FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS AUG 21 2025 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
NEETA THAKUR, on behalf of themselves No. 25-4249 and all others similarly situated; KEN D.C. No. ALEX; NELL GREEN NYLEN; ROBERT 3:25-cv-04737-RFL HIRST; CHRISTINE PHILLIOU; JEDDA FOREMAN; ELI BERMAN; SUSAN HANDY, ORDER
Plaintiffs - Appellees,
v.
DONALD J. TRUMP, in his official capacity as President of the United States; UNITED STATES DEPARTMENT OF GOVERNMENT EFFICIENCY; AMY GLEASON, in her official capacity as Acting Administrator of the Department of Government Efficiency; NATIONAL SCIENCE FOUNDATION; BRIAN STONE, in his official capacity as Acting Director of the National Science Foundation; NATIONAL ENDOWMENT FOR THE HUMANITIES; MICHAEL MCDONALD, in his official capacity as Acting Chairman of the National Endowment for the Humanities; UNITED STATES ENVIRONMENTAL PROTECTION AGENCY; LEE ZELDIN, in his official capacity as Administrator of the U.S. Environmental Protection Agency; UNITED STATES DEPARTMENT OF AGRICULTURE; BROOKE ROLLINS, in her official capacity as Secretary of the U.S. Department of Agriculture; AMERICORPS, aka the Corporation for National and Community Service; JENNIFER BASTRESS TAHMASEBI, in her official capacity as Interim Agency Head of AmeriCorps; UNITED STATES DEPARTMENT OF DEFENSE; PETER HEGSETH, in his official capacity as Secretary of the U.S. Department of Defense; UNITED STATES DEPARTMENT OF EDUCATION; LINDA MCMAHON, in her official capacity as Secretary of the U.S. Department of Education; UNITED STATES DEPARTMENT OF ENERGY; CHRIS WRIGHT, in his official capacity as Secretary of Energy; UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; ROBERT F. KENNEDY, Jr., in his official capacity as Secretary of the U.S. Department of Health and Human Services; UNITED STATES CENTERS FOR DISEASE CONTROL; MATTHEW BUZZELLI, in his official capacity as Acting Director of the Centers for Disease Control; UNITED STATES FOOD AND DRUG ADMINISTRATION; MARTIN A. MAKARY, in his official capacity as Commissioner of the Food and Drug Administration; UNITED STATES NATIONAL INSTITUTES OF HEALTH; JAYANTA BHATTACHARYA, in his official capacity as Director of the National Institutes of Health; INSTITUTE OF MUSEUM AND LIBRARY SERVICES; KEITH SONDERLING, in his official capacity as Acting Director of the Institute of Museum and Library Services; UNITED STATES DEPARTMENT OF THE INTERIOR; DOUG BURGUM, in his
2 25-4249 official capacity as Secretary of the Interior; UNITED STATES DEPARTMENT OF STATE; MARCO RUBIO, in his official capacity as Secretary of the U.S. Department of State; UNITED STATES DEPARTMENT OF TRANSPORTATION; SEAN DUFFY, in his official capacity as Secretary for the U.S. Department of Transportation,
Defendants - Appellants.
Appeal from the United States District Court for the Northern District of California Rita F. Lin, District Judge, Presiding
Argued and Submitted July 31, 2025 San Francisco, California
Before: Richard A. Paez, Morgan B. Christen, and Roopali H. Desai, Circuit Judges.
CHRISTEN, Circuit Judge:
On June 23, 2025, the district court issued a class-wide preliminary
injunction ordering three government agencies to reinstate research grants the
agencies had terminated pursuant to certain Executive Orders. The government
appealed and moved for a partial stay pending appeal of the preliminary
injunction.1 We deny the government’s motion.
1 The government’s motion for partial stay requested relief by August 4, 2025, but did not invoke this court’s rule governing emergency motions. Fed. R. App. P. 27- 3. Instead, the government invoked Rule 27-1(3), which permits a movant to request relief by a date certain to avoid irreparable harm. Fed. R. App. P. 27-1(3).
