The Trump administration dropped its appeal Tuesday of a November court ruling that barred it from withholding Transportation Department funding for blue states who opposed its immigration policies.

Chief U.S. District Judge John McConnell in Rhode Island, an Obama appointee, ruled last year that the administration “blatantly overstepped” their authority in attempting to link infrastructure funding to immigration enforcement demands. 

The Department of Transportation filed its motion to dismiss the appeal before the U.S. Court of Appeals for the First Circuit issued its decision. The department did not cite a specific reason for dropping the appeal.

The decision to drop the case comes after California led 20 states in the lawsuit in May after Transportation Secretary Sean Duffy wrote a letter on the Trump administration’s expectations for cooperation with immigration officials.

“I am pleased that the Trump Administration has accepted defeat and agreed to drop its appeal of this decision,” California Attorney General Rob Bonta said in a statement. "California is not playing games when it comes to vital transportation dollars that support our public infrastructure, and we will continue taking the president to court each time he weaponizes federal funding to bully our communities.”  

Although the move could be considered a victory for the Golden State, Duffy has withheld $40 million in federal funding for California because the state has not adhered to his department's rules requiring truck drivers to be proficient in the English language.

Duffy also said last week that his department has canceled $160 million in highway funding for California for failing to cancel over 17,000 allegedly illegally issued Commercial Driver’s Licenses by its January 5, 2026, deadline.

Misty Severi is a news reporter for Just The News. You can follow her on X for more coverage.