By Khorri Atkinson

Law360 (September 14, 2020, 9:57 PM EDT) -- A Second Circuit panel on Friday, at least temporarily, overturned a New York federal judge's latest order blocking the Trump administration from denying permanent residency to legal immigrants who receive public assistance such as health benefits in the wake of the COVID-19 pandemic.

This decision marked the second time the circuit court was called to rule on an order by U.S. District Judge George Daniels that halted the Trump administration's so-called "public charge" rule.

The circuit court last month mostly revived the rule after finding that Judge Daniels' nationwide ban on the rule, which he ordered last October, applied only within the circuit's jurisdiction — New York, Connecticut and Vermont. Friday's circuit ruling responded to a second July 29 order from Judge Daniels that temporarily blocked the U.S. Department of Homeland Security from implementing the policy across the U.S. due to the pandemic.

In his July order, Judge Daniels found that the policy deters immigrants from seeking COVID-19 testing and could threaten efforts to curb the spread of the disease, which has created a national health emergency crisis. The judge said U.S. Citizenship and Immigration Services' efforts to address these concerns were "plainly insufficient" and that the agency's alert informing immigrants that any testing or treatment for the coronavirus would not be counted against them is ambiguous and "further adds chaos and confusion."

But on Friday, Circuit Judges Pierre N. Leval and Gerard E. Lynch said DHS "has demonstrated a likelihood of success on the merits" of its argument that the district judge wrongly issued the July nationwide injunction while the government's appeal of the virtually identical injunctions entered in October were pending before the circuit court.

The two circuit judges, along with Circuit Judge Peter W. Hall, in August unanimously agreed with the district judge's October nationwide order blocking the new policy that was set to take effect that month. But the panel said the preliminary injunctions issued in two separate suits — one brought by a group of states and New York City and another filed by five nonprofits that provide legal and social services to noncitizens — will only apply to the three states that fall under its jurisdiction.

In Friday's order, Judges Leval and Lynch wrote that they doubt the district judge's July ruling was proper in light of the considerations the three-judge panel set forth in the August ruling.

The order also noted that Judge Hall "is currently unavailable" and that DHS's appeal is being adjudicated by the panel's two other judges.

The judges further emphasized that the Federal Rule of Civil Procedure grants the district court specific authority to suspend, modify, restore or grant an injunction during the pendency of the appeal. But the rule should be narrowly interpreted to allow the court to grant such relief as may be deemed necessary to preserve the status quo, they reasoned.

"Here, the district court did not attempt to preserve the status quo. In January, the Supreme Court stayed the initial preliminary nationwide injunctions in their entirety pending disposition of the government's appeal" at the Second Circuit and disposition of DHS's petition for a writ of certiorari "if such writ is timely sought," the order contended.

"Whether or not the pandemic affects the balance of equities favoring preliminary relief, it is not obvious that the effects of the pandemic bear on the considerations that led us to modify the district court's initial injunction," the order added.

Representatives for the parties did not immediately reply Monday to requests for comment on Friday's decision. 

The states are represented by the attorneys general of New York, Connecticut and Vermont, and the Corporation Counsel of the City of New York.

The nonprofit organizations are represented by attorneys with Paul Weiss Rifkind Wharton & Garrison LLP, the Center for Constitutional Rights and the Legal Aid Society.

The federal government is represented by Jack Starcher of the U.S. Department of Justice's Civil Division.

The case is State of New York v. U.S. Department of Homeland Security, case number 20-2537, in the U.S. Court of Appeals for the Second Circuit.

--Additional reporting by Suzanne Monyak. Editing by Gemma Horowitz.

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