By Forum Staff
The City Law Department on Friday announced its federal lawsuit challenging the Trump administration’s unlawful seizure of over $80 million previously applied for, awarded, approved, and paid by the Federal Emergency Management Agency to the Big Apple.
The funds, according to the suit, were paid to reimburse expenses already spent on the asylum seeker international humanitarian crisis that came to Gotham’s doorstep in the spring of 2022 under a FEMA program to assist localities bearing the brunt of costs of providing shelter and services to individuals released by the U.S. Department of Homeland Security into U.S. communities.
The suit, motion for a preliminary and permanent injunction, and motion for a temporary restraining order against the federal government argues that the funds that were previously reviewed, approved, and paid out by FEMA were removed out of a City bank account on Feb. 11, 2025, without notice or administrative process of any kind, violating federal regulations and terms of the Shelter and Service Program grant terms, as well as abusing the federal government’s authority and obligations to implement congressionally-approved and funded programs. The City seeks to recoup the funds and ensure the federal government does not, again, improperly withdraw disbursed funds or hold future funds that the city is entitled to receive.
On Feb. 4, 2025, FEMA disbursed $80,481,861.42 to the City to reimburse the city under a program that Congress funded to “support sheltering and related activities provided by non-federal entities, in support of relieving overcrowding in short-term holding facilities of the U.S. Customs and Border Protection.” FEMA awarded the City the grants to ensure “the safe, orderly, and humane release of noncitizen migrants from DHS short-term holding facilities.” But on Feb. 11, the federal government, without any notice or explanation, clawed back those funds. On Feb. 19, the federal government belatedly provided the city a “noncompliance” letter that did not identify any noncompliance by the city. Rather, it announced “concerns,” which are unfounded and do not comport with how the city has managed the unprecedented crisis brought to its doorstep.
Friday’s suit — filed in Manhattan federal court — argues that the letter is a mere cover to mask the real purpose of defendants’ “money-grab,” which — as many have stated publicly — is to withhold the funds permanently because they oppose the purposes for which the funds were appropriated, awarded, approved, and paid.
The Law Department is also arguing that the federal defendants’ withholding of these funds is arbitrary and capricious, contrary to law, ultra vires, and in excess of authority, without observance of lawful procedures. Further, the Law Department claims that the actions by these defendants violate the Due Process Clause, the separation of powers doctrine, and the Spending Clause of the U.S. Constitution.
The City is seeking a preliminary and permanent injunction, as well as a TRO from the Court 1) ordering the defendants to return the $80 million to the City’s bank account, 2) enjoining defendants from taking any further money from any City bank account in connection with these SSP grants, and 3) enjoining them from withholding SSP funds.
