The U.S. Court of Appeals for the Ninth Circuit has partially rejected the federal government’s effort to halt a district court order requiring the reinstatement of terminated research grants, ruling that plaintiffs are likely to succeed on claims that the Trump administration unlawfully cut funding based on viewpoint. The decision allows a preliminary injunction to remain in effect for grants terminated due to their association with diversity, equity, inclusion, and environmental justice initiatives, while granting a limited stay for a separate class of claims tied to contractual disputes.
The ruling in Thakur v. Trump marks a significant judicial check on executive authority over federal research funding and underscores constitutional limits on the government’s ability to penalize speech through grant terminations.
Researchers Challenge Mass Grant Terminations
The case was brought by university researchers whose multi-year federal grants were abruptly terminated in early 2025 by agencies including the Environmental Protection Agency (EPA) and the National Endowment for the Humanities (NEH). The termination notices were issued through standardized form letters stating that the grants no longer aligned with agency priorities or the President’s agenda.
Plaintiffs alleged that the terminations were not individualized funding decisions, but rather the direct result of a series of Executive Orders issued by President Donald Trump, which targeted diversity, equity, inclusion, accessibility, gender ideology, and environmental justice programs across the federal government. According to the researchers, the agencies implemented these orders by systematically identifying and terminating grants based on their perceived ideological content.
District Court Issues Class-Wide Injunction
The district court certified two provisional classes of plaintiffs. The first, known as the “Form Termination Class,” included researchers whose grants were canceled through generic notices without grant-specific reasoning. The second, the “DEI Termination Class,” consisted of researchers whose grants were terminated because of their association with DEI or environmental justice principles.
The district court issued a preliminary injunction ordering agencies to reinstate the terminated grants. It found that the Form Termination Class was likely to succeed on claims that the terminations were arbitrary and capricious under the Administrative Procedure Act, and that the DEI Termination Class was likely to prevail on First Amendment claims alleging unlawful viewpoint discrimination.
The government appealed and sought a partial stay of the injunction pending appeal.
Ninth Circuit Draws a Constitutional Line
Applying the traditional four-factor test for a stay pending appeal, the Ninth Circuit split its decision along the same class lines adopted by the district court.
For the Form Termination Class, the court agreed with the government that the claims were likely barred by the Tucker Act, which grants exclusive jurisdiction over contract-based monetary claims against the United States to the Court of Federal Claims. Because the relief ordered—vacating termination notices and reinstating grants—would effectively enforce payment obligations under federal contracts, the panel concluded that the district court likely lacked jurisdiction over those claims. As a result, the court granted a stay of the injunction for that class.
The court reached a different conclusion for the DEI Termination Class. It rejected the government’s argument that the administration had unfettered discretion to terminate grants based on policy priorities. Instead, the panel emphasized that while the government may choose which programs to fund, it may not use its spending power to suppress disfavored viewpoints.
The record, the court found, showed that agencies specifically targeted grants because they promoted DEI, DEIA, or environmental justice—concepts the panel concluded are inherently viewpoint-based. Because Supreme Court precedent forbids the government from penalizing speech through viewpoint discrimination even in the context of subsidies, the court held that the government had failed to show a likelihood of success on the merits of its First Amendment defense.
Injunction Largely Remains in Place
The Ninth Circuit also rejected the government’s claim that enforcing the injunction would irreparably harm executive policymaking authority. The court reiterated that the government cannot claim harm from being ordered to stop conduct that is likely unconstitutional.
While acknowledging that unrecoverable grant payments could constitute irreparable financial harm, the court concluded that this concern applied only to the Form Termination Class. For the DEI Termination Class, the public interest favored preserving constitutional protections against viewpoint discrimination.
Accordingly, the court granted the government’s motion for a stay only as to the Form Termination Class and denied it as to the DEI Termination Class, allowing the core of the district court’s injunction to remain in effect.