Attorney General Ellison sues Trump Administration’s over illegal attempts to end critical federal funding for states

Coalition of 21 states sue federal agencies over illegal use of a single clause in federal regulations to terminate billions of dollars in federal funding; regulation does not allow agencies to cancel funds on a whim

Trump Administration has already used clause to end tens of millions of dollars in funding to Minnesota

June 20, 2025 (SAINT PAUL) — Attorney General Ellison and a coalition of 21 other attorneys general are suing the Trump Administration over its unprecedented and unlawful attempts to invoke a single provision buried in federal regulations to strip away billions of dollars in critical federal funding for states and other grantees . Attorney General Ellison and the coalition seek to limit the Trump Administration’s use of this regulation to indiscriminately and illegally terminate critical funding for combating violent crime, educating students, protecting clean drinking water, conducting lifesaving medical and scientific research, safeguarding public health, addressing food insecurity, and much more. 

Since January 20, at the direction of President Trump and the Department of Government Efficiency (DOGE), federal agencies have stripped away thousands of grants they had previously awarded to states and grantees. The Trump Administration has slashed this critical federal funding by invoking a single clause in the federal regulations of the Office of Management and Budget (OMB), which provides that agencies may terminate an award of federal funding if it “no longer effectuates ... agency priorities.”  Those five words have formed the basis for much of the Trump Administration’s indiscriminate campaign to unlawfully terminate critical funding expressly authorized by Congress and awarded to states.

In Minnesota, since January 20, the Trump Administration has terminated tens of millions of dollars in federal grant funding in this fashion, defunding important state programs that build resilient local food chains for schools and childcare centers, improve food and agricultural supply chain resiliency, and advance environmental justice. One such grant in Minnesota, terminated on April 22, provided federal funding for training programs that create safer learning environments by training teachers and school administrators on violence prevention strategies. The grant was authorized by Congress with the passage of the STOP School Violence Act of 2018.

“The Trump Administration is not foolish enough to think that five words buried in federal regulations gives them the power to ignore the Constitution, override the will of Congress, and cut funding for programs that folks rely on, but they are trying it anyway. These efforts demonstrate a complete and utter disregard for the rule of law that should disturb every Minnesotan.” said Attorney General Ellison. “If Donald Trump does not want to fund violence prevention in Minnesota schools, he should have the courage to actually put forward legislation repealing the STOP School Violence Act of 2018. Then, Congress can debate the merits of Trump’s proposal and vote on it, as the Constitution intends. Instead, Trump is trying to use legal gimmicks to circumvent the Constitution, the Congress, and the will of the American people, all to force through policies that will harm Minnesotans. I will not stand for it, so I am suing the Trump Administration to put an end to this farce.”

As Attorney General Ellison and the coalition explain, the Trump Administration’s decision to invoke this regulation as its basis for slashing billions of dollars of critical funding to states is a dramatic departure from past practice. Before the Trump Administration, federal agencies had not terminated grants on a whim merely because the agency’s priorities shifted midway during the use of the grant. Nor was that how they applied the regulation.

However, since President Trump took office, federal agencies have shifted course and claimed unfettered authority to terminate grants on a whim and with no advance notice. In February, President Trump issued an executive order formally directing agencies—and the DOGE employees assigned to these agencies—to terminate grants en masse. Federal agencies have carried out that directive by invoking the regulation as grounds for terminating entire programs based on a purported shift in agency priorities, without any notice to the states and in conflict with the federal statutes appropriating funding for these programs.

The lawsuit argues that the Trump Administration’s decision to invoke the regulation to terminate grants based on their changed agency priorities is unlawful. The lawsuit explains that the regulation does not authorize federal agencies to terminate grants based on changes in agency preferences that occur after a grant is awarded. The lawsuit also notes the importance of obtaining clarity regarding the scope of this regulation, as states collectively accept hundreds of billions of dollars a year that are at risk of termination pursuant to this regulation. 

The coalition is filing this lawsuit against OMB and a number of federal agencies that have unlawfully relied on this regulation to collectively slash billions of dollars in federal funding to states: the Departments of Agriculture, Commerce, Defense, Homeland Security, Justice, Labor, and State, as well as the Environmental Protection Agency, Federal Emergency Management Agency, National Endowment for the Humanities, and National Science Foundation.

The coalition filed suit in the District of Massachusetts and seeking a declaratory judgment that the OMB regulation and defendants’ regulations do not independently authorize the Trump Administration to terminate funding based on agency priorities that were identified after the grant was awarded. In the alternative, the coalition is seeking to vacate the Trump Administration’s decision—reflected in its uniform practice across all of the defendant agencies—to invoke the regulation as grounds for terminating billions of dollars of federal funding based on purported changes in agency priorities.

Attorney General Ellison joins the Attorneys General of New Jersey, Massachusetts, New York, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Nevada, New Mexico, Oregon, Rhode Island, Vermont, Wisconsin, and the District of Columbia, and the state of Pennsylvania, in filing this lawsuit.