The suit was filed by the state of Illinois after hundreds of National Guard members were sent to Illinois and placed under federal control during "Operation Midway Blitz."
The Supreme Court blocked that effort, and the lawsuit was thrown out Monday morning.
Gov. JB Pritzker said in a statement, "Today's order concluding Illinois v. Trump confirms what has been clear to the people of Illinois from the beginning - Donald Trump's deployment of the National Guard to occupy our streets was a reckless and illegal abuse of power. I'm grateful to the court for siding with our communities and slowing the erosion of our democratic norms.
"I want to applaud Illinois Attorney General Kwame Raoul for securing this win in the courts as he has consistently stood up to defend the rights of our people and stop federal overreach. I also want to thank him and his staff for working around the clock to check Trump's march toward authoritarianism at every turn.
"Communities should not have to live in fear of masked federal troops occupying their neighborhoods, and our brave National Guard members should not be used as political props. These are foundational principles of any healthy democracy, and the result in this case validates that belief.
"While this is an important result, we know that the Trump Administration will continue to test the limits of its power no matter the cost to our communities. Illinois will keep standing up and fighting for the rights of our people."
Illinois Attorney General Kwame Raoul said in a statement, "In October, the District Court for the Northern District took action to stop the unlawful deployment of National Guard troops in Illinois because the administration could provide no lawful explanation for its deployment. That is because none existed. This matter went all the way to U.S. Supreme Court, which denied the administration's attempt to stay that lower court's order. Now, several months later, the federal government has conceded that the orders for deployment are not operational.
"The American people, regardless of the city or state in which they reside, should not live under threat of military occupation simply because they live in a jurisdiction that has fallen out of a president's political favor. I am pleased that today, the court has declared the Trump administration's unlawful orders defunct and said it is absolutely clear that the administration cannot use the Illinois orders to federalize or deploy National Guard troops in Illinois. I am proud of the attorneys from my office who diligently fought to uphold the rule of law, because in Illinois, we recognize that the Constitution is not merely a suggestion."
The Chicago Department of Law said in a statement, "We welcome the court's ruling today that the Trump Administration's deployment orders are no longer operational and cannot be used to federalize the National Guard. There was never a lawful basis to deploy the National Guard into Chicago for federal immigration enforcement. The orders represented a federal overreach that threatened the local rule of law."