A New Two-Step Dance: Supreme Court Decision Complicates Relief for Government Grant and Contract Terminations
Organizations challenging an agency’s termination of a grant or government contract based on an allegedly illegal government policy need to master a two-step dance, according to a recent U.S. Supreme Court decision. Under the Court’s highly fractured decision in National Institutes of Health v. American Public Health Association (No. 25A103), plaintiffs challenging both the terminations of their individual government grants or contracts and the policy on which the terminations were based must generally file separate suits in the U.S. Court of Federal Claims under the Tucker Act and in federal district court under the Administrative Procedure Act (“APA”). The new Tucker Act-APA two-step is complicated—indeed, Justice Jackson in dissent criticized it as a “labyrinth”—and may make it harder for litigants to obtain relief. Significantly, because the Court of Federal Claims generally lacks authority to provide equitable relief for contractual breaches, the Supreme Court...