[00:00:01] Speaker 00:
case number 25 and 48.

[00:00:04] Speaker 00:
They're instituted of justice at the balance versus United States Department of Justice.

[00:00:10] Speaker 00:
Miss Newman for the balance.

[00:00:12] Speaker 00:
Mr. Springer for the ability.

[00:00:16] Speaker 03:
Morning, counsel.

[00:00:19] Speaker 03:
Miss Newman, please proceed when you're ready.

[00:00:21] Speaker 05:
Good morning.

[00:00:24] Speaker 05:
The Office of Justice Programs adopted a novel and expansive interpretation of a regulatory provision that cabins OJP's authority to terminate existing grants.

[00:00:35] Speaker 05:
OJP invoked that newly claimed authority and terminated more than 800 million dollars in federal grant funding.

[00:00:43] Speaker 05:
OJP's departure from its long standing interpretation of its termination authority is inconsistent with the text and history of that regulation and it effectively turns a regulation intended to limit the circumstances in which a grant can be terminated into a provision that would allow any agency to terminate grants unilaterally for any reason at all.

[00:01:05] Speaker 05:
That is what happened here and why the district court described the terminations as being unquestionably arbitrary.

[00:01:12] Speaker 05:
Plaintiffs invoked the APA in challenging the lawfulness of OJP's adoption of that novel policy to terminate grants based on change agency priorities and in challenging OJP's arbitrary exercise of that newly claimed authority when it terminated nearly 400 grants.

[00:01:30] Speaker 05:
The APA, not any principle or provision of the grant agreement or provision of contract law governs this type of governmental policymaking.

[00:01:40] Speaker 03:
Can I just ask you at the outset, there's the Climate United decision that, of course, everybody is familiar with.

[00:01:48] Speaker 03:
And we can have a debate about whether that governs here and is binding here.

[00:01:52] Speaker 03:
But if we just bracket that for a second, let's just assume for argument purposes that it is.

[00:02:00] Speaker 03:
Then would there be anything left of your claim under that authority, or would you be saying that decision is wrong and you'd have an opportunity to seek further review of that?

[00:02:08] Speaker 05:
So I certainly think that we still have claims to make, even with Climate United.

[00:02:14] Speaker 05:
So our first contrary to law claim, which is our primary claim, is that the OJP's interpretation of 200.340 is

[00:02:25] Speaker 05:
unlawful, and that claim exists regardless of Climate United.

[00:02:30] Speaker 05:
That is a classic APA claim about an agency's interpretation of its regulation, and that was not at issue in Climate United.

[00:02:38] Speaker 03:
Our second contrary to law claim does look... Was there not a... I thought there was a 200.3.

[00:02:43] Speaker 03:
It's the same.

[00:02:46] Speaker 05:
It's the same.

[00:02:47] Speaker 05:
It's the same, but the argument that they made was similar to our second, our second contrary to law claim, which is a question about whether or not that was properly incorporated into the grant agreement under section two hundred three forty B.

[00:03:01] Speaker 05:
And so that claim is similar to our second contrary to law claim.

[00:03:07] Speaker 05:
But they did not make an argument like we made in our first contrary to law claim, which is that section 200, 340 does not allow for an agency to terminate grants based on a change in agency priorities.

[00:03:21] Speaker 05:
And that exists regardless of Climate United.

[00:03:24] Speaker 03:
Oh, I see.

[00:03:25] Speaker 03:
In other words, the argument you're making under 200.340A4 is that that statute, not statute.

[00:03:34] Speaker 03:
Regulation.

[00:03:34] Speaker 03:
Your regulation should only be understood to cover whatever the priorities were at the time.

[00:03:40] Speaker 03:
You can't take into account a change in priorities.

[00:03:43] Speaker 03:
OK, so that's tricky under the text.

[00:03:46] Speaker 03:
It's not, I mean, you've got some textual questions that would arise with respect to that.

[00:03:51] Speaker 03:
But if not for that particular argument, then you think the rest of the case would be governed by Climate United if Climate United did govern.

[00:04:01] Speaker 05:
Not completely.

[00:04:03] Speaker 05:
So we've argued here that these are not contracts under the Tucker Act, which is something that the plaintiffs in Climate United did not dispute.

[00:04:12] Speaker 05:
And we have our arbitrary and capricious claim about the termination of the grants.

[00:04:16] Speaker 05:
But we think the claim that most clearly stands separate and apart from Climate United and would not be governed by Climate United is the change in agency priorities.

