Federal Grant Funding for Biking at Stake in Multiple Lawsuits – CleanTechnica

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Last Updated on: 26th July 2025, 12:22 am

I joined the League of American Bicyclists straight out of law school during a simpler time. I did original research on traffic laws and wrote about their nuances in our Bike Law University series. There were federal threats to funding for bicycling, but those came from Congress, which is expected due to Congress’s Article 1 power to appropriate funding and provide for the general welfare.

This year — more than any previous year I can remember — legal issues related to federal funding are actively being litigated. Through memos, orders, and grant administration, previously awarded funding has been subject to legal challenge in new ways. This means that ongoing litigation has an impact on past awards, current awards, and whether people will apply for future awards and what might be required of them if they do.

Here is a roundup of recent happenings:

Grant Funding Freeze

In January, the Biden administration announced a $9.3 million grant awarded to the East Nashville Spokes project under the Active Transportation Infrastructure Investment Program (ATIIP). This was one of 14 projects selected from 352 applications and the third largest grant from ATIIP in the nation. ATIIP was created by the Infrastructure Investment and Jobs Act and this was its first award round. After being “ghosted” over multiple attempts to finalize the grant agreement with the Trump administration, Nashville joined a lawsuit by the Southern Environmental Law Center and the Public Rights Project along with 13 non-profits and five other cities to compel the Trump administration to administer grants awarded according to congressionally authorized spending.

In May, a district court judge ordered that ATIIP grant to be paid out to Nashville after finding that the Trump administration, “failed to produce a single document showing any individualized review of the Plaintiffs’ grants or discussion of any basis for freezing or terminating the grants other than disapproval of the purposes of the funding.”

What was at stake? A $9.3 million grant awarded under a highly competitive process in a new grant program for biking and walking networks recently created by Congress

What was the outcome? The judge ordered the grant to proceed because evidence showed that it was in keeping with Congressional intent and there was no evidence of deficiencies. However the Administration appealed and the judge has granted a stay until the case is resolved.

How might this impact other grants? Based on the court order, for the Department of Transportation to freeze grants there must be an individualized review that articulates a reason for freezing or terminating a grant that is separate from disagreeing with the purpose of the grant or project chosen.

“Follow the Law” Memo

In April, the Trump administration issued a “Follow the Law” letter stating its interpretation of laws related to immigration and non-discrimination that attach to federal contracts with state and local governments based upon federal transportation funding. In May, 20 states sued the Trump administration based on its “Follow the Law” letter alleging that it was attaching new conditions to federal transportation funding, that those conditions were not authorized by Congress, and that those conditions were unrelated to the grants or their purposes. In June, the court granted a preliminary injunction to the 20 states prohibiting the immigration enforcement conditions discussed in the “Follow the Law” letter because “Congress did not authorize or grant authority to the Secretary of Transportation to impose immigration enforcement conditions on federal dollars specifically appropriated for transportation purposes.” California is the lead plaintiff for this case and it is known as CA vs. USDOT.

What was at stake? All transportation funding awarded to states

What was the outcome? A preliminary injunction was granted so that transportation funding cannot be withheld based on non-compliance with Trump administration immigration enforcement conditions. No final disposition in the case has occurred.

How might this impact other grants? Based on the injunction, for the Department of Transportation to compel immigration enforcement conditions based on federal transportation funding, Congress must authorize those conditions or the DOT must articulate them in a way that is related to transportation funding. For potential recipients of federal transportation funding, they can currently pursue projects without the threat of unrelated immigration enforcement conditions or that funding will be paused based on unrelated immigration enforcement conditions.

In May, five counties and three cities sued the Trump administration based on its “Follow the Law” letter alleging that its imposition of anti-discrimination conditions was impermissible where the conditions were, in part, that any “policies or practices designed to achieve so called ‘diversity, equity, and inclusion,’ or ‘DEI,’ goals, presumptively violates Federal law.” In this case, Federal Transit Administration (FTA) grants and Housing and Urban Development (HUD) agency grants were initially at issue, but the relevant grant programs have expanded as plaintiffs have joined the case. Since the original filing, the number of plaintiffs in this lawsuit has gone from 8 to more than 60. In June, the court granted a preliminary injunction blocking enforcement of the conditions the administration had attempted to place on grants.

What was at stake? Without this lawsuit, grants could be conditioned on grantees not pursuing any DEI goals

What was the outcome? A preliminary injunction was granted so that funding cannot be conditioned on not pursuing any DEI goals. No final disposition in this case has occurred.

