Judge blocks Trump administration grant cuts to environmental groups over DEI

(CN) — A federal judge on Thursday sided with environmental groups who claim their federal grants were cut last year based on their personal views on diversity, equity and inclusion, or DEI, likely in violation of their First Amendment rights.

Chief U.S. District Judge Michael McShane, a Barack Obama appointee, granted a preliminary injunction against the federal government that would restore $14 million in federal grant money to the plaintiffs, the Institute for Applied Ecology, Institute for Bird Populations and the Mid Klamath Watershed Council, all based in California and Oregon.

The environmental organizations included some references to DEI on their websites or job application portals that were not funded by federal grant money — but were still flagged by the Trump administration for grant cuts in September of 2025.

The plaintiffs asked for the injunction against the government late last year because they say their organizations were targeted for cuts by the Department of Government Efficiency based on speech outside of their contracts.

“Today’s ruling allows us to get back to conserving and restoring native species and habitats in partnership with federal agencies,” said Keith Norris, the director for the Institute for Applied Ecology, in a statement from the Democracy Forward Foundation, which represented the plaintiffs. “We are grateful the court has recognized the politically motivated and arbitrary nature of these illegal terminations, and we look forward to once again delivering on-the-ground conservation that supports species, ecosystems, and rural communities.”

The Trump administration told the organizations and the court that the grant cuts were based on a change in priorities, which McShane said was apparent. Whether that change was constitutional was another matter, he wrote.

“The court notes that at this stage, defendants’ argument that they terminated the programs for cost-cutting reasons absent any DEI factors falls apart when compared to the admissible evidence in the record,” McShane wrote.

Department of the Interior Secretary Doug Burgum, who is named as a defendant, took to social media to celebrate the same day the grants were canceled by sharing an exclusive article from the conservative news outlet the Daily Caller, which announced the cuts. The plaintiffs say the government was coordinating with the Daily Caller to publicize the cuts to what it determined were DEI organizations.

“Despite having over 10 weeks to submit evidence supporting their argument that defendants terminated plaintiffs’ grants for legitimate reasons, defendants have, rather remarkably, managed to introduce practically nothing to support their argument that cost cutting, and not speech, drove the terminations,” McShane wrote.

Instead, the Trump administration only submitted four identical declarations from different federal agency employees that reference a change in priorities, McShane noted.

“The court agrees with defendants that the terminations appear to be based on ‘a change in agency priorities,’” he wrote. “However, based on this record — which defendants have had over 10 weeks to supplement or rebut — it appears that the policy change was based on a decision to punish any organization with any connection to DEI speech.”

The environmental organizations claim the grant cuts could potentially result in layoffs of skilled employees, damage their reputations and impact their financial stability.

“Here, the evidence in the record shows that the grant terminations have already significantly impacted plaintiffs’ operations and caused irreparable harm,” McShane wrote. “Defendants have submitted no evidence to rebut Plaintiffs’ assertions.”

The judge cited a similar case in Youth 71Five Ministries v. Williams, in which a Christian youth organization sued the Oregon Department of Education over revoking grant funding.

“In both cases, the government’s funding constraints limited the entities’ exercise of their rights outside the contours of the programs for which the government awarded the funding,” the judge wrote. “Because the Oregon Department of Education’s rule was likely unconstitutional where it leveraged funding to regulate the Organization’s conduct outside of the contours of Department-funded programs, Interior’s revocation of grants is likely unconstitutional where it leverages funding to regulate plaintiffs’ conduct outside of the contours of Interior-funded programs.”

In his ruling, McShane also granted the federal government a seven-day hold of the injunction to allow the federal government to seek an emergency stay in a higher court. Without a stay, the government must restore the grants on March 19.