By Nate Raymond and Daniel Wiessner
(Reuters) -A federal appeals court on Wednesday refused for now to allow U.S. President Donald Trump’s administration to proceed with a planned overhaul of the U.S. Department of Health and Human Services, which would involve reorganizing several agencies and firing thousands of employees.
A three-judge panel of the Boston-based 1st U.S. Circuit Court of Appeals declined to lift a federal judge’s injunction secured by several Democratic-led states. They had challenged a plan U.S. Health Secretary Robert F. Kennedy Jr announced in March to carry out a large-scale reorganization of the department.
The 1st Circuit rejected the Trump administration’s claims that the states could not show they would be immediately harmed if the injunction is lifted pending an appeal. The panel noted that the lower court relied on hundreds of pages of testimony from state officials.
“The government does not explain how the district court clearly erred in crediting these uncontroverted facts,” the court said in an unsigned order. All three judges were appointed by former President Joe Biden, a Democrat.
HHS did not immediately respond to a request for comment. The office of New York Attorney General Letitia James, which is spearheading the lawsuit, declined to comment.
Kennedy’s plan to reshape the department involved cutting 10,000 employees and centralizing some functions of the U.S. Food and Drug Administration, Centers for Disease Control and Prevention and other agencies under his purview.
The 19 states that sued, along with the District of Columbia, challenged HHS’ implementation of its restructuring plan, which also called for collapsing 28 divisions into 15 and closing half of its 10 regional offices.
While the states argued that the entire plan was unlawful, they only asked a judge to block firings and restructurings at four agencies within HHS, including the U.S. Centers for Disease Control and Prevention and the Office of Head Start.
The states said the cuts led to infectious disease lab closures, research being abandoned and partnerships being suspended, rendering the CDC unable to meet statutory mandates to investigate diseases and threatening Head Start centers that support early childhood programs.
In July, U.S. District Judge Melissa DuBose, a Biden appointee in Providence, Rhode Island, agreed, saying the administration “does not have the authority to order, organize, or implement wholesale changes to the structure and function of the agencies created by Congress.”
She ordered HHS to halt mass job cuts and restructurings at the four agencies, which also included the FDA’s Center for Tobacco Products and the Office of the Assistant Secretary for Planning and Evaluation.
The administration appealed, saying DuBose’s ruling should be set aside as the lawsuit was functionally identical to two earlier cases in which the 6-3 conservative majority U.S. Supreme Court lifted orders requiring it to reinstate employees let go en masse at other agencies by the administration.
The Trump administration had argued that the states’ case rests on speculation about what harms they would suffer as a result of changes to department services, and that any challenges to the firings had to be pursued by the federal employees themselves before the Merit Systems Protection Board.
But the 1st Circuit on Wednesday said that states rely on HHS for an array of services, such as infectious disease testing and data on maternal and infant mortality and health, and so had a stake in the dispute.
(Reporting by Nate Raymond in Boston and Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and David Gregorio)
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