A Florida federal court is facing a motion from 35 former federal judges demanding it reopen President Donald Trump’s dismissed IRS lawsuit, on grounds that a $1.776 billion settlement announced last week constitutes a fraud on the court and an unlawful raid on the federal treasury.
The motion asks Judge Kathleen Williams to set aside a voluntary dismissal filed by Trump’s legal team on May 18 and reopen the case under Rule 60 of the Federal Rules of Civil Procedure, which permits courts to vacate final judgments in cases of fraud.
“The Court was deceived,” the filing states. “The purported ‘settlement’ that the parties never placed before this Court raises profound questions about the parties’ candor toward the Court and manipulation of the judicial system, which threatens to undermine confidence in the administration of justice.”
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Trump sued the IRS and Treasury Department after a government contractor, Charles Littlejohn, pleaded guilty in October 2023 to stealing and leaking his confidential tax returns to The New York Times and ProPublica during his first term. The lawsuit sought $10 billion in damages.
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When Trump’s attorneys filed a Notice of Voluntary Dismissal with Prejudice on May 18, the settlement agreement was not before the court, and no settlement had been disclosed.
Shortly after the filing, the DOJ publicly announced it had entered into a “settlement agreement” in the case, establishing what it is calling the “Anti-Weaponization Fund” — a $1.776 billion fund drawn from the federal Judgment Fund — a standing Treasury account used to satisfy court judgments against the government — to be disbursed by a commission effectively controlled by the president to individuals who claim they were improperly targeted by federal agencies. The amount was chosen as a deliberate reference to 1776, the year the Declaration of Independence was signed.
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The following day, acting Attorney General Todd Blanche signed a separate addendum releasing “any and all claims” the United States might have against Trump, his family members, and affiliated entities — a provision the former judges say sweeps in IRS audits of Trump’s tax returns and all other potential federal claims against the president.
The 35 movants — who include retired circuit judges from the Fourth, Seventh, Tenth, and Federal Circuits — argue the dismissal should be voided on multiple grounds.
They contend the parties engineered a collusive scheme: Trump’s team filed the voluntary dismissal to terminate the court’s ongoing inquiry into whether the lawsuit presented an actual case or controversy, cutting off that inquiry before the judge could complete it. The court had ordered a briefing on the jurisdictional question before the notice of dismissal was released.
“The parties used this lawsuit — which was never an adversarial proceeding over which the Court even had jurisdiction — as a means to allow a ‘commission’ controlled by the President to dole out $1.776 billion in taxpayer dollars without constitutional or congressional authority to do so,” the filing states.
The judges further argue that the Judgment Fund may be used only to pay settlements arising from genuine litigation, not from collusive or feigned suits, thereby rendering the DOJ’s statutory basis for the fund legally infirm. They also point out that the DOJ actively defended against nearly identical IRS claims brought by other plaintiffs in separate cases — calling those suits meritless — making its decision not to contest Trump’s claims a further indicator of collusion.
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The motion was filed by attorneys at Susman Godfrey L.L.P. and Platkin LLP, representing retired judges, including Michael Luttig, a former Fourth Circuit judge, and Nancy Gertner, a former US district judge in Massachusetts. Democracy Defenders Action also appears as counsel.
Rep. Jamie Raskin called the settlement “pure fraud and highway robbery,” arguing no president can “concoct a fake case for $10 billion in damages against the government so he can be plaintiff and defendant and then ‘settle’ his bogus case against himself.”
Legal experts have raised Appropriations Clause concerns over the executive branch creating a government disbursement program without congressional authorization. Paul Figley, a former DOJ Civil Division attorney with three decades at the department, called the Judgment Fund a “huge loophole” in Congress’s power of the purse.
Ninety-three House Democrats filed an amicus brief in the case, arguing the court lacks subject matter jurisdiction and the DOJ has no authority to settle a collusive suit. Two police officers who responded to the January 6 Capitol attack — Daniel Hodges and Harry Dunn — filed a separate lawsuit in federal court in Washington, DC, against Trump, Blanche, and Treasury Secretary Scott Bessent, seeking to dissolve the fund entirely.
The movants are not asking the court to immediately invalidate the settlement — only to reopen the case so the court can complete its jurisdictional inquiry. That alone, they argue, would effectively freeze the fund. Under federal regulations, the Judgment Fund is only available for “final” settlements, and a settlement premised on a voided dismissal would not qualify.
Judge Williams noted in her May 18 dismissal order that “there is no settlement of record” but indicated she viewed herself as “stripped of jurisdiction.” Whether she agrees to entertain the motion under Rule 60 will be a significant test of the court’s willingness to scrutinize an arrangement the former judges say corrupts the judicial process itself.
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