Background
In early 2025, three federal agencies terminated research grants en masse via form letters pursuant to Executive Orders aimed at eliminating diversity, equity, and inclusion policies. Six University of California researchers sued, alleging violations of the First Amendment and the Administrative Procedure Act. The district court granted a preliminary injunction for two classes: those terminated by form letter and those terminated due to diversity-related Executive Orders. The government appealed, challenging standing and the injunction.
The court’s reasoning
The panel held that plaintiffs adequately alleged injury flowing from the grant terminations, including loss of funding and reputational harm, establishing Article III standing. Regarding the Form Termination Class, the court concluded the district court likely lacked jurisdiction under the Tucker Act because the APA claim was at its essence a contract action seeking to enforce an obligation to pay money. For the DEI Termination Class, the court found the agencies likely violated the First Amendment by terminating grants based solely on the recipients’ perceived expression of diversity, equity, and inclusion viewpoints. The court reasoned that while the government may define subsidy programs, it cannot leverage funding power to suppress disfavored viewpoints within those programs.
What it means going forward
The preliminary injunction is reinstated for researchers terminated due to diversity-related Executive Orders, requiring agencies to reinstate those grants. The injunction is vacated for researchers terminated via form letter without specific explanation, as those claims must be brought in the Court of Federal Claims.
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