, 259 (D.C. Cir. 2013)). With respect

to USDN’s grant issued under the Urban and Community Forestry Assistance Program and AC’s

grant issued under the Increasing Land, Capital, and Market Access Program (“ILCMAP” or

“Land Access Program”), the Court found that plaintiffs had shown a likelihood of success on their

claims these two grants were “[t]erminated for addressing the[] very issues Congress intended for

such programs to address.” Id. at *32. In contrast, however, plaintiffs’ two Due Process Clause

claims were determined not to be an adequate basis for a preliminary injunction because “plaintiffs

likely have no constitutionally protected property interest in their grant funding and thus have no

likelihood of success on their constitutional due process claim.” Id. at *22.

Finally, plaintiffs’ motion for expedited discovery was denied because “until that

[administrative] record is produced, plaintiffs cannot demonstrate ‘a strong showing of bad faith’

or that the ‘record is so bare as to frustrate judicial review’ to support their need for further

discovery” and because “defendants gave assurance at the motions hearing that the administrative

record would include what plaintiffs have requested in their discovery motion, as well as materials

reflecting ‘the process’ defendants took when evaluating the grants at issue.” Id. at *40 (quoting

Cmty. for Creative Non-Violence v. Lujan, 908 F.2d 992, 997-98 (D.C. Cir. 1990)).

Defendants then answered the amended complaint on August 29, 2025. See Answer, ECF

No. 35. On December 5, 2025, plaintiff OBC voluntarily moved to dismiss its claims, see Pl.’s

Consent Mot. to Voluntarily Dismiss Claims of Oakville Bluegrass Cooperative, ECF No. 42, and

OBC was terminated from the action, see Min. Order (Dec. 5, 2025).

C. Land Access Program Plaintiffs Granted Preliminary Injunctive Relief in

June 2026

On April 2, 2026, the original plaintiffs notified the Court that “in late-March 2026

Defendants terminated 49 of the 50 ‘Increasing Land, Capital, and Market Access Program’

(‘ILCMAP’) grants” and that “Defendants have admitted that these ILCMAP terminations are part

of the same policy over which Plaintiffs are litigating” because “termination letters sent to

ILCMAP awardees state that the terminations were undertaken pursuant to the policy to effectuate

Secretary Rollins’ March 13, 2025, anti-DEI memorandum.” Pls.’ Not. of Factual Dev. Related

to Gaps in the AR at 1, ECF No. 58.

Almost two months later, on May 26, 2026, the original plaintiffs moved for leave to file

a second amended complaint to add twenty-four plaintiffs (the “Land Access Program Plaintiffs”),

each of which had an ILCMAP grant terminated in March 2026, explaining that “[i]n light of

USDA’s cancellation of 49 Land Access Program grants using boilerplate letters and pursuant to

the same policy challenged in this case, Plaintiffs seek leave to amend their complaint” a second

time “to include these additional terminations.” Pls.’ Mot. for Leave to File Am. Compl. at 2, ECF

No. 62; see also USDN III, 2026 WL 1877821, at *4. “Simultaneously, the Land Access Program

Plaintiffs filed a motion for a preliminary injunction, seeking ‘an order that enjoins Defendants’

terminations of these Plaintiffs’ grants and restores the status quo ante.’” USDN III, 2026 WL

1877821, at *4 (quoting Land Access Program Pls.’ Mot. for a Prelim. Inj. at 1, ECF No. 63). On

June 30, 2026, over defendants’ objections, leave to amend the complaint was granted, and

preliminary injunctive relief was issued to the Land Access Program Plaintiffs enjoining the

terminations based on an “analysis principally follow[ing] the same reasoning already employed

to the same claims” in the prior preliminary injunction decision. Id. at *8 (citing USDN I, 2025

WL 2374528, at *32-33).

The Second Amended Complaint provides additional context as to the circumstances of

the USDA grant terminations. See SAC. The termination letters sent to ILCMAP grant holders

are “nearly identical” and “contain boilerplate language for all but one to two paragraphs in the

four-page letters.” Id. ¶¶ 177, 179. The opening paragraph of each letter contains the statement

that “[t]he United States Department of Agriculture (USDA) has determined that awards under

this program involved discriminatory preferences based on Diversity, Equity, and Inclusion (DEI)

and wasteful spending that did little to further agricultural land purchases. Accordingly, as

discussed below, USDA has determined your award no longer effectuates the program goals or

agency priorities.” Id. ¶ 183. Each letter cites the Secretary’s March 13, 2025, memorandum,

“Directive on Departmental Grant and Cooperative Agreement Priorities,” and contains general

concerns about the program, including that the “program [is] rife with DEI preferences that

discriminated based on immutable characteristics,” “did little to improve land access,” and has

“unacceptable risks of fraud, waste and abuse.” Id. ¶¶ 180, 184. The letters concluded that

“following careful consideration of your award—including any potential reliance interests,

intended outcomes described, as well as consideration of alternatives to termination—USDA has

determined the best use of resources and advancing USDA’s goals and priorities requires a full

termination to realign the program to be consistent with its statutorily mandated purpose and the

policies and priorities of the Department.” Id. ¶ 193. These letters were sent to every ILCMAP

grant holder save AC, whose ILCMAP grant at issue in this lawsuit was subject to, and protected

from termination by, the first preliminary injunctive order issued in this case eight months earlier,

on August 14, 2025. See id. ¶ 174; see also id. ¶ 176 (“But for that preliminary injunction, on

information and belief, AC’s Land Access Program grant would have been terminated pursuant to

the policy at issue here no later than . . . when the remaining Land Access Program awardees

received notice of the termination.”).

The now operative Second Amended Complaint asserts nine causes of action, claiming that

the grant terminations (1) violated plaintiffs’ Due Process rights under the Fifth Amendment to the

U.S. Constitution by failing to provide reasonable notice and an opportunity to be heard prior to

their grant terminations (Count I), and by doing so in an unconstitutionally vague manner (Count

II); (2) violated the APA by engaging in agency action that was not in accordance with law,

including agency regulations (Count III), and, was arbitrary and capricious by failing to explain

the reasons for terminating USDN’s, AC’s, PFC’s and IATP’s grants (Count IV) as well as Land

Access Program Plaintiffs’ grants (Count V); (3) violated the APA by engaging in arbitrary and

capricious agency action under a policy mandating grant terminations en masse, including

plaintiffs’ grant terminations (Count VI); (4) violated the APA by terminating USDN’s, AC’s and

Land Access Program Plaintiffs’ grants not in accordance with law “because the stated bases for

terminations directly contravene Congress’s statutory mandates for funding those programs,” id.

¶ 258, citing the Cooperative Forestry Assistance Act of 1978 and the Inflation Reduction Act of

2022 (Count VII); (5) violated constitutional separation of powers principles (Count VIII); and

(6) were ultra vires (Count IX), see SAC ¶¶ 198-286.

D. Defendants’ Noncompliance with the Scheduling Order

Almost immediately after issuance of the original preliminary injunction in August 2025,

disputes over the scope of the administrative record arose. Defendants provided notice, on

September 17, 2025, of the certified contents of the administrative record, Defs.’ Certification of

AR, ECF No. 37 (consisting of 346 pages, 305 pages of which were documents submitted or

received by plaintiffs for their awarded and terminated grants), but, “[i]n response to plaintiffs’

concerns about ‘perceived deficiencies’ in the administrative record, defendants ‘determined that

many of these items can be added,’ and were thus directed ‘to produce the supplemental

administrative record within three weeks (21 days) of the conclusion of’ the then-occurring

‘government shutdown,’” USDN II, 2026 WL 1500832, at *4 (citations omitted). 3 When the

government shutdown ended on November 12, 2025, the supplemental administrative record was

due by December 4, 2025, but, belatedly, almost two weeks later, defendants moved for an

extension of time nunc pro tunc, due to “limited staffing, and some confusion about the types of

“A lapse in federal appropriations between October 1 and November 12, 2025, resulted in the staying of filing and discovery deadlines imposed against the United States and its federal agencies in civil cases.” USDN II, 2026 WL 1500832, at *4 n.3 (citing D.D.C. Standing Order No. 25-55 (JEB) (Oct. 1, 2025), and D.D.C. Standing Order No. 25-59 (JEB) (Nov. 13, 2025)).

records that would be required to satisfy Plaintiffs’ concerns . . . .” Id. Plaintiffs opposed this

motion, noting, inter alia, that “the administrative record ‘did not certify that it contained all (or

even any) documents relevant to Defendants’ agency-wide policy alleged by Plaintiffs, other than

those relevant to Plaintiffs’ terminations,’” id. (citation omitted), and requesting sanctions in the

form of “‘an adverse inference that Defendants terminated all DEI- and climate-related grants

based solely on the presence of DEI- and climate-related search terms in grant documents,’” id.

(citation omitted). Over plaintiffs’ objection, defendants were granted an extension to supplement

the AR by December 22, 2025, and “judgment was reserved on plaintiffs’ motion for sanctions.”

Id.

Defendants then supplemented the AR twice, on December 19, 2025, and January 25, 2026.

See Defs.’ Certifications of AR, ECF Nos. 51, 53 (consisting of AR pages 347 to 739). Plaintiffs,

still dissatisfied, moved to supplement the record, see Pls.’ Mot. to Suppl. AR, ECF No. 55, which,

alongside plaintiffs’ renewed motion for sanctions, was resolved in a decision issued on May 29,

2026, see USDN II, 2026 WL 1500832, at *1. As that decision recounted, “the Court credited

defendants’ ‘assurance at the [preliminary injunction] motions hearing that the administrative

record would include what plaintiffs have requested in their discovery motion, as well as materials

reflecting “the process” defendants took when evaluating the grants at issue,’ in the absence of

evidence to the contrary.” Id. at *8 (quoting USDN I, 2025 WL 2374528, at *40); see also Hr’g

Tr. at 66:12-19, 71:11-21 (The Court: “[I]n my view the things that the plaintiffs are asking for in

their discovery requests are items and information that will be in the administrative record when

that is compiled . . . if I find on the jurisdictional issue, that I can exercise subject matter

jurisdiction here. Do you share that understanding?” Defendants’ Counsel: “I do, Your Honor.”).

