A federal judge handed the Trump administration a significant legal win this week, declining to block a Medicaid funding deferral that could withhold more than $259 million from Minnesota as part of a widening crackdown on public-benefits fraud. Judge Eric Tostrud, a Trump appointee, found the state’s challenge premature and rejected its bid for a preliminary injunction in a 42-page order that dismantled several of Minnesota’s legal arguments.
The ruling marks a concrete courtroom victory in the administration’s broader push to root out waste in Medicaid, a campaign spurred in large part by Minnesota’s own $250 million Feeding Our Future fraud scandal. It also signals that federal courts may give the executive branch wide latitude to use existing tools, including funding deferrals, to force states to prove their Medicaid spending is clean.
Judge Tostrud’s order concluded that the Centers for Medicare and Medicaid Services, led by Administrator Mehmet Oz, could for now withhold the funds and require Minnesota to provide piecemeal evidence that its Medicaid reimbursements were legitimate before releasing them. The judge said the state’s lawsuit was premature and that a preliminary injunction was unwarranted “for numerous reasons.”
Tostrud was blunt about the state’s legal theories. In his order, he wrote:
“Some of the legal theories Minnesota asserts are novel, and the law does not support them.”
Minnesota Attorney General Keith Ellison, a Democrat, had sued the Trump administration and CMS, alleging the deferral violated the Administrative Procedures Act and due process under the Constitution. His complaint cast the federal action in starkly political terms.
Ellison’s filing alleged that “the federal government has… weaponized Medicaid against Minnesota as political punishment.” The complaint further argued that “deferral has never been used to categorically deny funds to a state across entire service areas, as is being done here.”
Tostrud rejected the notion that political motivation alone could invalidate the action. Citing the 2019 Supreme Court case Department of Commerce v. New York, he quoted a concurring opinion directly:
“A court may not set aside an agency’s policymaking decision solely because it might have been influenced by political considerations or prompted by an Administration’s priorities.”
He added another line from the same concurrence that undercuts the core of Ellison’s argument:
“Agency policymaking is not a rarified technocratic process, unaffected by political considerations or the presence of Presidential power.”
In other words: the administration can pursue fraud aggressively even if its political opponents don’t like the timing or the target. Ellison’s office did not immediately respond to a request for comment.
The Trump administration’s focus on Minnesota did not come out of nowhere. The state’s Feeding Our Future fraud scandal, a sprawling scheme that first broke onto the national radar in 2022, involved roughly $250 million in stolen federal funds earmarked for child nutrition programs. The case drew renewed national attention in 2025 as convictions piled up and Minnesota became a flashpoint in the broader fight over public-benefits fraud.
The White House cited the scandal by name. An executive order issued in March that announced an anti-fraud task force stated plainly that “staggering fraud and waste in Minnesota alone is a case in point.” President Trump tapped Vice President JD Vance as the administration’s fraud czar to lead the multi-agency effort.
The problem in Minnesota extended well beyond a single program. A state-commissioned review highlighted vulnerabilities in 14 “high-risk” Medicaid services during a four-year period and flagged that $1.7 billion could have been “potentially improper.” That figure, generated by the state’s own analysis, gave the federal government ample basis to ask hard questions about where Minnesota’s Medicaid dollars were actually going.
Under the administration’s approach, CMS was enlisted to be more proactive by temporarily withholding reimbursements to states over potential instances of fraud rather than waiting for fraud to be proven after the money had already gone out the door. It is a shift from the old model, where taxpayer funds flowed first and investigations followed, often years later, after the money had vanished.
Minnesota is not the only state in the administration’s sights. Fox News Digital reported that CMS is also eyeing Medicaid deferrals in California, New York, and Maine. The pattern suggests the White House views the Minnesota case not as an isolated action but as the leading edge of a national enforcement strategy, one that Democratic leaders have fought on multiple legal fronts.
The enforcement push has an immigration dimension as well. U.S. Immigration and Customs Enforcement arrested Abdul Dahir Ibrahim, described as a Somali illegal immigrant convicted of fraud who was connected to several high-profile Minnesota politicians, including former Democratic vice-presidential nominee and Governor Tim Walz.
That arrest underscored a point the administration has made repeatedly: fraud in public-benefits programs and failures in immigration enforcement are not separate problems. They overlap, and the costs land on taxpayers and lawful residents who depend on programs like Medicaid to function honestly.
In a related legal development, U.S. District Judge Vince Chhabria ruled that the Trump administration can share certain Medicaid enrollee information with ICE for migrants known to be in the country illegally, Just The News reported. That ruling came after 22 Democratic states sued to block a data-sharing agreement between CMS and DHS. Judge Chhabria wrote that “the sharing of such information is clearly authorized by law and the agencies have adequately explained their decisions.” ICE officials were authorized to access six categories of basic personal information, address, citizenship, immigration status, phone number, date of birth, and Medicaid ID, in seven states that offer state-funded coverage to illegal immigrants.
Together, these rulings paint a picture of federal courts giving the administration room to operate on fraud and immigration enforcement simultaneously, despite aggressive legal challenges from Democratic attorneys general and state officials.
Keith Ellison framed the Medicaid deferral as retaliation. But the facts his own state generated tell a different story. When your own state-commissioned review flags $1.7 billion in potentially improper Medicaid payments across 14 high-risk service areas, the federal government does not need a political motive to start asking questions. It needs only basic stewardship of taxpayer money.
The “weaponization” argument has become a familiar reflex for Democratic officials facing federal oversight. It appeared when the administration moved to assert executive authority in other legal arenas as well. The claim assumes that any enforcement action touching a blue state must be punitive rather than substantive. Judge Tostrud’s order rejected that assumption directly, noting that political considerations do not, by themselves, disqualify an agency’s policy decisions.
Ellison’s argument also rested on the claim that deferrals had never been used this broadly. But the scale of the fraud in Minnesota was itself unprecedented. A quarter-billion-dollar fraud scandal, a state review flagging $1.7 billion in questionable payments, and a convicted fraudster with ties to prominent state politicians, these are not ordinary circumstances that call for ordinary responses.
The administration’s critics, including governors who have called for criminal prosecution of Trump officials, frame every enforcement action as authoritarian overreach. But the courts, at least so far, are not buying it.
The ruling is a temporary win, not a final one. Tostrud’s order addressed the preliminary injunction, whether the court should block the deferral while the case proceeds. The underlying lawsuit remains alive, and additional litigation is possible. Ellison testified before the Senate Homeland Security and Governmental Affairs Committee in February 2026, suggesting the political fight will continue alongside the legal one.
But the trajectory matters. Federal judges in multiple cases have now declined to block the administration’s Medicaid enforcement tools. The legal arguments that Democratic attorneys general assumed would carry the day, political motivation, unprecedented scope, constitutional due process, have met skepticism on the bench.
For Minnesota taxpayers and Medicaid recipients who depend on a program that works honestly, the question was never whether the federal government had the right to ask where $1.7 billion went. The question was why it took so long for anyone to ask.
Meanwhile, the pattern of Democratic officials responding to oversight with outrage rather than accountability continues unbroken. Ellison called it weaponization. The judge called it premature. The state’s own auditors called it $1.7 billion in potentially improper payments. Only one of those numbers matters to the people footing the bill.
When the government finally comes looking for a quarter-billion dollars that went missing on your watch, calling it “political punishment” is not a defense. It is a deflection.
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