DOGE Used ChatGPT to Kill $100M in NEH Grants: Court Says Unconstitutional

Last Updated: May 10, 2026 Reading Time: 10 min

On May 7, 2026, U.S. District Judge Colleen McMahon (Southern District of New York) issued a 143-page opinion ruling that DOGE's termination of more than 1,400 National Endowment for the Humanities grants was "unlawful, unconstitutional, ultra vires, and without legal effect." Over $100 million in congressionally appropriated funds had been impounded by DOGE in April 2025 using a ChatGPT prompt that flagged grants for cancellation, no DEI definition provided, no human review of the AI's outputs. The system flagged a Jewish Holocaust testimony anthology as "DEI." It flagged a $349,000 HVAC system replacement at the High Point Museum in North Carolina. The court called the entire process "a textbook example of unconstitutional viewpoint discrimination," and granted summary judgment for the plaintiffs (Authors Guild, ACLS, AHA, MLA) on every count. NEH lost 117 of 180 employees (65%) in the same window. This is what those 63 surviving NEH staff, every grant officer governmentwide who was ordered to execute a DOGE termination, and any federal employee who blew the whistle on impoundment needs to know.

Key Takeaways

• 143-page summary judgment issued May 7, 2026 by Judge Colleen McMahon (S.D.N.Y.) finding DOGE actions unlawful on four independent grounds: First Amendment viewpoint discrimination, Fifth Amendment equal protection, ultra vires DOGE authority, and ICA/APA violations.
• DOGE used ChatGPT with the prompt "Does the following relate at all to DEI? Respond factually in less than 120 characters." No DEI definition. No human review. Outputs taken at face value.
• Acting Chairman Michael McDonald ceded NEH authority to DOGE in writing ("it's your decision on whether to discontinue funding"). The court ruled that delegation invalid: a statutory power cannot be transferred to a body Congress never authorized.
• 117 of 180 NEH employees (65%) received termination notices by April 1, 2025. The ruling does NOT automatically restore those positions.
• Remedy: permanent injunction against further terminations; government ordered to rescind all termination letters; payment of withheld funds requires a separate Court of Federal Claims action.
• Whistleblower exposure: federal employees who refused to execute DOGE-directed terminations and faced retaliation have 5 USC 2302(b)(8) protection; OSC complaint pathway is open.
• Precedent value: ICA + ultra vires + First Amendment reasoning travels to every other DOGE-directed agency action (NIH, NSF, USAID, NEA, IMLS already in similar litigation).

What Happened Between March and May 2025

Date	Event
Mar 12, 2025	DOGE Small Agencies Team meets NEH leadership; signals mass layoffs and grant cuts
Mar 31 - Apr 1	NEH cancels 1,000+ grants; $100M+ impounded; 117 of 180 employees fired
Apr 3	NPR reports widespread terminations; 56 state humanities councils lose funding
Apr 14	Inside Higher Ed: "Draconian" layoffs; grants terminated in all 50 states
May 12	Authors Guild files class action (1:25-cv-03923, S.D.N.Y.)
Jul 25	McMahon issues preliminary injunction; "likely to succeed" on 1A and APA claims
Dec 18	McMahon compels discovery; rules DOGE materials are part of discoverable record
Mar 7, 2026	Plaintiffs file motion for summary judgment
May 7, 2026	McMahon grants summary judgment on all counts; 143-page opinion; permanent injunction

The ChatGPT Discovery That Sank DOGE's Defense

Through compelled discovery, plaintiffs established that DOGE staff used ChatGPT to flag grants for cancellation. The prompt:

"Does the following relate at all to DEI? Respond factually in less than 120 characters."

DOGE provided ChatGPT with no definition of DEI. The AI's responses were not reviewed by human experts. Decisions to terminate $100M+ in grants flowed directly from those outputs. Examples from the court record:

• "In the Shadow of the Holocaust: Short Fiction by Jewish Writers from the Soviet Union" flagged as DEI.
• $349,000 HVAC system replacement at the High Point Museum in NC, flagged as DEI.
• Newspaper digitization project, flagged for "inclusivity and representation."
• North Carolina Central University historical records digitization, flagged.

Judge McMahon's APA finding rested heavily on this. An agency action is "arbitrary and capricious" under 5 USC 706(2)(A) if there is no reasoned explanation. Outsourcing the explanation to an undefined AI prompt does not satisfy that standard. The court treated the ChatGPT methodology as independently disqualifying, even apart from the First Amendment problems.

The Four Legal Grounds (Why an Appeal Is Hard)

1. First Amendment Viewpoint Discrimination

The court found terminations were "a textbook example of unconstitutional viewpoint discrimination." Selection of grants for termination based on perceived viewpoint (DEI, racial history, gender topics) rather than merit triggered strict scrutiny. McMahon: "Agency discretion does not include discretion to violate the First Amendment."