Further, “with the administrative record having been filed and supplemented twice, review of the

categories of documents identified by plaintiffs as missing from the administrative record

reveal[ed] that supplementation and/or discovery [wa]s needed to ascertain the contours of the

agency-wide policy and how the termination decisions were made.” USDN II, 2026 WL 1500832,

at *8. Although plaintiffs’ request for depositions was denied at that time, defendants were

required to respond to two sets of interrogatories and requests for production. See id. at *12.

Additionally, as no showing of bad faith had been made, “[p]laintiffs’ motion for sanctions at this

juncture [wa]s denied but may be renewed should defendants continue to fall short of their

production obligations.” Id. at *14. Parties were ordered to propose jointly a schedule for the

limited discovery ordered, see id., and subsequently proposed competing schedules, see Joint

Status Rep. at 2-5, ECF No. 74 (plaintiffs proposing discovery completion within two weeks, by

June 19, 2026, and defendants proposing an extended rolling discovery schedule for completion

in six months, i.e., by November 2026). Pertinent to the plaintiffs’ proposed discovery of

defendants’ alleged policy of en masse grant terminations, defendants revealed that 948 USDA

grants had been terminated since January 20, 2025, see id. at 5 n.4, which was more than triple the

“312 awards known when the order was issued,” Min. Order (June 8, 2026). Parties were thus

ordered to confer on prioritization of discovery “as to the existence, or not, of the challenged policy

at issue,” and to provide a “proposal for rolling production of materials to supplement the

administrative record to be completed by September 2, 2026.” Id. (emphasis removed). In

response, defendants reiterated that “this process will require at least six months.” Joint Status

Rep. at 12, ECF No. 75. A Scheduling Order was issued on June 12, 2026, with nine interim

deadlines set to ensure measurable progress in meeting the September 2, 2026, discovery

completion date. Min. Order (June 12, 2026).

Less than a week later, on June 18, 2026, defendants sought an extension in the deadline

for the first interim production, which extension was granted, nunc pro tunc, with plaintiffs’

consent, see Min. Order (June 22, 2026), followed by three more extension requests, on June 30,

July 6, and July 10, see Defs.’ Unopposed Mot. to Extend June 30 Disc. Deadline, ECF No. 82;

Defs.’ Mot. to Extend the Disc. Schedule, ECF No. 86; Defs.’ Mot. to Extend the Disc. Schedule,

ECF No. 90, which requests were also granted, Min. Orders (July 1 and 14, 2026), though the

Court observed that defendants “so far appear to have made only minimal progress with production

and have prepared a privilege log that appears to be deficient” and cautioned that “[t]he scheduling

order was designed to promote efficiency and minimize burden” on the parties, “and defendants’

failure to confer in an effort to facilitate timely discovery and production will be considered if any

further request for an extension of a court-ordered discovery deadline is presented to the Court,”

Min. Order (July 14, 2026). Defendants’ fifth request for an extension, on July 17, 2026, was

denied, citing defendants’ failure to confer with plaintiffs prior to filing, and explaining that

defendants’ excuse of inadequate staffing in their serial requests for extensions no longer sufficed.

Min. Order (July 20, 2026).

Over a year after the initiation of this lawsuit, defendants filed, on July 14, 2026, the

pending partial motion to dismiss the Second Amended Complaint, see Defs.’ Mot., which became

ripe on August 25, 2026, see Defs.’ Reply in Further Supp. of Their Partial Mot. to Dismiss

(“Defs.’ Reply”), ECF No. 110. During briefing on that motion, defendants also filed, on July 24,

2026, their pending motion to vacate the Scheduling Order, see Defs.’ Mot. to Vacate, to which

plaintiffs responded with a cross-motion for sanctions, see Pls.’ Mot.; see Pls.’ Reply in Supp. of

Their Cross-Mot. for Sanctions & Additional Disc. (“Pls.’ Reply”), ECF No. 109. In the parties’

most recent update in response to the Court’s queries on the current status of discovery and the

AR, which was last supplemented in January 2026, see Min. Order (Sept. 29, 2026), defendants

describe the now “considerable resources dedicated to this case,” including “four (4) attorneys

from [the USDA Office of General Counsel (“OGC”)] permanently assigned to this case” and “two

(2) additional OGC attorneys in the Washington, DC office [who] are currently being onboarded”;

“three (3) personnel from USDA’s eDiscovery Program assisting with this case, including USDA’s

Director of Information Affairs”; and “four (4) reviewers from Deloitte [contracted] to review

records for responsive information.” Joint Status Rep. at 2, ECF No. 114. Defendants also

describe their process of a first-level responsiveness review, followed by a second-level privilege

review, and reported that “[f]rom August 27, 2026, and up through September 21, 2026,

Defendants have reviewed approximately 26,804 documents at the first level and made a

production of 21 documents to Plaintiffs on September 22, 2026,” and that “[f]rom September 22,

2026, through September 28, 2026, Defendants have reviewed approximately 8,975 documents at

the first level.” Id. at 3. Additionally, defendants have produced 1,517 documents, though only

21 of those documents were produced after July 7, 2026. Id. at 5-6.

II. APPLICABLE LEGAL STANDARDS

Set out below are the separate legal standards applicable to defendants’ motion to dismiss

pursuant to Federal Rule of Civil Procedure 12(b)(1) and (6), and plaintiffs’ motion for sanctions

pursuant to Rules 16 and 37 and the Court’s inherent powers.

A. Motion to Dismiss

To survive a motion to dismiss for “lack of subject-matter jurisdiction,” under Federal Rule

of Civil Procedure 12(b)(1), “[t]he plaintiff bears the burden of invoking the court’s subject matter

jurisdiction.” Arpaio v. Obama, 797 F.3d 11, 19 (D.C. Cir. 2015) (citing Lujan v. Defs. of Wildlife,

504 U.S. 555, 561 (1992)). When considering jurisdictional questions, the court accepts as true

all uncontroverted material factual allegations contained in the complaint and “construe[s] the

complaint liberally, granting plaintiff[s] the benefit of all inferences that can be derived from the

facts alleged.” Hemp Indus. Ass’n v. DEA, 36 F.4th 278, 281 (D.C. Cir. 2022) (second alteration

in original) (quoting Am. Nat’l Ins. Co. v. FDIC, 642 F.3d 1137, 1139 (D.C. Cir. 2011)).

Additionally, “where necessary, the court may consider the complaint supplemented by undisputed

facts evidenced in the record, or the complaint supplemented by undisputed facts plus the court’s

resolution of disputed facts.” Coal. for Underground Expansion v. Mineta, 333 F.3d 193, 198

(D.C. Cir. 2003) (quoting Herbert v. Nat’l Acad. of Scis., 974 F.2d 192, 197 (D.C. Cir. 1992)).

Federal Rule of Civil Procedure 12(b)(6) permits dismissal for “failure to state a claim

upon which relief can be granted.” FED. R. CIV. P. 12(b)(6). “To survive a motion to dismiss, a

complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is

plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when the plaintiff pleads factual

content that is more than “‘merely consistent with’ a defendant’s liability” and “allows the court

to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.

(quoting Twombly, 550 U.S. at 556-57). “Factual allegations, although assumed to be true, must

still ‘be enough to raise a right to relief above the speculative level.’” Hettinga v. United States,

677 F.3d 471, 476 (D.C. Cir. 2012) (per curiam) (quoting Twombly, 550 U.S. at 555). Courts “do

not assume the truth of legal conclusions, nor do [courts] ‘accept inferences that are unsupported

by the facts set out in the complaint.’” Arpaio, 797 F.3d at 19 (citing Iqbal, 556 U.S. at 678, and

quoting Islamic Am. Relief Agency v. Gonzales, 477 F.3d 728, 732 (D.C. Cir. 2007)). In

determining whether a complaint fails to state a claim, a court may consider only the facts alleged

in the complaint and “any documents either attached to or incorporated in the complaint and

matters of which the court may take judicial notice.” N. Am. Butterfly Ass’n v. Wolf, 977 F.3d

1244, 1249 (D.C. Cir. 2020) (citation modified).

B. Motion for Sanctions

Under Federal Rule of Civil Procedure 37(b)(2)(A), “[i]f a party . . . fails to obey an order

to provide or permit discovery, including an order under Rule 26(f), 35, or 37(a), the court where

the action is pending may issue further just orders.” FED. R. CIV. P. 37(b)(2)(A). The sanctions

expressly authorized for such a violation include: “(i) directing that the matters embraced in the

order or other designated facts be taken as established for purposes of the action, as the prevailing

party claims; (ii) prohibiting the disobedient party from supporting or opposing designated claims

or defenses, or from introducing designated matters in evidence; . . . (vi) rendering a default

judgment against the disobedient party; or (vii) treating as contempt of court the failure to obey.”

FED R. CIV. P. 37(b)(2)(A)(i)–(vii). Additionally, “[i]nstead of or in addition to the orders above,

the court must order the disobedient party, the attorney advising that party, or both to pay the

reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was

substantially justified or other circumstances make an award of expenses unjust.” FED R. CIV. P.

37(b)(2)(C).

“District courts have ‘considerable discretion’ in managing discovery and possess broad

discretion to impose sanctions for discovery violations under Rule 37.” Parsi v. Daioleslam, 778

F.3d 116, 125 (D.C. Cir. 2015) (quoting United States v. Philip Morris Inc., 347 F.3d 951, 955

(D.C. Cir. 2003)). “The central requirement of Rule 37 is that ‘any sanction must be just.’” Bonds

v. District of Columbia, 93 F.3d 801, 808 (D.C. Cir. 1996) (quoting Ins. Corp. v. Compagnie des

Bauxites de Guinée, 456 U.S. 694, 707 (1982)). “In addition to sanctions contemplated by the

Federal Rules of Civil Procedure, courts have an inherent power at common law to ‘protect their

institutional integrity and to guard against abuses of the judicial process with contempt citations,

fines, awards of attorneys’ fees, and such other orders and sanctions as they find necessary,

including even dismissals and default judgments.’” Parsi, 778 F.3d at 130 (quoting Shepherd v.

