Appeals Court Skeptical of Trump’s Bid to Dismantle Three Federal Agencies

A federal appeals court in Boston appeared skeptical on Wednesday of the Trump administration’s effort to dismantle three small federal agencies — firing most of their employees and cutting grants — in a hearing that could determine the fate of these Congressionally created institutions.

The three-judge panel of the First Circuit Court of Appeals — all appointed by Democratic presidents — heard arguments from Justice Department lawyer Simon Jerome, who said the district judge had erred in blocking the administration’s actions. According to him, Judge John McConnell in Rhode Island had no jurisdiction over the case, since the agencies had not adopted any formal policy that could be reviewed by the court.

But the judges pushed back. Judge Seth Aframe said the administration’s position would allow it to evade judicial review of efforts to dismantle agencies created by Congress, as long as it acted “in secret,” without a written policy. Judge Julie Rikelman, meanwhile, cited evidence presented by 21 Democratic state attorneys general showing that two of the agencies had eliminated their entire staffs after Trump’s order. “An agency cannot function without people,” she said.

The agencies in question are the Minority Business Development Agency, the Federal Mediation and Conciliation Service and the U.S. Interagency Council on Homelessness — institutions responsible for mediating labor disputes, supporting minority businesses and preventing homelessness. They were targeted by a Trump executive order in March 2025 on “reducing unnecessary elements of the federal bureaucracy,” among seven agencies identified in that order.

Judge McConnell had previously ruled that the agencies gave no reasonable explanation for why they were being dismantled and that closing them violated separation-of-powers principles. The administration has already dropped its appeal for a fourth agency, the Institute of Museum and Library Services.

The case, State of Rhode Island v. Trump, No. 26-1070 in the First Circuit, is expected to send an important signal about the limits of executive power over federal agencies created by law by Congress.

Source: Reuters