Holding disaster and preparedness grants hostage to immigration enforcement

Editor's note: a federal court held the grant conditions arbitrary and capricious and unconstitutionally coercive, vacated them and permanently enjoined them.

In March and April 2025, DHS revised the Standard Terms and Conditions governing every federal award it makes. Six new requirements obliged recipients to share immigration-status information, cooperate with ICE, give agents access to detainees, refrain from publicizing ICE operations, and certify compliance statewide. Because the terms applied to all DHS awards, they reached FEMA disaster relief and emergency-preparedness grants. Twenty states and the District of Columbia sued in May, arguing the department was forcing them to divert police resources to federal immigration enforcement or forfeit billions.

On September 24, 2025, Senior Judge William E. Smith granted summary judgment in a 45-page opinion and entered a permanent injunction. He found the conditions both arbitrary and capricious under the Administrative Procedure Act and unconstitutional under the Spending Clause. DHS, he wrote, engaged in a wholly under-reasoned and arbitrary process, did not meaningfully evaluate the states' reliance interests, and used vague language that made compliance a nearly impossible-to-achieve moving target. On the constitutional question he found the conditions unrelated to the grants' purposes, unlawfully ambiguous, and coercive, amounting to the economic dragooning condemned in National Federation of Independent Business v. Sebelius. DHS spokesperson Tricia McLaughlin responded that jurisdictions preventing the arrest of criminal illegal aliens should not receive federal funding.

On October 8 the states moved to enforce the judgment, and on October 14 the court granted that motion. Separately, five days after the injunction issued, DHS cut the plaintiff states' Homeland Security Grant Program awards, reallocating money to states whose immigration policies the administration favored; on September 30, 2025 Judge Mary McElroy entered a temporary restraining order in Illinois v. Noem blocking that reallocation, later narrowed to $245.5 million and converted to a preliminary injunction by agreement. The government appealed the FEMA judgment on November 21, 2025 and that appeal remains pending. The GAO impoundment findings, which concern emergency-shelter funds rather than grant conditions, are documented separately at DEF-04.