The three-judge panel of the 7th U.S. Circuit Court of Appeals in Chicago agreed with the decision last year of a lower court judge who imposed a temporary injunction on the administration. The decision says the administration exceeded its authority in establishing a new condition for cities to qualify for the grants.
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"The Attorney General in this case used the sword of federal funding to conscript state and local authorities to aid in federal civil immigration enforcement," Judge Ilana Rovner wrote. "But the power of the purse rests with Congress, which authorized the federal funds at issue and did not impose any immigration enforcement condition on the receipt of such funds."
The ruling is the latest blow in a battle between "sanctuary cities" that decline to cooperate with federal immigration agents, and a Trump administration determined to crackdown on illegal immigration.
The administration in July imposed a condition that cities receiving public safety grants must agree to inform federal agents when immigrants in the country illegally are about to be released from police detention. Chicago was among several cities that sued.
U.S. District Judge Harry Leinenweber last September granted Chicago's request for a temporary nationwide injunction. All three judges agreed Thursday with Leinenweber, meaning the nationwide injunction will remain in force. But one judge issued a partial dissent, saying that the ruling should apply to Chicago only.
All three of the judges on the panel were appointed by Republican presidents.
Chicago Mayor Rahm Emanuel claimed victory over the Trump administration. He added that the fight with the administration isn't over, noting the funds haven't been distributed.
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"From day one when we said we are not going to allow the Trump Justice Department to bully or intimidate the city of Chicago off of its values," he said. "This is our second opinion that reaffirms that Chicago is right."
Judge Rovner says in her opinion that Chicago does not interfere with the federal government's lawful enforcement of immigration laws and pursuit of its civil immigration activities, and presence in such localities will not immunize anyone to the reach of the federal government."
The battle is over the Edward Byrne Memorial Justice Assistance Grant program established in 2006 to provide federal money to cities to buy public-safety equipment, including police cars.
"The founders of our country well understood that the concentration of power threatens individual liberty and established a bulwark against such tyranny by creating a separation of powers among the branches of government," Rovner wrote. "If the Executive Branch can determine policy, and then use the power of the purse to mandate compliance with that policy by the state and local governments, all without the authorization or even acquiescence of elected legislators, that check against tyranny is forsaken."
In a statement, Justice Department spokesman Devin O'Malley said officials believe the department exercises its authority properly.
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"We will continue to fight to carry out the Department's commitment to the rule of law, protecting public safety, and keeping criminal aliens off the streets to further perpetrate crimes," he said.
Aside from Chicago, a number of other cities from California to Massachusetts have established policies to protect immigrants since Trump won the 2016 election.
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