3 25-4249 FACTUAL BACKGROUND
Plaintiffs are six researchers at the University of California (UC) who
applied for and received multi-year federal research grants from three agencies: the
Environmental Protection Agency (EPA), the National Science Foundation (NSF),
and the National Endowment for the Humanities (NEH).2 On appeal, the
government moves for a stay of the injunction only as it pertains to the research
grants awarded by EPA and NEH, so we limit our discussion to those two
agencies.3
In April 2025, EPA and NEH sent form letters to Plaintiffs informing them
that their grants were terminated. The EPA form letter states: “the award no longer
effectuates the program goals or agency priorities. The objectives of the award are
no longer consistent with EPA funding priorities.” The NEH form letter states:
“[y]our grant no longer effectuates the agency’s needs and priorities,” and informs
The motion did not explain the government’s need for a ruling by August 4, 2025. At oral argument, however, the government stated that there was no specific reason that relief was requested by that date, other than the general urgency to avoid irreparable harm. 2 Plaintiffs have since amended their complaint to include additional plaintiffs who received funding from other agencies. 3 On August 19, 2025, the government filed a citation of supplemental authorities requesting that NSF join the arguments raised in the government’s motion to stay the injunction. See Fed. R. App. P. 28(j). Because the government has not moved for NSF to join that motion, we do not address the request here.
4 25-4249 the recipient that “NEH is repurposing its funding allocations in a new direction in
furtherance of the President’s agenda.”
Plaintiffs allege that these terminations resulted from agency implementation
of at least eight Executive Orders the President issued in January and February
2025: Executive Orders 14173, 14151, 14168, 14154, 14217, 14238, 14158, and
14222. Executive Orders 14173 and 14151 (the “DEI Executive Orders”) seek to
eliminate diversity, equity, and inclusion (“DEI”) and diversity, equity, inclusion,
and accessibility (“DEIA”) policies and initiatives from all aspects of the federal
government. More specifically, Executive Order No. 14173, Ending Illegal
Discrimination and Restoring Merit-Based Opportunity, states that “critical and
influential institutions of American society,” including the federal government and
institutions of higher education, “have adopted and actively use dangerous,
demeaning, and immoral race- and sex-based preferences under the guise of so-
called ‘diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and
accessibility’ (DEIA) that can violate the civil-rights laws of this Nation.” 90 Fed.
Reg. 8633, 8633 (Jan. 21, 2025). This Executive Order directs the Office of
Management and Budget (OMB) to “[e]xcise references to DEI and DEIA
principles under whatever name they may appear,” including federal grants. Id. at
8634. Executive Order No. 14151, Ending Radical and Wasteful Government DEI
Programs and Preferencing, instructs “each agency, department, or commission
5 25-4249 head,” to provide the director of OMB with a list of all “[f]ederal grantees who
received [f]ederal funding to provide or advance DEI, DEIA, or ‘environmental
justice’ programs, services, or activities since January 20, 2021.” 90 Fed. Reg.
8339, 8339–40 (Jan. 20, 2025). This Executive Order directs agency heads to
assess the operational impact and cost of those specified grants and recommend
action. Id. at 8340. It expressly directs agency heads to “terminate . . . all . . .
‘equity-related’ grants.” Id. at 8339. Similarly, Executive Order No. 14168, titled
Defending Women from Gender Ideology Extremism and Restoring Biological
Truth to the Federal Government, directs that “federal funds shall not be used to
promote gender ideology.” 90 Fed. Reg. 8615, 8616 (Jan. 20, 2025).
The remaining Executive Orders reflect the various mechanisms through
which the administration seeks to refocus or reduce government spending,
including the establishment of the Department of Government Efficiency (DOGE).
For example, Executive Orders 14217, 14158, and 14222 instruct OMB and
federal agencies to work with DOGE to review existing grants and terminate those
considered unnecessary in an effort to reduce federal spending. 90 Fed. Reg.
10577, 10577 (Feb. 19, 2025); 90 Fed. Reg. 8441, 8441 (Jan. 20, 2025); 90 Fed.
Reg. 11095, 11095–96 (Feb. 26, 2025).
PROCEDURAL HISTORY
Plaintiffs filed suit on behalf of a proposed class of similarly situated UC
6 25-4249 researchers against sixteen agencies, alleging that the mass termination of grants
violated separation of powers, the First and Fifth Amendments of the Constitution,
and the Administrative Procedure Act (APA). Plaintiffs sought an order vacating
the grant terminations and a preliminary injunction enjoining the agencies from
giving effect to those terminations.
