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    Federal Research-Related Litigation

    The AAMC is engaged in or closely following several lawsuits that involve issues of impact to the research mission of academic medicine, including National Institutes of Health (NIH) grant terminations and indirect cost rates. The current status of these cases and their impact on institutions are detailed on this page.

    On this page

    NIH Grant Terminations

    Overview of current state

    In the spring of 2025, several thousand NIH grants were terminated under the rationale that the awarded research was no longer a priority or policy of the NIH. Two related lawsuits in federal court resulted in a finding that these terminations, covering over 900 listed grants, were arbitrary and capricious and should be vacated. While the litigation continues, the NIH has taken steps to reinstate the impacted grants.

    Key cases and decisions:

    Summary of complaints

    These cases were filed on April 2 and April 4, 2025, in the U.S. District Court for the District of Massachusetts. In the original complaint, the plaintiffs stated that the government is “launching a reckless and illegal purge to stamp out NIH-funded research that addresses topics and populations that they disfavor. Plaintiffs, who are leading health research organizations and research scientists, bring this case because they have been harmed by Defendants’ unlawful grant terminations and midstream abandonment of grant application processes.” The similar cases were both heard by District Judge William Young were heard jointly but not formally consolidated.

    Major events

    • April 17 and 28: The AAMC led amicus briefs in support of each case (Commonwealth of Mass. et al, PDF) (American Public Health Association, et al, PDF).
    • June 23: The court issued partial final judgements in the cases, finding that the agency directives that formed the rationale for the terminations constituted final agency action, were arbitrary and capricious, and were illegal and thus vacated. As a result, the grants at issue (which were identified by the plaintiffs) are being reinstated by the NIH. The federal government filed a motion for a stay in the District Court, which was denied. (Commonwealth of Mass. et al. list of grants, PDF) (American Public Health Association, et al. list of grants, PDF.)
    • June 24: The federal government appealed both cases to the U.S. Court of Appeals for the First Circuit.
    • July 3: The government filed an emergency motion for an immediate stay, which was denied by the First Circuit. The court declined to rule on an emergency basis and requested that the parties submit briefs for full consideration of the legal issues.
    • July 18: The First Circuit denied in both cases the government’s motion for a stay pending appeal.
    • July 24: The government filed an application for a stay to the U.S. Supreme Court. A response from the original plaintiffs is due August 1.

    Other lawsuits addressing related issues

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    Facilities and Administrative (Indirect) Costs

    Overview of current state

    Between February and June of 2025, the government issued policies for four federal research agencies [the National Institutes of Health, the Department of Energy, the National Science Foundation, and the Department of Defense (PDF)] implementing an immediate indirect cost rate cap of 15% for federal grants. These policies disregarded the existing system of negotiated rates between academic institutions and the federal government, on which grantee institutions relied. Litigation immediately halted implementation of all four of these harmful policies, none of which are currently in effect. The AAMC is a member of the Joint Associations Group on Indirect Costs, a collaborative effort of national organizations to develop a new model to account for and fund the full costs of research. More information on the group and additional resources can be found at the AAMC Facilities and Administrative Costs page.

    Key cases and decisions:

    Summary of complaint

    Following a Feb. 7, 2025, notice from the NIH that announced “a standard indirect rate of 15% across all NIH grants for indirect costs in lieu of a separately negotiated rate for indirect costs in every grant,” the AAMC, with the American Association of Colleges of Pharmacy, the Association of Schools and Programs of Public Health, the Conference of Boston Teaching Hospitals, and Greater New York Hospital Association, brought a lawsuit arguing that the NIH notice was unlawful and would result in irreparable harm, leaving institutions no choice but to scale back research activities.

    The court ruled in favor of the AAMC and its co-plaintiffs, issuing a permanent injunction and preventing the NIH from implementing the notice. The government appealed the case to the U.S. Court of Appeals for the First Circuit, where the litigation currently stands. The NIH website indicates that the agency is currently issuing awards “using previously approved negotiated indirect cost rates.” The case was considered jointly in the U.S. District Court for the District of Massachusetts by Judge Angel Kelley, along with two separately filed related actions:

    Major events

    • Feb. 7: AAMC v. NIH was filed in the District Court for the District of Massachusetts.
    • Feb. 10: The court granted the AAMC’s request (PDF) for a nationwide temporary restraining order.
    • March 5: The court granted a preliminary injunction in favor of the AAMC.
    • April 4: The judge issued a final judgement and permanent injunction, stating that the NIH notice: (1) violated 45 C.F.R. § 75.414 and Section 224 of the Further Consolidated Appropriations Act, 2024, Public Law 118-47, (2) was arbitrary and capricious, (3) failed to follow notice-and-comment procedures, and (4) was impermissibly retroactive. The order instructed the government that it could not take any steps to implement, apply, or enforce the notice.
    • April 8: The federal government appealed the decision, and the case was referred to the First Circuit.

    Other lawsuits addressing related issues

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