[00:04:25] Speaker 03:
On the argument that these are not contracts to begin with, that would have meant that a lot of stuff that's happened in the last few months

[00:04:31] Speaker 03:
it just happened for no reason, including at the Supreme Court, because those cases could have been resolved on the antecedent argument that you're presenting, that grants aren't contracts.

[00:04:40] Speaker 03:
Is that the implication, at least?

[00:04:43] Speaker 03:
Whether it's right or wrong, that's the implication.

[00:04:44] Speaker 03:
Right.

[00:04:44] Speaker 05:
That is the implication of it.

[00:04:46] Speaker 05:
But of course, the court did not reach that.

[00:04:48] Speaker 05:
It was briefed.

[00:04:49] Speaker 05:
They decided not to issue any reasoning and did not rule squarely on that issue.

[00:04:54] Speaker 05:
So we believe that is certainly still an argument that is open, even after NIH.

[00:04:59] Speaker 04:
The court didn't explicitly say anything about it, but they suggested that jurisdiction was appropriate in the court of federal claims, which means that grants are contracts.

[00:05:09] Speaker 04:
If there was any indication that they thought grants were not contracts, then their conclusion would make no sense.

[00:05:17] Speaker 05:
Well, I'll start with the fact that they didn't issue any opinion on that subject.

[00:05:22] Speaker 05:
And so that certainly still is a live claim.

[00:05:25] Speaker 05:
But understanding that is an antecedent question to the second.

[00:05:29] Speaker 05:
It could have been that in NIH, there were royalties and licensing that were involved with the research grants.

[00:05:36] Speaker 05:
It was an argument that the parties made in the briefs.

[00:05:38] Speaker 05:
But we don't know where the Supreme Court has landed on that because they haven't said anything about that.

[00:05:43] Speaker 04:
I mean, even putting aside the Supreme Court's stay orders, which I'm not sure that we can do, I mean, our court has long treated these types of things as grants, as contracts.

[00:05:59] Speaker 05:
Is there a specific case that you're referring to?

[00:06:02] Speaker 04:
I mean, just our whole, I mean, all of our Tucker Act cases, you know,

[00:06:08] Speaker 04:
I mean, I guess I'm not sure where the argument would come from that a grant that is in the form of a contract where there is offer acceptance and consideration would not be a contract.

[00:06:17] Speaker 04:
Can you point to any case suggesting a grant is not a contract?

[00:06:20] Speaker 05:
There are a few federal claims cases that have said that cooperative agreements are not contracts from the Tucker Act.

[00:06:28] Speaker 05:
I believe Lume, the 2017 federal circuit, is one such case.

[00:06:33] Speaker 05:
But it is a sort of individualized and specific analysis.

[00:06:36] Speaker 05:
And I think part of this court hasn't considered, prior to this current spat of litigation, cooperative agreements and grants of these types, which look very different than procurement contracts that were at issue, for example, in Spectrum and Ingersoll Rand.

[00:06:53] Speaker 05:
And so I do think when you're looking at whether or not there is adequate consideration on behalf of the government, the cases that the federal circuit has held do mean that there is consideration

[00:07:08] Speaker 05:
is where the grantee or cooperative agreement organization was providing a specific and direct benefit for the government, which we simply do not have here.

[00:07:19] Speaker 05:
We have organizations who are providing public services to the public, and that is the whole purpose under the statute of a cooperative agreement.

[00:07:30] Speaker 04:
This direct benefit test would have, I think,

[00:07:34] Speaker 04:
massive implications for government contracting.

[00:07:38] Speaker 04:
I mean, in this situation, Congress has determined what the benefit of the grant is, right?

[00:07:43] Speaker 04:
They have provided money for these programs.

[00:07:47] Speaker 04:
And so a suggestion that there has to be some additional direct benefit to the government, where would we find such a requirement?

[00:07:56] Speaker 05:
I think that just gets at the difference between procurement contracts, which are specifically for the benefit of the government under the statutory scheme, and cooperative agreements and grant agreements, which are for a public benefit of many different sorts.

[00:08:12] Speaker 04:
So procurement contracts would be the only type of thing that's a contract for Tucker Act purposes?

[00:08:17] Speaker 04:
Under your understanding?

[00:08:19] Speaker 05:
I think they're most clearly a contract for Tucker Act purposes.

[00:08:22] Speaker 05:
And under the Federal Circuit's test, it is then, is there adequate consideration?

[00:08:28] Speaker 05:
Is there offer?

[00:08:28] Speaker 05:
Is there acceptance?

