Stockton has withdrawn from two federal lawsuits challenging the Trump administration’s conditions on government grants, ending its participation in widespread legal efforts to prevent federal agencies from withholding funding over compliance with White House policies.
The lawsuits, City of Fresno vs. Noem and City of Fresno vs. Turner, challenged requirements tied to immigration enforcement; diversity, equity and inclusion programs; gender identity; and other federal policies. The participating local governments argued that the Trump administration was unlawfully attaching conditions to money Congress had authorized for essential public services.
Stockton’s withdrawal comes after federal judges granted preliminary injunctions temporarily protecting the city and other plaintiffs from certain disputed requirements while the lawsuits proceeded.
Mayor Christina Fugazi’s office announced the withdrawal this week in a news release, saying the decision was intended to preserve Stockton’s ability to pursue federal funding, particularly grants supporting law enforcement, emergency preparedness and other municipal services.
The City Council directed its attorneys to withdraw in July, but the decision was not publicly disclosed until Tuesday after Stockton had already exited both cases.
Why Stockton joined the lawsuits
The legal challenges stemmed from executive orders and federal grant policies adopted during President Donald Trump’s second term, including changes to federal grant oversight.
Federal agencies introduced requirements for grant recipients to certify compliance with administration policies involving immigration enforcement, diversity programs, gender identity and, in certain programs, elective abortion.
For local governments, the dispute centered on whether federal agencies could make compliance a condition of receiving grants for housing assistance, transportation improvements, emergency preparedness and public safety.
The cities and counties argued that the administration had exceeded its authority by imposing conditions Congress had not authorized — potentially forcing local governments to choose between changing their policies or losing federal funding.
The first lawsuit, Fresno vs. Turner, was filed in August 2025 against the departments of Housing and Urban Development, Transportation, Health and Human Services and the Environmental Protection Agency, among other federal defendants.
The case challenged grant conditions affecting programs that local governments rely on for housing, transportation, public health and environmental projects.
Stockton joined the litigation in February 2026, when an amended complaint added several local governments.
In April, U.S. District Judge Richard Seeborg extended a preliminary injunction to the newly added plaintiffs, including Stockton, preventing the covered agencies from enforcing certain challenged grant conditions.
The second lawsuit, Fresno vs. Noem, was filed in February 2026 against the departments of Homeland Security, Justice and the Interior, along with the Federal Emergency Management Agency.
That lawsuit focused on funding for law enforcement, emergency response, disaster preparedness and infrastructure.
Among the programs identified in federal court documents were two grants Stockton had already received: $500,000 through the Department of Justice’s COPS Safer Outcomes program and approximately $4.27 million through the Department of the Interior’s WaterSMART program.
The $500,000 grant was intended to help Stockton train law enforcement personnel to respond to people experiencing mental health crises, including through de-escalation training and coordination with San Joaquin County Behavioral Health Services.
The WaterSMART funding was intended to replace and upgrade outdated water meters serving residential, commercial and irrigation customers.
In declarations submitted to the federal court, Stockton officials argued that losing those grants could undermine public safety training and delay or cancel planned water infrastructure improvements.
On July 9, U.S. District Judge William Orrick granted a preliminary injunction preventing federal agencies from enforcing the challenged conditions against Stockton and other plaintiffs for specified grant programs.
The order also prohibited agencies from refusing to process grants because a local government was participating in the lawsuit.
Both rulings provided temporary protections while the litigation continued. Neither represented a final resolution in the legal disputes.
Withdrawal will preserve funding opportunities, city says
Fugazi’s office described Stockton’s withdrawal as a practical decision intended to protect its ability to compete for federal resources.
“My responsibility is to put Stockton first,” Fugazi said in a news release. “Federal public-safety dollars belong in our neighborhoods, supporting our officers, strengthening emergency response and providing services that directly benefit Stockton residents.”
The city initially joined the lawsuits amid uncertainty over changing federal grant requirements and their potential impact on local governments.
However, city leadership subsequently determined that continuing to participate in the litigation could create additional uncertainty around federal funding.
“There are times when government has to distinguish between winning an argument and delivering a result,” Fugazi said. “For Stockton, the result that matters is bringing resources home.”
The mayor’s office said the withdrawal should not be interpreted as the city changing its position on legal concerns raised in the lawsuits.
Instead, officials characterized the decision as an effort to preserve federal funding opportunities. The city also intends to seek reconsideration or reapply for funding programs where permitted, Fugazi said. The release did not specify grants that Stockton had lost because of its participation in the lawsuits or new funding opportunities the city may now be eligible for.
The city also acknowledged that leaving the litigation does not guarantee future funding awards, which remain subject to federal requirements and competitive application processes.
Public safety grant a priority
The withdrawal comes as Stockton has identified another federal funding opportunity: the Department of Justice’s Model Cities Initiative, a competitive program announced in June that is expected to distribute approximately $300 million among two to four cities.
On Aug. 18, the City Council approved its 2026-27 state and federal legislative advocacy program, which identified the initiative among Stockton’s federal public safety and emergency response priorities.
According to the Justice Department, the program would fund law enforcement staffing, crime prevention endeavors, technology upgrades, mental health services and other public safety efforts. Applications were due Sept. 1, with initial awards anticipated later this year.
The initiative includes some of the same requirements being challenged in the lawsuits that Stockton had previously joined.
Under the Justice Department’s application guidelines, cities must certify compliance with federal laws governing immigration and follow the department’s guidance addressing unlawful discrimination, including certain DEI practices.
The guidelines also identify support for immigration law enforcement. Funding for activities that impede federal immigration enforcement, including certain failures to provide access or respond to requests from DHS agents, are excluded.
The initiative also allows funding for automated license plate reader technology, although its guidelines do not explicitly require cities to share that data with federal immigration authorities.
It was not immediately clear whether Stockton completed an application before the September deadline or whether the initiative played any role in the council’s July decision to withdraw from the federal lawsuits. The published application requirements do not expressly disqualify cities for participating in litigation against the federal government.
Council made decision in July
Although Fugazi’s office announced the withdrawal from the lawsuits on Tuesday, the City Council had directed its attorneys to leave the litigation more than two months earlier.
Interim City Attorney Donald Larkin disclosed the decision following a closed council session this week.
“It wasn’t reported out at the time because the withdrawal required further negotiation with the federal government,” Larkin said, adding that the city’s request has been granted.
The July 21 council agenda listed both lawsuits for closed-session discussion. When councilmembers returned to open session that evening, then-City Attorney Marci Arredondo reported that no reportable action had been taken.
Federal court records show Stockton filed a notice voluntarily dismissing its participation in Fresno vs. Noem on Aug. 27. Its withdrawal from Fresno vs. Turner also was completed before Tuesday’s announcement.
The city has not publicly disclosed the negotiations Larkin referenced, identified which federal officials participated or explained whether any commitments regarding future funding accompanied Stockton’s withdrawal from the suits.