A federal appeals court just shut down the Trump administration's attempt to block $73.5 million in highway funds from New York.
The Transportation Department had claimed New York was handing out commercial driver's licenses to foreign nationals, but the court said the agency didn't have a strong enough legal reason to hold back the money and needed to stick to proper rules.
Ruling could shape state funding disputes
This decision is a big reminder that federal agencies can't just cut off state funding without solid legal grounds.
It could shape how future disputes between states and Washington play out, especially when it comes to who gets what funding and why.