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Complex Legal Developments

Aug 25, 2025

Complex Legal Developments

You may wish to consider the following items in concert

 

 

  • August 21, 2025 shadow docket decision of Supreme Court in National Institutes of Health, et al. v. American Public Health Association, et al. granting stay as to the District Court judgments vacating the Government’s termination of various research-related grants, but denying a stay with respect to the parts of the judgment finding that the directives authorizing such terminations are void, illegal and of no force and effect and therefore vacated the directives. As a result, the plaintiffs may only get their grant money by going to the Court of Claims rather than the District Court, although they may first litigate the authority to make such terminations in the general federal district courts, where the govt may appeal district court judgment.

 

The court majority disregarded the irreparable damage to the projects for which funding has been cancelled, but only described the irreparable damage to the government from refusing to grant a stay as follows:

    • And while the loss of money is not typically considered irreparable harm, that changes if the funds “cannot be recouped” and are thus “irrevocably expended.” Philip Morris USA Inc. v. Scott, 561 U. S. 1301, 1304 (2010) (Scalia, J., in chambers). The Government faces such harm here. The plaintiffs do not state that they will repay grant money if the Government ultimately prevails. Moreover, the plaintiffs’ contention that they lack the resources to continue their research projects without federal funding is inconsistent with the proposition that they have the resources to make the Government whole for money already spent.

 

In contrast the First Circuit Court of Appeals had observed 

    • Even so, the “stay inquiry calls for assessing the harm to the opposing party.” Nken, 556 U.S. at 435. The plaintiffs provided declarations explaining that the abrupt cutoff in funding will, among other things: cause their studies, some of which have been conducted over the course of many years, to “lose validity”; require animal subjects to be euthanized; force researchers with “project-specific knowledge and experience” to leave; delay treatment for patients enrolled in “clinical trials for life-saving medications or procedures”; and force the closure of community health clinics that provide preventative treatment for infectious diseases. Declarations submitted to the district court described that “[i]n many cases, there is no way to recover the lost time, research continuity, or training value once disrupted,” because studies and researchers cannot be held in stasis. Some declarants explained that the emergency short-term funding provided by their universities was not a sustainable solution and has required layoffs and research cuts; one declarant emphasized that “[u]sing alternative university funds to continue work . . .is neither possible . . . nor practical.” By contrast, the plaintiffs in California had “represented . . . that they ha[d] the financial wherewithal to keep their programs running” in the interim. 145 S. Ct. at 969.

 

Thus, Justice Jackson’s dissent final footnote observed

    • The Government promised grant money to the plaintiffs, and now it has changed its mind. These things happen. Whether the law permits the Government to terminate these grants in this manner is the nub of the instant dispute. Even if the Government is ultimately deemed entitled to do what it has done, why is it harmed (in any meaningful sense) if it cannot recover the previously promised grant payments that happen to issue while a court is deciding the lawfulness of its change of heart? Far from being injurious, one might think that those interim payments are a fair price to pay for the disruption the Government’s choice to abruptly renege on its promises has caused (emphasis in original text).

 

 

 

 

  • August 24, 2025 filing by Harvard in President and Fellows of Harvard College vs Dept Health and Human Services responding to the notice of supplemental authority filed a day earlier by the DOJ.  Harvard distinguished its case by asserting Harvard seeks relief beyond enforcement of an “‘obligation to pay money’ pursuant to … grants.”
    • Harvard seeks prospective injunctive relief.
    • Harvard’s claims include a First Amendment claim to stop retaliation that is specifically designed to cause Harvard injury.
    • Harvard brings claims rooted in the Government’s circumvention of Title VI’s procedures. Title VI expressly authorizes Administrative Procedure Act review in federal district court of agency action “terminating or refusing to grant or to continue financial assistance.” 42 U.S.C. § 2000d-2.

 

The complexity of the legal developments should not distract us from either the departure from traditional consideration of the balance of the parties’ equities in determining whether to grant a stay or the deleterious effects of many of the Supreme Court shadow decisions, regardless of the ultimate merits decisions as shown in the following two attached articles.

 

  • August 22, 2025 Nature report by Dan Garisto & Max Kozlov entitled, US Supreme Court allows NIH to cut $2 billion in research grants. The report focuses on the practical issues in obtaining grants, particularly funds due for the current fiscal year ending September 30, 2025. Fortunately, there was a UCLA research grant victory prior to this in which the frozen funds have been distributed.

 

  • August 24, 2025 The Exchange: Insights & Commentary from Bloomberg Tax by Andrew Leahey that describes the effects of the courts permitting baseless terminations of IRS employees.

 

US Supreme Court allows NIH to cut $2 billion in research grants

The decision will hinder lawsuits against grant terminations, legal specialists say.

The US Supreme Court has ruled that the administration of President Donald Trump can go ahead with cuts to active research grants. Credit: Perry Spring/iStock via Getty

The US Supreme Court has derailed researchers’ efforts to reinstate almost $2 billion in research grants issued by the National Institutes of Health (NIH). The court’s decision on Thursday represents a remarkable reversal, allowing the administration of US President Donald Trump to proceed with science cuts it began in late February.

In a divided decision, the high court held that lawsuits filed by researchers to reinstate grants should have been reviewed by a court specializing in contracts, rather than the district court they were filed in. But the Supreme Court narrowly ruled that the district court could review the NIH’s guidelines used to make the grant terminations and left in place the lower court’s order that the guidelines are illegal and should not be used. The lower court said in June that the grant cuts made by the Trump administration in relation to diversity, equity and inclusion (DEI) amounted to racial discrimination.

