U.S. District Judge Kathleen Williams threw out President Donald Trump's settlement with the Justice Department over his $10 billion IRS lawsuit on Monday, ruling the case was filed for an "improper purpose" and referring Trump attorney Alejandro Brito to the Florida Bar for possible disciplinary action.
Williams, an Obama appointee who has served on the Southern District of Florida bench since 2011, went further than simply dismissing the deal. She ordered her ruling sent to multiple state bar associations, including those where ethics complaints have been filed against Acting Attorney General Todd Blanche and Associate Attorney General Stanley Woodward, AP News reported.
The ruling lands two days before Blanche's Senate confirmation hearings for the permanent attorney general post, timing that guarantees the judge's broadside will shadow the proceedings.
Trump, his two eldest sons, and the Trump Organization sued the IRS and Treasury Department seeking at least $10 billion in damages. The suit stemmed from a real grievance: IRS contractor Charles Littlejohn leaked Trump's confidential tax records in 2019. Littlejohn later pleaded guilty to one count of unauthorized disclosure of tax return and return information.
That underlying breach was serious. A government contractor violated the law, exposed a sitting president's private financial records, and pleaded guilty to doing so. Any taxpayer, regardless of party, should expect accountability when a federal agency fails to safeguard confidential information.
But Williams concluded the lawsuit itself was not really about accountability. She found Trump was using the litigation to advance his own interests while simultaneously controlling the very federal agency he had sued, a structural conflict the judge treated as disqualifying.
As Fox News Digital reported, the proposed settlement included a provision to create an "Anti-Weaponization Fund" that would compensate alleged victims of government "lawfare" and halt IRS audits of Trump's finances. The fund was later dropped after political backlash, and Blanche moved to walk back that portion of the deal.
Walking it back was not enough for Williams.
Williams's written ruling did not pull punches. She framed the case as a betrayal of public trust, drawing a line between ordinary civil litigation and what she characterized as executive self-dealing.
"The Parties here are not private actors to a mine-run dispute, recounting their proficiency in the art of the deal they negotiated. Lead Plaintiff and Defendants are public servants, the pinnacle of the Executive Branch, sworn to uphold the law, faithfully perform the duties of their office, and protect the interests of the American public."
That phrase, "proficiency in the art of the deal", was pointed. Williams was telling Trump's team she viewed their settlement not as legitimate dispute resolution but as a choreographed arrangement between a plaintiff and defendants who shared the same boss.
The judge reserved particular skepticism for Blanche's May 19, 2026 testimony. When asked why the settlement agreement had not been submitted to the court for review, Blanche said "there is no judge" because the case had been dismissed and therefore "no mechanism" existed for judicial oversight.
Williams called that answer "at best, misleading and, at worst, disingenuous." She acknowledged the statement was "temporally accurate", the case had, in fact, been dismissed, but treated it as an evasion designed to keep the settlement beyond judicial scrutiny. She also found Blanche appeared to be speaking for both sides of the lawsuit, a conclusion that fed her broader finding of improper purpose.
The pattern Williams identified, a president suing his own executive branch, settling with his own appointees, and structuring the deal to benefit himself and his allies, is the kind of arrangement that invites judicial suspicion regardless of who occupies the Oval Office. Courts exist in part to prevent precisely this sort of circular self-dealing with public funds.
The proposed "Anti-Weaponization Fund" carried a price tag of $1.776 billion, Breitbart reported, and was designed to compensate Trump allies who claimed they had been targeted by government overreach. Williams described the settlement as an attempt "to confer immunity to people and entities affiliated with the President" using taxpayer money.
In her ruling, the judge wrote that the government "entered into a settlement that deviated from its litigation posture in similar actions, disregarded DOJ policies", a charge that strikes at the institutional credibility of the Justice Department itself.
This is not the first time federal courts have blocked major government actions in recent months, and the administration's legal strategy continues to generate friction with the judiciary.
Williams put a fine point on what she saw as the core constitutional problem:
"Whether Executive Branch actors can privately agree to give themselves and their former clients blanket immunities and billions of dollars in tax monies for legally undefined grievances was never an issue advanced to this Court. The answer is a resounding no."
