Case Overview: Trump v. CASA, Inc. (2025)
In Trump v. CASA, Inc., the Court addressed legal challenges to an executive order issued by President Donald Trump adopting an interpretation of birthright citizenship that would exclude the children of undocumented immigrants. Nonprofit plaintiffs, including CASA, successfully obtained nationwide injunctions from lower courts that prevented the order’s enforcement.
However, in a 6–3 decision, the Supreme Court ruled that such universal injunctions exceeded the jurisdictional authority of a federal district court. The majority concluded that district courts must confine injunctive relief to the parties before them and cannot block federal policies for all affected individuals or organizations outside of the ordinary Rule 23 class certification process.1
Importantly, the Court did not rule on the constitutionality of the executive order itself—its decision focused solely on the scope of interim judicial relief.
The Impact of the Federal Funding Pause and Its Injunctions
On January 27, 2025, the Office of Management and Budget (OMB) issued Memo M-25-13, which was directly related to EO 14169, enforcing an immediate pause on more than 2,600 federal grant and loan programs, which was subsequently rescinded. However, this action froze funding to nonprofits across sectors, including:
- Climate and environmental initiatives
- International development and public diplomacy
- Diversity, equity, and inclusion (DEI) programs
- Public health and human services grants
Within days, nonprofits and state attorneys general filed lawsuits. Two federal judges, one in the District of Columbia and one in Rhode Island, issued nationwide injunctions blocking the funding pause. They found that the executive order likely violated Congressional appropriations authority and threatened irreparable harm to plaintiffs and the communities they serve.
How CASA Changes the Landscape
The Supreme Court’s decision in CASA now casts legal doubt on the continued validity and scope of those nationwide injunctions. Specifically:
- Injunctions Must Now Be Narrow: Courts can no longer halt executive actions across the board unless the plaintiffs represent a certified class or all potentially impacted parties.
- Relief May Be Limited to Named Plaintiffs: Unless an organization is specifically named in the lawsuit, or is covered by a certified class action, —it may no longer be protected from federal government funding reductions.
- Geographic Disparities May Emerge: The funding pause may be blocked in D.C. or Rhode Island (or just to the named parties within those states) but enforced elsewhere, creating operational inconsistencies across service areas.
Strategic Implications for Nonprofit Organizations
Nonprofits can no longer depend on a single lawsuit to shield the entire sector from federal government decisions or orders.
Organizations no longer covered by pre-CASA injunctions may face:
- Pauses or termination of grant disbursements
- Delays in new awards and renewals
- Heightened reporting scrutiny
If nonprofits still pursue litigation, they may face increased costs associated with single-party lawsuits, class actions, increased delays and uncertainty.
Need for Governance-Level Oversight
Boards and executive teams must respond to this new legal environment by:
- Updating legal risk assessments
- Monitoring jurisdiction-specific developments
- Enhancing scenario planning and cash-flow analysis
