On Thursday, August 21, the Supreme Court issued an order in National Institutes of Health [NIH] v. American Public Health Association allowing NIH to terminate more than a thousand research grants that were cancelled earlier this year under President Trump's executive orders (EOs) targeting diversity, equity, and inclusion (DEI), gender identity, and COVID-19 research. In a 5–4 decision, the Court granted the government's request to put on hold two lower court orders that had invalidated the Administration's grant terminations, pending the Administration's full appeal of the lower court rulings.
The Supreme Court did not block the portions of the lower court orders finding that NIH's updated policies on grant terminations were unlawful. Rather, the court ruled that challenges to grant terminations must be brought in the Court of Federal Claims—which hears disputes involving government contracts or funds owed by the federal government—not the standard district courts that hear most types of federal litigation, including challenges to agency decision making under the Administrative Procedure Act (APA).
This decision builds on the Supreme Court's prior order in Department of Education v. California concerning the appropriate court for challenging agency grant terminations. As noted in the district court NIH opinions, this order sets up a difficult scenario for those seeking to challenge the termination of a federal grant based on a change in federal policy. The challengers may first need to file suit in a district court to challenge the legality of the policy, followed by a separate challenge in the Court of Federal Claims to seek payment for their terminated funding.
This decision may have implications for other litigation unfolding across the country in response to the Administration's mass cancelation of grants. Courts may revisit existing orders on grant terminations, and the ruling may shape challenges to future grant cancelations, including in the wake of the President's recent EO Improving Oversight of Federal Grantmaking. That said, the ruling appears to leave the door open to challenges under the APA to agency policies that precede grant terminations.
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