Labor & Employment Law Daily Wrap Up, GOVERNMENT CONTRACTS—U.S.: Supreme Court allows NIH’s DEI-related grant terminations to proceed, (Aug 25, 2025)

By Sheila Lynch-Afryl, J.D., M.A.

The American Public Health Association and 16 states challenged the federal government’s decision to terminate the grants.

The U.S. Supreme Court allowed the Trump administration to proceed with the National Institutes of Health’s (NIH) decision to terminate grants that advanced diversity, equity, and inclusion (DEI) initiatives. Chief Justice Roberts joined Justices Sotomayor, Kagan, and Jackson in dissenting from the ruling, with Justice Jackson criticizing the majority’s “bizarre claim-splitting regime” (National Institutes of Health v. American Public Health Ass’n, No. 25A103 (U.S. Aug. 21, 2025)).

In February, the NIH terminated hundreds of millions in grants on the basis that they were contrary to the administration’s policies on DEI and gender ideology, as reflected in Executive Orders 14151, 14168, and 14173. The American Public Health Association, along with other organizations, and 16 states sued the Trump administration in April alleging violations of the Administrative Procedure Act (APA). The district court, after first ruling on a motion to dismiss, later held that the NIH’s decisions to terminate the grants were arbitrary and capricious. After the First Circuit denied a stay, the Trump administration sought an emergency stay from the Supreme Court.

The Supreme Court ruled that the government’s request “is granted as to the District Court’s judgments vacating the Government’s termination of various research-related grants.” The Court relied on its decision in Department of Education v. California, which granted a stay pending appeal of a temporary restraining order enjoining the government from terminating education-related grants.

Chief Justice Roberts distinguished the Department of Education case, arguing that the NIH case “falls well within the scope of the District Court’s jurisdiction.” Justice Gorsuch wrote separately to assert, “Rather than follow” the Court’s direction in the Department of Education case, the district court “permitted a suit involving materially identical grants to proceed to final judgment under the APA.” Justice Kavanaugh also asserted that the case belongs in the Court of Federal Claims, not the federal district court.

The case is No. 25A103.

Judge: Jackson, K.

Attorneys: D. John Sauer, U.S. Department of Justice, for National Institutes of Health. Rachel Meeropol (American Civil Liberties Union Foundation) for American Public Health Association.

Companies: American Public Health Association

Cases: GovernmentContracts ContractClaims Discrimination SexDiscrimination AgencyNews