New York State Attorney General Letitia James has filed a lawsuit—alongside 20 other attorneys general—against the Trump administration over an executive order that effectively shuts down three federal agencies responsible for supporting libraries, museums, minority-owned businesses, and labor mediation services.
At the center of the lawsuit is the Institute of Museum and Library Services (IMLS), a modest but vital federal agency that in 2024 alone distributed $180 million in funding across all 50 states. In New York, more than $8 million from IMLS supported literacy programs, internet access, staff training, and salaries for two-thirds of the state library’s employees. That funding—and the services it sustains—is now at risk. Following the executive order, IMLS has placed nearly all of its employees on administrative leave and frozen hundreds of grants.
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Two additional agencies are also in the administration’s crosshairs: the Minority Business Development Agency (MBDA), which fosters economic growth for minority-owned enterprises, and the Federal Mediation and Conciliation Service (FMCS), which helps resolve labor disputes. The Trump administration has reportedly slashed MBDA’s staff from 40 to just 5 people and halted its grant-making activities. FMCS, meanwhile, has seen staffing levels drop from 200 to fewer than 15 workers and has begun terminating core programs that support unionized workers.
In a press release, James called the executive order “another attack on vulnerable communities, small businesses, and our children’s education,” and emphasized the ripple effect such a shutdown would have across public institutions. “The agencies they are attempting to dismantle support workers nationwide, provide funding to help minority-owned businesses, and make sure our libraries and museums stay open so children can engage in lifelong learning.”
The lawsuit, filed in federal court, argues that the order violates both the US Constitution and the 1946 Administrative Procedure Act by attempting to unilaterally eliminate agencies created by Congress without going through the legislative process. The suit also challenges the administration’s authority to override federal funding laws without congressional approval.
New York State Librarian Lauren Moore described the impact on her department as devastating. “This institute provides $8 million in federal support, sustaining 55 state library staff members and essential programs that directly serve local library communities and residents across the state,” she said. “Our libraries are more than just buildings; they are vibrant hubs of knowledge, culture, and community connection.”
James filed the suit jointly with the attorneys general of Rhode Island and Hawaii. Also joining are their counterparts from California, Massachusetts, New Jersey, Washington, Illinois, Oregon, and other states. The case is the latest in a string of legal actions brought by James in response to the Trump administration’s efforts to curtail federal funding for education, health care, and worker protections. Earlier this month, she won a temporary court order blocking the administration from slashing $11 billion in health funds for states.
The coalition’s legal challenge may set up yet another courtroom showdown between blue-state attorneys general and a White House bent on consolidating executive power. “This isn’t just about budget cuts,” James said. “This is about protecting the institutions that hold our communities together.”