LANSING — Michigan Attorney General Dana Nessel, as part of a multistate coalition, has filed a lawsuit (PDF) challenging the Trump administration’s unlawful attempt to impound Congressionally appropriated federal funding. In this lawsuit, filed in the U.S. District Court for the Northern District of California, Attorney General Nessel and the coalition argue that the impoundment of federal funding, including the President’s recently announced “pocket rescission,” violates the U.S. Constitution and the Administrative Procedure Act.  

“When the federal government withholds money that Congress has already approved, Michigan families feel the repercussions,” said Attorney General Nessel. “This is not the president’s money to withhold. It is money appropriated by Congress for specific purposes, including programs that Michigan families depend on. We will continue to hold the Trump administration accountable each time its unlawful actions harm Michiganders.”

On September 25, 2026, five days before the end of the fiscal year, President Trump announced that his administration would unilaterally rescind $810 million that it had determined “does not benefit American citizens.” Additionally, as of September 30, 2026, other Congressionally appropriated funding appears to remain unobligated, and is therefore at risk of expiring, including funding for emergency services and education.

In the lawsuit, Attorney General Nessel and the coalition argue that this is the latest front in a multi-year campaign of failed attempts by the administration to terminate, withdraw, or place conditions on funding that supports programs Congress has chosen to fund, but with which the President disagrees. Impoundment — the administration’s refusal to spend funds Congress has lawfully appropriated for particular purposes — violates the separation of powers, the Appropriations Clause, and the Presentment Clause of the U.S. Constitution. The coalition further argues that the impoundment of funds is unlawful agency action in violation of the Administrative Procedure Act.

Attorney General Nessel has repeatedly stood up to the president’s illegal attacks on federal funding — filing over 20 lawsuits to protect legally appropriated funds totaling over $3.55 billion preserved for Michigan in funding for public safety, education, childcare, food assistance, healthcare, biomedical research, transportation, clean energy, museums and libraries, victims of crimes, and other vital programs and benefits residents rely on. This includes: 

• Protecting 75% of the state’s total budget for statewide library services.
• Stopping the National Institutes of Health’s attempt to remove funding for indirect costs in over 1,800 Michigan-based scientific studies and treatment including cancer studies, lifesaving research, DNA testing, and more.
• Protecting federal grant funding from the Department of Transportation to develop, maintain, and ensure safety on the state’s roads, highways, railways, airways, and waterways.

Attorney General Nessel joins the attorneys general of California, Maine, Maryland, New Mexico, Nevada and Oregon in filing the lawsuit.