The district court granted Plaintiffs’ motion for a preliminary injunction and
provisionally certified two classes of UC researchers: (1) those whose research
grants were terminated by form letter without any grant-specific explanation (the
“Form Termination Class”); and (2) those whose research grants were terminated
because of the DEI Executive Orders (the “DEI Termination Class”). The court
concluded that the Form Termination Class was likely to succeed on its claim that
the terminations were arbitrary and capricious, and that the DEI Termination Class
was likely to succeed on its claims that the terminations violated the First
Amendment and were contrary to the agencies’ congressionally mandated
directives. The government appealed and moved for a partial stay of the district
court’s injunction.
ANALYSIS
We consider four factors when we decide whether to stay an injunction
pending appeal: (1) has the stay applicant made a strong showing that she is likely
to succeed on the merits; (2) will the applicant be irreparably injured absent a stay;
7 25-4249 (3) will issuance of the stay substantially injure the other parties interested in the
proceeding; and (4) where the public interest lies. Nken v. Holder, 556 U.S. 418,
434 (2009). The party seeking a stay pending appeal—here, the government—
bears the burden of establishing that these factors favor a stay. See id. at 433–34.
The government’s motion challenges the injunction only as it applies to the EPA
and NEH grants.
I. Likelihood of success on the merits
The government’s motion renews the arguments it made before the district
court that: (1) the district court lacks jurisdiction; (2) at least some Plaintiffs lack
standing; and (3) Plaintiffs are not likely to succeed on the merits of their claims.
A. Jurisdiction
The government first argues that the Tucker Act precludes district court
jurisdiction over the Form Termination Class’s APA claim. We disagree.
The Tucker Act gives the Court of Federal Claims jurisdiction “to render
judgment upon any claim against the United States founded . . . upon any express
or implied contract with the United States.” 28 U.S.C. § 1491(a)(1). Because this
statute “grants consent to suit” and “impliedly forbids” declaratory and injunctive
relief, it precludes bringing contract claims against the United States in federal
district court pursuant to the APA’s waiver of sovereign immunity. 5 U.S.C. § 702.
See Tucson Airport Auth. v. Gen. Dynamics Corp., 136 F.3d 641, 645–46 (9th Cir.
8 25-4249 1998). In other words, for contract claims against the United States seeking more
than $10,000, the Tucker Act confers exclusive jurisdiction on the Court of Federal
Claims.4 Id.
The Tucker Act “‘impliedly forbid[s]’ an APA action seeking injunctive and
declaratory relief only if that action is a ‘disguised’ breach-of-contract claim.”
United Aeronautical Corp. v. U.S. Air Force, 80 F.4th 1017, 1026 (9th Cir. 2023)
(quoting Megapulse, Inc. v. Lewis, 672 F.2d 959, 968 (D.C. Cir. 1982)). To
determine whether a claim is a disguised breach-of-contract claim, we apply the
Megapulse test, which considers: (1) the source of the rights upon which the
plaintiff bases its claims and (2) the type of relief sought (or appropriate). N. Star
Alaska v. United States, 14 F.3d 36, 37 (9th Cir. 1994). If the plaintiff’s rights and
remedies, as alleged, “are statutorily or constitutionally based, then district[] courts
have jurisdiction,” but if those rights and remedies “are contractually based then
only the Court of Federal Claims does.” United Aeronautical, 80 F.4th at 1026
(emphasis in original).
Beginning with “the source of the rights upon which the plaintiff bases its
claims,” id., Plaintiffs contend that the form termination notices, which did not
4 Pursuant to the Little Tucker Act, district courts have “concurrent jurisdiction with the claims court for actions not exceeding $10,000.” N. Star Alaska v. United States, 9 F.3d 1430, 1432 (9th Cir. 1993) (en banc) (per curiam) (citing 28 U.S.C. § 1346(a)(2)).
9 25-4249 state any reason specific to the recipient for termination of their grants, violated
their right to be free from arbitrary and capricious agency action. See 5 U.S.C. §
706(2)(A). The source of that right is statutory, and it “existed prior to and apart
from rights created under the contract.” Crowley Gov’t Servs., Inc. v. Gen. Servs.
Admin., 38 F.4th 1099, 1107 (D.C. Cir. 2022) (citation modified). Plaintiffs’ APA
claim is not premised on any rights derived from their grants or any purported
contract and thus resolving the claim does not require analyzing the terms of any
grant or contract. Rather, Plaintiffs’ APA argument is that the agencies, by sending
form termination notices, failed to provide a reasoned explanation for their actions.