[00:08:30] Speaker 05:
And part of what the Federal Circuit has taken into account in the past is, is there a direct benefit that this grantee is providing on behalf of the government?

[00:08:39] Speaker 05:
I think that's simply a product of the different types of services that are being provided here.

[00:08:46] Speaker 05:
And in particular, whether or not there are remedies that are available to grantees like the plaintiffs here, which is part of the mega pulse test, what is the relief that is sought and what is the relief that is appropriate.

[00:09:01] Speaker 05:
And here we believe even after you mentioned the Supreme Court's orders, even after NIH and Department of California, we believe that actually the NIH order leaves open the very type of APA claim that we're bringing in our first contrary to law claim, which is simply a question of whether or not an agency's interpretation of its regulation is lawful and consistent with the text of the regulation, the history of the regulation, et cetera.

[00:09:27] Speaker 01:
You don't quarrel with the federal circuits test for when a grant is a contract.

[00:09:35] Speaker 05:
No, we do not.

[00:09:36] Speaker 01:
So it just comes down to an assessment of whether the benefit the government receives from your clients counts as consideration.

[00:09:45] Speaker 04:
Correct.

[00:09:47] Speaker 01:
Yes.

[00:09:47] Speaker 01:
Sorry.

[00:09:48] Speaker 04:
I guess I have a question about whether the regulations that are cited here even create judicially enforceable rights because they are a kind of guidance document about how these things mean.

[00:10:02] Speaker 04:
How do you read the regulations to create a judicially enforceable right.

[00:10:07] Speaker 05:
So DOJ adopted the uniform guidance and 2 CFR 2800.100, I think.

[00:10:15] Speaker 05:
So DOJ has adopted the uniform guidance subject to a couple of modifications not relevant here as binding on the agency.

[00:10:23] Speaker 05:
So we're not challenging.

[00:10:25] Speaker 05:
The reason why OMB is not a defendant is because we're not challenging the facial nature of those regulations.

[00:10:32] Speaker 05:
it's how those regulations have been applied here and they certainly are enforceable once DOJ chose to adopt those regulations as binding on the agency.

[00:10:42] Speaker 01:
You describe the regulation as limiting legal limits on what the government can do regardless of the terms of any contract and

[00:10:56] Speaker 01:
I'm not sure that's right, because when you read the regulation as a whole, you're focused on A4, but A4 follows, for instance, A1, which says the government can

[00:11:15] Speaker 01:
terminate a contract for failure to comply with the terms, which means the government can put in the contract any termination terms it wants.

[00:11:26] Speaker 01:
And then on top of that is this A4, which is this super unusual government-specific termination thing, which gives them an extra power that you wouldn't expect to see in private contracts.

[00:11:41] Speaker 01:
So it doesn't seem like it's limiting.

[00:11:44] Speaker 01:
It seems like it's expanding.

[00:11:45] Speaker 05:
So I don't think that it's necessarily a question of whether it's limiting or expanding.

[00:11:50] Speaker 05:
I think it is whether or not, so the regulations impose specific situations in which an agency is allowed to terminate a contract.

[00:11:59] Speaker 05:
One of them is pursuant to the terms and conditions of the contract.

[00:12:02] Speaker 05:
And another is subsection E4, which is a failure to effectuate program goals or agency priorities.

[00:12:10] Speaker 05:
And I certainly do think that does place a substantive limit on an agency's ability to terminate a grant agreement.

[00:12:16] Speaker 05:
And what OMB made clear when it issued its final rule was that an agency could add that as a term and condition to a contract, but it didn't have to.

[00:12:27] Speaker 05:
And as we've seen from litigation that has arisen in this space, I think the EPA is actually the only agency that included as a specific term and condition in the grant agreement the specific language in subsection 8.4.

[00:12:43] Speaker 05:
DOJ did not do so, and it is not entitled to rely on that as a basis for termination when it did not include the language in the grant agreement.

[00:12:55] Speaker 05:
And I think part of what OMB made clear when it added this language to the final rule in 2020 and then again in 2024, it made clear in response to concerns about grants being terminated arbitrarily that it would not allow grants to be terminated arbitrarily.

[00:13:10] Speaker 05:
And it also, the specific examples given,

[00:13:14] Speaker 05:
contemplated that an agency would be relying on specific evidence that a specific award no longer met program goals or agency priorities.

[00:13:25] Speaker 05:
And I think that just indicates that the sort of mass terminations that we've challenged here is not, even if that had been included as a term and condition, would not be the sort of specific termination that the regs give OJP the authority to do.