How might this impact other grants? If grants can be conditioned on grantees not pursuing any DEI goals then jurisdictions with commitments to DEI goals may be unlikely to apply for grants or accept them if awarded. This could create substantially different outcomes in transportation grant awards.

GHG Emissions 

In March, eleven community groups and six cities, led by the Sustainability Institute as lead plaintiff, sued the Trump administration based on Executive Orders that froze federal grant funds awarded to reduce greenhouse gas emissions. In May, the court entered a judgment for the plaintiffs based on claims under the Administrative Procedure Act, issued a preliminary injunction for 32 grants, and denied a preliminary injunction for six grants that were funded by general funds available to an agency rather than according to a Congressional directive. In June, the Fourth Circuit Court of Appeals stayed the preliminary injunction based on the Trump administration’s argument that the new terms are a contract issue rather than a Congressional authority issue and that the administration would be irreparably harmed by disbursing grants. Plaintiffs have filed a petition for rehearing.

What was at stake? Whether the executive branch can withhold previously awarded funding to grantees based on disagreeing with the policies furthered by the grants. This threatens the Article 1 power of Congress to create grant programs and have the Executive branch administer them according to the law when the Executive disagrees with the policies set by Congress.

What was the outcome? Grants are currently frozen with a petition for rehearing pending. No final disposition in this case has occurred.

How might this impact other grants? If grants can be frozen after they are awarded due to an administration disagreeing with the policies furthered by the grants then any grants not fully obligated before an administration change may be subject to freeze and revocation. This may make grants less appealing during the final one or two years of an administration based on how long full grant awards take.

Sanctuary Cities Executive Order

In February, the cities of Chelsea and Somerville, Massachusetts sued the Trump administration based on Executive Order 14159 that froze federal funding for “sanctuary jurisdictions.” The federal funding was from a variety of sources, but included a $4 million Safe Streets and Roads for All grant to the city of Somerville. In June a preliminary injunction was sought and in July the Trump administration filed documents providing the court notice that it was abiding by the preliminary injunction granted in California vs. USDOT, the case with 20 states as plaintiffs discussed above.

What was at stake? Whether the executive branch can withhold previously awarded funding to grantees based on their designation as “sanctuary jurisdictions.”

What was the outcome? The executive branch is currently not enforcing the freeze on funding based on a preliminary injunction for similar activities in another case. No final disposition in this case has occurred.

How might this impact other grants? The impact in this case is similar to CA vs. USDOT, but more specific to grants issued to cities and involving a greater variety of federal agencies than at issue in CA vs. USDOT.

Supreme Court Ruling

Most of the cases reviewed involved at least one injunction. So, it is natural to wonder if the Supreme Court’s ruling in Trump vs. CASA that “Universal injunctions likely exceed the equitable authority that Congress has given to federal courts” will impact these cases. In the cases reviewed, the injunctions against the Trump administration based on the “Follow the Law” letter could be impacted by the Supreme Court’s ruling because those preliminary injunctions enjoined not just actions related to the parties and grants at issue in the cases, but also similar actions against others.

What’s Next: Looking Ahead Through 2026

The League of American Bicyclists rarely gets involved in lawsuits. However, we are actively monitoring cases related to federal funding so that we are aware of impacts on bicycle-related grants and can provide advice to communities looking to use federal funding to improve bicycling conditions.

The most recent transportation bill, the Infrastructure Investment and Jobs Act (IIJA) passed in 2021, contained large increases in discretionary grant programs. Most of these grant programs are authorized and funded by Congress through 2026. It is important that communities continue to apply for grants to realize the benefits intended by Congress, such as the Safe Streets and Roads for All program’s goal of significantly reducing traffic injuries and deaths. While aspects of grant administration have changed under the Trump administration, funding remains available and we hope that ongoing litigation does not prevent communities from seeking and receiving funding for their priorities.

It is likely that the experience with discretionary grant programs created in IIJA will inform the next transportation bill. If demand for a grant program dries up, that may make it less likely that Congress sees a continued need for that program. If Congress chooses to incorporate Trump administration priorities related to DEI, immigration, or other issues, then the next transportation bill (expected to be debated over the next year before the current bill expires in late 2026) is the time that will happen. We are hopeful that reducing traffic injuries and deaths, creating safe places to bike and walk, and improving air quality remain Congressional priorities.

Article from the League of American Bicyclists. By Ken McLeod