See § 706(2)(A); FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).
Contractual rights are not at issue.
As for the “type of relief sought,” United Aeronautical, 80 F.4th at 1026,
Plaintiffs sought—and the district court awarded—vacatur of the termination
notices and reinstatement of the terminated grants. These well-established APA
remedies are not contractual in nature. See, e.g., Mont. Wildlife Fed’n v. Haaland,
127 F.4th 1, 50 (9th Cir. 2025) (noting that “vacatur and remand is the default
remedy under the APA”).
The government insists that Plaintiffs seek specific performance pursuant to
the grant agreements, an “explicitly contractual remedy.” See Crowley, 38 F.4th at
10 25-4249 1107. Thus, the government asserts that this part of the Megapulse test “boils
down to whether [Plaintiffs] effectively seek[] to attain monetary damages.” Id.
Defendants overlook that even if Plaintiffs’ requested relief has the eventual
effect of requiring the government to make payments pursuant to the grants, “[t]he
fact that a judicial remedy may require one party to pay money to another is not a
sufficient reason to characterize the relief as ‘money damages.’” Bowen v.
Massachusetts, 487 U.S. 879, 893 (1988); see also Dep’t of Educ. v. California,
145 S. Ct. 966, 968 (2025) (per curiam). Plaintiffs’ request to effectively undo the
grant terminations and return Plaintiffs to the status quo does not seek performance
of a contractual obligation. Cf. Pauma Band of Luiseno Mission Indians of Pauma
& Yuima Rsrv. v. California, 813 F.3d 1155, 1167 (9th Cir. 2015) (noting that “one
cannot specifically perform something that is not a term in the contract”). Instead,
Plaintiffs’ APA claim seeks to ensure that the agencies’ course of conduct complies
with federal law. See Bowen, 487 U.S. at 905. At this preliminary stage, it appears
that any payments due under the grants are “a mere by-product” of the district
court’s “primary function of reviewing” the government’s interpretation of its
statutory obligations pursuant to the APA. Id. at 910.
Department of Education v. California, upon which the government relies,
does not compel a contrary conclusion. In Department of Education, the Supreme
Court addressed a claim brought pursuant to the APA “to enforce a contractual
11 25-4249 obligation to pay money.” 145 S. Ct. at 968. The claim fell within the scope of the
Tucker Act because the temporary restraining order required “the Government to
pay out past-due grant obligations and to continue paying obligations as they
accrue[d].” Id. Here, by contrast, Plaintiffs’ requested relief does not “order [any]
amount to be paid,” nor does it seek a “finding that the Federal Government owed
[Plaintiffs] . . . any amount of money.” Bowen, 487 U.S. at 909–10. Instead,
Plaintiffs request that the district court, based on the government’s violation of the
APA, “vacate the grant terminations and preliminarily enjoin Defendants from
giving effect to those terminations.” Such relief is not based on any conditions or
obligations under the grant agreements. Indeed, the record does not reflect that
Plaintiffs are even parties to the grant agreements. Accordingly, we conclude the
government has not demonstrated that it is likely to succeed in showing that the
district court lacked jurisdiction to review the APA claims raised by the Form
Termination Class.
B. Standing
The government argues that at least some members of the Form Termination
Class lack Article III standing because they have not demonstrated a cognizable
injury in fact. Again, at this stage, the government has not made a strong showing
that Plaintiffs lack standing.
12 25-4249 To establish injury in fact, a plaintiff must show “that he suffered an injury
in fact that is concrete, particularized, and actual or imminent.” TransUnion LLC
v. Ramirez, 594 U.S. 413, 423 (2021). Where the class seeks injunctive relief, the
court “consider[s] only whether at least one named plaintiff satisfies the standing
requirements for injunctive relief.” Bates v. United Parcel Serv., Inc., 511 F.3d
974, 985 (9th Cir. 2007) (en banc).
Here, the government suggests that the class representatives have not been
injured by every challenged grant termination. But “[a]ny issues regarding the
relationship between the class representative and the passive class members—such
as dissimilarity in injuries suffered—are relevant only to class certification, not to
standing.” B.K. ex rel. Tinsley v. Snyder, 922 F.3d 957, 967 (9th Cir. 2019)
(citation omitted); see also Ellis v. Costco Wholesale Corp., 657 F.3d 970, 979 (9th
Cir. 2011).