Am. Broad. Co., 62 F.3d 1469, 1472 (D.C. Cir. 1995), and citing Chambers v. NASCO, Inc., 501

U.S. 32, 44 (1991)).

III. DISCUSSION

Defendants’ partial motion to dismiss is considered first and is granted in part and denied

in part, followed by consideration of defendants’ motion to vacate the scheduling order and

plaintiffs’ request for sanctions, both of which are denied. At the outset, for clarification of what

is not at issue, defendants’ pending motion for partial dismissal does not challenge the following

four APA claims: that the terminations of plaintiffs’ individual grants violated the APA because

this agency action was not in accordance with law (Count III) and was arbitrary and capricious by

failing to explain the reasons for terminating the grants (Counts IV and V, as to four original

plaintiffs and Land Access Plaintiffs, respectively), and that USDN has plausibly alleged that

USDA and its component, the U.S. Forestry Service, violated the APA by terminating USDN’s

grant under the Land Access Program not in accordance with the law (part of Count VII).

A. Defendants Are Entitled to Partial Dismissal of Some of Plaintiffs’ Claims

Defendants seek dismissal, in whole or part, of six claims asserted in Counts I, II, VI, VII,

VIII, and IX of the Second Amended Complaint, and the claims of three original plaintiffs,

contending that: (1) AC, PFC and IATP’s claims should be dismissed as moot, Defs.’ Mot. at 5-9;

(2) Counts I and II, “which allege violations of the Fifth Amendment, should be dismissed,” id. at

18; (3) Count VI, “which alleges Defendants have an unlawful policy or practice of terminating

grants without individualized assessment should be dismissed because it is not a proper APA

claim,” id. at 9; (4) Count VII, “which alleges that the grant terminations were contrary to law . . .

should be dismissed” for the Land Access Program plaintiffs, id. at 14; and (5) Counts VIII and

IX, the separation of powers and ultra vires claims, should be dismissed, see id. at 21-22. These

claims are addressed seriatim.

1. Jurisdiction Can Properly Be Exercised over PFC’s and IATP’s Claims

for Declaratory Relief

Defendants challenge the exercise of subject-matter jurisdiction over claims arising out of

the termination of IATP’s and PFC’s Land Access Program grants and AC’s Community Food

Projects Competitive grant, contending that because the “period of performance for IATP’s grant

ended on September 29, 2025,” and “both [PFC] and [AC] have fully spent their grant awards,”

their claims are moot. Defs.’ Mot. at 5. While part of the relief claimed by these three plaintiffs

is indeed moot, the claims of at least IATP and PFC support other relief that is not moot and thus

dismissal is warranted only as to AC’s claims related to its Community Food Projects Competitive

grant.

The doctrine of mootness “focuses on whether events subsequent to the filing of the

complaint have so transpired that the decision will neither presently affect the parties’ rights nor

have a more-than-speculative chance of affecting them in the future.” N. Am. Butterfly Ass’n, 977

F.3d at 1258 (internal quotation marks omitted) (quoting Hardaway v. D.C. Hous. Auth., 843 F.3d

973, 978 (D.C. Cir. 2016)). “Mootness is a jurisdictional question because the Court ‘is not

empowered to decide moot questions or abstract propositions,’” a limitation that “derives from the

requirement of Article III of the Constitution under which the exercise of judicial power depends

upon the existence of a case or controversy.” North Carolina v. Rice, 404 U.S. 244, 246 (1971)

(per curiam) (first quoting United States v. Alaska S.S. Co., 253 U.S. 113, 116 (1920); then quoting

Liner v. Jafco, Inc., 375 U.S. 301, 306 n.3 (1964)). A lawsuit becomes moot “only when it is

impossible for a court to grant ‘any effectual relief whatever’ to the prevailing party,” so “[a]s long

as the parties have a concrete interest, however small, in the outcome of the litigation, the case is

not moot.” Zukerman v. U.S. Postal Serv., 961 F.3d 431, 442 (D.C. Cir. 2020) (first quoting Knox

v. Serv. Emps. Int’l Union, 567 U.S. 298, 307 (2012); then quoting Chafin v. Chafin, 568 U.S. 165,

172 (2013)). Additionally, “[t]o prevail on its [Federal] Rule [of Civil Procedure] 12(b)(1) motion

to dismiss for lack of jurisdiction . . . the party urging mootness, bears the ‘heavy burden’ of

establishing that the case is moot.” Id. at 441 (quoting Honeywell Int’l, Inc. v. Nuclear Regul.

Comm’n, 628 F.3d 568, 576 (D.C. Cir. 2010)).

Plaintiffs do not contest that the three grants of the organizations targeted for dismissal “are

now fully spent or closed out” but argue instead that the claims are not moot for two reasons: first,

each of the three plaintiffs “continue[s] to seek declaratory relief to remedy the reputational harm

caused by Defendants’ false allegations in the termination letters,” and, second, “[a]ll three

Plaintiffs can pursue the policy claim on the additional basis that invalidating Defendants’ illegal

policy will provide them future relief.” Pls.’ Opp’n to Defs.’ Mot. to Dismiss Pls.’ Second Am.

Compl. in Part (“Pls.’ Opp’n”) at 8-9, ECF No. 105. The first reason is sufficient to establish that

the claims of at least IATP and PFC are not moot, but the second reason does not withstand scrutiny

under binding precedent.

As to their first argument, recall that the termination letters for IATP and PFC accuse these

two organizations of taking part in “initiatives that unlawfully discriminate on the basis of race,

color, religion, sex, national origin, or another protected characteristic; that violate either the letter

or purpose of Federal civil rights laws . . . [and]; that are not free from fraud, abuse, or

duplication.” FAC, Ex. D, PFC Termination Letter at 1, ECF No. 10-6; id., Ex. E, IATP

Termination Letter at 1, ECF No. 10-7; see also SAC ¶¶ 165 (quoting from PFC termination letter),

169 (describing the IATP termination letter as “a laundry list of potential accusations”).

In contrast to IATP and PFC’s termination letters, which expressly accuse these two

organizations of somehow engaging in or facilitating unlawful conduct, the termination letter for

AC’s Community Food Projects Competitive Grant states only that the grant “no longer effectuates

USDA priorities, which are to maximize and promote American agriculture; ensure a safe,

nutritious, and secure food supply; enhance rural prosperity; and protect our National Forests.”

FAC, Ex. C, AC Termination Letter at 1, ECF No. 10-5. In this way, AC’s termination letter

contains no accusation that this organization’s receipt and use of the grant reflected unlawful

discrimination or perpetuated waste fraud and abuse, and thus AC’s claim to reputational harm

stands on a much weaker basis. A grant termination due only to USDA’s new priorities suggests

nothing negative, let alone nefarious or unlawful, about AC or its conduct or operations in

connection with the terminated grant, and the record here provides no other basis or argument for

reputational harm to AC.

Plaintiffs contend that they “have a valid and continuing legal interest in remedying this

reputational harm that extends beyond the life of their grant,” emphasizing that “[d]efendants have

never retracted or rescinded these termination letters, so the harm remains.” Pls.’ Opp’n at 9. To

remedy this reputational harm, plaintiffs believe that declaratory relief is necessary, as called for

in their first request for relief in the form of “a declaration that Defendants’ terminations of awards

and all others pursuant to the policy described herein are unlawful.” SAC, Requests for Relief ¶ 1.

Defendants discount these three plaintiffs’ claims of reputational harm, describing them as

“newly invented to avoid dismissal.” Defs.’ Reply at 5. Yet, nothing is “new” about the

reputational harm plaintiffs claim to suffer from USDA’s termination letters. Indeed, plaintiffs

refer to concerns over reputational harms in the First Amended Complaint, see FAC ¶ 6, in briefing

in support of preliminary injunctive relief, see Pls.’ PI Mem. at 3, 40-41, and the first preliminary

injunction decision examined the language in PFC and IATP’s grant termination letters and

determined that “[t]he vague accusation that plaintiffs engaged in fraud and abuse is not only

completely unsupported by any evidence or reasoning but also doubly damaging to the reputations

of these nonprofit organizations,” USDN I, 2025 WL 2374528, at *34.

As support for discounting any reputational harm stemming from the reasons given for the

grant terminations as a basis for maintaining a live controversy here, defendants rely on Foretich

v. United States, 351 F.3d 1198 (D.C. Cir. 2003), for the proposition that “where harm to reputation

arises as a byproduct of government action, the reputational injury, without more, will not satisfy

Article III standing when that government action itself no longer presents an ongoing controversy.”

Defs.’ Reply at 3 (quoting Foretich, 351 F.3d at 1212-13). This case is not helpful to defendants

and instead only confirms that plaintiffs’ claimed reputational harm may still be remedied through

declaratory relief in this case. The Foretich plaintiff was involved in a protracted child custody

dispute with his former wife and the notoriety created by that dispute reached Congress, where

supporters of his former wife “attempted to broker a deal with him” in a House subcommittee

hearing by attempting to make him “give up his parental rights and voluntarily seek vacatur of . . .

[child] visitation orders.” Foretich, 351 F.3d at 1208. When the plaintiff declined to do so,

Congress passed an Act that “undisputedly prohibit[ed] the Superior Court from awarding or

enforcing custody or visitation rights to [the plaintiff],” id., and this publicity caused damage to

plaintiff’s professional reputation such that his “business suffered a 30% decline following

adoption of the Act,” id. at 1209. While plaintiff was challenging the constitutionality of that Act,

his daughter turned eighteen years old, and thus the D.C. Circuit determined that his “claim is moot

insofar as it challenges the Act’s negation of his visitation rights.” Id. at 1209. Pertinent here, the

Circuit further determined, however, that notwithstanding the mootness of part of his requested

relief, his “reputational injuries are sufficiently concrete and amenable to redress by a declaratory

judgment in his favor as to satisfy the requirements of Article III standing,” id. at 1210, at least

insofar as they “derive[] directly from government action,” id. at 1214, rather than constituting a

“byproduct of government action” that “itself no longer presents an ongoing controversy,” id. at

1212-13. The same reasoning holds true in this case, where even though the grants have been fully

funded, the reputational injuries, at least those of PFC and IATP, are sufficiently amenable to

redress to provide Article III standing since, unlike AC, those two organizations were told their

grants were terminated due to USDA’s view that their receipt and use of the grant awards amounted

to unlawful conduct, and thus those injuries stem directly from government action. See id. at 1213

(holding that the alleged injury stemming from “a congressional determination that [the plaintiff

was] a child abuser and a danger to his own daughter” remained amenable to redress).

