| Photo by Giommarco Boscaro on Unsplash
NEW YORK — New York City has filed a lawsuit against President Trump and the federal government to reclaim $80 million that was clawed back by the Federal Emergency Management Agency (FEMA). The funds were initially intended to cover hotel costs for migrants. The lawsuit alleges that the Trump administration unlawfully seized the funds from a city bank account without advance notice or proper communication.
Mayor Eric Adams and the city’s legal team argue that the federal government violated federal law by removing the grant money and that the funds should be returned to the city. The lawsuit also seeks to prevent the federal government from taking more grant money from city bank accounts in the future.
The Law Department further argues that the federal defendants withholding these funds is arbitrary and capricious, contrary to law, ultra vires, and above authority, without observance of lawful procedures. Further, the Law Department claims that the actions of these defendants violate the Due Process Clause, the separation of powers doctrine, and the Spending Clause of the U.S. Constitution.
“With very little help from the federal government, our administration has skillfully managed an unprecedented crisis, which has seen over 231,000 people enter our city asking for shelter. The $80 million that FEMA approved, paid, and then rescinded — after the city spent more than $7 billion in the last three years — is the bare minimum our taxpayers deserve,” Adams said. “And that’s why we’re going to work to ensure our city’s residents get every dollar they are owed.”
The city is seeking a preliminary and permanent injunction, as well as a temporary restraining order (TRO) from the court by (1) ordering the defendants to return the $80 million to the city’s bank account,(2) enjoining the defendants from taking any further money from any city bank account in connection with this Shelter and Service Program (SSP) grants, and (3) enjoining them from withholding SSP funds.
New York City Corporation Counsel Muriel Goode-Trufant alleged in a complaint filed in the U.S. District Court for the Southern District of New York that the Trump administration “unilaterally took back more than $80 million, which they attempted to justify in a belated ‘noncompliance’ letter.
According to Goode-Trufant, the letter is a “mere cover to mask the real purpose of defendants’ money-grab,’ which—as many have stated publicly—is to withhold the funds permanently because they oppose the purposes for which the funds were appropriated, awarded, approved, and paid.”
The Adams administration said the city has less than 45,000 migrants currently receiving city shelter services, down from a high of 69,000 in January 2024 and out of the more than 231,000 who have arrived in New York City seeking city services since the spring of 2022.
The city’s efforts have directly resulted in approximately 24,000 fewer asylum seekers in the city’s care on a day-to-day basis, allowing the city to announce multiple additional site closures in December 2024, January 2025, and, most recently, February 2025, marking the end of tent-based emergency response shelters.
The lawsuit has sparked a range of reactions from New York City residents. Some residents support the lawsuit, believing the city should reclaim the $80 million FEMA took back. They feel the funds are crucial for addressing the migrant crisis and providing necessary services. They are concerned about the potential impact on the city’s budget and the ongoing challenges of managing the influx of asylum seekers.
On the other hand, some residents are skeptical about the lawsuit and question its timing and motives. Some believe it is politically motivated and may not achieve the desired outcome.
Overall, the reactions are mixed. Some residents strongly support the city’s efforts to reclaim the funds, while others remain cautious and critical of the lawsuit’s potential impact.
