2025 Supreme Court Decisions on Grant Terminations: What Research Administrators Need to Know

Guest Contributor: Anna Campana, Sr. Pre-Award Research Administrator, R1 Cancer Center

Plaintiffs suing the U.S. Government over grant terminations early in 2025 had initial success in getting federal courts to stay agency actions. However, after the last few U.S. Supreme Court decisions, these stays have been lifted, and grant recipients find themselves without a remedy to stop the funding losses at their institutions. Although disappointing to everyone involved in the research enterprise, these initial losses are not the final chapter, and the legal doctrine surrounding the cases will remain dynamic and interesting to follow. Because the outcome of these cases directly affects the future of academic research, this article provides an update on the current status of case law related to grants and contracts.

The background to these cases is well-publicized, involving abrupt federal agency actions terminating awards deemed contrary to Trump administration policy related to Executive Orders (EO) 14151 Ending Radical and Wasteful Government DEI Programs and Preferencing (2025), EO 14173 Ending Illegal Discrimination and Restoring Merit-Based Opportunity (2025), and EO 14168 Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government (2025). Once grants were terminated, organizations and states quickly sought relief in federal district court, asking for injunctions against agency action on several claims, including under sections of the Administrative Procedure Act (APA). The APA allows disputing parties “adversely affected or aggrieved by agency action within the meaning of a relevant statute” to apply for relief from federal courts (see 5 U.S.C. § 702). Although many cases are still pending, the emergency docket decisions out of the Supreme Court were not initially encouraging because plaintiffs’ request for funding reinstatement under the APA was denied (Department of Education v. California, 2025; National Institutes of Health v. American Public Health Association, 2025). Siding with the Government, the majority of justices agreed that grant termination claims, like contract disputes, belong in the U.S. Court of Federal Claims (COFC). Yet the Supreme Court has not yet provided an analysis for lower courts to use to differentiate a contract from some other type of agreement.

Because injunctive relief can only be achieved in federal district court, most plaintiffs had initiated proceedings in that forum. Furthermore, the Government may not even agree to be sued in the COFC. As the Brownstein Client Alert authors stated in their 2025 legal update Caught Between Courts: Navigating Grant Termination Claims,

…there is no guarantee that the government will agree that Federal Claims can hear these suits if they are filed. Indeed, the federal government has long contended that it cannot be subject to estoppel [an equitable doctrine invoked to avoid injustice] and could argue that it is entitled to take inconsistent positions as to jurisdiction to hear these disputes. 

Perhaps predictably, the Supreme Court has managed to undo years of case precedent with these emergency docket decisions that are now binding on lower courts. Lower court judges are struggling to incorporate these decisions into their rulings, and some have been critical of the Supreme Court’s use of the emergency docket in cases involving the Trump administration.

According to Keith and Twinamatsiko (2025), litigants can present alternative claims not addressed in National Institutes of Health and California. For example, in President & Fellows of Harvard College v. United States Department of Health & Human Services (2025), Harvard argued that the Government had violated its First Amendment rights by attempting to curtail their freedom of speech through multiple governance, leadership, and other academic reforms through demand letters. Harvard also argued that the Government had not followed the many procedural steps, including notifying Congress, required under Title VI of the Civil Rights Act of 1964 (prohibiting discrimination in federally funded programs) before they terminated billions of dollars of grants. Ruling in favor of Harvard, Judge Allison Burroughs found that the Government had acted contrary to constitutional and statutory rights under the First Amendment and Title VI, respectively. Because this case has been appealed by the Government and may reach the Supreme Court in the next few months, it will be an important test case to follow.

Keith and Twinamatsiko also discussed additional litigation addressing claims under various statutes and separation of powers doctrine in American Association of Physicians for Human Rights, Inc. et al. v. National Institutes of Health et al. (2025). Decided prior to National Institutes of Health but after California, the plaintiffs alleged that the Government terminated grants for research on sexual minority health in violation of statutes and legal doctrine. After analysis, the Court issued a preliminary injunction based on the likelihood of the plaintiffs succeeding on two grounds, that the Government violated (a) Section 1557 of the Patient Protection and Affordable Care Act (ACA) and (b) the due process clause of the Fifth Amendment. Section 1557 of the ACA prohibits discrimination in the administration of health programs supported by federal assistance, and the Fifth Amendment due process clause prohibits “the United States from invidiously discriminating between individuals or groups” (Washington v. Davis, 1976). The judge in this case did not believe that the plaintiffs would win on the merits under the APA because of the precedent set by the Supreme Court in California.

Finally, in Harris County, Texas v. Kennedy (2025), a district court in the District of Columbia ordered a preliminary injunction for the plaintiffs who lost billions in public health funding granted by Congressional statutes. As a result of the prior controlling decision in California, the Court found that the plaintiffs would not succeed in reversing grant terminations under the APA but would likely succeed on constitutional grounds related to (a) violation separation of powers (Congress holds the power of the purse, not the Executive Branch) and (b) ultra vires claims, whereby the Executive Branch exceeded their authority when terminating grants created by Congressional statute. In his opinion, Judge Christopher Cooper detailed the confusion between various court decisions and the Supreme Court’s decision in California as to the nature of contracts and jurisdictional authority. Certainly, understanding exactly what the Executive Branch has the legal right to do when it comes to grant terminations is still murky legal doctrine, in large part because emergency docket decisions by the Supreme Court did not address the merits of a case.

As of this writing, the winning argument in fighting grant terminations is not much clearer now than in early Spring of 2025 when federal agencies started issuing terminations. To further confuse the issue of whether grants are legally binding bilateral contracts, the Trump administration has recently published EO 14332, Improving Oversight of Federal Grantmaking, mandating that federal agencies insert Federal Acquisition Regulations (FAR) Termination For Convenience clauses in current and future notices of awards. The Government’s intention to portray grants as contracts is clear by their defenses in court and by their intent to insert this FAR clause in grant awards. Nonetheless, there are still justiciable statutory and constitutional claims that plaintiffs can use in court to attempt to reverse grant terminations. Ideally, the Supreme Court should issue merit-based opinions to clarify under what conditions federal agencies can legally terminate federal financial assistance appropriated by Congress. As the research community deals with these abrupt changes in government policy, analyzing current cases can provide insight on the type of claims likely to succeed in court as well as provide hope that there is a legal backstop to the attacks on higher education.