Plaintiffs’ second argument is that “invalidating Defendants’ illegal policy will provide

them future relief” because AC and PFC “have routinely been awarded such grants in the past, and

will be applying for yet more USDA grants in the future” while “IATP has received USDA grants

in the past and may apply for future USDA grants as well.” Pls.’ Opp’n at 9. In other words,

plaintiffs argue that nothing prevents defendants from “terminat[ing] Plaintiffs’ future USDA

grants on the same or similar bases pursuant to their illegal policy.” Id. at 11. Plaintiffs lack

standing to seek such prospective relief because the Second Amended Complaint is focused solely

on the terminated grants, with absolutely no allegations about potential future grants or that they

have in fact applied for, let alone received, future USDA grants, to provide sufficient factual

allegations about being subjected to any concrete threat of future application of the same alleged

unlawful policy. Those plaintiffs whose grant funding remains protected by the preliminary

injunctive relief certainly face such a concrete threat from the alleged unlawful policy, absent relief

in this case, but these three plaintiffs whose grant funding has ended stand in a different posture.

Indeed, the Supreme Court has determined that “[a]bsent a sufficient likelihood that [a plaintiff]

will again be wronged in a similar way, [that plaintiff] is no more entitled to an injunction than

any other citizen,” and “a federal court may not entertain a claim by any or all citizens who no

more than assert that certain practices . . . are unconstitutional.” City of Los Angeles v. Lyons, 461

U.S. 95, 111 (1993). Plaintiffs AC, PFC and IATP have not established that they will likely be

harmed by the same policy again, so this argument fails.

Accordingly, PFC and IATP, who were both accused of discriminatory and unlawful

conduct, may continue to pursue declaratory relief associated with their grant terminations to

remedy their reputational harm from defendants’ actions, but they may not continue to challenge

the defendants’ alleged policy, even if their grant terminations were allegedly part of the

effectuation of that policy. See Lyons, 461 U.S. at 111. Additionally, any claim by AC arising out

of its Community Food Project Competitive grant, the termination of which did not involve

allegations of discrimination or waste, fraud and abuse, is moot and AC’s participation in this

action will be limited to claims concerning its Land Access Program grant. See supra n.1.

2. Plaintiffs’ Due Process Claims (Counts I and II) Must Be Dismissed

In Counts I and II, plaintiffs claim defendants violated the Due Process Clause, first, by

failing to provide reasonable notice and an opportunity to be heard before terminating the

plaintiffs’ grants, see SAC ¶¶ 198-206 (Count I), and, second, for terminating the grants using an

“application of 2 C.F.R. § 200.340(a)(4)” that “is unconstitutionally vague and constitutes an

arbitrary exercise of authority” by issuing “form termination letters [that] are also

unconstitutionally vague because they are based on priorities that were never previously identified

for awardees,” id. ¶¶ 211-12 (Count II). Defendants contend that these clams are “legally deficient

because Plaintiffs had no protected property interest in continued grant funding” and “[w]ithout a

‘cognizable liberty or property interest,’ a plaintiff cannot state a procedural due process claim

against the government.” Defs.’ Mot. at 18-19 (quoting Hettinga, 677 F.3d at 480).

As noted before in this case, “[t]he first inquiry in every due process challenge is whether

the plaintiff has been deprived of a protected interest in ‘liberty’ or ‘property’” and that “[o]nly

after finding the deprivation of a protected interest do we look to see if the government’s actions

comport with due process.” USDN I, 2025 WL 2374528, at *22 (citation modified) (quoting NB

ex rel. Peacock v. District of Columbia, 794 F.3d 31, 41 (D.C. Cir. 2015)). Indeed, “[w]hile the

D.C. Circuit has recognized property interests in ‘certain government benefits’ to which one has

‘a legitimate claim of entitlement,’ courts have generally rejected, aside from certain employment

contexts, that parties have a constitutionally protected property interest in other anticipated

payments from the federal government.” Id. (quoting NB ex rel. Peacock, 794 F.3d at 41, and

citing New Vision Photography Program, Inc. v. District of Columbia, 54 F. Supp. 3d 12, 29

(D.D.C. 2014) (JEB) (collecting cases and explaining that the “Supreme Court ‘has never held that

government contracts for goods and services create property interests protected by due process’”

(quoting 2 Richard J. Pierce Jr., Administrative Law Treatise 764 (5th ed. 2010))).

Plaintiffs do not dispute this summary of applicable jurisprudence but instead emphasize

that “the D.C. Circuit is in the process of deciding when and how a party can plead Due Process

claims for grant terminations.” Pls.’ Opp’n at 18 (citing Vera Inst. of Just. v. U.S. Dep’t of Just.,

805 F. Supp. 3d 12 (D.D.C. 2025) (APM), argued, No. 25-5248 (D.C. Cir. Oct. 14, 2025)). 4 Based

on this view of the legal issue raised in an appeal of another case, plaintiffs contend that “there is

Appellants raise four principal questions on appeal: (1) “[w]hether the district court erred in concluding that the Tucker Act deprived it of jurisdiction over APA claims”; (2) “[w]hether Plaintiffs are likely to prevail on their APA claims”; (3) “[w]hether Plaintiffs have stated a viable due process claim and are likely to prevail on that claim”; and (4) whether a preliminary injunction should be entered. Appellants’ Opening Br. at 4, Vera Inst. for Just. v. U.S. Dep’t of Just., No. 25-5248 (D.C. Cir. argued Oct. 14, 2025)). Most of the ink spilled in the opening brief—more than thirty-six pages’ worth—is over the jurisdictional issue and viability of the APA claim, see id. at 16-53, with comparative short shrift given to the Due Process arguments, see id. at 53-57.

no reason the Court should dismiss the Due Process claims only for them to potentially be revived

later” and because “[p]laintiffs have not sought any documents based on this claim, [] premature

dismissal would only burden the Court and parties, without any benefit.” Id. In other words,

plaintiffs invite this Court to forbear in applying current binding precedent on the off chance that

the D.C. Circuit may provide a basis to sustain the viability of due process claims in the grant

termination context. See Defs.’ Reply at 13 (“Moreover, the prospect that binding precedent may

change later ‘is a risk inherent in a common-law legal system’ and ‘is an insufficient basis upon

which an indefinite stay of the proceedings for enforcement of an order may be grounded.’”

(quoting USDN II, 2026 WL 1500832, at *6 n.8)). This invitation to duck binding precedent is

rejected. Judicial economy is not a sufficient basis to deny a motion to dismiss where the legal

theory is not recognized because “[a]bsent a viable cause of action, a court must dismiss for failure

to state a claim.” Superior Fibre Prods., Inc. v. U.S. Dep’t of the Treasury, 156 F. Supp. 3d 54,

60 (D.D.C. 2016) (ESH) (citing Trudeau v. Fed. Trade Comm’n, 456 F.3d 178, 188 (D.C. Cir.

2006) (“Whether these are claims ‘upon which relief can be granted’ depends in part on whether

there is a cause of action that permits Trudeau to invoke the power of the court to redress the

violations of law that he claims the FTC has committed.”)).

Accordingly, dismissal of both Due Process claims in Counts I and II of the Second

Amended Complaint is appropriate.

3. Plaintiffs Have Plausibly Challenged Defendants’ Mass Termination

Policy as Arbitrary and Capricious (Count VI)

Defendants seek dismissal of Count VI of the Second Amended Complaint alleging that

“[d]efendants’ policy mandating grant terminations en masse—including Plaintiffs’ grants— . . .

is arbitrary and capricious.” SAC ¶ 254. As support, defendants renew arguments that their policy

of en masse terminations is not a final agency action, see Defs.’ Mot. at 14, but these previously

rejected arguments, see USDN I, 2025 WL 2374528, at *26-28; USDN III, 2026 WL 1877821, at

*6, are no more persuasive now.

This Court previously reasoned as to the original plaintiffs that “[w]hile litigants cannot

successfully challenge the whole of agencies’ activities by seeking, for instance, general

improvement across the board, plaintiffs can challenge specific policies or rules implemented by

the agency.” USDN I, 2025 WL 2374528, at *27 (citing Lujan v. Nat’l Wildlife Fed’n, 497 U.S.

871, 890 n.2 (1990) (“[If] there is in fact some specific order . . . applying some particular measure

across the board to all . . . terminations,” and that order is final, “it can of course be challenged

under the APA by a person adversely affected—and the entire ‘. . . program,’ insofar as the content

of that particular action is concerned, would thereby be affected.”)). Here, plaintiffs “allege that

the agency adopted a global policy of terminating en masse, without individualized consideration

or reasoned review, all grants ‘it can portray as related to . . . DEI or climate change,’” and

executed the mass terminations by offering a conclusory justification that the grants “‘no longer

effectuate new USDA priorities,’” with this policy “embodied in the Secretary’s March 13

memoranda and demonstrated by the agency ‘sending termination letters with the same type of

language.’” Id. (citations omitted). These allegations, the Court reasoned, plausibly showed that

“the policy is sufficiently discrete to be challenged under the APA, and plaintiffs can accordingly

request that it be vacated and enjoined on a prospective basis across the board.” Id. (citations

omitted).

The same reasoning holds true for the Land Access Program Plaintiffs, all of whom

received virtually identical termination letters “[o]n or around March 23, 2026,” consisting of

“boilerplate language” that references the Secretary’s March 2025 Memorandum, makes the

accusation, without citation to any evidence, that USDA “has determined that awards under this

program involved discriminatory preferences based on Diversity, Equity, and Inclusion (DEI) and

wasteful spending that did little to further agricultural land purchases.” SAC ¶¶ 174, 179-80, 183.

Indeed, here, too, “[d]efendants’ alleged policy and practice of allegedly perfunctory, unreasoned

terminations is sufficiently final for plaintiffs to obtain relief.” USDN I, 2025 WL 2374528, at

*27.

