Limits on the US Department of Transportation’s ability to tie transportation grants to immigration enforcement are now settled law after the US Justice Department declined to file an appeal of a federal court ruling blocking the practice.
The result removes a persistent source of uncertainty for states and local sponsors as they prepare fiscal 2026 grant applications, confirming that USDOT cannot impose immigration-related conditions on either the formula or discretionary transportation funding.
Although Justice filed a notice of appeal on Jan. 2 challenging the ruling, there are no records indicating the government plans to pursue the case to the U.S. Court of Appeals for the First Circuit. No appeal case has ever been filed, and the underlying district court case remains closed, leaving the Nov. 4 decision in place.
In that decision, the U.S. District Court for the District of Rhode Island invalidated what it called the “Immigration Enforcement Condition,” which the USDOT had sought to apply to grant programs administered by multiple subagencies.
In framing the dispute, Chief Justice John J. McConnell Jr. he asked if “the executive branch [can] Leverage all federal transportation funding, totaling billions of dollars, to compel state cooperation with federal civil immigration enforcement.”
RELATED
States sue DOT over threat to cut grants if no immigration enforcement help
The court answered this question in the negative, finding that USDOT lacked legal authority to impose the condition and that the policy violated both the Administrative Procedure Act and the Constitution’s Expenses Clause. The ruling ordered the annulment of the stipulation of the applicable grant agreements and the final prohibition on the department from enforcing it.
The ruling applies to all Transportation Department programs that collectively distribute hundreds of billions of dollars annually through a combination of formula and discretionary funding authorized by Congress, according to the court’s analysis of federal transportation statutes and grant administration practices.
Michigan Attorney General Dana Nessel, whose office joined the multi-state lawsuit, said the DOJ’s decision not to appeal confirms that courts have consistently rejected efforts to link policy goals unrelated to infrastructure funding.
“The Trump administration has repeatedly tried to illegally condition essential federal funds on states adopting its preferred immigration policies, but the courts have consistently rejected those efforts,” Nessel said in a statement.
“By abandoning this appeal, the federal government finally recognizes what the courts have already made clear: that transportation funding cannot be used as leverage to coerce states into enforcing federal immigration law,” he added.
The office of California Attorney General Rob Bonta, who led the multi-state lawsuit, said the federal government’s decision not to appeal fully resolves the case in favor of California and the other plaintiff states, leaving the court order in place nationwide.
RELATED
Court halts USDOT plan to tie state funding to immigration, DEI compliance
Clarity from the bench
From a transportation policy perspective, the outcome removes a layer of legal uncertainty that had hung over USDOT’s grant administration since early 2025, when the department began incorporating immigration-related language into grant terms and conditions. State transportation departments and local sponsors had warned that such certifications could complicate deals or delay awards.
The ruling affects both formula programs, in which funds are automatically distributed based on statutory criteria, and competitive discretionary grants, where sponsors compete for awards and must execute grant agreements subject to agency-imposed conditions.
In its opinion, the court emphasized that, while Congress may attach clear and related conditions to federal spending, there is no statutory basis for executive agencies to impose requirements unrelated to the purposes of the funding or that operate coercively or ambiguously, without explicit statutory authorization.
For agencies advancing capital programs and preparing grant applications for 2026, the DOJ’s abandonment of the appeal essentially locks in the Nov. 4 status quo, allowing projects across the country to continue without fear that arbitrary immigration-related conditions could jeopardize funding.
