A federal judge in Boston issued a ruling on Friday blocking the Trump administration from invoking a particular contractual provision to justify substantial reductions in federal funding. Twenty-three states had initiated legal action against the administration, contending that officials were leveraging the clause to terminate grants affecting areas including public safety, food security, and scientific research. The states had filed their lawsuit during the previous year and expressed concern that the clause would be applied to both current and future grant awards.
U.S. District Judge Indira Talwani granted summary judgment in favor of the states and rejected the government’s request to have the case dismissed. In her written decision, the judge stated that the administration’s interpretation of the termination clause lacked clear textual support and contradicted the applicable regulatory framework and legislative history. She also noted that the interpretation would violate constitutional requirements regarding conditions on federal spending.
The contested clause permits federal agencies to terminate grants if an award “no longer effectuates the program goals or agency priorities.” The provision was initially established in 2020 and underwent revision in 2024. The states’ lawsuit characterized the Office of Management and Budget’s application of the language as part of a sweeping effort to reduce federal funding. New Jersey’s attorney general issued a statement characterizing the ruling as a victory, stating the administration had unlawfully eliminated funding for public safety, disaster preparedness, and other programs.
The federal government’s legal team had argued the case should be dismissed, contending that some grants had already been terminated and claims about future impacts were speculative. Officials also contended the states had raised generalized objections without seeking restoration of individual grants. The Office of Management and Budget declined to provide comment on the ruling.