Overview
On May 21, the US District Court for the Western District of Washington extended a May 7 temporary restraining order (TRO) that prohibits the US Department of Housing and Urban Development (HUD) and the US Department of Transportation (DOT) from enforcing new federal grant conditions that limit funding to recipients that comply with the president's Executive Orders (EOs) targeting diversity, equity and inclusion (DEI) programs, immigration, and gender-based policies. The court indicated that it would enter a preliminary injunction in the coming days to enjoin enforcement of the conditions pending resolution of the merits.
The newly imposed conditions subject to the TRO were aimed at implementing the president's January 21 EO requiring federal contractors and grantees to certify that their DEI programs comply with antidiscrimination laws, and that their compliance with federal antidiscrimination law is "material to the government's payment decisions." The conditions also implement aspects of the president's immigration and gender identity EOs, which prohibit recipients from using funds to provide benefits to undocumented immigrants or to support "sanctuary policies," as well as from promoting "gender ideology" or encouraging elective abortions.
HUD and DOT included the new conditions in grant applications for programs that support a range of services, including transit, housing, homelessness services, and infrastructure programs that focus on accessibility and environmental impact.
Following HUD's and DOT's imposition of these conditions, several cities and localities — including the City of New York, City of San Francisco, City of Boston, City of Columbus, and Seattle's King County — filed a lawsuit challenging the conditions on various grounds. The cities and localities argued that the administration's attempt to condition critical federal housing and transportation funding on compliance with policy directives aimed at eliminating DEI initiatives, restricting immigration, and excluding transgender individuals, violated Article I's Spending Clause, the Fifth Amendment's Due Process Clause, and constitutional separation of powers principles, among other claims.
In its May 7 TRO, the court agreed that DOT and HUD impermissibly forced local governments to either accept potentially illegal conditions on the receipt of federal funds, or else risk losing millions of dollars in federal grant funding, including money that Congress already appropriated and budgeted for. In extending the May 7 TRO, the court noted that the conditions likely exceed the agencies' constitutional authority, violate the separation of powers by imposing terms not approved by Congress or closely tied to the grants' purposes, and are potentially void for vagueness or arbitrary and capricious under the Administrative Procedure Act.
Steptoe is monitoring developments surrounding the executive orders and the Administration's ongoing implementation of them. Please check back regularly for future updates and additional insights.