The government separately argues that not every member of the Form
Termination Class has standing because class members will only suffer injury to
the extent they are unable to replace any terminated federal funding. As an initial
matter, because standing in a Rule 23(b)(2) class is assessed at the time the
complaint was filed, any future mitigation of Plaintiffs’ injuries is immaterial to the
standing analysis. Slayman v. FedEx Ground Package Sys., Inc., 765 F.3d 1033,
1047 (9th Cir. 2014). Moreover, the government focuses solely on the prospect of
13 25-4249 some class members obtaining some replacement funding, and overlooks that the
class representatives—e.g., Dr. Christine Philliou, Dr. Neeta Thakur, and Dr. Nell
Green Nylen—also allege injury in the form of opportunity costs associated with
seeking alternative funding, disruptions to projects, and reputational harms
associated with grant terminations.
Accordingly, we conclude the government has not demonstrated that it is
likely to succeed in showing that the class representatives of the Form Termination
Class lack Article III standing.
C. Plaintiffs’ likelihood of success
i. Form Termination Class
The government argues that the Form Termination Class is not likely to
succeed on the merits of its APA claim because the agencies’ decision to
discontinue previously funded grants is committed to agency discretion and is not
reviewable. The APA creates a “basic presumption of judicial review,” rebutted
only if the relevant statute precludes review or if the action is “committed to
agency discretion by law.” Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 586
U.S. 9, 22–23 (2018) (citations omitted); 5 U.S.C. § 701(a)(2). An action is
“committed to agency discretion by law” only in “those rare circumstances where
the relevant statute is drawn so that a court would have no meaningful standard
against which to judge the agency’s exercise of discretion.” Weyerhaeuser, 586
14 25-4249 U.S. at 23 (quoting Lincoln v. Vigil, 508 U.S. 182, 191 (1993)). “Even where
statutory language grants an agency unfettered discretion, its decision may
nonetheless be reviewed if regulations or agency practice provide a meaningful
standard by which this court may review its exercise of discretion.” Trout
Unlimited v. Pirzadeh, 1 F.4th 738, 751 (9th Cir. 2021) (quoting ASSE Int’l, Inc. v.
Kerry, 803 F.3d 1059, 1069 (9th Cir. 2015)). Here, 2 C.F.R. § 200.340(a) provides
uniform administrative requirements for the termination of federal grants,
including those an agency terminates because they “no longer
effectuat[e] . . . agency priorities.” § 200.340(a)(4). Sections 200.340, 200.341,
200.343, and 200.345 outline the requirements for termination, the notification
requirements when grants are terminated, and the effects of suspension and
termination of grants. These regulations provide a meaningful standard by which
courts may review the agencies’ exercise of discretion. We therefore reject the
government’s argument that the terminations are not reviewable and consider
whether the form termination letters were arbitrary and capricious. 5 U.S.C.
§ 706(2)(A).
Agencies are “free to change their existing policies as long as they provide a
reasoned explanation for the change, display awareness that they are changing
position, and consider serious reliance interests.” FDA v. Wages & White Lion
Invs., LLC, 145 S. Ct. 898, 917 (2025) (citation modified). The EPA form letter
15 25-4249 provides three disjunctive reasons for termination: (1) failure to exhibit “merit,
fairness, and excellence;” (2) “fraud, abuse, waste, and duplication;” and (3) failure
to “serve the best interests of the United States.” The letter does not explain which
rationale applies to the recipient of the form letter. Nor does it explain how
research projects that were selected to receive federal funding after a competitive
process now fail to exhibit merit, or describe what the research duplicates, or
provide any specific evidence supporting the allegation that any researcher acted
abusively, fraudulently, or wastefully. The NEH form letter states only that the
grant “no longer effectuates the agency’s needs and priorities and conditions of the
Grant Agreement,” and merely recites § 200.340.