Defendants fault plaintiffs for not having “identified ‘some specific order or regulation,

applying some particular measure across the board to all individual [] terminations’ that they are

challenging,” Defs.’ Reply at 7 (alteration in original) (quoting Lujan, 497 U.S. at 890 n.2), but

the search for the clear contours of defendants’ policy is the precise reason that plaintiffs have

been permitted discovery. The absence of such evidence as a specific order or regulation is an

insufficient basis to dismiss this claim when plaintiffs have already established the plausible

existence of a policy to effectuate en masse terminations without individualized consideration.

Those extensive allegations include that: (1) “to identify DEI-related grants for review and

termination, Defendants used a variety of search terms, including ‘Equity,’ ‘Environmental

Justice,’ ‘DEI,’ ‘DEIA,’ ‘Diversity,’ ‘Inclusion,’ ‘Underrepresented producers,’ ‘Underserved

communities,’ ‘Socially disadvantaged producers,’ and ‘Socially vulnerable,’”; (2) “to identify

climate-related grants for termination, Defendants instructed staff to identify any active awards

that ‘include, fund, or otherwise support climate-related activities which do not demonstrably

directly or indirectly benefit farmers, rangers, or producers,’ specifically grants that fund ‘Climate

consulting services’; ‘Climate modeling, tracking, or other technology platforms or solutions’;

‘The authoring of a report not anticipated to benefit farmers, ranchers, or producers’; ‘Climatefriendly facilities/construction’; and ‘And other kinds of analysis, evaluation, or reporting,’ as well

as sixteen ‘additional topic areas and search terms’”; and (3) “Defendants later provided their staff

additional topic areas and search terms to employ.” SAC ¶¶ 135-36. Further, plaintiffs allege that

“USDA staff were instructed to fill out one of several spreadsheets with information regarding

each grantee identified through the searches,” but that “to the extent the spreadsheets were actually

utilized, they establish that the search terms were dispositive as to whether a grant was terminated.”

Id. ¶ 137. Later, “‘leadership’ were nominally required to approve any terminations, but to the

extent it occurred, that review was not substantive.” Id. ¶ 138.

Plaintiffs add that the USDA Secretary’s March 13, 2025 memoranda “appear intended to

codify and approve USDA’s policy requiring the identification and termination of DEI- or climaterelated grants based on search terms and without sufficient individualized review” because “[t]he

Memoranda state that it is the policy of the Department to ‘not fund programs or organizations that

promote or take part in climate change or environmental justice initiatives’ or ‘DEI.’” Id. ¶ 139.

Contending that “USDA continues to follow the policy codified in [the memoranda] when

terminating grants,” plaintiffs allege that “USDA relied on [a memorandum] in the most recent

Land Access Program terminations issued in March 2026.” Id. ¶ 140-41 (capitalization

standardized). The original terminations were carried out through “letters that were based on []

form letters,” id. ¶ 144, and “[o]n or around March 23, 2026, FSA sent termination letters

purportedly cancelling 49 out of the 50 awarded Land Access Program grants,” id. ¶ 174, through

“nearly identical termination letters,” id. ¶ 177. Plaintiffs allege that but for the original

preliminary injunction, all of the Land Access Program grants “would have been terminated

pursuant to the policy at issue.” Id. ¶ 176.

Such allegations are more than enough to establish the plausibility of the existence of a

policy of terminating grants en masse without individualized consideration and based on a

keyword search for certain disfavored words and little other reasoned consideration. Such

perfunctory process would not pass muster under the APA, as defendants’ counsel has conceded.

See Hr’g Tr. at 71:11-72:10 (The Court: “If [a word search] were the process, would you say that

that process was not individualized and was arbitrary and capricious?” Defense counsel: “I don’t

think they could go in and see the words ‘climate change’ and press a delete button that

perfunctorily . . . To me, Your Honor, it doesn’t seem that that’s appropriate. . . . There would

need to be a much more thorough review than just a ‘control’ find search.”). Defendants’ motion

to dismiss Count VI therefore fails.

4. Land Access Program Plaintiffs Have Plausibly Alleged that the Grant

Terminations Were Contrary to Law in Count VII

Count VII claims that defendants’ “policy requiring terminations based on DEI—and its

individual termination of Land Access Program Plaintiffs’ and AC’s grants—are at odds with

Congress’s mandate that USDA funds for Land Access Program go towards programs that address

socially disadvantaged and underserved farmers” and, as such, this policy is “not in accordance

with the statutory requirements for the program and thus violates the APA.” SAC ¶¶ 269-70.

Defendants’ challenge to this claim has been rejected twice before. See USDN III, 2026 WL

1877821, at *9; USDN I, 2025 WL 2374528, at *32-33. Nevertheless, defendants reassert that,

due to an amendment made by the Inflation Reduction Act, the statutory authorization for the

current version of the Land Access Program is not intended “to be used to fund projects that give

preference to individuals based on their race, sex, sexual orientation, or other immutable

characteristics,” and therefore termination of these grants, which defendants say “were designed

to condition eligibility . . . based on a farmer’s race or other immutable characteristics,” was not

contrary to law. Defs.’ Mem. at 14-15. As plaintiffs correctly observe, “[t]his third bite at the

apple fares no better.” Pl.’s Opp’n at 14.

As has now twice been recounted, “[t]he Land Access Program originated with section

1006 of the American Rescue Plan Act, entitled ‘USDA Assistance and Support for Socially

Disadvantaged Farmers, Ranchers, Forest Land Owners and Operators, and Groups,’ which

appropriated funds for supporting the designated people or groups.” USDN I, 2025 WL 2374528,

at *32 (quoting American Rescue Plan Act (“ARPA”), Pub. L. No. 117-2, § 1006, 135 Stat. 4, 13-14 (2021)). The statute defines “[t]he term ‘socially disadvantaged farmer, rancher, or forest

landowner’ [to] mean[] a farmer, rancher, or owner or operator of nonindustrial private forest land

who is a member of a socially disadvantaged group,” and, in turn, “socially disadvantaged group”

is given the definition provided in 7 U.S.C. § 2279(a). ARPA, § 1006(c), 135 Stat. at 14. Under

7 U.S.C. § 2279(a), “[t]he term ‘socially disadvantaged group’ means a group whose members

have been subjected to racial or ethnic prejudice because of their identity as members of a group

without regard to their individual qualities.” 7 U.S.C. § 2279(a)(6).

ARPA § 1006 provided further direction on how specific percents of the appropriated funds

were to be used, including for the following five programmatic purposes: (1) “to provide

outreach…and other technical assistance on issues concerning food…or nutrition to socially

disadvantaged farmers, ranchers, or forest landowners, or other members of socially disadvantaged

groups,” ARPA § 1006(b)(1); (2) “to provide grants and loans to improve land access for socially

disadvantaged farmers, ranchers, or forest landowners, including issues related to heirs’

property . . .,” id. § 1006(b)(2); (3) “to fund the activities of one or more equity commissions that

will address racial equity issues within the Department of Agriculture and its programs,” id.

§ 1006(b)(3); (4) “to support and supplement agricultural research, education . . . as well as

scholarships and programs that provide internships and pathways to federal employment by,”

funding such programs at institutions eligible for funding under 7 U.S.C. § 321, et seq. (known as

the Second Morrill Act), including Tuskegee University, 1994 institutions under 7 U.S.C. § 301

note, Alaska Native, Native Hawaiian and Hispanic-serving institutions under 7 U.S.C. §§ 3156,

3241, and “insular area institutions of higher education located in the territories of the United

States” under 7 U.S.C. § 3361, id. § 1006(b)(4); and (5) “to provide financial assistance to socially

disadvantaged farmers, ranchers, or forest landowners that are former farm loan borrowers that

suffered related adverse actions or past discrimination or bias in [USDA] programs,” id.

§ 1006(b)(5).

This program was expanded the next year in the Inflation Reduction Act of 2022 (“IRA”)

Sec. 22007, Pub. L. No. 117-169, 136 Stat. 1818. From a total appropriated amount of

$1,010,000,000 for fiscal year 2021, see ARPA § 1006(a), the appropriated amount for fiscal year

2022, and “to remain available until September 30, 2031,” was almost three times that amount for

a total of $2,859,000,000 in the IRA § 22007, which amended ARPA § 1006 to appropriate these

additional funds for five programs that correlate directly with the same five programs set out in

ARPA § 1006. Rather than using the defined terms, “socially disadvantaged farmer, rancher, or

forest landowner” and “socially disadvantaged group,” see ARPA § 1006 (c)(2) and (3) (referring

to 7 U.S.C. § 2279(a)), to describe the eligible recipients of grant funding and intended

beneficiaries under the programs, however, the IRA’s amended § 1006 eliminates the definition

section and uses the undefined term “underserved farmers, ranchers, and forest landowners.” IRA

§ 22007 (amending ARPA § 1006).

Each agreement between the Land Access Program Plaintiffs and USDA states that “[t]he

authorizing statute for this agreement is Section 1006 of the American Rescue Plan Act . . . as

amended by Section 22007 of the Inflation Reduction Act of 2022,” specifying that “Section

1006(b)(1) and (b)(2) of the American Rescue Plan Act authorizes assistance and support to

farmers, ranchers, and forest landowners and operators; and focuses on addressing the needs of

underserved producers through outreach, education, engagement, and technical assistance to

increase land, credit, and market access.” E.g., Land Access Program Pls.’ Mot. for a Prelim. Inj.,

Decl. of Black Or. Land Trust’s Exec. Dir., Qiddist Ashe, Ex. A, Att. 2, Agreement Number:

FSA24GRA0011612, at 1, ECF No. 63-3. Though the record is silent as to which subsection of

Section 1006 AC’s Land Access Program grant was awarded, presumably this too was awarded

under IRA’s amended § 1006(b)(1) and (b)(2). See Pls.’ PI Mot., Decl. of Leah Atwood, Dir. of

Partnerships for AC, ECF No. 14-4.

