US Supreme Court leaves NIH grant recipients with reduced funding

The 5 – 4 decision of the US Supreme Court in National Institutes of Health v. American Public Health Association leaves US$783 million in National Institutes of Health (NIH) grants unavailable to researchers and academic medical centers nationwide. The ruling poses immediate consequences, including the cancellation of clinical protocols that patients rely on. Academic healthcare institutions, which have long relied on NIH funding to sustain their research programs, are facing unprecedented financial stress.

The Trump administration had sought to terminate the NIH grants on the grounds that recipients failed to comply with the following executive orders: Ending Radical and Wasteful Government DEI Programs and Preferencing; Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government; and Ending Illegal Discrimination and Restoring Merit-Based Opportunity. The lawsuits, filed by grant recipients and 16 states challenged those actions, asserting violations of the US Constitution and the Administrative Procedure Act (APA).

Following the ruling of the US Court of Appeals for the First Circuit, upholding the district court’s order, the Trump Administration then petitioned the US Supreme Court for emergency relief arguing that the administration would suffer irreparable harm if the disputed grant funds were disbursed and recipients later proved unable to return the money if the government prevails in the case.

In a four-paragraph order, the majority of the US Supreme Court concluded that the district court lacked jurisdiction to compel reinstatement of the grants and therefore stayed those portions of the lower court's order that directed NIH to restore funding. Nevertheless, a separate majority of the US Supreme Court declined to disturb the part of US District Judge Young’s order that invalidated the NIH’s underlying guidance for research on diversity, equity, gender identity and inclusion, which the agency had cited as the basis for the terminations.

The order was accompanied by five separate opinions, each written by different groups of Justices, that explain the legal issues involved in grant disputes and highlight where they disagree, especially regarding how certain federal laws, like the APA and the Tucker Act, interact. No matter how these legal questions are ultimately resolved, the immediate impact on the healthcare research community is significant and wide-reaching.

Implications for grant recipients

Practically, with the order now in effect, many institutions should expect to receive stop-work orders and/or notices of termination of their grants. Grant recipients should review their grants to determine what action they wish to take, including a potential challenge to the termination. Federal statutes, most notably the Tucker Act, may permit a grant recipient to initiate a damages action in the US Court of Federal Claims.

Even if institutions do not wish to take formal action to challenge the termination, they should review closeout procedures to ensure they are complying with all federal laws associated with the early termination and receive all appropriate payments or reimbursements that predate the termination notice.