Judge Says FEMA Can’t Withhold Grant Funds Under ‘Arbitrary and Capricious’ Conditions

The decision favors a coalition of 12 states that sued the Trump administration over new conditions for disaster recovery and emergency relief funds.

1 minute read

January 7, 2026, 5:00 AM PST

By Diana Ionescu @aworkoffiction


A member of the National Guard stands in front of a FEMA truck on January 19, 2021 in Washington D.C.

A FEMA trailer in Washington, D.C. in January 2021. | AlexiRosenfeld / Shutterstock

The U.S. District Court for the District of Oregon blocked the Trump administration from withholding Department of Homeland Security funding for disaster relief and emergency management, reports Robyn Griggs Lawrence in Smart Cities Dive.

The case stems from a lawsuit brought by 12 states that alleged DHS’s decision to freeze funding “until states verified that population counts excluded people removed under federal immigration law” caused undue damage and called for data not available to states. The lawsuit says that DHS and FEMA “provided no reasoned explanation (or, indeed, any explanation) for why they added this hold, no legal basis for adding the hold, and no guidance for States to use in attempting to comply.”

The judge asserted that the states have no way of complying with the department’s request and that the funding lapses would “risk emergency management and homeland security capacities,” making the action not “consistent with Congressional intent or FEMA’s mission.”

Tuesday, January 6, 2026 in Smart Cities Dive

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