The rest of the record also provides little explanation for the termination
decisions. Michael McDonald, Acting Chairman of NEH, stated in his declaration
that NEH selected grants for termination by identifying grants that were
purportedly directed at “environmental justice” and “diversity, equity, and
inclusion,” among other terms, and categorizing grants as “High, Medium, Low, or
No Connection” to the Executive Orders. Daniel Coogan, Deputy Assistant
Administrator for Infrastructure and Extramural Resources in the EPA’s Office of
Mission Support, stated in his declaration that EPA’s grant review process
occurred “independent from any Executive Order,” but the district court noted that
this assertion was inconsistent with the EPA’s public announcements. For
16 25-4249 example, on February 14, 2025, the EPA stated that it “has worked diligently to
implement President Trump’s executive orders, including the ‘Ending Radical and
Wasteful Government DEIA Programs and Preferencing,’ as well as subsequent
associated implementation memos.” EPA Administrator Lee Zeldin Cancels Nine
More Contracts, Saving Nearly $60 Million, EPA (Feb. 14, 2025),
https://perma.cc/XJH9-8JKB.5 On this limited record, we agree with the district
court that the recipients of the form letter and the public were left to guess at the
reasons for these terminations.
The government conceded at oral argument that there is no record evidence
that either agency considered the researchers’ reliance interests. Nor is there
evidence that the agencies considered the hundreds of millions of dollars taxpayers
have invested in the grant projects that would be lost if the grants are terminated.
See, e.g., DHS v. Regents of the Univ. of Cal., 591 U.S. 1, 33 (2020) (requiring an
agency that is “not writing on a blank slate” to “assess whether there were reliance
interests, determine whether they were significant, and weigh any such interests
against competing policy concerns”). In one of many examples, Dr. Neeta
Thakur’s $1.3 million grant to study the impact of wildfire smoke on California
5 Additionally, on March 10, 2025, the EPA announced that it “cancelled grants and contracts related to DEI and environmental justice.” EPA Administrator Lee Zeldin Cancels 400+ Grants in 4th Round of Cuts with DOGE, Saving Americans More than $1.7B, EPA (Mar. 10, 2025), https://perma.cc/3P2M-6PUY.
17 25-4249 communities over the course of three years was terminated seven months before
the study’s projected end. As a result, the research that taxpayers have already
funded will not be published. The government points to no evidence that EPA
considered those facts when it terminated Dr. Thakur’s research grant.
Because the letters left the recipients guessing as to the agencies’ rationale,
and there is no evidence that the agencies considered reliance interests before
terminating the grants, the government has not “made a strong showing” that it is
likely to succeed on the merits of its argument that the district court abused its
discretion when it concluded that the termination of grants by form letters was
likely arbitrary and capricious. Nken, 556 U.S. at 426.
ii. DEI Termination Class
The government argues that the district court abused its discretion when it
concluded that the DEI Termination Class was likely to succeed on the merits of its
First Amendment claim that the agencies unlawfully terminated their grants based
on their viewpoint. The government relies on the significant flexibility it is
afforded when acting as a patron to subsidize speech, as opposed to when it
regulates speech as a sovereign. The government argues that it “can, without
violating the Constitution, selectively fund a program to encourage certain
activities it believes to be in the public interest” to the exclusion of other activities.
Rust v. Sullivan, 500 U.S. 173, 193 (1991); Regan v. Tax’n With Representation of
18 25-4249 Wash., 461 U.S. 540, 549–50 (1983). In support, the government relies on
National Endowment for the Arts v. Finley to argue that there is a First Amendment
violation only when the government uses its sovereign power to “drive ‘certain
ideas or viewpoints from the marketplace’”—not when the government simply
ceases funding those ideas or viewpoints. 524 U.S. 569, 587 (1998) (citation
omitted).
In our view, the government misreads Finley. There, Congress amended the
National Endowment for the Arts’s (NEA) reauthorization bill to require that grant
applications be evaluated by “taking into consideration general standards of
decency and respect for the diverse beliefs and values of the American public.” Id.
at 572 (citation omitted). The Plaintiffs, performance artists who applied for
grants, brought a facial challenge to the amendment and argued that it violated
their First Amendment rights. Id. at 577, 580. Importantly, the Plaintiffs “d[id]
not allege discrimination in any particular funding decision,” and therefore, the
Supreme Court “ha[d] no occasion . . . to address an as-applied challenge in a
situation where the denial of a grant may be shown to be the product of invidious
viewpoint discrimination.” Id. at 586–87. The Court explained that “[i]f the NEA
were to leverage its power to award subsidies on the basis of subjective criteria
into a penalty on disfavored viewpoints, then [it] would confront a different case.”
