Court order blocks HUD and DOT from attempting to force local governments to submit to Trump ideology or else relinquish billions in funding for housing and transportation
SAN FRANCISCO, CA (June 4, 2025) – San Francisco City Attorney David Chiu and Santa Clara County Counsel Tony LoPresti issued the following statement today after U.S. District Court Judge Barbara J. Rothstein granted a Preliminary Injunction Order preventing the Trump Administration from imposing illegal conditions on federal grants from the U.S. Department of Housing and Urban Development (HUD) and Department of Transportation (DOT).
San Francisco, the County of Santa Clara, and a coalition of other local governments filed the lawsuit on May 2, 2025, over HUD’s attempt to impose illegal new conditions on the receipt of federal grants to enact President Trump’s policy preferences. The lawsuit also included claims against DOT. On May 21, 2025, Plaintiffs filed an amended complaint and a second motion for Preliminary Injunction alleging that additional DOT grant conditions are unlawful. The Preliminary Injunction issued yesterday prohibits HUD and the DOT from imposing or enforcing the new grant conditions on Plaintiff jurisdictions.
“These grants provide millions in funding for housing our most vulnerable and billions to ensure safe and effective transportation for our residents and visitors,” said City Attorney David Chiu. “These new grant conditions not only violate the Constitution, but they also have nothing to do with the purpose or performance of these grants. This is part of Trump’s strategy to push his ideology by threatening local programs and budgets. We are grateful the Court again ruled in our favor and blocked Trump’s attempts to illegally condition these grants.”
“At a time when local jurisdictions are facing incredible budget challenges, the Court’s order acknowledges the harm being caused by the Trump Administration’s overreach in placing unconstitutional conditions on critical funding awarded to cities and counties to combat homelessness,” said Santa Clara County Counsel Tony LoPresti. “Countless low-income families, young adults, survivors of domestic violence, and people with disabilities rely on this federal grant funding to stay housed every day. The Court’s timely intervention prevents the federal government from abandoning their responsibility to our community and allows us to continue to provide critical rental assistance and housing services to those in need in Santa Clara County.”
Background
The HUD Continuum of Care (CoC) grant program provides San Francisco over $50 million in annual grant funding to address homelessness. The County of Santa Clara receives $33 million in CoC grant funding, which it contracts with non-profit community organizations to provide rental assistance and case management. In March 2025, HUD issued CoC grant agreements that included new conditions that are not authorized by Congress, but instead unlawfully impose President Trump’s anti-immigrant, anti-LGBTQ+, anti-choice, and anti-equity policy preferences.
Similar conditions have appeared in general terms and conditions in grant agreements from departments overseen by the DOT, including the Federal Transit Administration (FTA) grants, Federal Highway Administration (FHWA), Federal Aviation Administration (FAA), and Federal Railroad Administration (FRA).
A significant portion of federal funds committed to San Francisco come from the DOT. The San Francisco Municipal Transportation Agency is the recipient of a total of $1.28 billion in awarded and anticipated FTA funding through October 2025. The San Francisco International Airport (SFO) expects to receive $803 million in FAA grant funding to implement its current ten-year Capital Improvement Plan. Other City departments expect approximately $50 million in funding promised, but not yet provided by the DOT. The loss of DOT funding would be catastrophic to the City.
The lawsuit alleges these grant conditions violate the Spending Clause, Separation of Powers, and Fifth Amendment of the Constitution as well as the Administrative Procedure Act.
The Preliminary Injunction order prevents HUD and DOT from imposing or enforcing the new grant conditions on Plaintiff jurisdictions and from rescinding, withholding, cancelling, or otherwise interfering with Plaintiffs’ grant agreements on the basis of those conditions. The Court found the public interest is in Plaintiffs’ favor, Plaintiffs are likely to succeed on the merits, and Plaintiffs would suffer irreparable harm without a Preliminary Injunction.
On the new DOT grant conditions, the Court’s order states: “Accordingly, the Court concludes that Plaintiffs are likely to prevail on their claim that in attempting to impose on Plaintiffs the conditions in the Master Agreement, Defendants have acted in a manner that violates the Separation of Powers doctrine and exceeds statutory authority, and that under the APA those conditions must be set aside.”
Including the City and County of San Francisco, County of Santa Clara, and Martin Luther King, Jr. County, Washington, there are now 31 plaintiff jurisdictions in the lawsuit.
The case is Martin Luther King, Jr. County, et al., v. Scott Turner, et al., U.S. District Court for the Western District of Washington, Case No. 2:25-cv-00814-BJR. The Order Granting Preliminary Injunction can be found here.
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