A federal judge in Boston blocked the Trump administration on Friday from using an obscure grant clause to cut billions of dollars in federal funding, handing the states a major win in a case over how far Washington can go in canceling awards already made.
U.S. District Judge Indira Talwani granted summary judgment to the 23 states that sued last year, and denied the government’s bid to throw out the case. Her ruling means the administration cannot rely on the clause to strip grants when it says an award no longer fits program goals or agency priorities.
The fight reached the court because the states said the clause was being used to terminate grants tied to crime prevention, food security and scientific research. They argued the language, first introduced in 2020 and revised in 2024, was being invoked for the first time to claw back money that had already been approved. That mattered because the dispute was never just about one grant. It was about whether a grant award could be undone after the fact on the ground that priorities had changed.
Talwani said the administration’s reading did not hold up. In her ruling, she wrote that the defendants’ interpretation of the Termination Clause was not clearly supported by the text, ran against the regulatory scheme, found no support in the rulemaking history and would violate the Spending Clause’s requirement that funding conditions be stated clearly. She also rejected the government’s argument that the suit was too speculative and too broad.
That argument was aimed at the future, but the states said the damage was already happening. Lawyers for the federal government said some grants had already been terminated and that the plaintiffs were attacking thousands of grants in the abstract without asking to restore any single one. Talwani was not persuaded, and that leaves the administration without the clause it had used to justify the cuts.
Jennifer Davenport, the New Jersey Attorney General, called the ruling an important win for all New Jerseyans and said the Trump Administration had “recklessly and illegally gutted” federal funding for public safety, disaster preparedness, scientific research, clean water and more. She said the president and his allies could not hold critical programs hostage to their personal whims and political ideologies.
The ruling turns on a provision that lets federal agents end a grant if the award no longer effectuates the program goals or agency priorities. The states said that standard was being used to expand a narrow termination power into a broad budget-cutting tool. The federal government declined to comment through the Office of Management and Budget, and the decision leaves open the next step: whether the Trump administration will appeal, or whether the court fight now shifts from what can be cut to what money must stay in place.
