The Ninth Circuit Just Drew the Line on Post-Award Grant Conditions. County of King v. Turner Tells You Exactly Which Ones Survive.

For eighteen months, the operative question for anyone holding a federal grant has been simple and unanswerable: how much can an agency add to an award after it has already been made?

On August 25, 2026, the U.S. Court of Appeals for the Ninth Circuit answered a large part of it. In County of King v. Turner, No. 25-3664, a panel affirmed in substantial part three district court preliminary injunctions blocking the Departments of Housing and Urban Development, Transportation, and Health and Human Services from enforcing a set of grant conditions imposed on roughly $14 billion in congressionally appropriated funds.

Writing for the panel, Judge M. Margaret McKeown put the holding in a single sentence that grant administrators should tape to a wall: the majority of the conditions "far exceed the limited authority set out by Congress and superimpose onerous requirements well after the government already awarded grant funds."

The case matters far beyond the roughly 75 cities and counties who brought it. The conditions at issue were not bespoke. They were template language, propagated across award terms at three cabinet departments, and versions of the same language have appeared in notices of funding opportunity and award letters at agencies that were never parties to this suit. The Ninth Circuit did not strike the conditions as a bloc. It sorted them, and the sorting is the useful part.

What was actually challenged

The plaintiff coalition — King, Pierce, and Snohomish counties in Washington; Santa Clara and San Francisco counties in California; and cities including San Jose, Oakland, Palo Alto, Boston, Columbus, and New York — filed in the Western District of Washington in May 2025 (case 2:25-cv-00814). The defendants were HUD Secretary Scott Turner and his counterparts at DOT and HHS.

The grant programs swept in were not marginal. They included HUD Continuum of Care homelessness assistance, DOT transit and infrastructure formula and competitive funding, and a range of HHS child welfare, public health, and civil rights programs. The district court issued preliminary injunctions in June 2025, August 2025, and January 2026 as new tranches of conditions appeared.

The conditions themselves clustered into four types:

1. Antidiscrimination compliance conditions requiring the recipient to certify compliance with federal antidiscrimination law — not just in the funded activity, but across the recipient's operations.
2. False Claims Act materiality clauses declaring that those certifications are "material" to the government's payment decision, which is the element that converts an administrative compliance slip into treble-damages FCA exposure.
3. Use-of-funds restrictions barring recipients from using grant money to promote what the conditions called gender ideology, elective abortion, or illegal immigration.
4. An immigration verification mandate requiring recipients to run beneficiaries through a specific federal verification system.

The four holdings

On antidiscrimination conditions, the government partly won. The panel held these conditions are unlawful to the extent they reach programs or activities that do not receive federal funds — but permissible as applied to the federally funded program itself. This is the one place the Ninth Circuit narrowed the injunction, and it remanded with instructions to do so.

That distinction is old law wearing new clothes. Federal civil rights statutes attached to spending have long been read to reach the "program or activity" receiving the funds. What the agencies attempted here was entity-wide reach through a grant term. The court declined to let a condition do what the statute does not.

On False Claims Act materiality, the government lost. The panel held that the conditions declaring compliance certifications material for FCA purposes are not authorized by statute. This is quietly the most consequential holding in the opinion. Materiality under the FCA is a judicial inquiry into whether the government's payment decision actually turned on the representation. An agency cannot manufacture it by decree in an award term. For a mid-size nonprofit, the difference between "we may have to repay a disallowed cost" and "we face treble damages and a qui tam relator" is the difference between a bad quarter and dissolution.

On the use-of-funds restrictions, the government lost. The panel held these exceed statutory authority. Congress appropriated funds for homelessness assistance and transit; it did not delegate to the Secretary the power to attach unrelated ideological restrictions to their expenditure.

On the immigration verification mandate, the government lost. Requiring recipients to use a specific verification system was held unauthorized. Note the narrowness of the reasoning available here: the problem the court identified was the absence of statutory authorization, not the policy. A statute could change that answer.

Why this is not a "sanctuary city" case

It is being read that way in some coverage, and that reading will cost people money. The plaintiffs were local governments, but the conditions were written into award terms that apply to subrecipients and nonprofit direct recipients alike. A Continuum of Care lead agency passes these terms down. A transit authority passes them to contractors. A community health center signs them directly.

The holding is about the limits of agency authority to attach conditions to appropriated funds, and specifically about attaching them after the award. That principle does not check anyone's incorporation status at the door.

What this changes for recipients, concretely

If you signed award terms containing these conditions, you are not automatically free of them. A preliminary injunction is prospective relief that runs against the enjoined defendants. It is not a rescission of your grant agreement. The practical move is to ask your program officer, in writing, whether the agency will continue to enforce the enjoined terms in your award — and to keep the answer.

Recipients outside the Ninth Circuit are in a weaker position than the headlines suggest. The Ninth Circuit covers Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington, plus Guam and the Northern Mariana Islands. The persuasive value elsewhere is real — this is a published appellate opinion from a large circuit — but a grantee in Ohio does not have binding authority in hand. Expect parallel litigation, and expect a circuit split to be the thing that decides whether this reaches the Supreme Court.

Do not over-read the antidiscrimination holding. The one condition category that partly survived is the one most recipients were least worried about. Compliance with federal antidiscrimination law within the funded program remains a lawful condition and remains fully enforceable. If your compliance posture was built on the assumption that all of this was going away, rebuild it.

Preserve the FCA question. The materiality holding is the one most likely to be tested on appeal, because it constrains the government's most powerful enforcement lever. Until it is settled, treat every certification you sign as if it could be material, and document the basis for each one. That is cheap insurance either way.

Audit your subaward templates. If you are a pass-through entity, you likely flowed these conditions down verbatim, because that is what pass-through entities are required to do with award terms. Your subrecipients are now operating under terms that an appellate court has held largely unauthorized. Get counsel on whether to amend, and document the decision either way.

The larger pattern

Read alongside the OMB Uniform Guidance rewrite and the agency-level rules now following it, County of King marks a boundary in an ongoing project: moving the locus of grant control from the appropriation to the award term. The Ninth Circuit's answer is that award terms are downstream of statutes, not a substitute for them.

That answer is a preliminary one, issued at the preliminary injunction stage, in one circuit, on a record that is still developing. The case returns to the district court for the narrowing on remand, and the merits are ahead.

But the sorting logic is now on the books, and it is usable today. When the next NOFO arrives with an unfamiliar condition attached, the question the Ninth Circuit asks is the question you should ask: which statute authorizes this, and does it reach beyond the funded program? If nobody at the agency can answer that in a sentence, you have found the vulnerable clause.