22 States Sue Trump Administration Over Federal Grants Freeze
A coalition of 22 states filed a lawsuit seeking to reverse the Trump administration's sweeping freeze on federal grants and loans. The outcome of the lawsuit will "probably" affect NTIA's Digital Equity Act (DEA) grant programs, said Andrew Schwartzman, the Benton Institute for Broadband & Society's senior counselor. "The qualification is that the government hasn't filed anything yet, and there are no motions or other pleadings that expand on what is said in the complaint," he said. The administration ended the $2.5 billion DEA grant program in May, causing states to cancel all contracts that would have used that money (see 2505090051).
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The coalition of 21 state attorneys general and Pennsylvania Gov. Josh Shapiro (D) told the U.S. District Court for Massachusetts in a complaint last month that the funding was abruptly ended without due process and sought to force the administration to resume it. Central to the lawsuit is a 2020 clause within an OMB regulation specifying when federal agencies may terminate grants, which says such action is allowed if an award "no longer effectuates the program goals or agency priorities." OMB reiterated its policy in 2024.
That rulemaking "makes plain that OMB intended for the clause to permit terminations in only limited circumstances and provides no support for a broad power to terminate grants on a whim based on newly identified agency priorities," the states' lawsuit said.