Urban Sustainability Directors Network v. United States Department of Agriculture

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. 1  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. 2 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 1 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. 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 2 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). 4 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 5 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 6 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,’ 7 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 8 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. 9  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 10 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 11 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 3 “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)). 12 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 13 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). 14  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 15 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 16 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 17 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, 18 fines, awards of attorneys’ fees, and such other orders and sanctions as they find necessary, in