In summary
The Court of Federal Claims was a little-known court until the U.S. Supreme Court said that universities need to file suit there, and not in conventional district courts, to try to have their research grant funding restored. The Trump management has terminated billions of dollars in science grants.
Following a intricate Supreme Court ruling in late August, the fate of billions of dollars of science research grants is now at the mercy of an obscure federal law known as the Tucker Act.
“I had never spent more than three minutes in class even mentioning the existence of the Tucker Act, and it would never have occurred to me to do so before this spring,” said David Marcus, a UCLA professor of law who specializes in civil procedure and federal courts.
The Tucker Act created the modern version of the Court of Federal Claims, in existence since before the Civil War. Until recently it was the venue for contract disputes with the federal government — think: a company hired to build a bridge sues Uncle Sam over missed pay.
But starting with a surprise,terse order in April followed by a zigzagging set of decisions last month that are stumping lawyers, the Supreme Court basically declared that this little-known court is now the venue for any university or state that wants to dispute the Trump administration’s cancellation of research grants.
The Supreme Court’s April ruling stated that grant disputes should be hashed out in the Court of Federal Claims. The ruling came in a case in which California and other states sought to recover tens of millions of dollars in education funding.
Then came the high court’s fractured August ruling, which saw two slim majority rulings in the same case. One was a 5-4 decision siding with Trump that said grant funding has to be settled at the Court of Federal Claims rather than in a traditional district court. The decision could help the Trump administration because it likely requires plaintiffs to seek the restoration of their funding in the Court of Federal Claims and then challenge the legality of the policy behind the grant cancellations in a district court — in effect extra work for researchers and campuses seeking their funding back.
But the other 5-4 decision benefitted research universities by indicating that the new federal rules prompting the grant cuts where probably illegal, partially upholding a lower court judge’s order. The case will now proceed in the lower courts.
The ambiguity of the “tricky, complicated ruling,” as one legal scholar called it,prolongs the despair of thousands of researchers and graduate students whose life’s work — and a key source of staff income — either remains defunded or is now at risk of being once again terminated.
Many of the grants were terminated because they ran afoul of Trump’s January executive orders banning so-called Diversity,Equity,and Inclusion initiatives.
“It’s entirely foreign to me” that the Court of Federal Claims is “now the place to handle these sort of basic, fundamental questions about the government’s power to handle appropriations,” Marcus said.
It’s not clear if existing grants that were cancelled and then reinstated, such as the hundreds at the National Institutes of Health,will again be defunded. The University of California is the recipient of hundreds of these health science grants.Nationally, the grants paid for research into life-saving drugs, dementia, heart disease in rural areas, robotics education and a whole gamut of science inquiries.
But even before the court’s August ruling, the UC was warning of major slowdowns to its research apparatus. The grant terminations and other funding cuts “have already disrupted the entire biotech research ecosystem at the University of california,” Theresa A. Maldonado, UC’s vice president for research and innovation, told a state legislative hearing in August.In 2024, California programs won more than $5 billion in grants from the NIH and over $1 billion from the National Science Foundation, she told lawmakers. More than 1,000 startups have been founded based on UC patents, she added.
CalMatters reached out to the University of California and California Department of Justice about how they interpret the Supreme Court’s split decision and the role of the Court of Federal Claims. California’s attorney general is part of a multistate suit at the center of the supreme Court’s August ruling. Both agencies are studying the implications of the ruling, spokespersons for each agency said.
“Cuts to NIH funding risk derailing vital discoveries, disrupting research teams, and undermining economic growth in California and across the contry,” UC spokesperson Stett Holbrook told CalMatters in an email. “We are closely assessing the ruling’s impact across UC’s campuses and health systems and will continue to press for full restoration of this essential federal support.”
how we got here
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The Supreme Court’s split set of decisions was a response to a June lower court decision in Massachusetts. Judge William G. Young found that the federal government illegally terminated the grants,in large part because the grants weren’t reviewed individually but cancelled en masse. He also said the cancellations were racially motivated and ordered the funding restored. The August Supreme Court decision says that questions about restoring grant funding should go before the Court of Federal Claims.
“There is no reasoned decision-making at all” about the NIH’s grant terminations,” Young wrote in his opinion expanding on his June decision. Instead,the cancellations were driven by “sparse pseudo-reasoning,and wholly unsupported statements,” he wrote.
young also faulted the Trump administration for having no definition for what constitutes DEI.
Earlier this month Young apologized to the supreme Court for seemingly misinterpreting its April order in which the justices for the first time said federal grants must be heard in the Court of Federal Claims, The new York Times reported.Young indicated he was unclear on what the high court’s April and September orders meant for other district judges. “I simply did not understand that orders on the emergency docket were precedent,” he said.
Other jurists said the Supreme Court’s use of the so-called “shadow docket” to issue rulings with little guidance or clarification is confusing. Because of the shadow docket decisions, lower court judges “must grapple with both existing precedent and interim guidance from the Supreme Court that appears to set that precedent aside without much explanation or consensus,” wrote one judge in a September opinion.
The April decision commits one sentence to why the Court of Federal Claims is the right venue for government grant disputes. The five-judge majority in August in effect pointed to the april decision to support their ruling.