Although the Supreme Court ruled partially in the researchers’ favour, some scientists say the decision amounts to a de-facto win by the Trump administration, because the time and cost of challenging their terminations in a different court will be prohibitive. And it could spell doom for other legal efforts, such as one by a group of University of California researchers, to reinstate their funding from other agencies such as the US National Science Foundation.

“In a scientific sense, this is a total loss,” says Jenna Norton, a programme officer at the National Institute of Diabetes and Digestive and Kidney Diseases, which is part of the NIH. “The trust and certainty that is so critical to successfully conduct research has been completely obliterated by this ruling.”

“What the court made clear yesterday is, if your grants get cut, you’re not going to be able to get any effective remedy for it,” says Samuel Bagenstos, who until December was the top lawyer for the NIH’s parent agency, the Department of Health and Human Services.

Neither the NIH nor the researchers who led the lawsuit against the agency responded to Nature’s queries about the ruling.

Legal challenges

Early this year, the NIH began terminating thousands of research grants related to a plethora of topics disfavoured by the Trump administration, including DEI, HIV/AIDS and COVID-19. An analysis by Nature found that the cuts have razed entire fields of study, such as investigations into the health of transgender people. This loss of billions of dollars of funding has led dozens of research institutions, such as Stanford University in California, to lay off staff members.

Several US states, researchers and organizations that represent scientists filed lawsuits challenging the NIH’s cuts in early April, arguing that the terminations were illegal because the agency — the largest funder of biomedical research in the world — did not follow proper procedures and did not give adequate reasoning for cancelling the grants.

In June, judge William Young of the US District Court for the District of Massachusetts in Boston ruled that the NIH guidelines used to terminate the grants and about 800 of the terminations, including those related to DEI, were illegal. “I’ve been on the bench for 40 years — I’ve never seen government racial discrimination like this,” Young said at a hearing announcing his decision.

The next month, a three-judge appeals-court panel unanimously denied the Trump administration’s request to halt Young’s ruling, noting that the cuts would delay lifesaving research by years, if not decades. The government then filed an emergency petition with the Supreme Court.

A court divided

The case divided the Supreme Court’s nine justices, three of whom were appointed by Trump, leading to an unusually fractious 36-page emergency ruling.

Basing their ruling on a previous emergency decision from April, a slim majority of the justices held that district judges like Young lacked jurisdiction. Instead, they said, the case should have been heard by the US Court of Federal Claims (CFC), which specializes in government contract disputes. But the CFC cannot block NIH policy or reinstate terminated grants — it can only award monetary damages.

“The cost of litigating this through the Court of Federal Claims is going to be so high,” says Scott Delaney an epidemiologist at the Harvard T.H. Chan School of Public Health in Boston and a former lawyer. “I think there’s a lot of folks, a lot of institutions, and a lot of [lab leaders] that aren’t even going to try.”

Some of the justices vehemently opposed the majority’s decision, and warned about its impacts to science. “The forward march of scientific discovery will not only be halted — it will be reversed”, wrote Justice Ketanji Brown Jackson in a blistering dissent (Jackson was appointed by former president Joe Biden, a Democrat.) “Yearslong studies will lose validity. Animal subjects will be euthanized. Lifesaving medication trials will be abandoned. Countless researchers will lose their jobs.”

The ruling adds to a winning streak for the Trump administration at the Supreme Court. A majority of justices have at least partially sided with the administration 17 times in a row regarding emergency petitions. Repercussions from the latest decision are still uncertain. For example, if the NIH re-terminates the 800-odd grants, it could be a violation of the district court decision that the agency’s guidelines are illegal.

Norton says that for NIH staff members to spend time re-terminating grants will inflict further damage on US science. The fiscal year ends in just five weeks, she says, and the agency needs to spend the money that the US Congress directed it to spend by that deadline. This ruling might prevent that, she says, adding “it will put at risk all of the science that NIH does, across the board”.

The decision has given affected researchers whiplash. Sara Gianella Weibel, an AIDS researcher at the University of San Diego in California, has already had a grant terminated and then reinstated this year for research investigating the effect of hormone therapy on HIV-positive transgender women. “Just a few hours before the Supreme Court decision, I got an e-mail that I was able to resume spending,” she says. Now, the grant is likely to be cut again. “It’s heartbreaking,” she adds.

 

The Exchange: Insights & Commentary from Bloomberg Tax —Andrew Leahey Sunday, August 24, 2025

 

Earlier this year, over 7,000 probationary IRS employees were terminated with all the warmth and human touch of a spreadsheet sort. There were no in-person performance evaluations, signed letters, or individualized reviews—just mass emails citing a mismatch between performance and mission needs.

A Treasury Inspector General for Tax Administration report dated Aug. 14 found that only about half of those employees had a performance rating on record, 90% of whom were deemed “Fully Successful” or better.

This is serious procedural mismanagement from a personnel standpoint. But it’s more of a success story from the perspective of the Department of Government Efficiency, the initiative ostensibly driving these cuts.

Despite the courts forcing the IRS to reinstate those employees, more than half didn’t come back Some took an offered buyout, while others simply walked. Why wouldn’t they? They had just been treated like disposable data points by an agency that didn’t even bother personalizing their pink slips.

Mass firing people, erasing procedural fairness under the guise of performance management, and doing it fast enough to outpace internal mechanisms for formal objections doesn’t just reduce personnel; it destroys institutional trust. The idea of returning to work might feel like volunteering for a second betrayal.

Yet, these events mean DOGE did what it set out to do. The IRS now has thousands fewer employees, and it didn’t have to trigger the political tripwires that surround a formal reduction in force.

It’s hard to imagine future “efficiency” efforts in this vein won’t take notes on the IRS’s experience: Let the spreadsheet sort determine who stays and who gets cut, let the courts undo it if they want, then let low morale do the rest. We may see all this play out again.