Judge rejects NYC's request to order immediate return of $80 million from FEMA to shelter migrants

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NEW YORK (AP) — A federal judge on Wednesday ruled that the Federal Emergency Management Agency doesn’t need to immediately return more than $80 million that it took away from New York City last month in a dispute over funding for sheltering migrants.

Judge Jennifer H. Rearden in Manhattan declined to issue a temporary restraining order, saying the city had failed to prove it will suffer irreparable harm. The city's lawsuit against President Donald Trump and other federal defendants was expected to proceed as New York seeks a preliminary injunction.

The city sued the Trump administration on Feb. 21 after FEMA clawed back grant funding intended to reimburse the city for hotels it leased as shelters for migrants. FEMA claimed it rescinded the funds over concerns a violent gang had taken over a city shelter.

FEMA approved and awarded the funds during the final months of President Joe Biden’s administration but didn’t disburse them until after Trump took office, the city said.

City lawyers argued the Trump administration’s gang concerns were a “hastily-constructed facade” and that its real goal was to thwart implementation of the congressionally-authorized shelter funding program.

“Defendants’ money-grab — after FEMA review, approval, and actual payment, without notice or process of any kind — was, simply put, lawless,” the city argued in its lawsuit.

Attorney Emily Hall, representing the U.S. government, told the judge during an hour of oral arguments on Wednesday that the money would be available once the lawsuit is fully adjudicated, unless Congress revokes it.

Joshua Rubin, a lawyer for the city, told Rearden that it came as “a real shock to us” when the money was taken back.

He said the money was provided to house individuals who FEMA had decided could be in the country.

Rubin said he knew it was an “extraordinary request at the outset of the case” to ask that the funds be immediately restored, “but these are extraordinary circumstances.” He said it was unconstitutional that the money was taken back when Congress had appropriated it.

The judge, though, said in an oral ruling that the city had cited “no irreparable harm to warrant extraordinary relief.”