AG Nessel Files Lawsuit Challenging Unlawful Conditions on Federal Counterterrorism Funding

LANSING – Michigan Attorney General Dana Nessel joined 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. Attorney General Nessel and the coalition’s lawsuit (PDF) 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 require the states to change the way they conduct elections, including by transmitting lists of all registered voters to DHS, and to assist DHS in enforcing federal immigration law. They would also permit DHS to terminate any federal grant at any time and for any reason. 

“Since taking office, the Trump administration has repeatedly tried to unlawfully weaponize federal funding to force its agenda on states,” said Attorney General Nessel. “Now, they are risking public safety by tying counterterrorism and disaster preparedness funding to another desperate attempt to usurp states of their constitutional right to administer their own elections. It’s baffling and unacceptable for the federal government to put lives on the line because they fear the outcome of the midterms. We successfully defended this crucial funding before, and we will do so again to protect our communities.”

Attorney General Nessel joined two similar and successful lawsuits in 2025, addressing many of the same grants and attempted interference with these grants. First, in the U.S. District Court for the District of Rhode Island, Attorney General Nessel and a coalition challenged and defeated DHS’s efforts to condition billions in federal emergency funding on states’ agreement to enforce federal immigration law. Later, Attorney General Nessel led a case in the District of Oregon that defeated FEMA’s efforts to impede the use of emergency management and homeland security funding. 

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. The State of Michigan receives approximately $15 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 (PDF) last year.

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.

Finally, the challenged funding conditions unlawfully claim effectively unfettered power to terminate these grants on a whim. The agencies are attempting to add a condition that would allow FEMA to terminate any grant program for any reason. This constant threat of termination undermines the stability and reliability that these critical programs rely on to be effective. A federal court recently rejected the Trump administration’s attempts to interpret an existing regulation to have that effect.

The attorneys general argue in the lawsuit that the grant conditions violate the Administrative Procedure Act and the U.S. Constitution’s Spending Clause.

Joining Attorney General Nessel in filing the lawsuit are attorneys general of Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Hawai'i, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New Jersey, New York, North Carolina, Oregon, Rhode Island, Vermont, Virginia, Washington and Wisconsin, as well as the governors of Kentucky and Pennsylvania.

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