The Department of Justice has failed in its bid to shut down a lawsuit challenging a controversial $1.8 billion fund linked to Donald Trump’s complaint against the IRS.
Judge Leonie Brinkema is presiding over the case, which targets a fund described by critics as a slush fund spun up to settle Trump’s grievances with the tax authority.
On June 12, the judge issued an injunction blocking any effort to operationalize the fund by processing claims or disbursing money to recipients.
The court had ordered the government to file declarations by June 19, 2026, or face a scheduling order requiring defendants to submit a responsive pleading by July 17, 2026.
Rather than comply or file a timely motion for reconsideration, the DOJ chose to file a defiant two-page notice under the name of Stan Woodward, a former Trump-linked lawyer now attached to the department.
Woodward argued that “such declarations are unnecessary and the compelled testimony of senior officials from the Executive Branch implicates serious separation of powers concerns.”
He also contended that counsel had twice signed briefs reaffirming that “the Fund is not going forward,” and that those statements were “made against the backdrop of serious penalties for falsity.”
The two-page notice closed with a blunt assertion that “the Court’s demands are unnecessary,” signed by Woodward and Senior Counsel Andrew Block.
Judge Brinkema was unmoved, noting that Woodward’s claim about serious penalties for falsity substantially overstates the matter, since counsel are immune from criminal prosecution for statements made during litigation.
The judge also pointed out that Acting Attorney General Blanche had pointedly refused to reduce his statements to writing, weakening the government’s position considerably.
Trump’s ongoing public statements refusing to permanently disavow the fund further undermined the DOJ’s argument that the case had become moot.
Brinkema dismissed the apex doctrine argument, noting that “defendants have neither been required to sit for depositions, although they may now become subject to that process during discovery proceedings.”
In her ruling, she cited the president’s and Acting Attorney General Blanche’s “continued interest in compensating alleged victims of alleged government weaponization” as central to her reasoning.
She also highlighted the defendants’ unwillingness to provide declarations under penalty of perjury and Blanche’s refusal to rescind the May 18, 2026 memo that established the fund’s structure.
“All support the conclusion that this civil action is not moot,” Brinkema concluded, directing the clerk to schedule briefing and keeping the lawsuit very much alive.