DHS Violated Order to Unfreeze Migrant Support Funds, Judge Says

The Department of Homeland Security failed to comply with a court order directing them to unfreeze migrant support funds to Chicago, Denver and Pima County, Ariz., a Chicago federal judge found Monday.

The federal government must process reimbursement requests that had been submitted before the grants in question were formally terminated in April, said Judge Matthew Kennelly of the US District Court for the Northern District of Illinois.

The government can deny the requests if it articulates a reason the requests are improper, as long as it doesn’t rely on the rationales that Kennelly rejected in his findings last year, he said.

The department has until Feb. 23 to process the reimbursements or cite a valid reason they believe the requests were improper.

At oral arguments, attorneys for the Trump administration said they didn’t have to abide by a statutory 30-day reimbursement deadline because the grants are in “closeout,” meaning they had until April to determine what payments they owe.

But the regulation governing reimbursements “does not contemplate allowing a federal agency to escape its regulatory obligations simply because it later terminates a grant,” Kennelly said.

Some $55 million is at stake, according to the municipalities who sued.

They successfully sought an order unfreezing the money after the Federal Emergency Management Agency last year “de-obligated” the grants. FEMA’s move came after Elon Musk promised to “clawback” funds he said were going to shelter “illegals.”

The municipalities are represented by their respective legal departments.

The case is Chicago v. Dep’t of Homeland Security, N.D. Ill., No. 1:25-cv-05463, order 2/9/26.