The Federal Agency That Funds Your Public Library Was Almost Shut Down Here’s How a Lawsuit Saved It

The American Library Association and the nation’s largest union of public workers reached a binding settlement with the U.S. Department of Justice on April 9, 2026, reversing the Trump administration’s attempt to shut down the Institute of Museum and Library Services — the only federal agency dedicated to funding America’s libraries and museums. The settlement restores all canceled grants, reinstates all fired staff, and legally bars the administration from taking further action to dismantle the agency. There is no consumer claim form. This article explains what IMLS is, what was nearly lost, what the settlement restored, and what still threatens library funding in 2027.

Quick Facts

Field	Detail
Case Name	American Library Association et al. v. Sonderling et al.
Plaintiffs	American Library Association (ALA) + AFSCME
Defendant	Trump Administration / U.S. Department of Justice
Court	U.S. District Court, District of Columbia
Settlement Date	April 9, 2026
Settlement Status	Binding agreement signed — dismissal filed within 7 days if terms held
What Was Settled	IMLS stays operational; all RIFs rescinded; all grants reinstated
Consumer Claim Form	None — this is not a consumer class action
Annual IMLS Grants	More than $200 million distributed annually to libraries across all 50 states
Remaining Risk	White House FY 2027 budget proposes eliminating IMLS entirely via Congress

Where Things Stand Right Now

• The settlement confirms that all previously terminated grants have been reinstated, all agency staff reductions have been reversed, and the administration will not take further steps to implement the executive order targeting IMLS.
• Three days earlier, on April 6, 2026, the U.S. Court of Appeals for the First Circuit granted the Trump administration’s own request to drop its appeal of a separate permanent injunction — a ruling from November 2025 that had already permanently blocked the administration from shutting down IMLS through executive order.
• However, the Trump administration’s proposed FY 2027 budget includes zero funding for IMLS, meaning the fight over library funding has shifted from the courts to Congress.

What Is IMLS and Why Does It Matter to You?

IMLS is the only federal agency tasked with providing funding for the nation’s libraries. It was established in 1996 by a Republican-led Congress with a mission to advance, support, and empower America’s museums, libraries, and related organizations through grantmaking, research, and policy development.

In fiscal year 2024 alone, IMLS distributed $211 million in grants to libraries. That money flows through a matching program with state libraries and library commissions, giving it the ability to directly support community needs. Those grants fund programs most Americans use without realizing they have federal backing — after-school reading programs, job search assistance, digital access for seniors, veterans’ telehealth spaces, interlibrary book lending, and early childhood literacy programs.

For example, IMLS funds have upgraded internet speeds for library patrons in Whitefish, Montana; provided Braille books for the blind in Louisiana; and delivered education kits for homeschool families in Choctaw County, Mississippi. These are locally driven programs, funded federally, and administered efficiently at the state level.

Related article: IBM Agrees to Pay $17 Million Over DEI Hiring Practices, What It Means for Federal Contractors and Workers

What the Trump Administration Did — and What the Lawsuit Stopped

President Trump signed an executive order on March 14, 2025, that referred to IMLS and several other federal agencies as “unnecessary.” The order directed the Office of Management and Budget to reject any budget requests from IMLS other than funds needed to shut the agency down.

Following the order, staff were placed on administrative leave and many received termination notices. The agency’s then-acting director began canceling grants and contracts and fired the members of the National Museum and Library Services Board.

The American Library Association president Sam Helmick described what happened next: libraries across the country began cutting hours, staff, and services — including after-school programs, support for job seekers, and connection services for older adults.

The ALA and AFSCME, represented by Democracy Forward and co-counsel Gair Gallo Eberhard LLP, filed suit in federal court in Washington, D.C., in April 2025 to stop the dismantling. A separate lawsuit filed by 21 state attorneys general in Rhode Island federal court ran in parallel — and in November 2025, that court permanently blocked the administration’s executive order as illegal and unconstitutional.

What the April 9 Settlement Actually Requires

The settlement agreement states that IMLS will continue to award grants, contracts, cooperative agreements, and other forms of assistance to the full extent of Congressional appropriations, and that IMLS is required to comply with its various statutory requirements.

Specifically, the settlement requires that:

• All reductions in force issued to IMLS staff in 2025 are permanently rescinded, and all employees who received termination notices may return to work
• All previously canceled grants are reinstated and remain active
• IMLS will not issue any further reductions in force in order to carry out the executive order
• The agency will continue its full congressionally mandated operations — grantmaking, research, and policy development — without interruption

The plaintiffs agreed to file a joint stipulation dismissing the case without prejudice within seven days, provided the government adheres to the terms of the agreement. “Without prejudice” means the case could be reopened if the administration violates the settlement terms.

