Supreme Court Archives - Government Contracts Navigator

Supreme Court Weighs in for a Second Time on Jurisdiction over Grant Termination Cases

Dominique L. Casimir and Sara N. Gerber ●

The Supreme Court recently ruled for the second time that federal district courts likely lack jurisdiction under the Administrative Procedure Act (“APA”) to hear challenges to terminations of federal grants. The first such ruling came in April of this year, when the Court granted an emergency stay in California v. Department of Education. On August 21, 2025, the Supreme Court issued another emergency stay, in NIH v. American Public Health Association, reaffirming the view that challenges to grant terminations are, in substance, breach of contract actions for money damages that belong in the Court of Federal Claims under the Tucker Act.

Since California, several lower courts have nevertheless asserted jurisdiction over grantee lawsuits seeking reinstatement of terminated grants, often distinguishing California on procedural or factual grounds. We have previously written about some of those cases (including Massachusetts v. Kennedy, which was later consolidated with NIH). Although the Supreme Court’s decision in NIH is an interim order, the jurisdictional question may now be functionally settled, particularly given Justice Gorsuch’s admonishment to lower courts that even if they “sometimes disagree with this Court’s decisions…they are never free to defy them. When this court issues a decision, it constitutes a precedent that commands respect in lower courts.” Following NIH, we expect terminated grantees will largely be forced into the Court of Federal Claims, which generally does not have authority under the Tucker Act to grant the equitable relief—reinstatement of grants—that many of them are seeking.

Supreme Court Lifts Restraining Order on Grant Terminations

Dominique L. Casimir and Sara N. Gerber ●

The Supreme Court recently issued a ruling with significant impacts for federal contractors and grantees looking to challenge terminations of their contracts and grants in U.S. district courts. Terminated contractors and grantees may strongly prefer to challenge terminations in the district courts rather than in the Court of Federal Claims, because the Court of Federal Claims does not have authority to grant equitable relief to do things like restore funding or enjoin terminations, and the available grounds for challenging contract and grant terminations in the Court of Federal Claims are significantly limited.

In February 2025, the Department of Education (“DOE”) terminated $600 million in grants for teacher training on the grounds that the training included diversity, equity, and inclusion (“DEI”) concepts and thus no longer effectuated DOE priorities. The grantees challenged these terminations in a lawsuit filed in the U.S. District Court for the District of Massachusetts. The District Court issued a Temporary Restraining Order (“TRO”) directing DOE to restore the terminated grant funding. DOE asked the First Circuit to stay the TRO pending appeal, which the First Circuit denied. DOE then filed an emergency appeal to the U.S. Supreme Court, where a majority of the justices sided with DOE.

Conflicting State and Federal Requirements for Government Contractors . . . Again

Merle M. DeLancey, Jr. ●

In 2021, federal government prime contractors and subcontractors found themselves in a difficult situation with respect to COVID vaccination requirements. More than a dozen states enacted laws prohibiting companies from requiring their employees to be COVID-19 vaccinated or even show proof of COVID-19 vaccination as a condition of employment. At the same time, federal government contracts were subject to mandatory employee vaccination requirements in the FAR and DFARS. (i.e., FAR 52.223-99 Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors (OCT 2021) (DEVIATION) and DFARS 252.223-7999 Ensuring Adequate COVID-19 Safety Protocols for Federal Contractors (Deviation 2021-O0009) (OCT 2021). Luckily, the potential conflict was resolved, on May 9, 2023, when President Biden signed Executive Order (“EO”) 14099, Moving Beyond COVID–19 Vaccination Requirements for Federal Workers, which revoked EO 14042, Ensuring Adequate COVID Safety Protocols for Federal Contractors. EO 14099 directed agencies to rescind any policies that were adopted to implement EO 14042. Thus, the potential conflict between inconsistent federal and state laws concerning COVID-19 vaccinations was mooted.