This is the hardest ground for the government to overcome on appeal. Once a court finds viewpoint discrimination in a government program, the burden shifts to the government to prove the action was narrowly tailored to a compelling interest. ChatGPT flagging Holocaust testimony as DEI is not narrowly tailored to anything.

2. Fifth Amendment Equal Protection

The court found DOGE "blatantly used" protected characteristics (race, sex, other categories) as proxies for identifying grants to terminate. This violates the equal protection component of the Fifth Amendment's Due Process Clause.

3. Ultra Vires DOGE Authority

DOGE had zero statutory authority over NEH. The NEH authorizing statute (20 USC 956) vests grant decisions in the NEH Chairperson. Acting Chairman McDonald's written surrender of that authority to DOGE ("it's your decision on whether to discontinue funding") was itself invalid because he cannot delegate a statutory power to a body Congress never authorized. Ultra vires actions are void from the start.

This finding travels to every other DOGE-directed agency action. If DOGE has no inherent statutory authority over NEH, it has none over NIH, NSF, USAID, or any other agency unless Congress passes a specific grant of authority.

4. Impoundment Control Act + APA

The Impoundment Control Act of 1974 (2 USC 681-688) requires the executive branch to spend congressionally appropriated funds unless it follows specific deferral or rescission procedures. DOGE bypassed all of them. The GAO had already flagged similar impoundments as ICA violations. The APA arbitrary-and-capricious standard was independently violated by the ChatGPT process.

What the Ruling Does and Does NOT Do

Action	What McMahon Ordered	Practical Effect
Future terminations	Permanently barred	DOGE cannot terminate more NEH grants
Termination letters	Government must rescind	Grants restored to legal status
Payment of withheld funds	NOT ordered directly	Grantees must file separately in Court of Federal Claims
Restoration of NEH employees	NOT ordered	Separate MSPB / OPM process required
State humanities councils	Termination letters rescinded	Funding pathway restored, payment still pending

The clarity of the ruling is the precedent it establishes: every DOGE-directed termination of an NEH grant is "void from the start." The fuzziness is what happens with the money. Recovering actual dollars requires a Court of Federal Claims action, which can take months or years.

What This Means for Federal Employees Across Agencies

NEH employees who were terminated

The ruling does not restore your position. Routes for reinstatement:

1. MSPB appeal if you were fired by adverse action procedures (5 USC 7512). 30-day filing window from effective date.
2. OPM/MSPB class action if your termination was part of a mass action (probationary class action active).
3. Whistleblower retaliation claim under 5 USC 2302(b)(8) if you raised concerns about ICA or ultra vires problems before being fired. File with Office of Special Counsel.
4. Veterans' preference claims if applicable.

Grant officers, contracting officers, program officers at OTHER agencies

If you executed a DOGE-directed grant or contract termination based on the same ultra vires authority McMahon rejected, your legal exposure is real but limited. Courts generally focus on officials who issued unlawful directives, not on employees who reasonably believed they had valid authority.

Going forward:

• If you receive a directive to cancel congressionally appropriated grants WITHOUT an OMB rescission message under the ICA, request in writing that your General Counsel confirm the authority.
• Document any concerns you raise.
• If GC clears it but you still believe the action is unlawful, escalating to the agency IG creates additional whistleblower protection.

Federal employees who blew the whistle on DOGE actions

5 USC 2302(b)(8) protects federal employees from retaliation for making a "protected disclosure." A protected disclosure includes a reasonable belief that a violation of law is occurring. ICA violations and ultra vires actions both qualify. Your disclosure must have been made to an authorized recipient (supervisor, IG, Congress, OSC, another appropriate official).

If you face retaliation, file with the Office of Special Counsel (osc.gov) as soon as possible. If you face an adverse personnel action (firing, demotion, suspension), you may also appeal to the MSPB within 30 calendar days.

Important caveat: whistleblower protections do not automatically restore your job. They create a legal claim. OSC must investigate. MSPB must adjudicate. With the MSPB backlog currently exceeding 11,000 cases, timelines are long.

Calculate Your Severance and Retirement Impact

If you were a federal employee at NEH (or any cultural agency) who lost your job in the 2025 terminations:

• Federal Severance Pay Calculator to estimate your statutory entitlement under 5 USC 5595. Federal severance is (weeks of service) x (base pay) capped at 52 weeks' salary.
• FERS Retirement Calculator if you were close to retirement when terminated. Loss of months of service can affect your annuity calculation; if your firing is later found unlawful, back pay restoration may also restore service credit.
• VERA/VSIP Decision Calculator if you remain employed at a cultural agency and have been offered a buyout. Compare staying vs. leaving with the new legal context factored in.

