Judge rules DOGE's NEH grant cuts unconstitutional

In early April 2025, DOGE officials terminated more than 1,400 NEH grants totaling over $100 million in congressionally appropriated funds, the largest mass grant cancellation in the agency's nearly 60-year history. NEH acting chairman Michael McDonald signed the termination letters, but depositions later confirmed DOGE staff drove every decision. In a letter to one recipient dated April 1, 2025, McDonald wrote that "the NEH has reasonable cause to terminate your grant in light of the fact that the NEH is repurposing its funding allocations in a new direction in furtherance of the President's agenda."

Only about 40 grants awarded under the Biden administration survived the mass termination intact.

DOGE deployed two staffers, Justin Fox and Nathan Cavanaugh, both in their 20s, to NEH with no humanities expertise and no training in federal grantmaking. Fox and Cavanaugh divided the grants into buckets they called "Craziest Grants" and "Other Bad Grants." They ran keyword "Detection Codes" across every grant description, flagging projects that mentioned terms including "BIPOC (Black, Indigenous, People of Color)," "Minorities," "Native," "Tribal," "Indigenous," "Immigrant," "LGBTQ," "Homosexual," and "Gay."

Fox also fed each grant's short description to ChatGPT with the prompt: "Does the following relate at all to DEI? Respond factually in less than 120 characters. Begin with 'Yes.' or 'No.' followed by a brief explanation." He testified he didn't define DEI for the AI and "did not have the slightest idea how ChatGPT understood the term," according to deposition records released in the lawsuit.

ChatGPT's classification errors included flagging Jewish history grants as DEI. An anthology titled "In the Shadow of the Holocaust: Short Fiction by Jewish Writers from the Soviet Union" was classified by ChatGPT as DEI because, it explained, "this anthology explores Jewish writers' engagement with the Holocaust in the USSR." A grant to advance the National Catholic Center for Holocaust Education was canceled over McDonald's objections. Fox testified that a documentary about the Colfax Massacre, a Reconstruction-era mass killing of Black Americans, was DEI because it "focused on a singular race," meaning it was "not for the benefit of humankind."

In the courtroom, McMahon called the process a "textbook example of unconstitutional viewpoint discrimination." In her ruling she wrote: "What mattered to DOGE was not whether a grant lacked scholarly merit, failed to comply with its terms, or fell outside NEH's statutory purposes. What mattered was that the grant concerned a 'minority group.'"

The American Council of Learned Societies, the American Historical Association, and the Modern Language Association filed the first lawsuit on May 1, 2025. Eleven days later, the Authors Guild filed a separate class action on behalf of all approximately 1,400 affected grantees. Judge McMahon consolidated both cases on May 14, 2025, noting they were "substantially identical."

The plaintiffs moved for summary judgment on March 6, 2026, releasing deposition transcripts and internal emails that became central to the ruling. Discovery also uncovered that DOGE and NEH staff communicated about the process via Signal, which plaintiffs alleged violated the Federal Records Act.

On May 7, 2026, Judge McMahon granted summary judgment on all counts in favor of the plaintiffs. The 143-page decision declared the grant terminations "unlawful, unconstitutional, ultra vires, and without legal effect." She permanently barred the Trump administration from enforcing the terminations and ordered every canceled grant reinstated.

McMahon found three independent violations: (1) DOGE lacked statutory authority to cancel grants that NEH's own enabling legislation vested in the agency's chair and external peer reviewers; (2) the terminations constituted viewpoint discrimination under the First Amendment; and (3) the use of race, religion, national origin, sex, and sexual orientation as cancellation criteria violated the equal protection component of the Fifth Amendment.

On the separation-of-powers question, McMahon drew a sharp line. She wrote that the executive "has no constitutional authority to block, amend, subvert or delay spending appropriations based on the president's own policy preferences." Congress created NEH in 1965 under the National Foundation on the Arts and the Humanities Act, appropriating funds specifically for humanities grants administered through peer review. DOGE displaced that statutory grantmaking scheme to carry out presidential executive orders targeting DEI, a substitution the judge found exceeded constitutional limits on executive power.

She cited the Impoundment Control Act of 1974, which requires the president to obligate congressionally appropriated funds unless Congress itself authorizes withholding them.

McMahon rejected the government's argument that ChatGPT, not DOGE, made the classification decisions. "ChatGPT was the Government's chosen instrument for purposes of this project," she wrote, "and DOGE's use of AI to identify DEI-related material neither excuses presumptively unconstitutional conduct nor gives the Government carte blanche to engage in it."

She also rejected the argument that letters signed by McDonald as acting NEH chairman gave the terminations legal cover. Depositions established that DOGE, not McDonald, held final authority, and that DOGE staff had told NEH leadership to disregard internal rules and not question the legality of their actions.

The ruling's impact hit all 50 states. NEH funds museums, historic sites, libraries, documentary filmmakers, K-12 schools, universities, public television and radio stations, and independent scholars. Since its founding in 1965, NEH has awarded over $6 billion in grants. The terminated awards funded scholars studying Ukrainian literature at Harvard, Princeton researchers in art and archaeology, and documentation of the civil rights struggle.

Joy Connolly, president of the American Council of Learned Societies, said: "The humanities are not a luxury. They're how a democracy understands itself. Today's decision is a step toward honoring the will of Congress and our mission as a nation — to seek the truth, know ourselves, and build a better future on that knowledge."

Questions remained after the ruling about whether reinstated grantees would actually regain access to funds. Trump's proposed FY2027 budget called for the permanent elimination of NEH, and DOGE's workforce cuts had already reduced agency staff by roughly 65 percent. An anonymous NEH staffer told The Atlantic that the ruling was welcome but that "major questions remain about whether NEH-grant recipients will actually regain access to funds and whether a drastically diminished agency has the staffing capacity to realistically administer them."

As of May 7, 2026, the White House and Department of Justice hadn't responded to press requests for comment on the ruling, and no appeal had been announced.

Judge McMahon was nominated to the Southern District of New York by President Bill Clinton in 1998 on the recommendation of Republican Sen. Alphonse D'Amato and confirmed by the Senate. She served as Chief Judge from 2016 to 2021 and isn't a recent appointee of either major party. Her 143-page ruling in ACLS v. McDonald, consolidated with The Authors Guild v. NEH, is among the most direct federal court decisions on DOGE's authority to redirect agency spending without statutory basis. It's also one of the first rulings to hold that AI-assisted government decision-making doesn't transfer constitutional accountability away from the executive branch.