Regulatory Alert: Federal Court Vacates Immigration Enforcement Provision in DOT/FAA Grant Agreements
November 4, 2025
Today, a judge from the U.S. District Court for Rhode Island issued an order and permanent injunction in an ongoing case, State of California v. DOT, declaring unlawful the “immigration enforcement condition” (IEC) that has been included in federal grant funding agreements from the U.S. Department of Transportation (DOT) and Federal Aviation Administration (FAA) since April. The order effectively eliminates the IEC from all grant agreements administered by DOT and permanently precludes DOT from attempting to condition transportation-related grant funding on state or local government cooperation with federal immigration officials.
You can read the order here. We expect the Trump administration and DOT will appeal the decision, which means further developments and changes may occur. In the meantime, however, DOT and FAA may not enforce or include the IEC condition in grant agreements, including any agreements that airport sponsors execute with FAA.
Background. In late April, FAA updated its grant agreement for all new Airport Improvement Program (AIP) and Infrastructure Investment and Jobs Act (IIJA) grants that will be issued under the new administration. The agreement contains two controversial provisions. One requires airport sponsors to certify they do not operate a diversity, equity, and inclusion (DEI) program that violates federal anti-discrimination laws. A second provision, or the IEC, requires sponsors to “cooperate with Federal officials in the enforcement of Federal law, including cooperating with and not impeding [U.S. ICE] and other Federal offices and components of [DHS] in and the enforcement of Federal immigration law.” You can read our April 28 Regulatory Alert for additional details.
Grant Agreement Litigation. In response to the DOT grant agreement being released in April, three separate lawsuits challenging one or more provisions in the agreement have been filed and had an effect on certain airport sponsors. The following is a brief status of each case:
- King County v. Turner: A U.S. District Court in Washington has granted sixteen airport sponsors a preliminary injunction, blocking the Trump administration’s attempt to impose and enforce the DEI provision and IEC in FAA grant agreements. The administration has appealed the preliminary injunction, although the timing of when the U.S. Court of Appeals will issue a decision is uncertain.
- State of California v. DOT: In June, the U.S. District Court in Rhode Island granted a request from twenty states for a preliminary injunction to preclude the administration from enforcing the IEC in DOT grant agreements. Kentucky and D.C. were added to the lawsuit and injunction in July. Since then, airport sponsors located in the twenty-one states and D.C. have been covered by the preliminary injunction even though they are not named plaintiffs in the lawsuit. However, today, in a decision on a motion for summary judgment, the court declared the IEC “unlawful” and vacated the provision from all grant agreements administered by DOT. We expect the administration will appeal the decision.
- City of Fresno v. Turner: In September, a U.S. District Court in California granted six airport sponsors a preliminary injunction, blocking the administration’s attempt to impose and enforce the DEI provision and IEC, among others, in FAA grant agreements. We expect the administration will also appeal the preliminary injunction in this case.