Other than the use of the new undefined “underserved” term, nearly identical language is

used to describe the programs funded in IRA’s amended § 1006. For example, IRA’s amended

§ 1006 describes the purpose of the first program, titled “TECHNICAL AND OTHER

ASSISTANCE,” using identical language as in the original text in ARPA § 1006, “to provide

outreach…and other technical assistance on issues concerning food . . . or nutrition to,” and then

substitutes for the term “socially disadvantaged” the text “underserved farmers, ranchers, or forest

landowners, including veterans, limited resource producers, beginning farmers and ranchers, and

farmers, ranchers, and forest landowners living in high poverty areas.” IRA § 1006(a), 136 Stat.

at 2022. Likewise, IRA’s amended § 1006 describes the purpose of the second program, titled

“LAND LOSS ASSISTANCE,” using closely similar language to the original text in ARPA

§ 1006, “to provide grants and loans . . . to improve land access (including heirs’ property and

fractionated land issues) for underserved farmers, ranchers, or forest landowners, including

veterans, limited resource producers, beginning farmers and ranchers, and farmers, ranchers, and

forest landowners living in high poverty areas.” IRA § 1006(b), 136 Stat. at 2022. Next, IRA’s

amended § 1006, in a third subsection, titled “EQUITY COMMISSIONS,” describes the purpose

of these commissions using identical language as in the original text in ARPA § 1006, “to fund the

activities of one or more equity commissions that will address racial equity issues within the

Department of Agriculture and the programs of the Department of Agriculture.” IRA § 1006(c),

136 Stat. at 2022. The fourth subsection of IRA’s amended § 1006, titled “RESEARCH,

EDUCATION, AND EXTENSION,” uses similar, though broader, purpose language than in

ARPA § 1006, “to support and supplement agricultural research, education . . . as well as

scholarships and programs that provide internships and pathways to agricultural sector or Federal

employment for” certain specified institutions, including those enumerated in the original text.

IRA § 1006(d), 136 Stat. at 2022. Finally, the fifth subsection of IRA’s amended § 1006, titled

“DISCRIMINATION FINANCIAL ASSISTANCE,” directs funds “for a program to provide

financial assistance, including the cost of any financial assistance, to farmers, ranchers, or forest

landowners determined to have experienced discrimination prior to January 1, 2021, in Department

of Agriculture farm lending programs . . .,” IRA § 1006(e), 136 Stat. at 2022-23, which is similar

to the original text in ARPA §1006 describing the beneficiaries of this financial assistance as

“socially disadvantaged . . . former farm loan borrowers that suffered related adverse actions or

past discrimination or bias in [USDA] programs,” ARPA § 1006(b)(5).

In short, the IRA’s amended § 1006 uses identical or similar language for the purposes of

the appropriated funding and describes beneficiaries and eligible grant recipients for the programs

funded under this section as “underserved,” rather than the defined terms “socially disadvantaged

farmer, rancher, or forest landowner,” or “socially disadvantaged group.” Though the term

“underserved” is undefined, the USDA generally defines “underserved applicants” “as a group

whose members have been subjected to racial, ethnic, or gender prejudice because of their identity

as members of the group without regard to their individual qualities.” Press Release, FSA, USDA

Offers Targeted Farm Loan Funding for Underserved Groups and Beginning Farmers (June 2,

2020), https://perma.cc/7JWT-F3NA (“For farm loan program purposes, targeted underserved

groups are women, African Americans, American Indians and Alaskan Natives, Hispanics and

Asians and Pacific Islanders.”); see also Pls.’ Opp’n at 15 n.5 (quoting a March 6, 2024, USDA

press release, now removed from USDA’s website and thus inaccessible, applying the same

definition that “USDA defines underserved applicants as a group whose members have been

subjected to racial, ethnic, or gender prejudice because of their identity as members of the group

without regard to their individual qualities.”).

Indeed, at the time of the IRA’s passage and even today, the term “underserved” is used

“routinely” in USDA regulations. Pls.’ Opp’n at 15 n. 5 (citing, e.g., 7 C.F.R. § 610.22(c) (2025)

(“[H]istorically underserved groups and individuals; i.e., minorities, women, persons with

disabilities, socially and economically disadvantaged groups, and beginning farmers and

ranchers”) (emphasis supplied); 7 C.F.R. § 9.302 (2025) (“Underserved farmer or rancher means

a beginning farmer or rancher, limited resource farmer or rancher, socially disadvantaged farmer

or rancher, or veteran farmer or rancher”) (emphasis supplied); 7 C.F.R. § 5001.3 (2025) (defining

“underserved communities” to include “unserved or underserved populations, including minorities

or protected groups, persistent poverty areas, or areas where Rural Development projects have not

been awarded in the past five years”) (emphasis supplied)). The use of the phrase “socially

disadvantaged” in these regulations defining “underserved” harkens to the statutory definition of

“socially disadvantaged groups,” in 7 U.S.C. § 2279(a)(6) (defining the term to mean “a group

whose members have been subjected to racial or ethnic prejudice because of their identity as

members of a group without regard to their individual qualities.”), which was expressly referenced

in ARPA’s § 1006 (c)(3).

Against this backdrop of the original ARPA § 1006 amended statutory authorization for

the grants at issue and regulatory use of the term “underserved” used in the current version of §

1006, twice now, “[d]efendants’ attempt to recast the statute as one that contemplated aid to

growers based purely on financial status,” is an effort that has been determined to be “not credible.”

USDN I, 2025 WL 2374528, at *33; see USDN III, 2026 WL 1877821, at *9. In their opposition

to the original preliminary injunction, defendants argued in two sentences that “Section 22007(b)

[meaning § 1006(b)] funds initiatives based on farmers’ financial status and does not mention race,

sex, or sexual orientation” and that “Section 22007(b) [meaning § 1006(b)] allows the Department

to continue to find initiatives that assist ‘underserved’ and ‘limited resource’ producers without

funding initiatives ‘that unlawfully discriminate on the basis of race, color, religion, sex, national

origin, or another protected characteristic.’” Defs.’ Combined Mem. in Opp’n to Pls.’ Mot. for a

Prelim. Inj. & for Expedited Disc. at 31, ECF No. 22 (citation omitted). Defendants expanded on

this argument in opposing the second preliminary injunction motion, pointing out that “[u]nlike

Section 1006 American Rescue Plan, the Section 22007(b) of the Inflation Reduction Act does not

purport to assist ‘socially disadvantaged farmers,’ and does not even contain the term ‘socially

disadvantaged farmers,’” and arguing that had “Congress intended for the funds appropriated

under Section 22007(b) [meaning § 1006(b)] of the Inflation Reduction Act to fund grants for

programs that assisted farmers not based on their financial status but based on their race or other

protected class, then Congress would not have amended the statute to omit the term ‘socially

disadvantaged farmers and ranchers.’” Defs.’ Combined Mem. in Opp’n to Pls.’ Mots. for Leave

to File a Second Am. Compl. & for a Prelim. Inj. at 21-22, ECF No. 76. Defendants renew this

argument contending that their “position that Congress did not intend for farmers to qualify for

assistance under the ILA Program based on their race or other immutable characteristics is based

on a plain text reading of the amendments that Congress made to the program as part of the

Inflation Reduction Act.” Defs.’ Mot. at 16. As plaintiffs point out, however, “Defendants cite no

legislative history to support this argument,” Pls.’ Opp’n at 17, and “it is more likely that Congress

chose ‘underserved’ to broaden the class of eligible farmers using a variety of markers of social

and governmental bias, including race and gender, and consistent with the current regulatory and

statutory uses of that term,” id.

Indeed, the fundamental flaw in defendants’ position is that even if Congress intended in

the IRA’s amended § 1006 to replace the prior criteria with new criteria for grant eligibility, see

Defs.’ Mot. at 17—and momentarily disregarding the common-sense understanding that

“underserved” may apply more broadly than “socially disadvantaged”—plaintiffs have still

established that defendants acted contrary to law. Simply applying a keyword search for certain

disfavored words—“including ‘Equity,’ ‘Environmental Justice,’ ‘DEI,’ ‘DEIA,’ ‘Diversity,’

‘Inclusion,’ ‘Underrepresented producers,’ ‘Underserved communities,’ ‘Socially disadvantaged

producers,’ and ‘Socially vulnerable,’” which search terms were allegedly dispositive as to

whether a grant was terminated, see SAC ¶ 135, will likely sweep up grants benefiting financially

disadvantaged and thereby “underserved” farmers, rancher, or forest landowners. For instance,

applying the search term “Socially disadvantaged producers,” id., will almost certainly result in

targeting for termination grants designed to benefit “farmers, ranchers, and forest landowners

living in high poverty areas,” IRA § 1006(b), but the process allegedly employed by defendants to

terminate grants would encompass these grants too. In any event, the overall context of the statute,

which includes the creation of equity commissioners and funding directly aimed at farmers who

themselves directly experienced discrimination from USDA, confirms the reality of a strong

overlap between those “underserved” and those who have been socially disadvantaged through

historic discrimination.

While defendants may now have policy disagreements with the IRA’s amended § 1006 and

may vigorously object to the appearance of the words like “DEI, “DEIA,” “Diversity,” and

“Inclusion,” they run afoul of the law when they predicate termination of grants on the existence

of those words and not consideration of the statutory objective.

5. Plaintiffs’ Separation of Powers Claim (Count VIII) Withstands

Dismissal But Not the Ultra Vires Claim (Count IX)

Defendants seek dismissal of the last two Counts VIII and IX in the Second Amended

Complaint. In Count VIII, USDN, AC, and the Land Access Program Plaintiffs raise a separation

of powers claim, contending that because “[t]he Constitution vests the right to appropriate funds

exclusively with Congress,” defendants’ policy terminating their grants “violates the separation of

powers because the basis for terminating such awards directly contravenes their statutory

mandates.” SAC ¶¶ 275, 278, 280. Count IX asserts an ultra vires claim that defendants “have

no statutory authority to terminate awards for reasons wholly inconsistent with” the relevant

statutes.” Id. ¶¶ 284-85.

