Judge Blocks Trump's Blanket Justification for Cutting Grants

A federal judge in Boston ruled on Friday, July 17, that the Trump administration cannot rely on a White House budget office regulation to cancel billions of dollars in federal grants simply because the programs no longer align with the president's priorities.

U.S. District Judge Indira Talwani, who was appointed by President Barack Obama, granted summary judgment in favor of a coalition of 20 states, the District of Columbia, and the governors of Kansas, Kentucky, and Pennsylvania. The lawsuit, led by the attorneys general of New Jersey, Massachusetts, and New York, targeted the Office of Management and Budget (OMB), OMB Director Russell Vought, and eleven federal grant-making agencies, including the Departments of Justice, Agriculture, and Homeland Security, the EPA, FEMA, the National Science Foundation, and the National Endowment for the Humanities.

The case centered on a "Termination Clause" in federal regulations — a provision added in 2020 during Trump's first term and later revised under the Biden administration — that allows agencies to end a grant if it no longer serves current program goals or agency priorities. Since returning to office, the Trump administration had cited that clause repeatedly to cancel grants it associated with diversity, equity and inclusion initiatives and climate-related programs, triggering a wave of related litigation nationwide.

Judge Talwani found that the clause does not give agencies authority to terminate grants based on priorities identified only after the awards were already made. The plaintiff states said $5.4 billion in existing grants had been at risk, on top of funding already cut from universities, crime-prevention programs, and school lunch initiatives.

New Jersey Attorney General Jennifer Davenport said the ruling put an end to the administration's weak justification for the cuts, while New York Attorney General Letitia James also criticized the funding terminations.

Not every recent ruling has gone against the administration, however. In a separate case decided the same week, U.S. District Judge John Cronan in Manhattan — a Trump appointee — declined to order the National Science Foundation to restore STEM diversity grants canceled since April, ruling that such claims belonged before the Court of Federal Claims rather than his court.

The rulings add to a broader pattern of legal battles over the administration's efforts to reshape federal research and grant funding, with outcomes so far varying depending on the court and the specific legal theory at issue.