A nationwide coalition of 75 cities, counties, and housing and transit authorities represented by Pacifica secured an important victory yesterday in the United States Court of Appeals for the Ninth Circuit in their battle to prevent federal agencies from using grant programs to coerce local governments into adhering to President Trump’s political agenda.
A Ninth Circuit panel largely upheld a district court’s preliminary injunction that blocked the Department of Housing and Urban Development (HUD) and the Department of Transportation (DOT) from imposing new conditions on billions in already-awarded grant programs relied upon by communities across the country to support unhoused people, fund public transit, build and maintain highways and railways, and improve and develop airports. The conditions included that grantees eliminate all forms of diversity, equity, and inclusion (DEI) policies, help with the administration’s aggressive and lawless immigration enforcement, target and punish transgender people, and cut off information about lawful abortions.
The coalition argued that the agencies violated the Administrative Procedure Act by contravening the Separation of Powers doctrine and thus undermined powers granted to Congress by attempting to impose the conditions. During a February hearing before the Ninth Circuit, Pacifica attorney Paul Lawrence argued on behalf of the coalition: “The district court correctly held that [the conditions are]…beyond the statutory authority of the agencies to enact and in violation of the Separation of Powers and also that they were arbitrarily and capriciously adopted because there was no process or reasoning to explain why this change in the conditions that were being applied to the local governments at issue.”
In its decision, the Ninth Circuit panel held that most of the conditions are unlawful, and that the coalition is likely to succeed in its lawsuit to prevent their imposition.
“The majority of the conditions far exceed the limited authority set out by Congress and superimpose onerous requirements well after the government already awarded grant funds,” wrote Judge M. Margaret McKeown in the opinion. “Although the agencies’ position is fairly reduceable to the excuse ‘the President made us do this,’ we are ultimately not in the business of second-guessing agency policy.”
The three-judge panel also included Judges Richard A. Paez and Patrick J. Bumatay, who wrote a partial dissent.
Pacifica initially filed suit on May 2, 2025 on behalf of eight cities and counties in five states, but after a U.S. District Court issued a temporary restraining order on May 7, 23 additional government entities representing communities in seven more states joined the plaintiff coalition. On June 3, the district court granted a preliminary injunction to the expanded coalition. Pacifica has since filed amended complaints, adding additional plaintiffs to bring the total to 75.
The Pacifica litigation team representing the coalition includes Lawrence, Jamie Lisagor, Sarah Washburn, and Meha Goyal. Public Rights Project is serving as co-counsel in the case.