As to the separation of powers claim, defendants contend dismissal is appropriate because

“[t]he limited cases involving successful Appropriations Clause challenges have involved attempts

to spend funds not appropriated by Congress or a refusal to spend appropriated funds where the

relevant statutes required that the funds be spent” and that “[n]either of those circumstances exists

here.” Defs.’ Opp’n at 21 (citing Off. of Pers. Mgmt. v. Richmond, 496 U.S. 414, 432 (1990), and

Train v. City of New York, 420 U.S. 35, 42-45 (1975)). Plaintiffs, in turn, cite a more recent case

by another judge on the Court recently affirmed by the en banc D.C. Circuit, Pls.’ Opp’n at 20

(citing Climate United Fund v. Citibank, N.A., 778 F. Supp. 3d 90, 116 (D.D.C. 2025) (TSC), aff’d

per curiam, No. 25-5122, 2026 WL 2235002, at *1 (D.C. Cir. Aug. 4, 2026) (en banc)). That case

concerned the Environmental Protection Agency’s decision to “suspend[] all eight grants

comprising the entire NCIF [National Clean Investment Fund] and CCIA [Clean Communities

Investment Accelerator Fund] programs,” both of which programs were designed to help “finance

clean technology projects nationwide” and had been created by Congress in the IRA. Climate

United Fund, 778 F. Supp. 3d at 99, 116. The grantees sued and were found to have a likelihood

of success on the merits of a claim for a “violation of the separation of powers” because “‘Congress

speaks through the laws it enacts’ and here, EPA has terminated programs established through

lawfully enacted congressional appropriations without any basis in statutory authority.” Id. at 115

(quoting In re Aiken County, 725 F.3d at 260). Thus, “EPA cannot shut down these programs

completely and it cannot ‘decline to spend previously appropriated funds.’” Id. (quoting In re

Aiken County, 725 F.3d at 260). In other words, “EPA lacks the authority to effectively unilaterally

dismantle a program that Congress established.” Id. at 116.

Plaintiffs allege similar facts capable of supporting the inference that defendants are

“unilaterally dismantl[ing] a program that Congress established.” Id. The Second Amended

Complaint alleges that “[o]n or around March 23, 2026, FSA sent termination letters purportedly

cancelling 49 of the 50 awarded Land Access Program grants.” SAC ¶ 174. AC is identified as

“the only Land Access Program grantee who did not receive such a termination letter,” id., for the

highly plausible reason that “[b]ut for that preliminary injunction, on information and belief, AC’s

Land Access Program grant would have been terminated pursuant to the policy at issue here no

later than [] when the remaining Land Access Program awardees received notice of the

termination,” id. ¶ 176. Each of the Land Access Program Plaintiffs “received nearly identical

termination letters,” id. ¶ 177, and each administrative appeal was met with a response by USDA’s

National Appeals Division stating that “FSA’s March 23, 2026, division terminating your ILA

grant is not appealable because it concerns matters of general applicability” and that “[the] grant

termination is based on the general policy priorities of USDA and its decision to cancel the [Land

Access Program] program,” id. ¶ 197 (citation modified).

Against these factual allegations, defendants nonetheless insist that they “are not refusing

to spend appropriated funds” but “only seek to spend the funds consistent with the program

authorizing statutes and the Department’s current priorities.” Defs.’ Reply at 14. This boils down

to a factual dispute that may not be resolved at the motion to dismiss stage when plaintiffs’ factual

allegations must be taken as true and the inferences to be drawn must be in plaintiffs’ favor. Thus,

under the reasoning recently affirmed by the en banc D.C. Circuit, plaintiffs have adequately

alleged that defendants sought to terminate the entire congressional program and thus have

plausibly pleaded a separation of powers violation by terminating (or trying to terminate) all grants

awarded under a congressionally authorized and appropriated program.

Plaintiffs also bring an ultra vires claim, alleging that “USDA and USFS’s termination of

Forest Program awards, including USDN’s award, and USDA and FSA’s termination of Land

Access Program awards, including AC’s and Land Access Program Plaintiffs’ awards, are

unlawful ultra vires actions,” SAC ¶ 286, because these agencies “have no statutory authority to

terminate awards for reasons wholly inconsistent with the IRA” and other applicable statutes, id.

¶ 284-85. The D.C. Circuit has determined that an ultra vires challenge, which “permits, in certain

limited circumstances, judicial review of agency action for alleged statutory violations even when

a statute precludes review,” applies only where “(i) the statutory preclusion of review is implied

rather than express; (ii) there is no alternative procedure for review of the statutory claim; and (iii)

the agency plainly acts in excess of its delegated powers and contrary to a specific prohibition in

the statute that is clear and mandatory.” Changji Esquel Textile Co. v. Raimondo, 40 F.4th 716,

721-22 (D.C. Cir. 2022) (quoting DCH Reg’l Med. Ctr. v. Azar, 925 F.3d 503, 509 (D.C. Cir.

2019)); see also Nyunt v. Chairman, Broad. Bd. of Governors, 589 F.3d 445, 449 (D.C. Cir. 2009).

The D.C. Circuit has explained that such a “demanding standard is necessary because ultra

vires review seeks the intervention of an equity court where Congress has not authorized statutory

judicial review, on the assumption that Congress has not ‘barred judicial comparison of agency

action with plain statutory commands.’” Fed. Express Corp. v. U.S. Dep’t of Com., 39 F.4th 756,

765 (D.C. Cir. 2022). To succeed, then, “ultra vires claimants must demonstrate that the agency

has plainly and openly crossed a congressionally drawn line in the sand.” Id. Thus, the D.C.

Circuit has “explained that if the plaintiff’s claims would have failed under the APA, then those

same claims necessarily ‘could not succeed under’ ultra vires review, which has an even

‘narrow[er] scope.’” Id. (alteration in original) (quoting Trudeau, 456 F.3d at 190).

In light of this precedent, “there is no risk that the ‘premature’ dismissal of an ultra vires

claim will prejudice a plaintiff who also brings an APA claim” because “ultra vires review

inherently ‘represents a more difficult course . . . than would review under the APA.’” Lewis v.

U.S. Parole Comm’n, 743 F. Supp. 3d 181, 201 (D.D.C. 2024) (RCL) (quoting Trudeau, 456 F.3d

at 190). Thus, “prudential considerations favor interpreting the ultra vires pleading standard to

foreclose the mutual survivability of a statutory claim and an ultra vires claim, even at the motion

to dismiss stage.” Id.; see also Jafarzadeh v. Duke, 270 F. Supp. 3d 296, 311 (D.D.C. 2017) (JDB)

(“[B]ecause plaintiffs are able to assert the same claim through the APA, they cannot obtain relief

under the Mandamus Act or through the Court’s inherent power to review ultra vires agency

actions.”).

Thus, as plaintiffs continue to assert viable APA claims, their ultra vires claim will be

dismissed without prejudice. See Lewis, 743 F. Supp. 3d at 201 (“[I]f a plaintiff advances both a

well-pleaded APA claim and a duplicative ultra vires claim, the ultra vires claim must be

dismissed upon a motion by the defendants for failure to state a claim.”). 5 Accordingly, the

separation of powers claim (Count VIII) survives defendants’ motion to dismiss but not plaintiffs’

ultra vires claim (Count IX).

B. Imposition of Sanctions Is Not Appropriate

Defendants also move to vacate the scheduling order entered June 12, 2026, see Defs.’

Mot. to Vacate, and in response plaintiffs have moved for sanctions or, alternatively, additional

discovery in the form of “a single deposition of each individual responsible for terminating the

DEI- and climate-related grants,” Pl.’s Mot. at 2, which, defendants clarify would amount to

“thirty-three different individuals [who] signed the termination letters,” Defs.’ Combined Mem. in

Opp’n to Pls.’ Mot. for Sanctions & Reply in Further Supp. of Their Mot. to Vacate the Scheduling

Order (“Defs.’ Opp’n”) at 10, ECF No. 107. Though defendants’ diligence in complying with

their obligations to complete the AR and comply with limited discovery requests is disappointing

and will not be rewarded with their requested elimination of all deadlines, each motion is denied

for the reasons explained below.

Defendants currently have nine outstanding deadlines for discovery, but rather than confer

with plaintiffs and propose new realistic dates for completion of discovery, they filed their motion

In an effort to sustain the ultra vires claim, plaintiffs contend that “if in this matter DOGE or another outside party directed USDA’s terminations under the Defendants’ mass termination policy, then such terminations could be ultra vires,” Pls.’ Opp’n at 19, but this fails since no factual allegations necessary to support this argument are presented in the Second Amended Complaint or Count IX, which make no reference to DOGE or such outside decision-makers of the grant terminations. See SAC ¶¶ 282-86; see also Defs.’ Reply at 13 (“Even if this could be a basis for an ultra vires claim, Plaintiffs have not plausibly alleged in the Complaint that the decisions to terminate grants came from outside of the Department.”). In short, this argument does not help plaintiffs demonstrate that their operative complaint plausibly advances an ultra vires claim.

to vacate the scheduling order “on July 24, 2026, after four of the deadlines ha[d] passed and on

the same day as three of the deadlines” came due. Defs.’ Mot. to Vacate at 2. They contend that

“the schedule has not been efficient or minimally burdensome giving their resource constraints”

and “competing priorities,” noting that “[d]efendants do not benefit from discovery lasting longer

than necessary,” id. at 3, 4, while “Plaintiffs continue to litigate this case as if it is in an emergency

posture even though Plaintiffs [sic] grants are funded under the Court’s preliminary injunctions,”

id. at 4. Outlining the reasons for excusable neglect to explain why they have fallen so far behind

the deadlines set in the scheduling order, defendants explain that “senior attorneys assigned to this

case faced medical emergencies that unexpectedly interfered with their ability to assist with this

case for significant periods of time” and that “[o]ther attorneys assigned to this case have put in

notice that they will be leaving the Department imminently.” Id. at 2. Further, because they “fell

behind on earlier productions, it necessarily made it impossible to fully meet future deadlines.”

