Trump’s Bid to Remake Grant Process Stands to See Legal Hurdles

The Trump administration’s plan to more tightly control who gets federal grants is likely to face legal resistance from aspiring recipients worried the changes will hurt their ability to secure funds, grant specialists say.

The White House’s rule, if finalized as proposed May 28, would require senior political officials to approve every grant before the money can go out the door. It’s the latest evolution of the Trump administration’s effort, dating back to last year, to claw back grants and awards it says are part of a Biden-era “‘woke’ policy agenda that did not reflect the values of the vast majority of the American public.”

The proposal requires discretionary grants to “advance the president’s policy priorities,” a shift from the historical model in which grant decisions were made by career program officers. That would politicize grantmaking in ways not seen in recent memory, said Jules Barbati-Dajches, an analyst at the Center for Science and Democracy.

“The political party in power would have the leeway to fund, or not fund, the research that serves their president, rather than conducting research for the purposes of innovation, economic benefit, and the public good,” Barbati-Dajches said.

At least one broad effort to nip the proposal in the bud is already underway: the advocacy group Stand Up For Science is encouraging the public to submit comments urging the White House Office of Management and Budget to rescind the proposal.

If that doesn’t work and Congress doesn’t take its own action, Stand Up for Science plans to “step in with lawsuits,” said Colette Delawalla, the group’s founder and CEO.

“These comments lay the groundwork for legal action next, and they also signal to Congress that is not something that the public is OK about,” Delawalla said during a call with supporters June 2. “We recognize the importance of legal strategy, especially as we sort of play this out.”

Challenging Denials

Advocacy groups, universities, and private companies might also challenge denied grants by suing over each instance, because most agencies don’t offer an internal mechanism for challenging awards, said George Petel, a partner at Wiley Rein LLP.

But to be successful, a litigant would have to prove some type of clear malfeasance—for example, by showing that an agency technical expert’s judgment was overruled by a political appointee, leading to a decision to not grant an award, Petel said.

Making that case won’t be easy, he said, because “there isn’t a whole body of case law to figure out what a court might do.”

Traditionally, courts have been reluctant to weigh in on cases that turn on technical questions—like most grant decisions—because “they’re not physicists, they’re not pharmaceutical scientists,” Petel said.

“The rub will be whether Congress clearly articulated how they want this money spent,” he said. “If an agency is spending the money as Congress intended, but it just happens to be going to fringe organizations, it’s still possible that a court would say, ‘That’s perfectly in line with what Congress intended; we’re not going to second-guess the agency’s deliberative process in making this decision.”

Courts are more likely to be wooed by cases involving clear congressional language about how grant money should be spent. Department of Transportation grants to fund public infrastructure could fall into that category, according to Petel.

“I can imagine a lot of state attorneys general are going to be filing suits where they believe they’re not getting the money they think they’re entitled to, or it’s coming with strings they don’t want to accept,” he said. “They’re going to be challenging on the basis that that’s not what Congress intended.”

Challenging the Rule

But the administration’s language in the proposed rule, if finalized, could make the regulation itself vulnerable to legal challenges.

Dozens of public comments suggest the decisions relying on political appointees could be challenged as “arbitrary and capricious,” and that the lack of internal agency appeal process could violate the Administrative Procedure Act.

Legal experts also flagged a provision that would prohibit public entities that receive funds, such as universities, from viewpoint discrimination, including for events used with non-federal money.

Petel said the rule will definitely be challenged if it’s finalized. He said one possible line of attack is that the rule goes too far in proscribing what a grant agreement must say.

“Public universities, of course, are subject otherwise to the First Amendment, but there are disagreements as to whether and how current First Amendment doctrine applies to controversial speakers on campuses. If adopted, this provision’s conditioning of federal financial assistance may be challenged as unconstitutional,” wrote attorneys from Ropes & Gray LLP led by Mark Barnes.

Much of the rule focuses on restricting grant funds to projects related to diversity, equity, and inclusion (DEI), but the rule also lacks a clear definition of what DEI is, said Robert Field, a professor at Drexel University’s Kline School of Law and Dornsife School of Public Health.

“There’s nothing illegal about DEI,” Field said. “The Supreme Court said that colleges cannot use race as an explicit criterion in admissions, but that’s it in terms of the law.”

If the White House’s proposal is finalized, “they’re giving themselves a lot of leeway to go after a lot of different kinds of grants and activities,” he said.

Field said that you could see challenges to the law over vagueness because it becomes difficult to understand how to comply with terms like “DEI” or “anti-American.”

“I think that would be a powerful avenue for opponents to use in challenging the regulations in court,” said Field.