Id. at 587. The Court went on to emphasize that “even in the provision of
19 25-4249 subsidies, the Government may not ‘aim at the suppression of dangerous ideas.’”
Id. (emphasis added) (citation modified) (quoting Regan, 461 U.S. at 550).
Contrary to the government’s argument, this case does not appear to be one
in which an agency decided not to “fund a program.” See Rust, 500 U.S. at 193.
Rather, it is one in which more than a dozen agencies selected particular grants for
termination regardless of the programs through which they were funded, based on
their connection to DEI, DEIA, and environmental justice. Thus, we “confront a
different case” than Finley (where plaintiffs brought a facial challenge to
Congress’s mandate that NEA consider standards of decency in awarding grants),
Rust (where plaintiffs brought a facial challenge to HHS regulations interpreting
Title X’s prohibition on funding for abortion services), and Regan (where plaintiffs
brought a facial challenge to the IRS’s requirement that organizations refrain from
lobbying to qualify for § 501(c)(3) tax-exempt status). Plaintiffs’ as-applied
challenge is closer to Rosenberger v. Rector and Visitors of University of Virginia,
515 U.S. 819 (1995). In that case, the University of Virginia made funds available
to cover printing costs for student newspapers. Id. at 843. The University denied a
Christian newspaper’s application for funds because the newspaper engaged in
“religious activity” by “promot[ing] or manifest[ing] a particular belie[f] in or
about a deity or an ultimate reality,” conduct prohibited by the University’s
guidelines for student activity funding. Id. at 827. The Court concluded that the
20 25-4249 University “d[id] not exclude religion as a subject matter” but “select[ed] for
disfavored treatment those student journalistic efforts with religious editorial
viewpoints.” Id. at 831, 833, 835 (“[W]hen the State is the speaker, it may make
content-based choices,” but “[h]aving offered to pay the third-party contractors on
behalf of private speakers who convey their own messages, the [State] may not
silence the expression of selected viewpoints.”).
Here, the record at this stage shows that the agencies selected grants for
termination based on viewpoint. Indeed, the government does not meaningfully
dispute that DEI, DEIA, and environmental justice are viewpoints. The agencies,
the termination letters, and the Executive Orders do not define these terms, but
dictionary definitions demonstrate that DEI, DEIA, and environmental justice are
not merely neutral topics. Instead, the terms convey the viewpoint that the
exclusion of historically disadvantaged groups is undesirable. diversity, equity and
inclusion, Merriam-Webster, https://perma.cc/84ZW-7JSR (last visited Aug. 12,
2025) (“a set of values and related policies and practices focused on establishing a
group culture of equitable and inclusive treatment and on attracting and retaining a
diverse group of participants, including people who have historically been
excluded or discriminated against”); diversity, equity and inclusion, Cambridge
English Dictionary, https://perma.cc/M2GS-L4UT (last visited Aug. 12, 2025)
(“the idea that all people should have equal rights and treatment and be welcomed
21 25-4249 and included, so that they do not experience any disadvantage because of
belonging to a particular group, and that each person should be given the same
opportunities as others according to their needs”); environmental justice,
Cambridge English Dictionary, https://perma.cc/V5CK-Z2GP (last visited Aug. 12,
2025) (“the idea that all groups of people deserve to live in a clean and safe
environment”).
We are bound by the bedrock principle that the government cannot “leverage
its power to award subsidies on the basis of subjective criteria into a penalty on
disfavored viewpoints” or “aim at the suppression of dangerous ideas” in the
provision of subsidies. Finley, 524 U.S. at 587 (citation modified) (quoting Regan,
461 U.S. at 550). The government does not dispute that it terminated the subject
grants because they promoted DEI, DEIA, or environmental justice. We therefore
conclude that the government has failed to make a strong showing that the district
court abused its discretion when it concluded that the DEI Termination Class was
likely to succeed on the merits of its First Amendment claim.
The agencies’ implementation of the DEI Executive Orders reinforces our
conclusion. McDonald’s declaration states that NEH staff reviewed open grants in
light of the DEI Executive Orders, and NEH’s “policy for selecting grants for
termination at NEH focused first on identifying open grants that focused on or
promoted (in whole or in part) ‘environmental justice,’ ‘diversity, equity, and
22 25-4249 inclusion,’ or ‘diversity, equity, inclusion and accessibility,’ and ‘gender
ideology.’” NEH created and used spreadsheets that identified grants as “either
‘High, Medium, Low, or No Connection’ in terms of the Executive Orders.”
