Judge Indira Talwani ruled on Friday in the Judge Talwani Trump grant lawsuit that the Trump Administration cannot use a grant clause to make billions of dollars in funding cuts. The order blocks reliance on the clause that the states challenged last year, and it keeps the case alive after the government sought dismissal.
Talwani ruling in Boston
Talwani granted summary judgment against the government and denied its motion to dismiss. In her ruling, she wrote: "Defendants’ interpretation of the Termination Clause is not clearly supported by the text of the provision, runs counter to the regulatory scheme, receives no support in the rulemaking history, and would violate the Spending Clause’s requirement that conditions be imposed unambiguously."
The clause was first introduced in 2020 and revised in 2024. It says federal agents can terminate a grant if the award no longer effectuates the program goals or agency priorities, and the lawsuit said the Office of Management and Budget used it to justify what it described as a nationwide slash-and-burn campaign.
New Jersey and 23 states
Twenty-three states filed the lawsuit last year, saying the clause was being used to cut grants tied to crime prevention, food security, and scientific research. The states also said they were concerned it could be used to cancel current and future grants, not just a single award.
New Jersey Attorney General Jennifer Davenport said, "Instead of working with us to keep the public safe and lower costs for hardworking New Jerseyans, the Trump Administration has recklessly and illegally gutted federal funding for public safety, disaster preparedness, scientific research, clean water, and more," and added, "Today’s decision is an important win for all New Jerseyans and confirms that the Trump Administration defied the law when it embarked on its campaign to gut critical federal funding to the states."
Spending Clause dispute
Talwani also cited the Spending Clause in her ruling, saying the government’s reading would fail to state grant conditions with enough clarity. Lawyers for the federal government argued the case should be dismissed because some grants had already been terminated and the plaintiffs’ claims about future grants were too speculative.
They said the states had raised blanket objections to the termination of thousands of grants without seeking relief that would restore a single grant, creating what they called jurisdiction and justiciability defects. The ruling leaves the clause blocked for now, and the record does not identify any separate court date or appeal step.
For the affected states, the immediate result is that the administration cannot use this clause as a standalone path to cut the disputed grants. Which grants had already been terminated, and how many remain at issue, is the unresolved point left on the table.
