Immigration and Customs Enforcement officers escort an arrestee in an apartment building in the Bronx. Courts disagree on the federal government's ability to condition grant money on the adherence of state and local law enforcement agencies to federal immigration policy. Photo: Richard Drew/AP

The U.S. Court of Appeals for the Second Circuit on Monday refused to revisit a panel decision allowing the Trump administration to withhold millions of dollars in law-enforcement grants from New York City and several states over their sanctuary policies on immigration.

The decision, by a majority of the court's 13 commissioned judges, was a win for the Trump administration's tough stance against sanctuary policies at the state and local level.

But it highlighted deep divisions among Second Circuit judges—and among federal circuit courts broadly—over the federal government's ability to condition grant money on the adherence of state and local law enforcement agencies to federal immigration policy. And it came over the objection of the court's chief judge, Robert Katzmann, who in an unusual move said the outcome represented the "rare case" in which he would have supported en banc rehearing.

The ruling also laid bare sharp differences between the judges appointed to the court by Democrats and its ascendant conservative majority, bolstered by four judicial appointments of  President Donald Trump, including that of former White House lawyer Steven Menashi.

As it stands, the Second Circuit is now at odds with four other federal appeals courts, which had all upheld lower court orders barring the Department of Justice from enforcing its demands, which require cities and states to share immigration information with the federal government. Despite the divides on display, all 12 of the court's participating judges agreed Monday that the issue was primed for U.S. Supreme Court review.

Plaintiffs in the case included New York State and New York City, along with the state of Connecticut. Also in the litigation before the Second Circuit were the governments of Massachusetts, New Jersey, Rhode Island, Virginia and Washington state. New York Solicitor General Barbara Underwood, of state Attorney General Letitia James' office, was listed as lead counsel for the plaintiffs, along with a team from the office of New York City Corporation Counsel James Johnson.

A unanimous Second Circuit panel in February lifted an injunction by a district court judge that prevented the Trump administration from attaching immigration-related conditions to applications for federal funds under the Edward Byrne Memorial Justice Assistance Grant Programs, which provide millions in federal funding for a host of criminal justice efforts, including support for investigative task forces, prosecutors' and public defenders' offices, drug courts and diversion programs.

The three-judge panel wrote at the time that the plain language of relevant statutes had authorized the DOJ to make the changes, and said that the federal government maintains broad authority over states and municipalities when it comes to enforcing immigration policies.

"While mindful of the respect owed to our sister circuits, we cannot agree that the federal government must be enjoined from imposing the challenged conditions on the federal grants here at issue," Reena Raggi, a senior judge and an appointee of President George W. Bush, wrote in a 77-page opinion.

She was joined in the ruling by Judges Ralph K. Winter and José Cabranes, who were appointed to the Second Circuit by Presidents Ronald Reagan and Bill Clinton, respectively.

The Second Circuit typically strongly leans against granting requests for en banc rehearing, regardless of whether the judges agree with a panel's decision. The court, whose composition flipped last year to a majority of Republican appointees, however, has showed signs recently that it may be rethinking its long-held approach.

On Monday, four judges appointed by President Donald Trump joined Judges Debra Ann Livingston, an appointee of President George W. Bush, and Cabranes in opposition to a rehearing.

The five-page defense of the panel's ruling acknowledged disagreements among other appeals courts, but also rejected criticisms that the Second Circuit had reached an incorrect decision in the case before it.

"Regardless of the differing opinions of those circuits, our court's decision to deny rehearing—one made by an en banc court consisting of twelve of our court's thirteen active circuit judges—evinces an unmistakable truth: that, in the circumstances presented, reasonable judicial minds can differ as to whether the relevant statutory text permits the Department of Justice to impose the challenged conditions on grants of money to state and municipal law enforcement," the Second Circuit said.

Judges Raymond Lohier Jr. and Peter Hall, appointed by Presidents Barack Obama and Bush, respectively, concurred with the denial, but only for the purpose, they said, of expediting an appeal to the Supreme Court, which is set to reconvene in the fall.

Judge Michael Park, who was also appointed by Trump in 2019, "took no part in the consideration or decision of the petitions," according to the ruling.

The main pushback came from Judge Rosemary Pooler, a Clinton nominee who in a 15-page dissent chastised her colleagues for allowing Trump to impose funding conditions that, she said, were not authorized by Congress.

"The circuit split—which generated a host of persuasive opinions from our sister circuits—calls into serious question the correctness of our court's rationale and conclusions," Pooler wrote, joined by Judges Denny Chin and Susan Carney, who were both appointed to the court by Obama.

"The opinion in New York v. U.S. Department of Justice ignores the words of the statute, the relevant legislative history, and the conclusions of our sister circuits. I am, frankly, astounded that my colleagues did not find this a case of exceptional importance warranting en banc review," she said.

According to Pooler, the U.S. attorney general lacked the discretion to impose immigration-related requirements on the grant funding, and federal law did not enact the conditions explicitly.

"By permitting the DOJ to stretch its authority beyond its statutory bounds, the New York panel invites the Executive Branch to compel states and localities to provide information to, and coordinate with the federal government on, all aspects of law enforcement activity," Pooler wrote.

Lohier, writing separately, noted that until 2016, the Byrne grants had never conditioned federal funding on adherence to federal immigration policy, and localities did not use the money for immigration enforcement.

"Why has this decision careened so far off the textualist track? How can it be that the language of the statute is both unambiguous and at the same time that reasonable minds could differ about the meaning of the statutory text," he asked.

"Setting aside the policy result of cutting funds to local police forces that refuse to toe the Department line on immigration and that want to focus instead on combatting local crime, what the panel has done here is not an approach that is true to Congress's words or to ordinary principles of statutory construction," Lohier wrote.

Katzmann, who has led the Second Circuit since September 2013, agreed that Pooler and Lohier had the better of the competing statutory analyses. But he added that the panel's decision was premised at least in part on arguments that the DOJ had either not made or disavowed by the time of its appeal.

The panel's opinion, Katzmann wrote, did not explain why it had been appropriate for the judges to depart from the principle that those arguments should be waived, and said, "I cannot see why it was."

"All of my participating colleagues also seem to agree that Supreme Court review is now inevitable," Katzmann wrote in a 10-page dissent. "Of course, that will be for the Supreme Court to decide. Now that our Court has declined to rehear this case, I hope my colleagues are right."

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