The U.S. Department of Education and the White House legal team quietly withdrew an appeal of a federal judge’s injunction that had blocked the administration’s attempt to cancel hundreds of millions in research grants and demand as much as $1.2 billion from the University of California system. The move leaves intact the court’s preliminary finding that the government overstepped procedural limits in freezing funds tied to civil-rights probes. The dispute centered on UCLA and other UC campuses after the administration opened investigations into whether the schools mishandled antisemitism claims tied to pro-Palestinian protests. The government had also sought policy changes ranging from restrictions on campus protests to the dismantling of some diversity programs. Dropping the appeal reduces the immediate legal leverage the administration had aimed at extracting broad institutional reforms from UC. It also signals a tactical retreat that may reshape how the department approaches enforcement actions against large research universities going forward.