City attorney outlines federal litigation over grant freezes; city currently accessing reimbursements

City attorneys and finance staff told the Madison Finance Committee on May 27 they are monitoring multiple federal lawsuits that could affect local grant funding but said that, as of the briefing, the city has no federal grants that are frozen or terminated.

City attorney update: Laura Manella of the city attorney’s office said her office is tracking three categories of federal litigation filed in federal court. The categories are (1) cases challenging the executive branch’s actions to freeze or terminate existing grants; (2) cases contesting forced amendments to grant terms and conditions; and (3) litigation about the validity and scope of nationwide injunctions that federal judges sometimes issue.

Manella said many of the early suits produced temporary restraining orders or preliminary injunctions preventing agencies from cutting off funds while litigation proceeds. She described a recurring procedural defense — that disputes should be heard in the Court of Federal Claims under the Tucker Act — but said judges so far have not accepted that argument in the grant-termination cases she’s followed.

"There's been three sort of types of cases out there that we've been tracking," Laura Manella said, summarizing the litigation categories and how courts have responded so far.

King County case and forced amendments: Manella pointed to King County v. Turner, a case challenging forced changes to grant terms and conditions from federal agencies including HUD and USDOT. A federal judge in Washington state issued temporary restraining orders halting those forced amendments through early June, she said; the scope of that relief is limited to the named plaintiffs.

Local grant status and reimbursements: Finance staff reported positive, practical developments for local grant administration. Staff said FEMA funds tied to a stormwater/flood mitigation grant have been dispersed to the state emergency management division, and the city has been submitting reimbursement requests and receiving payments. An EPA grant that had been temporarily inaccessible has reopened and staff are submitting costs. Staff said they are not aware of any HUD grant funds suspended for the city.

Legal and practical implications: Manella said appeals and procedural defenses remain pending and cautioned that outcomes could change. She also noted the broader, procedural question now before higher courts about whether federal judges should issue nationwide injunctions, which could determine how widely an injunction in any given case protects others beyond the named plaintiffs.

Next steps: The city attorney's office and finance staff said they will continue to monitor litigation and advise departments that apply for or manage federal grants. No department grant funds for the city were reported as frozen at the time of the briefing.