That language, "blanket immunities" and "legally undefined grievances", frames the settlement as something closer to a political favor than a legal resolution. Whether you agree with the judge's characterization or not, the words will follow Blanche into his confirmation hearing.
Williams did not limit her rebuke to the settlement itself. She referred Brito to the Florida Bar for possible disciplinary action. AP News reported that another attorney, Daniel Epstein, was barred from filing in the Southern District of Florida for up to a year.
Fox News Digital reached out to Brito and the DOJ for comment. The White House referred inquiries to Trump's personal attorneys. No responses were reported.
The Florida Bar referral is not a sanction in itself, it triggers a review process that could lead to discipline or could end with no action. But for any practicing attorney, a federal judge's referral is a serious professional mark. It signals that the court believes the lawyer's conduct crossed a line that warrants investigation by the body that controls his license.
The ruling also ordered copies sent to state bars where Blanche and Woodward are members, ensuring the disciplinary implications extend well beyond Brito alone. In other recent legal settlements with political dimensions, the DOJ has navigated sensitive terrain, but rarely under this level of judicial censure.
There is a conservative case for taking this ruling seriously rather than dismissing it as judicial overreach by an Obama appointee.
The underlying wrong, Littlejohn's leak of Trump's tax records, was real, criminal, and prosecuted. The government failed to protect a citizen's confidential information, and that citizen happened to be the president. A lawsuit seeking accountability was legitimate in principle.
But the mechanism matters. A president suing agencies he controls, settling with appointees he installed, and structuring the payout to benefit his political allies is not the kind of accountability conservatives typically champion. It is the kind of arrangement that, if a Democratic president attempted it, would rightly draw howls from the right about corruption and self-dealing.
The "Anti-Weaponization Fund" concept, compensating people who claimed they were victims of government lawfare, sounds appealing in the abstract. Many Americans on the right believe the federal government has been weaponized against political dissenters. But routing $1.776 billion in taxpayer money through a settlement that a federal judge finds was negotiated in bad faith is not the way to address that problem. It is the kind of shortcut that undermines the very rule-of-law principles conservatives claim to defend.
Williams's ruling also raises fair questions about Blanche's conduct ahead of his confirmation hearings. His testimony that "there is no judge" and "no mechanism" for reviewing the settlement may have been technically true, but a nominee for attorney general should be held to a higher standard than technical accuracy. The nation's top law enforcement officer should not be in the business of finding procedural gaps to avoid judicial oversight. That is the kind of lawyering conservatives rightly criticize when the other side's attorneys do it.
Blanche's confirmation hearings begin Wednesday, and Senate Democrats will arrive armed with Williams's ruling. Every line about "misleading" testimony and "improper purpose" will be read into the record. Every reference to Blanche appearing to speak for both sides of the lawsuit will be treated as evidence of unfitness.
That political dynamic is predictable. What matters more is whether Senate Republicans take the ruling's substance seriously. Blanche may well be confirmed, the votes may be there regardless, but senators who care about the Justice Department's institutional integrity should demand clear answers about why the settlement was structured the way it was, why it was not submitted for judicial review, and whether DOJ policies were in fact disregarded.
High-profile court rulings and verdicts have a way of reshaping political narratives overnight. This one may do the same for Blanche's path to confirmation.
Conservatives who spent years, rightly, demanding accountability for the FBI's abuse of the FISA process, the IRS's targeting of Tea Party groups, and the DOJ's handling of the Russia investigation cannot now shrug when a federal judge finds the executive branch manipulated the courts for political self-interest. The principle is the same. The standard cannot shift based on who benefits.
Littlejohn broke the law. He was prosecuted. That is how the system is supposed to work. But a $10 billion lawsuit that a federal judge finds was filed for an "improper purpose," settled in a way that "deviated from DOJ policies," and designed to grant "blanket immunities" to presidential allies is not accountability. It is something else entirely.
If the right wants to be the side that stands for clean government and constitutional order, it has to be willing to say so even when the conduct in question comes from its own team. Williams may be an Obama appointee, but her ruling asks a question that has nothing to do with who put her on the bench: Can a president use the courts to settle with himself and call it justice?
The answer should be obvious to anyone who means what they say about the rule of law.