The U.S. Court of Appeals for the Ninth Circuit affirmed a lower court’s preliminary injunction preventing the Trump Administration from imposing unlawful political and ideological conditions on critical federal housing and transportation grants.
The decision in Martin Luther King, Jr. County, et al. v. Scott Turner, et al., in which the County of Santa Clara is a leading plaintiff, safeguards billions of dollars in federal funding relied upon by local governments across the country.
The ruling blocks the Trump Administration from imposing unlawful conditions on grants from the U.S. Department of Housing and Urban Development (HUD) and U.S. Department of Transportation (DOT), including requirements related to immigration status verification, cooperation with federal immigration enforcement, recognition of non-binary and transgender identities, “promoting” abortion, and other ideological mandates unrelated to the purpose of the funding.
“The Ninth Circuit’s ruling confirms that the Trump Administration abused its authority in imposing ideological conditions on federal grants supporting critical local government homelessness, transportation, and infrastructure projects,” said Santa Clara County Counsel Tony LoPresti. “The federal government’s efforts to advance its anti-immigrant, anti-abortion, anti-transgender, and anti-DEI agenda met a critical roadblock today: a federal court’s thoughtful application of the law. The County is pleased with the Ninth Circuit’s decision and looks forward to continuing to press its other challenges to the Trump Administration’s unlawful efforts to condition grant funding with the benefits of today’s ruling.”
The County of Santa Clara and seven other local governments first filed the lawsuit in May 2025, challenging the Trump Administration’s attempt to force local governments to adopt its political agenda or risk losing critical HUD and DOT funding. On June 3, 2025, U.S. District Court Judge Barbara J. Rothstein issued a preliminary injunction blocking the challenged conditions. The Trump Administration appealed, and the Ninth Circuit heard oral argument earlier this year.
The Ninth Circuit largely upheld the injunction, ruling that federal agencies cannot impose DEI-related grant conditions across an entire recipient organization, including programs that receive no federal funding. The court narrowed the injunction only as to conditions requiring compliance with Title VI of the Civil Rights Act in federally funded programs. All other challenged conditions remain fully enjoined.
The Ninth Circuit’s opinion has significant implications for the County and its broader litigation challenging unlawful conditions on federal funding. While the Ninth Circuit’s decision addresses conditions attached to HUD and DOT grants, the County and its co-plaintiffs subsequently expanded the case in the lower court to challenge similar conditions on grants administered by the U.S. Department of Health and Human Services (HHS). The district court granted a subsequent preliminary injunction blocking those HHS conditions, which remains in effect. Today’s Ninth Circuit decision further supports the legal foundation for that injunction.
The County is joined in the lawsuit by 74 other local jurisdictions, including the City and County of San Francisco, the City of San José, and the City of Oakland. Several jurisdictions are represented by Public Rights Project and Pacifica Law Group, which served as co-counsel in the case.
The case is Martin Luther King, Jr. County, et al. v. Scott Turner, et al., U.S. Court of Appeals for the Ninth Circuit, Case No. 25-3664. View a copy of the Ninth Circuit’s decision.
About the County of Santa Clara
The County of Santa Clara government serves a diverse, multicultural population of 1.9 million residents in Santa Clara County, Calif., making it more populous than 14 states in the United States. The County provides essential services to its residents, including public health protection, environmental stewardship, medical services through the County of Santa Clara Health System, child and adult protection services, homelessness prevention and solutions, roads, park services, libraries, emergency response to disasters, protection of minority communities and those under threat, access to a fair criminal justice system, and many other public benefits.