Thakur v. Trump, 3:25-cv-04737

Background

Beginning January 2025, the President issued multiple executive orders directing federal agencies to review and terminate grants related to "diversity," "equity," "inclusion," "gender ideology," and to reduce perceived waste; DOGE coordinated implementation.
EPA, NSF, and NEH (among other agencies) quickly identified and terminated hundreds–thousands of previously awarded multi‑year research grants to University of California-affiliated researchers, often using keyword/title searches.
Terminations were implemented via standardized form letters that stated grants "no longer effectuated agency priorities" but gave no grant‑specific, reasoned explanation or consideration of grantees’ reliance interests.
Six UC researchers sued seeking vacatur of terminations and a classwide preliminary injunction; they asserted First Amendment, APA (arbitrary & capricious; contrary to law), Due Process, and separation‑of‑powers claims, and sought provisional class certification.
The district court provisionally certified two overlapping classes (Equity Termination Class and Form Termination Class), found plaintiffs likely to succeed on First Amendment and APA claims (for NSF and NEH statutory claims and for mass terminations), found irreparable harm, and granted classwide preliminary relief/vacatur as described.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1) First Amendment — viewpoint discrimination (Equity Termination Orders)	Executive Orders and agency terminations punished research promoting DEI and related viewpoints, thus unlawfully penalizing protected speech.	Agencies may set funding priorities and decline to fund speech that does not fit program objectives.	Court: Likely First Amendment violation — terminations constitute viewpoint‑based penalties (not permissible program‑definitional exclusions).
2) APA — agency action contrary to law (NEH & NSF statutory limits)	NEH and NSF are statutorily directed to support research reaching/reflecting diversity and to broaden participation in STEM; terminating such grants contradicts those statutory mandates.	Agencies have discretion in funding and priorities; terminations align with changed priorities.	Court: Plaintiffs likely to succeed — NEH and NSF terminations pursuant to Equity Orders likely exceed statutory authority.
3) APA — arbitrary & capricious; lack of reasoned explanation (form‑letter terminations)	Mass terminations by form letter provided no grant‑specific reasoning, ignored reliance interests, and effected a significant change in agency position without explanation.	Letters referenced "agency priorities" and applicable termination regulations; agencies performed individualized reviews.	Court: Likely arbitrary and capricious — form letters and process lack the required reasoned explanation and consideration of reliance; vacatur and injunctive relief appropriate.
4) Jurisdiction — Tucker Act & Article III standing	District court has jurisdiction; plaintiffs (researchers) suffered concrete injuries and have standing to seek equitable relief.	Claims belong in Court of Federal Claims under the Tucker Act; plaintiffs lack contractual rights as non‑parties and therefore lack standing.	Court: Rejected Tucker Act and standing defenses — claims are statutory/constitutional (not disguised contract claims); plaintiffs have Article III standing.

Key Cases Cited

Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (preliminary injunction standard)
Nat’l Endowment for the Arts v. Finley, 524 U.S. 569 (1998) (limits on conditioning subsidies to suppress disfavored viewpoints)
Rust v. Sullivan, 500 U.S. 173 (1991) (government may define programmatic limits when itself the speaker)
Agency for Int’l Dev. v. All. for Open Soc’y Int’l, Inc., 570 U.S. 205 (2013) (permissible and impermissible funding conditions and outside‑program mandates)
Koala v. Khosla, 931 F.3d 887 (9th Cir. 2019) (withholding benefits as penalty on viewpoints violates First Amendment)
Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) (arbitrary and capricious standard; factors an agency must consider)
DHS v. Regents of Univ. of Cal., 591 U.S. 1 (2020) (agency changing longstanding policy must account for reliance interests)
Bennett v. Spear, 520 U.S. 154 (1997) (final agency action test for APA review)
Bowen v. Michigan Acad. of Family Physicians, 476 U.S. 667 (1986) (presumption favoring judicial review of agency action)
Lincoln v. Vigil, 508 U.S. 182 (1993) (when agency discretion is unbounded, decisions may be unreviewable)
FCC v. Fox Television Stations, 556 U.S. 502 (2009) (requirements for explaining a change in agency policy)
Dep’t of Commerce v. New York, 588 U.S. 752 (2019) (courts may infer coordinated agency action where record shows lockstep conduct)
Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024) (agency power is limited to what Congress authorizes)