Trump Admin Withholding FEMA Funds From ‘Sanctuary’ States Is Illegal, Federal Judge Rules

The judge ruled that the restrictions on funding are ‘arbitrary and capricious’ and violate the Constitution’s spending clause.

People walk past a Federal Emergency Management Agency sign following a news conference at the Altadena Disaster Recovery Center in Altadena, Calif., following the Eaton fire on Jan. 30, 2025. Mario Tama/Getty Images

A district court on Sept. 24 blocked the Trump administration’s policy of withholding emergency grant funds from so-called sanctuary jurisdictions that have been refusing to cooperate with federal immigration law enforcement.

The lawsuit, Illinois v. Federal Emergency Management Agency (FEMA), is being heard in the U.S. District Court for the District of Rhode Island.

Twenty states in May sued the federal government to have grant funds, disbursed by FEMA, restored to them after President Donald Trump issued an executive order on Jan. 20 that, among other things, directed the withholding of federal funds from states that refuse to cooperate with Immigration and Customs Enforcement in the removal of illegal immigrants.

The states sought a motion for “summary judgment” from the court, which would resolve the case in their favor without a full bench trial and which is usually granted when a party’s claims are clear and convincing on their face. That motion was granted by the court, which means that the administration’s FEMA funding restrictions have been deemed illegal and void.

“Defendants’ arguments ... are all without merit,” District Judge William E. Smith wrote in the order granting summary judgment. On the merits, the court ruled that the Trump administration’s actions were “arbitrary and capricious” under the Administrative Procedure Act and that they violated the Constitution’s spending clause.

“[The Department of Homeland Security] engaged in a wholly under-reasoned and arbitrary process. ... [There was no] actual explanation of why it is necessary to attach sweeping immigration conditions to all the grants at issue,” Smith wrote. The Department of Homeland Security (DHS) is FEMA’s parent agency.

On the constitutional issues, Smith ruled that because “the grants at issue fund programs such as disaster relief, fire safety, dam safety, and emergency preparedness,” any immigration-related conditions did not “advance the purpose” of the funding and could not be tailored to them, as required by spending clause case law.

The decision is a victory for the 20 states, all represented by Democratic attorneys general, that have opposed the administration’s policy of mass deportations of illegal immigrants, with the prioritization of those with a criminal record. States, as sovereign entities, cannot be forced by the federal government to cooperate with Immigration and Customs Enforcement, and the Trump administration has sought to induce that cooperation to support its removal plans.

“We just won our lawsuit against [DHS] after a judge ruled the department can’t hold life-saving disaster relief funds hostage to advance its anti-immigration efforts,” New York Attorney General Letitia James, one of the parties to the case, wrote on social media.

“The federal government cannot prioritize its cruel immigration agenda over Americans’ safety.”

Assistant DHS Secretary Tricia McLaughlin told The Epoch Times in a statement: “Cities and states who break the law and prevent us from arresting criminal illegal aliens should not receive federal funding.

“The President has been clear on that. Under [DHS] Secretary [Kristi] Noem’s leadership, DHS is working to end violations of federal immigration law and remove criminal illegal aliens from American communities.

“Radical sanctuary politicians need to put the safety of the American people first—not criminal illegal aliens. The Trump Administration is committed to restoring the rule of law. No lawsuit, not this one or any other, is going to stop us from doing that.”