Attorney General Jennifer Davenport co-led a coalition of 26 states to stop the Trump Administration’s continued efforts to use federal funds—specifically, billions of dollars in federal counterterrorism and other funds—to coerce states into complying with the administration’s political and policy priorities.
“Despite its repeated losses in court, the Trump Administration continues to try to impose unlawful funding conditions well outside of its authority,” said Attorney General Davenport. “FEMA cannot use counterterrorism and other essential federal funding as a weapon to coerce states into assisting with civil immigration enforcement or to change our election administration. Threatening counterterrorism funding at a time when the President’s war in the Middle East magnifies threats is dangerous and wrong.”
The coalition’s lawsuit filed today challenges decisions by the Federal Emergency Management Agency (FEMA) and the U.S. Department of Homeland Security (DHS) to impose unlawful conditions on billions of dollars in federal funds that Congress appropriated for states to use in preparing for and responding to emergencies and natural disasters, including acts of terrorism. The conditions challenged in the lawsuit would (1) impose unlawful immigration conditions; (2) force all states to change the way they conduct elections; and (3) permit DHS to terminate any federal grant at any time and for any reason.
New Jersey co-led two similar and successful lawsuits in 2025, each in the U.S. District Court for the District of Rhode Island, challenging DHS’s efforts to condition billions in federal emergency funding on states’ agreement to enforce federal immigration law and DHS’s subsequent attempt to unlawfully reallocate federal homeland security funding away from jurisdictions it viewed as insufficiently supportive of the President’s political agenda.
Now, DHS and FEMA have established grant conditions for 2026 funding that again attempt to coerce the states into complying with the administration’s policy priorities. The conditions in total affect billions of dollars in funding, including over a billion dollars in Homeland Security Grant Program (HSGP) funding that states use to support security measures and protect residents from terrorism, cyberattacks, and more.
New Jersey receives over $55 million in HSGP funding each year for state and municipal efforts to prevent, prepare for, and respond to acts of terrorism.
First, DHS and FEMA have again threatened to impose the same immigration conditions that they attempted to impose in 2025 on all federal grant programs. The conditions would require states to devote scarce law enforcement resources to assisting DHS in enforcing federal immigration law. These conditions were found to be unlawful and were enjoined by a district judge last year. The agencies are also attempting to add a condition that would allow FEMA to terminate any grant program for any reason. A federal court recently rejected the Trump Administration’s attempts to interpret an existing regulation to have that effect.
Second, DHS and FEMA threaten to withhold 20% of each state’s counterterrorism funding if states do not change state election law to conform to the administration’s policy goals. The attorneys general assert that these requirements would force states to abandon years of work and millions of dollars of investments in their elections systems, all to obtain unrelated funding that Congress earmarked for the prevention of terrorist attacks.
Specifically, the challenged funding conditions would require states to transition to paper-ballot systems, conduct a mandatory 5% manual audit of voting systems, reconcile voters and ballots using a methodology DHS has not disclosed, and use DHS’s Systematic Alien Verification for Entitlements (SAVE) system to verify the citizenship of every election worker and every registered voter in state’s voter databases—even though in litigation, DHS does not dispute that SAVE erroneously flags citizens as noncitizens. If states do not comply, DHS and FEMA will withhold at least 20% of each state’s HSGP funding.
Finally, the challenged funding conditions unlawfully claim effectively unfettered power to terminate these grants on a whim. This constant threat of termination undermines the stability and reliability that these critical programs rely on to be effective.
The attorneys general argue in today’s lawsuit that the grant conditions violate the Administrative Procedure Act and the U.S. Constitution’s Spending Clause.
Deputy Solicitor General Shankar Duraiswamy and Assistant Attorney General Mayur P. Saxena are leading this matter on behalf of New Jersey, along with Deputy Attorneys General Meghan Musso, Bassam Gergi, and Yael Fisher.
Attorney General Davenport co-led the coalition of states along with California Attorney General Rob Bonta, Illinois Attorney General Kwame Raoul, and Rhode Island Attorney General Peter Neronha.
Joining the four attorneys general in filing this lawsuit are the attorneys general of Arizona, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Oregon, Vermont, Virginia, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.
