A Supreme Court decision expected within days could affect thousands of federal grant recipients battling the Trump administration over the termination of their funding for projects including for climate and environmental justice work.
The case on the high court’s “shadow docket” of emergency cases centers on the National Institutes of Health’s attempt to cancel hundreds of millions of dollars in research grants awarded to scientists and universities. NIH says the research focuses on diversity, equity and inclusion, which are at odds with administration priorities.
There are similarities between the government’s effort to cancel the NIH grants and EPA’s effort to reclaim billions of dollars awarded for things like green lending, community cleanup projects and climate resilience. The money was allocated during the Biden administration and has long been under contract
Lawyers are awaiting the Supreme Court decision — which could come at any time — for hints of how challenges to EPA’s termination of grants could be treated by lower courts or the Supreme Court itself. The latest briefs were filed with the Supreme Court on Monday.
“It could come out in ways that are very important for the climate cases, and it could come out in ways that really don’t have a lot to do with the climate cases,” said David Super, a law professor at Georgetown University Law Center.
The Trump administration has justified its bid to rescind a range of finalized grant awards — including for research and climate law programs — by arguing that the executive branch has broad authority to void awards that conflict with a new president’s policy objectives. In canceling grants for research in areas like Buddhism and HIV stigma and puberty and transgender youth, NIH cited three of President Donald Trump’s directives, including an Inauguration Day executive order condemning “radical and wasteful government DEI programs.”
EPA originally cited the DEI order to justify canceling all grants under certain Biden-era programs, such as the Community Change Grants program, which was to give historically marginalized communities $1.6 billion to clean up pollution or prepare for climate change risks.
When EPA issued termination letters for the program in May — with litigation over the terminations already underway — the agency said more generally that the awards are “no longer consistent with EPA funding priorities.”
Justice Department attorneys defending Trump administration grant cancellations — including those representing NIH in the Supreme Court case — have argued repeatedly that challenges to the cancellations are contracts disputes and the only legal recourse is for recipients to sue EPA for damages in federal claims court.
The administration cites the 19th-century Tucker Act, which gave private citizens the right to sue the federal government in federal claims court and recover damages. Plaintiffs in claims court can receive only monetary compensation. The claims court cannot reverse grant terminations or other federal decisions — which is the main benefit to the Trump administration in seeking a venue change in grant cancellation cases.
In the NIH lawsuit, Solicitor General D. John Sauer is asking the Supreme Court to set aside a Massachusetts federal district judge’s injunction in June that requires NIH to disburse award funds while legal challenges are ongoing. Sauer told the court Monday that the district court does not have jurisdiction because the case should be heard in claims court.
Justice Department attorneys representing EPA have made similar arguments in cases involving recipients of recently terminated grants.
“There’s different wrinkles to it for different types of claims, but it’s the same argument,” said Daniel Jacobson, who was general counsel for the White House Office of Management and Budget under former President Joe Biden and now advises federal grant recipients in private practice.
‘Quintessential breach-of-contract’
In one high-profile case, nonprofits are suing EPA to prevent it from canceling $20 billion in grants providing seed capital to expand lending in sectors such as renewable energy, electric transportation and energy-efficient homes.
A federal district judge in Washington, D.C., in April issued an injunction against EPA requiring it to let grant recipients spend their funds while litigation continues. The $20 billion was from the Biden-era Greenhouse Gas Reduction Fund, which gave money to community development and green-energy nonprofits to support a nationwide network of lenders in areas of clean energy.
Justice Department lawyer Yaakov Roth said in an appeal filed in May that the lawsuit against EPA involves “quintessential breach-of-contract claims over which the district court lacked jurisdiction.”
Roth argued that the Tucker Act limits recipients of greenhouse grants to bringing claims in the Court of Federal Claims, where “only certain remedies are available.”
District Judge Tanya Chutkan had written in her injunction that in arguing the challenge was merely a breach-of-contract case, EPA’s attorneys ignored that “government actions, even those involving contractual relationships, are subject to review when they implicate statutory, constitutional, or procedural violations.”
In other words, the case raised legal and constitutional issues that went beyond a broken government contract. The other matters required review by a district court.
The U.S. Court of Appeals for the D.C. Circuit blocked Chutkan’s order from taking effect and kept the grant funds frozen.
Jim Drummond, a veteran EPA career attorney who helped set up climate law programs before retiring in March, said that if the Supreme Court sides with the administration in sending grants cases to federal claims court, the result would be “a terrific delay in justice.”
“Some grantees will not be able to keep the lights on long enough to have their day in court,” Drummond said. In claims court, grant recipients would have to individually file breach-of-contract lawsuits against agencies.
Litigation could take years, Drummond said, especially because the Trump administration’s cancellation of so many federal grants would overload the claims court docket.
“No one has ever seen anything like these mass terminations,” said Drummond, who served at EPA in various legal capacities for more than 30 years. “It’s the mass termination of hundreds and hundreds of grants all across the government — NIH grants, Department of Education grants, EPA grants, National Science Foundation grants. All sorts of grants of different types and different terms are being terminated on the same grounds — purportedly, changing priorities.”
“If justice is going to be served in these terminations — if they are, as I believe, arbitrary — the government’s going to have to deal with the merits of the claims,” Drummond said.
Unconstitutional cancellations?
Lawyers said that if the Supreme Court sides with NIH and sends the research grant challenge to federal claims court, other grant cases will not automatically follow the same path.
Plaintiffs against the EPA are arguing that the grant cancellations were unconstitutional and nullified the will of Congress by not implementing programs created by the 2022 Inflation Reduction Act and which EPA is required to administer.
But the Supreme Court is not going to rule on the constitutionality of NIH’s cancellations because the district court injunction did not address the issue. Although the NIH plaintiffs argued that the cancellations were unconstitutional, Judge William Young focused on NIH’s lack of due process in terminating the grants, which he said wasn’t “reasonable or reasonably explained.”
But several EPA cases involve constitutional issues. Chutkan in her preliminary injunction in the green lenders case wrote that the plaintiffs were likely to succeed on their constitutional claims.
Super, the Georgetown law professor, said the Inflation Reduction Act gave EPA less discretion over some of its grant programs than NIH had over its research grants.
“The Greenhouse Gas Reduction Fund is a very specific statute,” Super said. “It tells you exactly what Congress wanted in really remarkable detail. So I would have trouble seeing anything that the court would say about NIH really translating very easily to the Greenhouse Gas Reduction Fund.”
If the Supreme Court issues a broad decision in the NIH case that states that all lawsuits that involve federal contracts must be heard in federal claims court, “that’s devastating for the climate programs,” Super said.
But if the court decides that there is something about the NIH grants program that makes the challenge to their terminations primarily a contracts case — or if the court rules on the unique circumstances of the case — that could have little or no impact on other cases involving grants terminations.
District courts with grant termination cases probably won’t issue decisions in those cases before the Supreme Court weighs in on the NIH challenges.
“No one wants to put out a decision and then two weeks later pull it back and say, ‘We have to reconsider in light of what the court did,’” Super said. “So my guess is that there are quite a few cases — the Greenhouse Gas [Reduction Fund] case but other impoundment cases as well — where people are waiting to see what the Supreme Court does with this.”
