A federal judge in Boston on Tuesday refused to put her ruling on hold while the Trump administration appeals it. The ruling says federal agencies cannot cancel grants already awarded to Massachusetts and other states just because the agency’s priorities changed after the award. U.S. District Judge Indira Talwani denied the government’s motion for a stay pending appeal in State of New Jersey v. U.S. Office of Management and Budget, No. 1:25-cv-11816, an eight-page order we read on the federal docket.
She also went further than the usual legal test. A stay that lets the government keep doing what a court has found unlawful while it avoids a ruling on the merits is not in the public interest, she wrote, “where it threatens respect for and confidence in the judiciary.”
The case at a glance
| Case | State of New Jersey v. U.S. Office of Management and Budget, No. 1:25-cv-11816 (D. Mass.) |
|---|---|
| Judge | U.S. District Judge Indira Talwani |
| Plaintiffs | 20 states including Massachusetts, the governors of Pennsylvania, Kansas and Kentucky, and the District of Columbia |
| Defendants | OMB and 12 other federal departments and agencies: Agriculture, Commerce, Defense, Homeland Security, Justice, Labor, State, Interior, EPA, FEMA, the National Science Foundation and the National Endowment for the Humanities |
| Ruling on the merits | July 17, 2026, summary judgment for the states; Rule 54(b) final judgment entered October 7 |
| Appeal | Filed October 22; First Circuit No. 26-2210 |
| Today’s order | November 3, 2026: stay pending appeal denied |
What the judge already decided
The fight is over one sentence in the federal grant rules, 2 C.F.R. § 200.340(a)(4), which we read on the eCFR. It says a federal award may be terminated “by the Federal agency or pass-through entity pursuant to the terms and conditions of the Federal award, including, to the extent authorized by law, if an award no longer effectuates the program goals or agency priorities.”
The administration read that to let it cancel grants that no longer fit its priorities. Talwani disagreed. Her final judgment declares that the provision, in both its 2024 and 2021 versions, does “not allow terminations of awards based on new program goals or agency priorities that an agency identifies after granting the award.”
Why she refused to pause it
A court deciding whether to stay its own judgment during an appeal weighs four factors from Nken v. Holder, 556 U.S. 418 (2009): whether the party asking for the stay is likely to win the appeal, whether it will be irreparably harmed without a stay, whether the stay will hurt the other side, and the public interest. Talwani found the government failed on all four.
- The merits. The government did not make the required “strong showing” that it is likely to win, for the reasons in her July decision.
- Harm to the government. The administration said the judgment impedes its ability to end grants that no longer serve the “current Administration’s” priorities and causes a separation-of-powers harm. The judge said it did not identify which grants it wants to terminate, which made the claimed harm “too ‘speculative.'”
- Harm to the states. A stay would let agencies terminate the states’ grants unlawfully, make their current claims moot and force them to sue elsewhere. Where the government’s only “injury” is having to refrain from conduct the court found unlawful, she wrote, it is the government that “will suffer no comparable injury.”
- The public interest. Grant terminations based on new priorities affect communities, research, the people and institutions paid under the grants, and the vendors and landlords who contracted to carry them out.
She also faulted the government’s strategy. If it is confident she is wrong, she wrote, it could ask the appeals court for expedited review. Instead it sought a stay, a “tactic” that she said “is aimed at allowing the government alone to continue engaging in conduct found unlawful by a lower court while litigation continues.” In a footnote, she said the record suggests the government was responsible for the delay in entering final judgment after her July ruling.
What the judgment does and does not do
The order stresses that the relief is limited. According to Talwani, the judgment:
- Does not stop agencies from terminating grants for any lawful reason, including grants that fail to meet the program goals set when they were awarded.
- Does not undo terminations that have already happened.
- Does not order the government to pay money under a contract.
- Does not limit the priorities the government can set for new grants.
- Does declare that the termination rule does not authorize cutting off existing awards because of priorities identified after the award.
That limit matters because of recent Supreme Court rulings on grant cases. Citing Department of Education v. California, 604 U.S. 650 (2025), the order says the judgment does not “enforce a contractual obligation to pay money.” Talwani also cited Justice Amy Coney Barrett’s concurrence in a 2025 National Institutes of Health case for the view that challenges to grant terminations that have already happened belong in the Court of Federal Claims, while challenges to the government’s internal guidance can be heard in district court.
What happens next
The government can ask the First Circuit for a stay, and if that fails, the Supreme Court. The appeal itself, No. 26-2210, will decide whether her reading of the termination rule holds. For now, the declaration stays in effect.
Massachusetts is a plaintiff, and its lawyers have filed papers on behalf of all the states. Our tracker lists every active lawsuit between Massachusetts and Washington.
Frequently asked questions
Can the federal government cancel grants because its priorities changed?
Not under this judgment, for the grants at issue. Judge Talwani declared that 2 C.F.R. § 200.340 does not allow terminating awards based on program goals or agency priorities identified after the grant was made. Agencies can still terminate grants for other lawful reasons. The ruling is on appeal.
Does this ruling restore grants that were already cut?
No. The judge said the judgment does not vacate terminations that have already occurred.
What is a stay pending appeal?
An order pausing a judgment while the losing side appeals. It is “extraordinary relief,” the judge wrote, and the party asking for it must show it is likely to win, will be irreparably harmed, and that a stay is fair to the other side and in the public interest.
Which states are in the case?
New Jersey, Massachusetts, New York, Arizona, California, Colorado, Connecticut, Delaware, Hawai’i, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Rhode Island, Vermont and Wisconsin, along with the District of Columbia and the governors of Pennsylvania, Kansas and Kentucky.
Sources: Memorandum and Order, State of New Jersey v. U.S. Office of Management and Budget, No. 1:25-cv-11816 (D. Mass. Nov. 3, 2026), Doc. No. 153, and Rule 54(b) Final Judgment, Doc. No. 142, read on the federal docket; 2 C.F.R. § 200.340 read on the eCFR. Nken v. Holder, 556 U.S. 418, and Department of Education v. California, 604 U.S. 650, verified on CourtListener. Universal Hub first reported the ruling. General information, not legal advice.