Labor & Employment Law Daily Wrap Up, LITIGATION NEWS, TRENDS—NYAG Letitia James’s recent wins include successful challenge to dismantling of four federal agencies, (Dec 1, 2025)

By Brandi O. Brown, J.D.

A federal district court granted summary judgment to the coalition of state attorneys general who challenged the dismantling of the FMCS, among other agencies.

New York Attorney General Letitia James announced before the holiday that a coalition of over 20 state attorneys general, of which she is part, succeeded in obtaining a summary judgment victory in their challenge to the dismantling of the Federal Mediation and Conciliation Service (FMCS), the Institute of Museum and Library Services (IMLS), the Minority Business Development Agency (MBDA), and the U.S. Interagency Council on Homelessness (USICH). Notably, the FMCS promotes peaceful resolution of labor disputes. In an order issued by a federal district court in Rhode Island, that court determined that the Executive Branch could not dismantle these federal agencies in circumvention of the will of the Legislative Branch.

Dismantling four agencies. The states challenged the legality of Executive Order 14238, “Continuing the Reduction of the Federal Bureaucracy” (“Reduction EO”), which had the effect of dismantling the IMLS, MBDA, FMCS, and USICH “by withholding already-appropriated federal funding from these agencies, terminating numerous grants and programs that these agencies administer, and placing many of the agencies’ employees on administrative leave.” The court had previously issued a preliminary injunction barring the administration from implementing the EO and notes that the First Circuit denied the administration’s request for a stay pending appeal.

Permanent injunction. On summary judgment, the states argued that implementation of the Reduction EO violates the Administrative Procedure Act (APA), the Separation of Powers doctrine, and the Take Clare Clause of the United States Constitution. The court granted the states’ motion and issued a permanent injunction, permanently enjoining the government “from taking any future actions to implement, give effect to, comply with, or carry out” the directives contained in the Reduction EO with respect to IMLS, MBDA, FMCS, and USICH.

“The federal government’s illegal attack on these agencies threatened vital resources for workers, small businesses, and the most vulnerable in our communities,” said Attorney General James. “This is a major victory in our ongoing work to defend important services that New Yorkers rely on every day. I will keep fighting to stop the chaos and destruction of this administration’s attempts to dismantle our government.”

The case is No. 1:25-cv-00128-JJM-AEM.

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