Donald Trump Suffers Legal Loss Over Billions of FEMA Funds

Newsweek

6 days ago

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A federal judge has temporarily halted the Trump administration's plan to reallocate more than $4 billion in federal disaster preparedness funds, marking a legal victory for 20 states that challenged the move.
U.S. District Judge Richard Stearns of Massachusetts issued a preliminary injunction Tuesday, August 5, preventing the Federal Emergency Management Agency (FEMA) from diverting money allocated to its Building Resilient Infrastructure and Communities (BRIC) program. The program funds projects designed to strengthen infrastructure against natural disasters.
Why It Matters
The ruling temporarily safeguards $4 billion in FEMA funds that support 2,000+ projects nationwide. BRIC is central to helping states and cities prepare for floods, wildfires, hurricanes, and other disasters that are becoming more frequent and severe. The program finances major infrastructure improvements—such as coastal flood defenses, stormwater and levee upgrades, sewage protection systems, and critical drainage projects.
Local officials warn that without these funds, communities—particularly those in flood-prone or economically vulnerable regions—face delays or cancellations of safety projects leaving those areas facing greater risks and higher future recovery costs.
The Federal Emergency Management Agency (FEMA) building is seen on May 15, 2025 in Washington, D.C.
The Federal Emergency Management Agency (FEMA) building is seen on May 15, 2025 in Washington, D.C.What To Know
What is the BRIC program?
The BRIC program has been a cornerstone of America's strategy to build long-term resilience. From flood barriers to sewage overhaul and levee upgrades, BRIC has funded essential improvements that save lives, reduce recovery costs, and strengthen community preparedness.
Examples of BRIC-funded mitigation projects include:
Bridgeport, Connecticut : $42 million coastal flood defense system with walls and elevated streets; funding cuts risk years of safety planning.
: $42 million coastal flood defense system with walls and elevated streets; funding cuts risk years of safety planning. Austin, Texas : ~$50 million stormwater and levee upgrades near key energy and wastewater facilities; grant cancellation jeopardizes regional flood protection.
: ~$50 million stormwater and levee upgrades near key energy and wastewater facilities; grant cancellation jeopardizes regional flood protection. Detroit, Michigan : Sewage system improvements shielding 600+ homes in vulnerable Jefferson Chalmers neighborhood; halted BRIC support threatens ongoing flood mitigation.
: Sewage system improvements shielding 600+ homes in vulnerable Jefferson Chalmers neighborhood; halted BRIC support threatens ongoing flood mitigation. Mount Pleasant, North Carolina : $4 million stormwater management project for flood-prone areas paused after funding freeze.
: $4 million stormwater management project for flood-prone areas paused after funding freeze. Nationwide Projects: Typical BRIC rounds fund 53 projects (~$796 million total) for disaster resilience across multiple states, including CA, NY, WA, and NC.
FEMA stated in a June 2018 fact sheet that: "Natural hazard mitigation saves $6 on average for every $1 spent on federal mitigation grants." making these funds essential to public safety and long-term resilience.
States Challenge FEMA Decision
The lawsuit was brought in July 2025, by 20 Democratic-led states, including Washington, Massachusetts, California, and New York, as well as Pennsylvania Governor Josh Shapiro in his official capacity.
The plaintiffs argue that FEMA acted unlawfully when it announced it was ending BRIC and redirecting more than $4 billion in unspent funds to other federal accounts without congressional approval.
With projects in jeopardy following termination of the BRIC program, local leaders and state attorneys general have emphasized the real-world consequences facing flood-prone and climate-vulnerable areas.
Judge's Reasoning
In his order, U.S. District Judge Richard Stearns of Massachusetts found that FEMA had taken, "affirmative steps" to implement the program's termination, including canceling funding opportunities and notifying states that unobligated funds would no longer be available. The judge noted that FEMA's monthly report to Congress in June showed a $4.07 billion reduction in BRIC funds, labeled a "reversal" of prior set-asides.
The court concluded that this presented an imminent threat of harm to states that rely on BRIC funding for mitigation projects, such as stormwater management and the relocation of buildings in flood-prone areas.
"The funds, if spent on other purposes, will be lost forever," Stearns wrote, adding that there is "an inherent public interest in ensuring that the government follows the law."
FEMA's Position
According to reporting by Reduceflooding, citing an April 4, 2025, press release—which has since been removed from FEMA's website—the BRIC program was described as, "yet another example of a wasteful and ineffective FEMA program." It accused the program of being, "more concerned with political agendas than helping Americans affected by natural disasters."
However, David Richardson, FEMA's acting administrator, stated in the court filing that the BRIC program had not officially ended and that no grants had been canceled as of July. But Judge Stearns found these assurances inconsistent with FEMA's actions, concluding that the program's termination appeared to be a preordained outcome.
According to the states' lawsuit, more than 2,000 approved resilience projects could be jeopardized if BRIC funding were diverted. These include initiatives like California's $21 million flood prevention project in Sacramento and New York City's $50 million project to address rising sea levels and extreme heat.
Broader Context
The Trump administration has sought to reallocate funds across several federal agencies, including FEMA. While it has recently downplayed earlier statements about eliminating FEMA entirely, officials have described efforts to reform and streamline the agency.
What People Are Saying
David Richardson, FEMA's acting administrator, stated: "The BRIC program provides technical and financial assistance to States and local governments for cost-effective pre-disaster hazard mitigation measures that reduce injuries, loss of life, and damage and destruction of property," adding that: "The Secretary of Homeland Security [Kristi Noem] has not made a final decision to end the BRIC program," and "no grants have yet been canceled."
U.S. District Judge Richard Stearns of Massachusetts wrote in his 15-page ruling, August 5: "The BRIC program is designed to protect against natural disasters and save lives. The potential hardship to the government, in contrast, is minimal." He emphasized that " … the order maintains the status quo while the court considers the merits of the lawsuit."
California Attorney General, Rob Bonta, one of the lead plaintiffs, said in a statement, July 16: "The president keeps breaking the law, and we keep holding him accountable in court. Shuttering this program would do nothing to prevent waste, fraud, and abuse or improve government efficiency. This is a program with bipartisan support that is focused on protecting lives and livelihoods from flooding, wildfires, earthquakes, and other natural disasters."
What Happens Next
With this ruling, the BRIC program—created in 2019 to support infrastructure resilience projects nationwide—remains funded while legal proceedings continue.
Judge Stearns' order does not immediately release funds to states but prevents FEMA from spending them on other programs, while leaving open the possibility for FEMA to request emergency access to the funds if a major disaster occurs during the injunction period.
The order is intended to preserve the contested funds until the court issues a final decision on whether the administration had the legal authority to dismantle BRIC.