Supreme Court Stays District Court Order Vacating NIH Grant Terminations, But Leaves Guidance Vacatur Intact

On August 21, the Supreme Court, in National Institutes of Health v. American Public Health Association, granted the government’s application for a stay of the district court’s order vacating NIH’s termination of various research grants. The Court denied the government’s application with respect to the district court’s vacatur of related internal guidance documents. The Court’s order impacts federal government grantees who wish to challenge grant terminations in federal court.

Background and Context

Beginning shortly after his inauguration, President Trump issued a series of executive orders directing federal agencies to end support for research related to, among other topics, diversity, equity, and inclusion (DEI), “transgender issues,” and COVID-19. The National Institutes of Health (NIH) began implementing these executive orders by issuing internal guidance documents and, soon after, terminating thousands of existing research grants relating to the disfavored topics. This policy shift impacted research into a wide variety of health-related issues, including domestic violence, suicide prevention, HIV transmission, Alzheimer’s disease, and cardiovascular health.

In April, two groups of plaintiffs—the first, a coalition of impacted researchers, health organizations, and unions, and the second, a group of sixteen States—filed suit in federal district court alleging that NIH’s actions, including both its internal guidance and the resulting mass termination of grants, violated the Administrative Procedure Act (APA) and various constitutional provisions. The district court held, in a final decision on the merits, that the challenged actions were arbitrary and capricious in violation of the APA, vacating both the guidance documents and the grant terminations. After unsuccessfully seeking to stay the order in the district court and First Circuit Court of Appeals, the government applied for a stay in the Supreme Court.

The Supreme Court’s Order  

The Supreme Court issued an order granting the government’s application as to the grant terminations themselves and denying it with respect to the internal guidance documents.

In doing so, the Court reasoned that the district court likely did not have “jurisdiction to adjudicate claims ‘based on’ the research-related grants or to order relief designed to enforce any ‘obligation to pay money’ pursuant to those grants. Op. at 1 (citing Department of Ed. v. California, 604 U.S. __ (2025) (per curiam)). In the Court’s view, challenges to grant terminations are inherently suits for money damages that by statute must be brought in the Court of Federal Claims. Further, as to irreparable harm, the Court focused on harm to the government if the terminated grants were reinstated and NIH was required to make payments upon them. The Court stated that “while the loss of money is not typically considered irreparable harm, that changes if the funds ‘cannot be recouped’ and thus ‘irrevocably expended.’” Op. at 1 (quoting Philip Morris USA Inc. v. Scott, 561 U.S. 1301, 1304 (2010) (Scalia, J., in chambers). The Court concluded “that the [g]overnment faces such harm here.” Op. at 1.

Justice Barrett explained in a concurring opinion that challenges to grant terminations must be brought in the Court of Federal Claims, not in federal district court because, under the Tucker Act, the APA’s waiver of sovereign immunity does not extend to enforcing contractual obligations to pay money, regardless of the substantive basis for the claim. On the other hand, in her view, challenges to the agency guidance that directed those grant terminations belong in federal district court.

Dissenting Views and Concerns

The order provoked a separate opinion from Chief Justice Roberts (joined by Justices Sotomayor, Kagan, and Jackson). Those Justices would have denied the government’s application in full, concluding that the district court had jurisdiction over both the guidance and the grant terminations.

Justice Jackson issued another concurrence in part and dissent in part, warning of the severe practical consequences of the Court’s decision. Specifically, she raised concerns that the loss of funding would disrupt ongoing research, force the euthanization of animal subjects, terminate clinical trials, and close community health clinics.

Justice Gorsuch (joined by Justice Kavanaugh) issued another opinion expressing frustration with the district court for failing to treat as binding precedent the Court’s order in Department of Ed. v. California, 604 U.S. ___ (2025), which previously suggested in a per curiam order that federal district courts did not have APA jurisdiction over grant terminations.  Justice Gorsuch wrote that “regardless of a decision’s procedural posture, its ‘reasoning—its ratio decidendi’—carries procedural weight in ‘future cases.’” (Citations omitted.)  Justice Gorsuch’s expectation that district courts treat the Court’s non-binding ruling as precedential is especially notable given Court’s extensive activity on its “shadow docket” this term.

Justice Kavanaugh also wrote, stating that the Court’s “straightforward” opinion in Department of Ed. mandated that plaintiffs’ claims “must be brought in the Court of Federal Claims” because “[t]he core of plaintiffs’ suit alleges that the Government unlawfully terminated their grants.”

Practical Impact and Next Steps

As a result of the Supreme Court’s order, the grants at issue in these cases will remain terminated throughout the appellate process. The internal guidance documents, however, remain vacated and cannot be used as a basis for future grant terminations unless the district court’s order is reversed on appeal. 

Though not a final decision on the merits, the Court’s order sets the procedural path for further litigation to challenge grant terminations, indicating that APA-based claims challenging grant terminations themselves may have to be brought in the Court of Federal Claims (even though that court has no equitable authority to direct the grants be reinstated and can award only money damages), while the agency actions underlying those terminations must be challenged in federal district court.

This bifurcation poses procedural and substantive hurdles for entities seeking to challenge grant terminations. While plaintiffs can challenge in federal district court unlawful agency rules, guidance, or other executive actions that direct grant terminations, most actions seeking to recover unlawfully terminated federal funding will likely have to be pursued separately in the Court of Federal Claims. This may increase the burden on plaintiffs challenging grant terminations, forcing them to litigate in two courts to obtain full relief. And even where plaintiffs are successful in doing so, the relief afforded may not be complete because only money damages are available from the Court of Federal Claims under the Tucker Act. In short, the Court’s order will make it difficult for funding recipients to restore the status quo in the form of continuation of terminated or threatened grants or contracts. 

We note, however, that district court decisions invalidating grant terminations on non-APA grounds are not affected by the Court’s decision. For example, in GLMA v. NIH, a federal district court in Maryland ordered reinstatement of NIH grants that were terminated based on their connection to LGBTQI+ health. The court in that case found that the terminations of those grants violated the equal protection component of the Fifth Amendment and Section 1557 of the Affordable Care Act. The Court of Federal Claims lacks jurisdiction over such claims, which must be brought in federal district court.

The Path Forward  

Federal research institutions, universities, and affected researchers should closely monitor further developments in the appellate courts and consider the implications of this jurisdictional split for future grant-related litigation. Crowell’s Government Contracts and Litigation teams are available to advise on navigating these complex legal and procedural issues.