Judge to temporarily block Trump administration from yanking $11B in health funds from states

by Jacob Fischler, Wisconsin Examiner
April 3, 2025

A federal judge in Rhode Island will grant a request from Democratic state officials to temporarily prevent President Donald Trump’s administration from cutting state health grants, the judge said at a Thursday afternoon hearing.

U.S. District Court Judge Mary McElroy said the 24 Democratic attorneys general and governors were likely to prevail on the merits of their case seeking to restore funding that the Trump administration’s Department of Health and Human Services abruptly rescinded late last month.

““I’m going to grant the temporary restraining order. The balance of the equities are to maintaining the funding as it is,” McElroy said after brief arguments from attorneys representing a consortium of state governments and HHS. “The harm to the plaintiff states and the plaintiff agencies if we cease that … is clearly irreparable.”

HHS, under Secretary Robert F. Kennedy Jr., revoked $11 billion in grant funding to states beginning on March 24, the states wrote in a Tuesday filing requesting the court block the move.

McElroy indicated at least part of her decision was based on the broadness of the Trump administration’s argument.

The administration was hampered from fighting the case after receiving the states’ motion for a temporary restraining order and “4,000 pages of exhibits” mere days ago, Leslie Kane, who represented HHS, said.

“Given the time limitation … it really significantly limits any substantive argument I can make at this time,” Kane said. She still offered a general objection to the “extraordinary emergency relief” she said the states were seeking.

But McElroy, whom Trump appointed during his first presidency, ruled that the “voluminous” record provided by the states weighed in favor of granting the order.

“Given that the government really hasn’t had time to make any kind of objection except a broad objection, I don’t see how I can deny the temporary restraining order on the record that’s before the court, which, again: quite voluminous,” McElroy said.

States scrambling

The rescissions of grant funding in late March from COVID-19-era laws surprised state health departments and led to rapid layoffs and pauses in contract work while states scrambled to understand what other cuts they would need to make.

Sarah Rice, an assistant attorney general in Rhode Island who argued for the Democratic states, listed several effects already or soon to be felt by the states.

In Minnesota, 170 employees had already been laid off, with hundreds more at risk of job loss. Rhode Island employees with extensive training on vaccine storage might be laid off. Subcontractors in Wisconsin were told to pause their work, and Washington state may be unable to move substance abuse and mental health patients from a “high-acuity” treatment setting to community treatment, Rice said.

“These are just exemplars from the very many declarations that the state employees put together,” she said.

States had no advance warning their funding would be pulled, and were especially shocked by the reversal of funding because HHS had told them how to continue to use COVID-19 funding, Rice said.

“This was quite a surprising turn because HHS had prior issued guidance that instructed the states how to modify these programs to comply with the appropriations statutes after the public health emergency related to COVID-19 had ended,” Rice said.

The department had even granted states extensions for various grants as late as June 2027, Rice added.

The attorneys general of Colorado, Rhode Island, California, Minnesota, Washington, Arizona, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New Mexico, New York, North Carolina, Oregon and Wisconsin and Govs. Andy Beshear of Kentucky and Josh Shapiro of Pennsylvania brought the case.

Last updated 5:36 p.m., Apr. 3, 2025

Wisconsin Examiner is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Wisconsin Examiner maintains editorial independence. Contact Editor Ruth Conniff for questions: info@wisconsinexaminer.com.

Jacob Fischler covers federal policy and helps direct national coverage as deputy Washington bureau chief for States Newsroom. Based in Oregon, he focuses on Western issues. His coverage areas include climate, energy development, public lands and infrastructure.