Neither the April nor the August Supreme Court rulings “seriously engages with the scope of the Tucker Act and the Court of Federal Claims jurisdiction,” Marcus said. “It’s just astonishing.”
Ten of the 21 judges on the Court of Federal Claims were appointed by President Donald Trump,and a majority were appointed by Republican presidents,giving the Trump administration a likely advantage. However, the appeals court overseeing the Court of Federal Claims contains a majority of judges appointed by Democrats.The U.S. Supreme Court can review decisions by the appeals court.
At least $14 billion in grants affected by ruling
Parts of the Supreme Court decision “raise foundational questions” about grant termination lawsuits in federal district courts, Scott delaney, a former environmental health research scientist at Harvard University, told CalMatters in an email.
“That means that it’ll be much harder (and possibly impractical) to sue to reinstate all NIH and NSF grants that have been terminated, though scientists may still be able to win a court order forcing NIH or NSF to pay their universities the money that the government should have paid them under the grants,” he wrote.
Delaney co-founded Grant Witness, a tool that scours federal datasets to tally which grants the federal government under Trump has terminated or suspended.
CalMatters asked him to count how many National science Foundation and National institutes of Health grants that campuses across the country were fighting to reinstate are now affected by the Supreme Court ruling. The answer?
- NIH: 4,044 grants worth $5.7 billion in unspent funds ($12.6 billion in total award value)
- NSF: 1,954 grants worth $1 billion in unspent funds ($1.8 billion in estimated total award value)
Delaney said the Supreme Court ruling will likely affect billions of other dollars in grants from other agencies, such as NASA and the Environmental Protection Agency, but Grant Witness isn’t tracking all those yet.
Why Court of Federal Claims may be a challenge for universities
Marcus said there are probably four reasons universities want to avoid the Court of Federal Claims in their lawsuits — and these are likely the same reasons why the Trump administration wants them there.
First, some district courts and appeals courts are more likely to include judges whose judicial leanings are more sympathetic to the states and research groups suing the Trump administration.That doesn’t mean just judges appointed by Democrats. Young, the district judge in the National Institutes of Health case, was appointed by Ronald Reagan.
Next, the Court of Federal Claims can award monetary damages, but it cannot make wider rulings, such as halting an agency from continued funding terminations. Those questions would have to go before a traditional district court, so it adds more work for plaintiffs suing the federal government.
third, the Court of Federal Claims is more limiting in how it allows researchers to join a class action suit. Basically, researchers whose grants were affected by the terminations would have to opt-in by filing paperwork to receive potential financial relief or have their grants restored, Marcus said. That’s different from what occurs in traditional federal courts, where a judge can approve a set of criteria for who is eligible for a class, and then all those eligible people benefit from any decision that awards the class relief.
But if a university sues, Marcus thinks the process is somewhat easier: The school would just file a complaint with a long list of all the grants or researchers covered in their suit.
Fourth, Justice Ketanji Brown jackson in her dissenting opinion for the Supreme Court noted other possible hardships. Requiring plaintiffs to argue before district courts that the rules terminating their grants are illegal and then separately getting their terminated grants reinstated is “sending plaintiffs on a likely futile, multivenue quest for complete relief,” Jackson wrote.
Justice Amy Coney Barrett disagreed in her majority 5-4 opinion. “Vacating the guidance does not reinstate terminated grants,” she wrote, adding that “two-track litigation” in different courts is common.She also addressed Jackson’s criticisms head-on, writing that both district courts and the Court of Federal Claims can separately adjudicate the relief universities or researchers seek.
Barrett and Jackson were on the same side in the other 5-4 decision having mentioned that Trump’s policies to cut the grants were likely illegal.
What’s next?
Marcus cautions that the legal terrain around restoring grants remains an open question.
But based on his reading of the Supreme Court cases,it is indeed quite possible that the Court of Federal Claims is where scientists will have to try to force the restoration of any terminated funding. And the district court will continue to determine whether the policy behind the grant cuts is legal. It creates a scenario in which the Court of Federal Claims can order funding restored, but until a district court rules on the policy justifying the grant cuts, the federal government can continue to cancel other grants or deny new ones.
But Marcus also cites at least one federal judge in California who thinks that individual researchers cannot sue in the Court of Federal Claims as they’re third parties to the contracts; the government technically sent the contracts to the university, not to the researchers. Under that scenario, it may be that individual researchers cannot sue to restore their grants at all and would instead need to rely on their employer to take up the legal fight.
The equation for universities suing is also nuanced,Marcus said. If a university such as the UC sues to restore funding, there’s a possibility that a district court may rule that funding restoration would have to be heard in the Court of Federal Claims. However, he noted that a federal judge in Massachusetts ordered the Trump administration to restore the $2.2 billion in grants it froze at Harvard University. that judge argued in part that the cuts violated the First Amendment rights of the university. So, even though the case is about money — presumably the domain of the Court of Federal claims — issues of protected speech belong in a traditional district court.
“The resolution of these claims might result in money changing hands, but what is fundamentally at issue is a bedrock constitutional principle rather than the interpretation of contract terms,” the judge, Allison D. Burroughs, wrote.