Id. at 4. These explanations are taken at face value, also mindful of the fact that the number of

plaintiffs increased sixfold with the filing, on June 30, 2026, of the Second Amended Complaint,

and that defendants’ anticipated six-month completion date for discovery and supplementation of

the AR was proposed before the expansion of the claims to include the Land Access Program

Plaintiffs. Moreover, defendants have, though belatedly, now seemingly put into place the

personnel necessary to complete discovery. See Joint Status Rep. at 2, ECF No. 114 (stating that

“[i]n addition to the senior OGC [USDA Office of General Counsel] managers over seeing this

case,” there are “four (4) attorneys from OGC permanently assigned to this case” and “two (2)

additional OGC attorneys in the Washington, DC office [who] are currently being onboarded”;

“three (3) personnel from USDA’s eDiscovery Program assisting with this case, including USDA’s

Director of Information Affairs”; and “four (4) reviewers from Deloitte [contracted] to review

records for responsive information”).

Nevertheless, defendants propose no suggested deadlines nor provide any timeframe by

which future production obligations will be satisfied. See id. Indeed, on September 30, 2026,

when asked to provide a “date certain by which defendants plan to complete production of: (a) the

AR; and (b) responses to plaintiffs’ discovery requests,” defendants stated that they “cannot

currently provide the date certain that they can complete production of the AR and responses to

Plaintiffs’ discovery requests,” but also represented that the June 5, 2026, representation that

discovery might be completed by November 5, 2026, was no longer viable after “[d]efendants

greatly expanded the scope of the search for responsive information on July 7, 2026,” and “twentyfour additional plaintiffs whose grants under the ILCMAP” were added to this action. Joint Status

Rep. at 8-9, ECF No. 114. Granting defendants’ motion to vacate would leave discovery in this

case in an unacceptable liminal state with no deadlines, and that requires denial of defendants’

motion.

Plaintiffs once again have moved for sanctions contending that defendants’ failure to

comply with the Scheduling Order deadlines—and multiple amended deadlines—“for discovery

and to produce a complete administrative record has tainted the evidence, lacks innocuous

explanations, constitutes bad faith, has the potential to unduly prejudice Plaintiffs, unduly burdens

the Court, and reflects Defendants will not bring themselves into line.” Pls.’ Mot. at 1. For these

reasons, plaintiffs request that the discovery effort be put aside and instead the Court obviate the

need for further discovery by imposing the sanction of adverse inferences “that: (i) USDA had a

policy to terminate DEI- and climate related grants solely based on the presence of DEI- or climaterelated terms in the grant material, which resulted in the termination of the grants identified in

response to Plaintiffs’ Second Interrogatory; and (ii) to the extent Defendants seek to rebut the

presence or effect of that policy in individual instances, Defendants possess no other evidence than

what is in the grants’ termination letters, one of only two complete set of documents Defendants

have produced to date.” Id. For their part, defendants could avoid further discovery by accepting

these findings in the form of adverse inferences and continuing this litigation with those findings

in place, but they strongly oppose any such findings being made. According to defendants, “[t]he

adverse inference Plaintiffs seek is inconsistent with the facts of the case” and defendants argue

that plaintiffs “can compare the spreadsheets against the list of the awards that were terminated

and see for themselves that not all awards that contained a particular search term were terminated,”

and use this to support an inference that individualized review must have occurred. Defs.’ Opp’n

at 7-8. Perhaps sensing the weakness of this position—particularly, the glaring omission of any

context for this argument with information, for example, whether only a miniscule 2% or an

overwhelming 99% of the awards with a keyword hit were terminated—defendants promise that

they “have additional records forthcoming if given the opportunity to put this case back on track.”

Id. at 8. As plaintiffs observe, “one presumes that if that smoking gun existed Defendants would

have produced and cited it at any time in the last year.” Pls.’ Reply at 4 n.1.

In any event, as was true the previous time plaintiffs’ motion for sanctions was considered

“[s]uch adverse inferences would be tantamount to an instruction that defendants’ actions in

terminating the grants were arbitrary and capricious and make dispositive briefing . . . easily

resolved in plaintiffs’ favor.” USDN II, 2026 WL 1500832, at *12. The D.C. Circuit has warned

that “[b]ecause the missing evidence instruction deals not with evidence but with its absence, ‘there

is the danger that the instruction permitting an adverse inference may add a fictitious weight to

one side or another of the case.’” Huthnance v. District of Columbia, 722 F.3d 371, 379 (D.C. Cir.

2013) (quoting Burgess v. United States, 440 F.2d 226, 234 (D.C. Cir. 1970) (opinion of Fahy,

J.)); see USDN II, 2026 WL 1500832, at *12 (quoting same).

Plaintiffs primarily base their request for adverse inferences on the argument that

defendants’ excuse about a “lack of staffing” is “particularly difficult to justify given it was

patently obvious Defendants would need to prepare for litigation.” Pls.’ Mot., Att. 1, Pls.’ Resp.

to Defs.’ Mot. to Vacate & P. & A. in Supp. of Pls.’ Cross-Mot. for Sanctions & Additional Disc.

(“Pls.’ Mem.”) at 8, ECF No. 101-1. They further state that “Defendants’ efforts to explain their

staffing only confirms its dilatory nature, while raising additional concerns.” Id. at 9. By

September 30, 2026, however, defendants’ staffing appears to have been resolved as defendants

described the now “considerable resources dedicated to this case,” including “four (4) attorneys

from OGC [USDA Office of General Counsel] permanently assigned to this case” and “two (2)

additional OGC attorneys in the Washington, DC office [who] are currently being onboarded”;

“three (3) personnel from USDA’s eDiscovery Program assisting with this case, including USDA’s

Director of Information Affairs”; and “four (4) reviewers from Deloitte [contracted] to review

records for responsive information.” Joint Status Rep. at 2, ECF No. 114. 6

Given the evolving circumstances surrounding the administrative record and requirements

for limited discovery, plaintiffs have not established the bad faith requisite for adverse inferences.

Less than two weeks after USDN II clarified defendants’ discovery obligations and directed the

parties to propose a schedule controlling discovery, defendants revealed that “the number of

defendants’ terminated grant awards ha[d] tripled from 312 awards known when the order was

Plaintiffs also attempt to establish “bad faith warranting an adverse inference” through defendants’ efforts in the D.C. Circuit “to stay the preliminary relief awarded to the Land Access Program Plaintiffs and to overturn the earlier preliminary injunctions.” Pls.’ Mem. at 10. To whatever degree defendants’ continued efforts to litigate this case in the D.C. Circuit might represent bad faith, any possible prejudice to plaintiffs is now moot as defendants’ motion for a stay was denied on September 29, 2026. See Urb. Sustainability v. U.S. Dep’t of Agric., No. 26-5264 (D.C. Cir. Sep. 29, 2026) (per curiam order).

issued to 948 awards at present.” Min. Order (June 8, 2026) (citations omitted). Then, less than

three weeks after the June 12, 2026 scheduling order was imposed, the Second Amended

Complaint was filed adding the twenty-four Land Access Program Plaintiffs to the case. At the

time, defendants opposed granting leave to amend “emphasizing the ‘demanding discovery

schedule’ already in place and arguing that ‘[g]ranting Plaintiffs’ motion for leave to amend the

complaint will increase the number of plaintiffs for whom Defendants need to add documents to

the administrative records from four to twenty-eight, a sixfold increase.’” USDN III, 2026 WL

1877821, at *7 (citation omitted). That “the addition of twenty-four plaintiffs will trigger

additional production demands for completion of the administrative record” was acknowledged,

and defendants were assured that “should such production require additional time, defendants are

entitled to detail the reasons and make any necessary request for deadline extensions.” Id. Given

the larger discovery burden than anticipated when the Scheduling Order was originally entered,

and defendants’ efforts, though belated, to add sufficient staffing to this case such that between

August 27 and September 28, 2026, they were able to process 35,779 documents at the “first level

of review,” see Joint Status Rep. at 3, ECF No. 114, plaintiffs have not shown that defendants’

attempts to comply with the scheduling order were so deficient as to amount to bad faith.

Therefore, plaintiffs’ request for adverse inferences is denied. 7

In the alternative, plaintiffs request “depositions of the class of people who have personal

knowledge of how Defendants executed the relevant terminations.” Pls.’ Mem. at 16. As was true

in USDN II, “plaintiffs are notably silent about the number of depositions, which agency personnel

Plaintiffs once again requests monetary sanctions, see Pls.’ Mem. at 15; Pls.’ Reply at 6, but because they have not made a showing of bad faith, this request is denied, see Parsi, 778 F.3d at 131 (“[A] finding of bad faith is required for an award of attorney’s fees under the court’s inherent power. . . . ‘[T]he district court must find clear and convincing evidence of the predicate misconduct.’” (quoting Shepherd, 62 F.3d at 1478)); see also USDN II, 2026 WL 1500832, at *14 n.12 (denying plaintiffs’ previous request for attorneys’ fees for the same reason).

would be noticed for a deposition or even which level of defendants’ personnel would be targeted

for deposition(s).” 2026 WL 1500832, at *12; see Pls.’ Mem. at 15-16; Pls.’ Reply at 6. Thus,

this request, too, is denied. While depositions may in fact be helpful and at this point warranted

in this case, the Court will not order any number of such depositions in a vacuum, but only based

on the documentary production, conferral among the parties and as properly justified to complete

discovery. The parties will be directed to confer and propose an updated schedule for completion

of discovery, which may include a reasonable, limited number of depositions, and any necessary

supplementation of the AR.

IV. CONCLUSION

For the reasons explained, defendants’ motion to dismiss is granted in part and denied in

part. Specifically, defendants’ motion to dismiss is granted as to Counts I, II and IX in the Second

Amended Complaint, to the claims asserted by Agroecology Commons arising out of the

termination of its Community Food Competitive Grant, to Institute for Agriculture and Trade

Policy and Providence Farm Collective’s claims in Count VI of the Second Amended Complaint,

and otherwise denied. In addition, defendants’ motion to vacate the schedule for completion of

discovery and supplementation of the administrative record, and plaintiffs’ motion for sanctions

are both denied. Instead, the parties are ordered to confer and propose shortly a modified schedule

for completion of the outstanding discovery and supplementation of the administrative record.

An order consistent with this Memorandum Opinion will be entered contemporaneously.

Date: October 6, 2026

BERYL A. HOWELL

United States District Judge

Urban Sustainability Directors Network v. United States Department of Agriculture

Authorities cited

Opinion · public domain