The Fight Is Not Over: What Still Threatens Your Library

The settlement blocks the executive order. It does not protect IMLS from Congress. The White House’s proposed FY 2027 federal budget would eliminate funding for IMLS entirely, as well as the school library program Innovative Approaches to Literacy.

The ALA president pointed out that Trump proposed eliminating IMLS in four consecutive budget cycles during his first term — and Congress restored funding each time, thanks to bipartisan advocacy from library supporters across the country. The same battle is now underway for FY 2027.

What library supporters can do right now:

• Contact your U.S. senators and representatives directly and ask them to protect IMLS funding in the FY 2027 appropriations process
• Sign up for action alerts through the American Library Association at ala.org
• Write a letter to the editor of your local newspaper explaining what IMLS-funded programs mean to your community
• Share your story of how your local library’s programs have helped you or your family — ALA is actively collecting these accounts

Key Dates in the IMLS Legal Fight

Milestone	Date
Trump executive order labels IMLS “unnecessary”	March 14, 2025
21 state AGs file Rhode Island v. Trump	April 4, 2025
ALA and AFSCME file ALA v. Sonderling	April 6, 2025
ALA wins temporary restraining order — halts mass layoffs	May 1, 2025
Rhode Island judge issues preliminary injunction blocking dismantlement	May 6, 2025
First Circuit upholds preliminary injunction	September 2025
Rhode Island judge issues permanent injunction	November 21, 2025
IMLS reinstates all canceled grants	December 3, 2025
Trump administration drops appeal of Rhode Island ruling	April 6, 2026
ALA and AFSCME sign binding settlement with DOJ	April 9, 2026
White House FY 2027 budget proposes eliminating IMLS	April 2026

Frequently Asked Questions

Can I file a claim or get money from this settlement? 

No. This is not a consumer class action. The settlement is a legal agreement between the American Library Association, AFSCME, and the U.S. Department of Justice. It restores a federal agency — it does not distribute money to individual consumers. If you are interested in how consumer antitrust settlements actually pay money back to individuals, the Ticketmaster antitrust class action lawsuit is a more relevant example of a case where affected consumers may receive direct compensation.

Is my local library safe now? 

The settlement protects IMLS through the current funding cycle and legally bars the administration from using the 2025 executive order as a basis for further cuts. As of April 2026, the Administration’s earlier executive order cannot be implemented, and all previous actions to do so have been reversed. However, the White House’s FY 2027 budget proposes eliminating IMLS entirely through the congressional appropriations process — a separate and ongoing threat.

What is IMLS and does my library actually use it? 

IMLS is the sole federal agency that provides libraries and museums with grants, and it also conducts policy development and research. In FY 2024 alone, it distributed $211 million in grants to libraries. If your local public library offers internet access, after-school programs, job search resources, early childhood story time, or interlibrary lending, there is a strong likelihood those programs receive some level of IMLS-backed funding through your state library agency.

What is a “reduction in force” and did library workers actually lose their jobs?

 A reduction in force (RIF) is a formal government process for laying off federal employees. After the executive order, IMLS staff were placed on administrative leave and many received termination notices — reducing the agency’s approximately 75 employees to just 12 active workers. The settlement reverses all of those terminations and authorizes every affected employee to return to work.

What was Rhode Island v. Trump and how is it different from this settlement?

 Rhode Island v. Trump was a separate lawsuit filed by 21 state attorneys general that resulted in a permanent court injunction in November 2025, blocking the administration from shutting down IMLS. The Trump administration appealed — and then dropped that appeal on April 6, 2026, letting the permanent injunction stand. The ALA/AFSCME settlement, signed April 9, resolved their parallel D.C. federal court case on the same terms. Together, both outcomes mean all related litigation is now fully resolved.

Does a settlement mean the government admitted wrongdoing? 

No. Settlements in federal litigation do not require either side to admit fault. The government agreed to the terms — restoring IMLS, reinstating grants, and rehiring staff — without formally conceding that the executive order was illegal. The Rhode Island court’s separate permanent injunction, however, did find the administration’s actions to be illegal and unconstitutional.

What should I do if I want to protect library funding going forward? 

Contact your U.S. senators and representatives directly. The ALA’s advocacy page at ala.org provides letter templates, action alerts, and guidance on how to communicate with your specific elected officials. The next critical decision point is the FY 2027 congressional appropriations process, where IMLS funding must be actively defended against the White House’s proposal to eliminate it.

Last Updated: April 12, 2026

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.