Background
Thirty-one cities, counties, and local agencies received or were conditionally awarded federal grants administered by the Department of Housing and Urban Development and the Department of Transportation. The grants supported homeless-assistance programs and transportation infrastructure and operations, and some recipients had already spent millions of dollars in reliance on their awards.
In 2025, acting pursuant to executive orders, HUD and DOT added conditions requiring recipients to certify compliance with federal antidiscrimination law, agree that such compliance was material under the False Claims Act, restrict grant-funded activities involving “gender ideology,” elective abortions, and illegal immigration, and verify certain beneficiaries’ immigration status. The district court preliminarily enjoined enforcement of the challenged conditions. The government appealed, except as to DOT’s condition requiring cooperation with federal immigration enforcement.
The Court’s Holding
The Ninth Circuit affirmed the preliminary injunction in large part, holding that the local governments were likely to succeed on their Administrative Procedure Act claim that most conditions exceeded the authority Congress delegated to HUD and DOT. The court concluded that neither Title VI nor the False Claims Act authorized agencies to compel recipients to agree broadly that compliance with all applicable antidiscrimination laws was material to federal payment decisions. It also held that HUD’s restrictions on the use or effects of Continuum of Care funds and its immigration-status verification requirement exceeded the authority supplied by the governing statutes.
The panel reached a narrower conclusion concerning the antidiscrimination certifications themselves. Title VI permits agencies to require federally assisted programs and activities to operate without prohibited discrimination, but it does not authorize conditions reaching every program a recipient operates, including programs receiving no federal assistance. The court therefore remanded with instructions to narrow the injunction so that it bars only the portions extending beyond Title VI’s lawful scope. It also upheld the district court’s findings of likely irreparable harm and that the equities and public interest favored preliminary relief. Judge Bumatay concurred in the remand concerning the antidiscrimination conditions but dissented from affirmance as to the remaining conditions.
Key Takeaways
- Federal agencies may attach grant conditions only within authority delegated by Congress; executive orders do not independently supply that authority.
- Title VI supports antidiscrimination assurances for federally assisted programs and activities, but not blanket certifications covering every program operated by a grant recipient.
- HUD and DOT could not require advance agreement that antidiscrimination compliance was material under the False Claims Act, and HUD lacked statutory authority for the challenged funding-use and immigration-verification conditions.
Why It Matters
The decision limits the Executive Branch’s ability to add policy-driven conditions after federal grants have been awarded. It preserves agencies’ power to enforce lawful antidiscrimination requirements within federally funded programs while emphasizing that broader conditions affecting local-government operations, potential False Claims Act liability, or beneficiary eligibility must rest on congressional authorization.