Although Justice filed a notice of appeal on Jan. 2 challenging the ruling, no records indicate the government plans to pursue the case in the U.S. Court of Appeals for the First Circuit. No appellate case was ever docketed, and the underlying district court case remains closed, leaving the Nov. 4 decision in force.

In that decision, the U.S. District Court for the District of Rhode Island invalidated what it called the “Immigration Enforcement Condition,” which USDOT had sought to apply across grant programs administered by multiple subagencies. 

Framing the dispute, Chief Judge John J. McConnell Jr. asked whether “the executive branch [can] leverage all federal transportation funding—totaling billions of dollars—to compel state cooperation with federal civil immigration enforcement.”

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The court answered that question in the negative, holding USDOT lacked statutory authority to impose the condition and that the policy violated both the Administrative Procedure Act and the Constitution’s Spending Clause. The ruling ordered the stipulation vacated from applicable grant agreements and permanently enjoined the department from enforcing it.

The ruling applies across Transportation Dept. programs that collectively distribute hundreds of billions of dollars annually through a mix of formula and discretionary funding authorized by Congress, according to the court’s analysis of federal transportation statutes and grant administration practices.

Michigan Attorney General Dana Nessel, whose office joined the multistate lawsuit, said DOJ’s decision not to pursue the appeal confirms that courts have consistently rejected efforts to tie unrelated policy objectives to infrastructure funding.

“The Trump administration has repeatedly tried to illegally condition essential federal funds on states adopting its preferred immigration policies, but the courts have consistently rejected those efforts,” Nessel said in a statement.

“By dropping this appeal, the federal government is finally acknowledging what the courts have already made clear—that transportation funding cannot be used as leverage to coerce states into enforcing federal immigration law,” she added.

California Attorney General Rob Bonta’s office, which led the multistate lawsuit, said the federal government’s decision not to pursue the appeal fully resolves the case in favor of California and the other plaintiff states, leaving the injunction in place nationwide.

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Clarity From the Bench

From a transportation policy standpoint, the outcome removes a layer of legal uncertainty that had hovered over USDOT grant administration since early 2025, when the department began incorporating immigration-related language into grant terms and conditions. State transportation departments and local sponsors had warned that such certifications could complicate agreements or delay awards.

The ruling affects both formula programs, in which funds are distributed automatically based on statutory criteria, and competitive discretionary grants, where sponsors compete for awards and must execute grant agreements subject to agency-imposed conditions.

In its opinion, the court emphasized that while Congress may attach clear, related conditions to federal spending, there is no legal basis for executive agencies to impose requirements unrelated to the funding's purposes or that operate in a coercive or ambiguous manner, absent explicit statutory authorization.

For agencies advancing capital programs and preparing fiscal 2026 grant applications, DOJ’s abandonment of the appeal essentially locks in the Nov. 4 status quo, allowing projects nationwide to proceed without fear that arbitrary immigration-related conditions could jeopardize funding.