Coogan’s declaration states that the grant termination process “began by looking at
grant titles and project descriptions.” Although his declaration states that the EPA
reviewed and terminated grants “independent from” the Executive Orders, the
EPA’s public announcements state the opposite. For example, on March 10, 2025,
the EPA announced that it “cancelled grants and contracts related to DEI and
environmental justice.” EPA Administrator Lee Zeldin Cancels 400+ Grants in
4th Round of Cuts with DOGE, Saving Americans More than $1.7B, EPA (Mar.
10, 2025), https://perma.cc/3P2M-6PUY
Because the current record suggests that the government aimed at the
suppression of speech that views DEI, DEIA, and environmental justice favorably,
the government has not shown that it is likely to succeed on the merits of its claim
that the district court abused its discretion when it concluded the agencies likely
terminated the grants based on viewpoint.6
6 Because we conclude the government failed to show that it was likely to succeed on the merits of its claim that the district court abused its discretion when it concluded that Plaintiffs were likely to succeed on their First Amendment claim, we do not reach the government’s argument challenging the class’s claim that the terminations were contrary to NEH’s enabling statute.
23 25-4249 II. Remaining Nken factors
The government argues that the preliminary injunction risks irreparable
harm to the government and the public interest by: (1) interfering with the
President’s ability to carry out core Executive Branch policies, and (2) compelling
the government to disburse funds that it cannot recover.7
The government first argues the district court’s preliminary injunction will
interfere with the Executive Branch’s chosen policy agenda. This argument rests
on the assumption that the government’s conduct is lawful. But the government
has not made a strong showing of a likelihood of success on the merits, and the
government “cannot suffer harm from an injunction that merely ends an unlawful
practice.” Rodriguez v. Robbins, 715 F.3d 1127, 1145 (9th Cir. 2013). Moreover,
we have rejected the assertion that “the irreparable harm standard is satisfied by the
fact of executive action alone.” Doe #1 v. Trump, 957 F.3d 1050, 1059 (9th Cir.
2020). The government’s first claimed harm is not irreparable because the
government “may yet pursue and vindicate its interests in the full course of this
litigation.” Washington v. Trump, 847 F.3d 1151, 1168 (9th Cir. 2017) (per
curiam).
7 To the extent the government argues that the third and fourth factors merge, that is so when the government is the party opposing a stay, rather than the party seeking one. See Nken, 556 U.S. at 435.
24 25-4249 The government also contends that it will be irreparably harmed because the
district court’s preliminary injunction requires it to disburse money it may never
recover. For support, the government principally relies on Department of
Education, where the plaintiffs did “not refute[] the Government’s representation
that it [was] unlikely to recover the grant funds once they [were] disbursed.” 145
S. Ct. at 968–69.
Even if the government may be unable to recover at least some of the funds
it disburses pursuant to the grants and may therefore suffer some degree of
irreparable harm, see id., the remaining equitable factors do not favor the
government.8 Unlike in Department of Education, where the plaintiffs conceded
that they could “keep their programs running” in the absence of grant funding, id.,
Plaintiffs have established that the termination of grants will result in layoffs,
interruptions to graduate programs, destruction of research projects, and injury to
Plaintiffs’ professional reputations. Further, if research projects are lost due to
grant funding being halted midstream, the public will obtain no benefit from
research in which substantial funds have already been invested—a significant
8 In Department of Education, the Supreme Court relied on the government’s factual representation—reflected in a declaration submitted in the district court— that funds disbursed pursuant to the grants at issue would be difficult to recover. 145 S. Ct. at 969. The government submitted no comparable evidence here. Further, unlike in Department of Education, Plaintiffs here contend—and the Government does not meaningfully contest—that there are “existing mechanisms to recoup funds.”
25 25-4249 waste of taxpayer dollars. Thus, Plaintiffs have shown that entry of a stay will
result in considerable harm to Plaintiffs and the public.
The government failed to meet its burden to show that the remaining Nken
factors favor entry of a stay pending appeal.
CONCLUSION
The government’s motion for partial stay pending appeal (Dkt. No. 7) is
DENIED.
26 25-4249