STATEMENT: Federal Funding for Libraries Makes its Case in Court
The Trump Administration is attempting to have this case dismissed based on standing.
In federal court today, a coalition of twenty-one States’ Attorneys General began their challenge the legality of President Trump’s Executive Order mandating the abrupt and indefinite shutdown of the Institute of Museum and Library Services (IMLS), the Federal Mediation and Conciliation Service (FMCS), and the Minority Small Business Administration (MSBA).
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The plaintiffs argue that the Executive Order not only contravenes statutory obligations established by Congress but also causes immediate and irreparable harm to states, agencies, and the public they serve. At the heart of the lawsuit is the assertion that these agencies lack the legal authority to suspend operations unilaterally and that the Executive Branch has failed to follow required procedures under the Impoundment Control Act and the Administrative Procedure Act.
The lawsuit claims that the implementation of the Executive Order will cause permanent and irreversible harm to grant recipients. The Trump Administration argues that states can simply fund these agencies during the lawsuit and would be reimbursed by the Institute of Museum and Library Services (IMLS) if the plaintiffs win. However, states cannot divert taxpayer funds mid-fiscal year. Every state library depends on funding from the IMLS, which Congress has mandated. In the complaint, numerous state libraries demonstrate that they use IMLS Grants to States to finance functions that the states do not cover. The plaintiffs' attorney emphasized that the Administration has made no conflicting statements regarding this issue. Furthermore, the plaintiffs clarified that IMLS cannot operate at its current staffing levels, most staff are currently on administrative leave, rendering the agency incapable of fulfilling its statutory obligations.
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President Trump’s Executive Order creates harm that extends beyond cuts to current funding. The abrupt shutdowns of all three federal agencies named in the lawsuit pose serious, potentially catastrophic problems for state and local governments, businesses, unions, and individuals. Similar to state libraries, the Federal Mediation and Conciliation Service (FMCSP) is referenced in over 40 state laws related to contract negotiations, collective bargaining, and resolving union/management conflicts. The Minority Small Business Administration (MSBA) is integral to various local and state economic development plans, which are now disrupted or dismantled. The lack of funding and resources through the MSBA will directly and adversely affect startup businesses.
The Trump Administration is attempting to have this case dismissed based on standing. The plaintiffs contend that, contrary to the Administration's assertions, the states have legitimate standing to bring this case to court. They argue that the case should continue because all three agencies are essentially closed or lack the capacity to fulfill their statutory obligations, and there is no public interest in continuing the Executive Order. Additionally, there is no evidence that the Administration will change its actions regarding the E.O. In fact, the current acting director of IMLS has continued to issue cancellation notices to grant recipients as recently as yesterday.
The Assistant Attorney General of Rhode Island noted that two significant events occurred on March 14, 2025: the E.O. was issued, and the President signed the 2025 budget continuing resolution. The judge questioned the plaintiffs’ argument that the actions of the agencies are illegal under the Impoundment Control Act, which provides legal mechanisms for Congress to review executive branch budget withholdings. The Act mandates that the President report any budget withholding to Congress and adhere to the results of the congressional impoundment review process. It is worth noting that the current acting director of IMLS did not respond to the IMLS Advisory Board’s inquiry about plans to reduce the agency to its statutory minimums. Additionally, the Administration has failed to initiate any of the required congressional oversight under the Impoundment Act for any of the agencies.
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The attorney representing the Trump Administration argued that the plaintiffs are employing "an impermissibly broad brush" by claiming that the closure of these federal agencies and the cessation of their statutory functions cause irreparable harm. The judge asked the government’s attorney if the "harm to the public," particularly regarding the closing of libraries like the State Library of Maine, should be considered in this case. The government maintained that the impact on the public is irrelevant to the case.
The judge observed that if the President believes he was elected to terminate these agencies, he is free to advocate for this view with Congress and the public, but he cannot unilaterally dismantle these statutorily established agencies without passing new legislation. The judge pointed out that IMLS has a statutorily authorized formula for administering Grants to States, which has been halted by the implementation of the E.O. He remarked that ending that program appears inconsistent with Congress’s intentions.
The judge then asked the Trump Administration attorney, "Where do the agencies get their authority to close themselves down?" The government lawyer did not directly respond to this question.
Ultimately, the government contends that the states lack standing to sue. The administration argues that the Administrative Procedure Act (APA) does not permit the states to challenge this type of administrative action. The plaintiffs counter that the administration has not provided a reasoned explanation for shuttering these agencies and that government attorneys are attempting to formulate a circular argument suggesting that, because the agencies did not document their decisions, the states cannot challenge their closure.
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The government's final point is that if the states wish to seek relief, each grant recipient must individually approach the Court of Federal Claims to present their specific case regarding the grant. It became evident during the hearing that there is no statutory, constitutional, or rational justification for the Trump Administration's decision to close these federal agencies. If the Executive Order is legal, the agency directives should have limited their actions accordingly. It is clear to us that the administration is violating both statutory obligations and discretionary programs. We believe the plaintiffs effectively established their standing today, demonstrating that the agencies implementing the Executive Order are causing them harm and that the lawsuit should move forward. The judge indicated that he would issue a decision as soon as possible.