The Trump administration's attempt to freeze more than $10 billion in child care funding earlier this year is now the subject of a new legal battle — not over the freeze itself, but over how the decision was made behind closed doors.
The American Civil Liberties Union, the National Women's Law Center, and the National Center for Law and Economic Justice sued the U.S. Department of Health and Human Services on Monday, seeking records under the Freedom of Information Act. The groups say HHS has failed to produce documents they requested in March about how the agency developed its child care funding restrictions, including communications with YouTube creator Nick Shirley and documents related to alleged fraud in federally funded child care programs.
What the Lawsuit Seeks
This lawsuit is separate from earlier litigation that challenged the funding freeze itself. Instead of asking a court to stop the policy, the plaintiffs want HHS to release records explaining how the agency created and carried out the restrictions.
According to the complaint, the records request covers HHS' "Enhanced Defend the Spend" policy, the five-state funding freeze, communications with Nick Shirley, and documents describing the legal and factual basis for the agency's actions.
The complaint alleges HHS adopted the policy shortly after Shirley published a December 2025 video making what it describes as unsubstantiated fraud allegations against Somali child care providers and Democratic officials in Minnesota. It also alleges Vice President JD Vance and HHS' official social media account shared the video shortly after it was published.
HHS did not immediately respond to a request for comment.
How the Dispute Began
The funding dispute began in January when HHS froze more than $10 billion in funding under the Child Care and Development Fund, Temporary Assistance for Needy Families program, and Social Services Block Grant program for California, Colorado, Illinois, Minnesota, and New York. A federal judge later blocked the policy, and HHS withdrew the funding freeze earlier this month.
The complaint says the earlier lawsuit continues despite the withdrawal, with the plaintiff states amending their case to add the Office of Management and Budget after alleging discovery showed the agency helped identify the states targeted by the freeze.
This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.
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