The litigation over the rescinded grants moved quickly. By June, a District Court judge concluded the federal policy “represents racial discrimination” and entered a preliminary injunction that would have reinstated all the cancelled awards. In his written opinion, Judge William Young observed that the government issued directives blocking DEI support without even attempting to define DEI, rendering the policy arbitrary and capricious and therefore in violation of the Administrative Procedure Act. He invalidated the policy and ordered the funding restored.
The ruling ultimately reached the Supreme Court, which handed down a decision in which a fractured majority agreed on only one point: Judge Young’s District Court was not the proper forum to decide disputes over federal funding. Accordingly, restoring the money from the cancelled grants would need to be pursued through a separate case in a different court.
Importantly, that left the rest of the decision in place. Young’s finding that the administration’s anti-DEI, anti-climate and similar policies were unlawful and therefore void was upheld.
Restoring reviews
That has significant implications for the second part of the original suit, which concerned applications that had not yet been funded and were blocked from consideration by the Trump Administration policy. With that policy voided, there was no lawful basis for the National Institutes of Health (NIH) to have failed to consider those submissions when they were filed. In the meantime, however, deadlines expired, funding pools were spent, and in some cases applicants no longer qualified as “new investigators” under the category they had applied in.
The proposed settlement effectively restarts the clock: the blocked applications will be evaluated for funding as if it were still early 2025. “Defendants stipulate and agree that the end of Federal Fiscal Year 2025 does not prevent Defendants from considering and/or awarding any of the Applications,” it states. Even if the Notice of Funding Opportunity has since been withdrawn, the grant applications will be sent for peer review.
