A federal judge in Washington has kept alive the central challenge to the U.S. Department of Agriculture's (USDA) grant terminations, including claims that the agency canceled awards by keyword search without looking at each one. The October 6 ruling also leaves USDA under orders to hand over the records behind those decisions.
U.S. District Judge Beryl A. Howell partly granted and partly denied the government's motion to dismiss in Urban Sustainability Directors Network v. United States Department of Agriculture. The plaintiffs, 27 nonprofits and King County, Washington, held awards for work such as urban forestry and food access. Her memorandum opinion settles which claims survive. It does not decide whether USDA's alleged termination policy was unlawful.
Judge Finds Keyword-Search Allegations Plausible
The plaintiffs say USDA staff ran grant files through searches for words like "equity," "environmental justice" and "underserved communities," then tracked the hits in spreadsheets. Termination letters followed, most of them nearly identical. Judge Howell found the allegations "more than enough" to make such a policy plausible under the Administrative Procedure Act. At a hearing, even the government's lawyer agreed that deleting every grant mentioning climate change would fall short of a real review.
USDA tells a different story. Its lawyers point out that some awards containing flagged terms survived, which they argue proves someone looked at each grant individually. Discovery will test that. Separately, the court turned back for a third time USDA's reading that Congress never meant the Land Access Program to serve socially disadvantaged producers, so 24 land-access grantees keep their claim that the cancellations conflicted with the statute.
USDA Disclosed 948 Terminated Awards Since January 2025
Getting those records has turned into a fight of its own. In June, USDA disclosed 948 terminated awards since January 20, 2025, more than triple the 312 the court knew about when it issued an earlier order. Production deadlines then slipped one after another. The agency pointed to thin staffing and attorneys' medical emergencies, and eventually asked the court to scrap the schedule without offering new dates.
Judge Howell said no. She stopped short of the sanctions and adverse inferences the plaintiffs wanted, finding no proof of bad faith, and told both sides to come back with a revised discovery schedule.
Court Relief Still Covers Only the Plaintiffs' Own Grants
Preliminary injunctions from August 2025 and June 2026 restored the plaintiffs' own grants, and nothing in this ruling reaches the hundreds of other canceled awards. The judge threw out the due process claims and a claim that USDA exceeded its legal authority. Two groups whose funding has already ended can pursue only a declaration aimed at the reputational damage from their termination letters. USDA's appeal of the injunctions is still pending, though the U.S. Court of Appeals for the D.C. Circuit denied its request for a stay on September 29.
Much of what kept the plaintiffs' claims alive came from their own paperwork, including award terms and the agency's termination letters. Grant recipients that keep that file current are better placed to show what a project was funded to do if the money stops. Similar disputes are playing out elsewhere, from a Nebraska nonprofit contesting a canceled solar grant to farmers already absorbing federal policy shifts.
The next steps are a revised discovery schedule and the appeals court's ruling on the injunctions. Until those arrive, the larger question of whether USDA ran an unlawful mass-termination policy stays open. For developers trying to sort out why individual projects have stalled, a terminated award is one more cause worth tracing.