DOGE Court Loss Tracker (As of May 10, 2026)

Original FedTools compilation:

Case	Court	Ruling	$ at Stake	Status
Authors Guild v. NEH (1:25-cv-03923)	S.D.N.Y.	DOGE loses; permanent injunction May 7, 2026	$100M+ grants	Final judgment; appeal possible
IMLS grants (American Library Assoc.)	D. Rhode Island	DOGE loses; grants reinstated Dec 2025	~$200M grants	Settled Apr 2026
Probationary employees (AFGE v. OPM)	N.D. Cal.	OPM unlawful; ~17K employees affected	Billions in back pay	Ongoing; SCOTUS paused some reinstatement
USAID contractors (Danziger v. US)	Ct. Fed. Claims	Motion to dismiss denied April 2026	$2B+	Active
NIH grant terminations	Active	Citing McMahon preliminary injunction	TBD	Active

The pattern: DOGE keeps losing on the merits, especially on ICA and ultra vires grounds. The variation is in remedy and in how willing higher courts are to stay or reverse the lower-court rulings. The Supreme Court has been mixed.

NEH by the Numbers

Metric	Pre-DOGE	After DOGE (Apr 2025)	Post-Ruling Status
Full-time employees	~180	~63 (35%)	Ruling does NOT restore positions
Active grants	~3,000	~1,600 (est.)	1,400+ terminations declared void
Annual grant budget	$74.4M (FY25)	$0 distributed	Restoration ordered; payment in CFC
State humanities councils funded	56	0	Termination letters rescinded
NEH annual budget	~$200M	Impounded	ICA violation confirmed

What's Next

Appeal: Government can appeal to the Second Circuit. As of May 9, 2026, no appeal had been confirmed. If filed, permanent injunction stays in effect unless a higher court grants a stay.

Court of Federal Claims actions: Grantees seeking actual payment of withheld funds will file there. Expect a wave of CFC filings over the coming months.

Other DOGE-affected agencies: McMahon's ruling will be cited in NIH, NSF, NEA, USAID, and other ongoing litigation. The ICA + ultra vires + 1A theory is now battle-tested.

FY2027 budget: the White House proposed eliminating NEH entirely. The McMahon ruling does not protect FY2027 appropriations from congressional cuts; it only protects already-appropriated FY2025 and FY2026 funds.

For your agency: if a DOGE official has directed grant or contract terminations at your shop, expect litigation pressure to mount. The ICA and ultra vires arguments now have a 143-page S.D.N.Y. opinion behind them.

Frequently Asked Questions

What did the court actually rule?

DOGE's termination of 1,400+ NEH grants was "unlawful, unconstitutional, ultra vires, and without legal effect." Summary judgment for plaintiffs on all counts. 143-page opinion by Judge Colleen McMahon (S.D.N.Y.), May 7, 2026. Government must rescind all termination letters; future terminations permanently barred.

Does the ruling pay grantees immediately?

No. McMahon ordered rescission of termination letters and barred further terminations. Actual payment requires a separate action in the Court of Federal Claims.

Can NEH employees who were fired get their jobs back automatically?

No. The ruling does not restore positions. Reinstatement requires MSPB appeal, OPM/MSPB class action, or court action with veterans' preference. The ruling helps if your termination was tied to refusing to execute unlawful DOGE directives.

What is "ultra vires"?

A Latin legal term meaning "beyond the power." McMahon found DOGE had no statutory authority over NEH. The NEH authorizing statute (20 USC 956) vests grant decisions in the NEH Chairperson. Delegation to DOGE was invalid. Ultra vires actions are void from the start.

Can DOGE appeal and undo this?

Yes, to the Second Circuit. As of May 9, no appeal confirmed. Permanent injunction stays in effect during any appeal unless a higher court grants a stay. The First Amendment holding is the strongest ground and hardest to reverse.

I'm a federal employee at another agency. DOGE told us to cancel grants. Am I protected if I refused?

Yes, if you raised the legality concern as a "protected disclosure" under 5 USC 2302(b)(8). File with OSC if you face retaliation. If you executed the order and now worry about exposure, exposure falls primarily on officials who issued the directive, not on employees who reasonably believed they had valid authority.

Related Resources

• VA Vigil Investigations + Federal Whistleblower Rights 2026: companion guide on Pickering/Garcetti and 5 USC 2302(b)(8) protections.
• DoD Department of War Rebrand: companion agency-cuts piece.
• CDC Workforce Cuts 2026: another agency under DOGE-directed cuts and grant clawback.
• RIF Survival Guide 2026
• Federal Severance Pay Calculator
• VERA/VSIP Decision Calculator
• FERS Retirement Calculator

Sources

• NBC News: Judge rules cancellation of humanities grants unconstitutional
• Washington Post: Judge rules DOGE's cuts to humanities grants unconstitutional
• PBS NewsHour: Judge finds DOGE-led cancellation unconstitutional
• American Historical Association: Federal Judge Rules to Restore NEH Funding
• Authors Guild: Major First Amendment Victory in NEH Ruling
• CourtListener: Authors Guild v. NEH docket
• Inside Higher Ed: How DOGE Gutted the NEH in 22 Days
• Federal Register: Impoundment Control Act (2 USC 681-688)
• MSPB: Whistleblower Protection (PPP 8)
• LII Cornell: 5 USC 2302