On April 4, 2025, the United States Supreme Court issued a decision addressing where recipients of federal grants can challenge the termination of a grant and what relief is available. It is important to note that the court’s analysis was in the context of an emergent application, meaning the decision is a projection of what the final outcome of the matter will be, but is not based on the full merits of the case.
In Department of Education, et al. v. California, et al., the facts are as follows. The Teacher Quality Partnership (TQP) and Supporting Effective Educator Development (SEED) are federal grant programs implemented by the U.S. Department of Education (USDOE). The purpose of the grants is to award funds to assist in the recruiting and training of teachers for traditionally underserved schools.
On February 7, 2025, the USDOE issued the same letter to 104 recipients of the grants, terminating them because the recipients’ uses of the funds: 1) promote diversity, equity, and inclusion initiatives; 2) violate the purpose of federal civil rights law; 3) conflict with the USDOE’s policy of prioritizing merit, fairness, and excellence in education; 4) are not free from fraud, abuse, or duplication; or 5) otherwise fail to serve the best interests of the United States.
Eight states, including New Jersey, sought a temporary restraining order in the District Court of Massachusetts to prevent the USDOE from terminating the grants, pending litigation of the matter. The district court granted the restraining order, finding, among other things, that the USDOE’s termination of the grants was arbitrary and capricious because their justifications were “only conclusory” and not specific to any actions by the grant recipients.
In considering the USDOE’s request to vacate the district court’s restraining order, the United States Supreme Court’s decision hinged on jurisdiction. The district court believed it had jurisdiction to issue the restraining order because the states were seeking equitable relief (reinstatement of the grants). However, the court categorized the relief sought as a request to enforce a contract with the United States, for which money damages would be the remedy. Therefore, the court determined that the Tucker Act provided jurisdiction to the Court of Federal Claims and noted that the USDOE “is likely to succeed in showing the district court lacked jurisdiction to order the payment of money under the APA.”
The court’s decision appears to imply that recipients of federal grants cannot ask a district court to pause the termination of a federal grant, pending a final determination on whether the termination was appropriate, but can only seek to recover the money lost from the termination of the grant in the Court of Federal Claims. Stay tuned to future issues of SBN for further developments as this issue evolves.
For additional information about this matter, please contact Caitlin Pletcher in the NJSBA Legal and Labor Relations Department at (609) 278-5279, or consult your board attorney for specific legal advice.
