U.S. District Judge Harry Leinenweber on Friday granted Chicago's request for a temporary "nationwide" injunction.
The ruling blocks nationwide enforcement of two of the three new conditions the Justice Department sought to impose on jurisdictions seeking funds through the Byrne Justice Assistance Grant, which doles out almost $400 million to state and local agencies each year.
Leinenweber apparently agreed, saying in his ruling that Sessions had attempted an "unprecedented seizure of power" in imposing such conditions on law enforcement grants, The Chicago Sun-Times reported.
Chicago Mayor Rahm Emanuel says a federal judge's ruling that Attorney General Jeff Sessions can not withhold grant money to so-called sanctuary cities is a clear statement "that the Trump administration is wrong".
The limited restrictions on funding challenged by Chicago were imposed by the Justice Department after the Trump administration was blocked by a San Francisco judge in April from making much broader cuts in jurisdictions that don't assist its efforts to deport undocumented immigrants. That problem is one officials are well aware of; in states from California to Texas, many cities have moved to adopt policies discouraging law enforcement from enquiring about immigration status, and prioritizing public safety over detention and deportation.
The announcement came just days after a nationwide conversation about Dreamers, undocumented immigrants who were brought to the USA illegally as children.
"So-called sanctuary policies make all of us less safe because they intentionally undermine our laws and protect illegal aliens who have committed crimes", Sessions said.
Leinenweber, in his 41-page ruling, said that the city could suffer "irreparable harm".
"The ruling further frustrates an administration mired in litigation over immigration policy since Trump took office in January".
Federal records show the Justice Department doled out $1 billion in Byrne JAG money to state governments, $430 million to nonprofits and $136 million directly to cities and counties a year ago.
Let's be clear what the city of Chicago and other sanctuary cities are fighting so hard for.
Emanuel says welcoming immigrants is in Chicago's DNA. Among them are requirements that cities notify immigration agents when someone in the country illegally is about to be released from local jails and to allow agents access to the jails.
Sessions described Chicago's lawsuit in August as "astounding". Here, we follow binding Supreme Court precedent and the persuasive authority of the Second Circuit, neither of which elevates federalism to the degree urged by the City here.
A Justice Department spokesman, Devin O'Malley, declined comment when asked whether the administration would appeal the court order.
"Once such trust is lost, it can not be repaired through an award of money damages, making it the type of harm that is especially hard to rectify", Leinenweber wrote. Cautioning that the Justice Department's approach could cause "irreparable harm", he also pointed to concerns over mistrust between the public and law enforcement.