A new conflict between state and federal procurement requirements may be brewing for federal prime contractors and subcontractors concerning race-based employment preferences and diversity policies after the Supreme Court decision in Students for Fair Admissions v. Harvard and Students for Fair Admissions v. UNC.

The Once and Future King: SCOTUS Maintains the Government May Intervene in Previously Declined FCA Matters to Seek Dismissal

Luke W. Meier and Carolyn R. Cody-Jones ●

Last Friday, June 16, 2023, the U.S. Supreme Court (“SCOTUS”) ruled that the federal government may seek to dismiss a qui tam False Claims Act (“FCA”) suit over the relator’s objection, even where it previously declined to intervene in the case and the relator invested in moving the case forward. The 8-1 decision by the high Court firmly established the broad authority for the government to intervene in such circumstances under a Rule 41(a) “reasonableness” standard, explaining that the key reason for this is that “the government’s interest in [an FCA] suit … is the predominant one” based on the “FCA’s government-centered purposes.” United States Ex Rel. Polansky v. Executive Health Resources, Inc., Slip. Op. No. 21–1052, at 12, 599 U.S. ____ (2023).

When an FCA suit is filed, the government has 60 days (which is typically extended) under the FCA statute to decide whether to decline or intervene in the case. See 31 U.S.C. § 3730. If declined, the relator may proceed with the litigation without the government’s support. The statute also allows the government to intervene “at a later date upon a showing of good cause.” § 3730(c)(3). As of 2022, publicly available statistics show that the government has elected to intervene only in about 40 percent of all qui tam FCA matters subject to judgment or settlement.

What Is “Knowing” under the FCA? Supreme Court to Consider Impact of Ambiguous Regulations

Jennifer A. Short, Bridget Mayer Briggs, and Tjasse L. Fritz ●

A successful False Claims Act (“FCA”) claim must show that the defendant submitted a false claim or statement “knowingly.” The “knowing” element—the scienter prong—depends on whether the defendant actually knew that the claim or statement was incorrect, or recklessly disregarded the facts or legal requirements that rendered the claim “false.” But, of course, government regulations, contract terms, and grant requirements can be incredibly complex and difficult to understand. When the ground rules are unclear, how does a company “know” that its claims for payment may be false under the FCA?

What does the FCA say about “knowing”?

The FCA defines “knowing” as (1) having “actual knowledge of the information;” (2) acting “in deliberate ignorance of the truth or falsity of the information;” or (3) acting “in reckless disregard of the truth or falsity of the information.” 31 U.S.C. § 3729(b). A “specific intent to defraud” is not required for liability under the FCA.

Supreme Court Grants Cert to Resolve Circuit Split on FCA Statute of Limitations

Sara N. Gerber

The U.S. Supreme Court has granted a writ of certiorari to address a Circuit Court split concerning whether False Claims Act (“FCA”) relators may rely on the statute of limitations in 31 U.S.C. § 3731(b)(2)—a limitations period which is triggered by the government’s knowledge of the fraud—when the government does not intervene. The Supreme Court granted cert on November 16, 2018, to review the Eleventh Circuit’s decision in U.S. ex rel. Hunt v. Cochise Consultancy, Inc. The Eleventh Circuit reversed the Alabama District Court, reviving the relator’s complaint by giving the relator the benefit of the longer limitations period in § 3731(b)(2).

At the center of the matter is the interplay between the two limitations periods in the FCA after which a “civil action under section 3730” is time-barred: (1) “6 years after the date” of an alleged violation, see 31 U.S.C. § 3731(b)(1); or (2) “3 years after the date” when material facts “are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no more than 10 years after the date” of the alleged violation, see 31 U.S.C. § 3731(b)(2). The relator in Cochise Consultancy filed his claim more than six years after the alleged fraud occurred, but within three years of his disclosure of the fraud to FBI agents who had interviewed him about his role in a separate kickback scheme, to which he ultimately pled guilty and served time in federal prison. Continue reading “Supreme Court Grants Cert to Resolve Circuit Split on FCA Statute of Limitations”

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What does the FCA say about “knowing”?

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