Wisconsin Leads Multistate Suit Over $45M Grant Terminations

Fourteen states are suing the U.S. Department of Labor in the Court of Federal Claims over more than $45 million in terminated American Rescue Plan grants for unemployment-system modernization. The department ended the grants in May 2025. Wisconsin Attorney General Josh Kaul and Maryland Attorney General Anthony Brown lead the case. About $29 million in Wisconsin grants were affected. Gov. Tony Evers announced the suit. About $10 million of Wisconsin's funding remained unspent, and the state ended its vendor contract. $8.2 million already spent cannot be recovered. The halted work had covered upgrades for fraud detection, identity verification, cybersecurity, and service delivery. The Labor Department said the grants no longer aligned with its priorities. The states say the termination lacked proper notice or authority and violated grant agreements and congressional intent.