State of Washington v. United States Department of Housing and Urban Development (D.R.I.)
Case Overview
A coalition of states, led by Washington and joined by Oregon, California, Colorado, Connecticut, New Jersey, Arizona, Maine, Vermont, Wisconsin, the District of Columbia, and others, challenged HUD's overhaul of the Continuum of Care program, the main federal homelessness-assistance grant stream. HUD had rescinded a two-year funding notice in November 2025 and replaced it with notices that cut permanent-housing funding and imposed new conditions, including criteria tied to gender identity and diversity programs. The states argued the changes violated the Administrative Procedure Act. The case was heard in the District of Rhode Island before Judge Mary McElroy and consolidated for decision with the parallel suit by homelessness organizations, National Alliance to End Homelessness v. HUD (1:26-cv-00436).
The Facts
Facts
A coalition of states, led by Washington and joined by Oregon, California, Colorado, Connecticut, New Jersey, Arizona, Maine, Vermont, Wisconsin, the District of Columbia, and others, challenged HUD's overhaul of the Continuum of Care program. HUD had rescinded a two-year funding notice in November 2025 and replaced it with notices that cut permanent-housing funding and imposed new conditions, including criteria tied to gender identity and diversity programs. The case was heard in the District of Rhode Island before Judge Mary McElroy and consolidated for decision with the homelessness organizations' parallel suit, National Alliance to End Homelessness v. HUD.
The Issue
Issue
Whether HUD's November 2025 and December 2025 Continuum of Care funding notices violated the Administrative Procedure Act, including whether the agency changed policy without the required notice and comment.
The Rules
Rule
The Administrative Procedure Act requires notice-and-comment procedures for substantive rules and bars arbitrary and capricious agency action; a reviewing court sets aside action taken without the required procedures or reasoned explanation.
The Application
Analysis
On August 7, 2026, Judge McElroy granted in part and denied in part the cross-motions for summary judgment and set aside HUD's November 2025 and December 2025 funding notices as violations of the Administrative Procedure Act, finding the agency changed policy without the required notice and comment. Washington's attorney general described the result as defeating HUD's effort to kneecap homelessness services, and final judgment entered the same day.
The Conclusion
On August 7, 2026, Judge Mary McElroy (D.R.I.) granted summary judgment in part in this coalition suit led by Washington and joined by other states, setting aside HUD's 2026 Continuum of Care Notice of Funding Opportunity as a violation of the Administrative Procedure Act for lacking the notice-and-comment rulemaking the McKinney-Vento Act requires, and entered final judgment. The government appealed to the First Circuit, where the case was consolidated with the parallel nonprofit and local-government suit. On September 24, 2026, the First Circuit vacated the judgment and remanded. After the panel signaled that the notice-and-comment claim was unlikely to succeed, the plaintiffs moved for summary vacatur and remand, and the court construed them to have abandoned and formally waived that claim, leaving no live dispute. The plaintiffs are estopped from raising the notice-and-comment claim again, and the First Circuit directed that any eventual district-court judgment dismiss it with prejudice. The district court's set-aside of the funding notice therefore no longer stands.
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