[00:13:46] Speaker 04:
So even if it's possible to state some of these claims as a matter of, you know, violating regulations, I mean, the longstanding test in our circuit is that the claims have to be purely, they have to be entirely independent of the contract.

[00:14:05] Speaker 04:
And so even if the regulation is implicated here, at the end of the day, the parties here arguably are relying on contractual rights.

[00:14:17] Speaker 04:
What is the best argument that the regulatory claims that you're putting forth are truly independent, which is our longstanding test?

[00:14:25] Speaker 05:
I will push back a little bit on the truly independent.

[00:14:27] Speaker 05:
I think there were several cases, Crowley included, that said,

[00:14:34] Speaker 05:
Principle number one, even if it arises with a backdrop of a contractual relationship, and I believe the language of Crowley is, quote, they would have no claims to assert, end quote, absent a contract, that doesn't mean that the right and the claims that plaintiffs are bringing arises out of the contract.

[00:14:52] Speaker 05:
So I think you can have a contract and disputes that arise out of a dispute over the terms of the contract.

[00:14:58] Speaker 05:
And you can have truly independent,

[00:15:00] Speaker 05:
claims that do not arise out of the contract, but arise out of other statutes or regulations, as is the case here, that place substantive limitations on an agency's authority to act.

[00:15:13] Speaker 05:
And our first contrary to law claim, you do not have to look at the grant agreement at all.

[00:15:18] Speaker 05:
It is completely independent and a question about the lawfulness of the agency's determination.

[00:15:22] Speaker 04:
Any right that the plaintiffs here have arises out of the fact that they have a grant agreement.

[00:15:28] Speaker 05:
But this court has squarely rejected in Megapulse and in Crowley that that is the test.

[00:15:33] Speaker 05:
All of those cases arose in the backdrop of contractual relationships.

[00:15:38] Speaker 05:
Megapulse involved regulations placed on the government's dissemination of data.

[00:15:46] Speaker 05:
That claim wouldn't have existed if the test was there is a contractual right here.

[00:15:51] Speaker 05:
And because you have a contract with the government, then that means you have to be channeled over to the Tucker Act.

[00:15:57] Speaker 05:
And so I think, again, the way that I think about it and the DC Circuits Test and Megapulse is, is a statute or regulation the thing that is imposing the duty on the government?

[00:16:12] Speaker 05:
And is it the grant agreement that is, so is it a regulation that imposes a duty or places a limitation on the government, or is it

[00:16:22] Speaker 05:
uh a duty or a limitation that arises out of the grant agreement and the second prong of mega pulse is the relief that plaintiffs are seeking something that arises similarly out of the grant agreement or is it something that is consistent with the APA and declaratory and injunctive relief of the sort that we saw here that simply by

[00:16:44] Speaker 04:
plaintiff preferring to get injunctive relief doesn't get you out of the Tucker Act.

[00:16:48] Speaker 04:
That's the whole purpose of the Tucker Act is to channel those claims to the court, channel such claims to the court of federal claims where injunctive relief is not available.

[00:16:59] Speaker 04:
Certainly.

[00:16:59] Speaker 04:
And wanting injunctive relief doesn't avoid Tucker Act jurisdiction.

[00:17:04] Speaker 05:
Absolutely, and I think under megapoles, I don't think under megapoles, the question is, is this so clearly a contract claim that it should go to the court of federal claims?

[00:17:14] Speaker 05:
Or is it something that plaintiffs are creatively trying to draft around to get out of the Tucker Act land?

[00:17:19] Speaker 05:
And I think district courts are very well suited to make those types of determinations.

[00:17:23] Speaker 05:
They make them every single day about whether or not there's particularity pled as to fraud, whether or not somebody is trying to get around the strictures of a jurisdictional act.

[00:17:33] Speaker 05:
And so I think we have to be careful about not making it such that it is, is there under any conception at all that I can possibly come up with that this might be creatively pled as a contractual claim, or is it something that is independent of and similar to the sort of EPA claims that district courts adjudicate every single day?

[00:17:58] Speaker 01:
Here's why I'm a little skeptical on independence, which is you're right.

[00:18:05] Speaker 01:
There are different fact patterns and the verbal formulations are intention.

[00:18:13] Speaker 01:
And sometimes we say truly and sometimes we don't.

[00:18:16] Speaker 01:
But here's what this case is about.

[00:18:19] Speaker 01:
It's a reg that is basically a template for contracts.

[00:18:26] Speaker 01:
It says, here are some

[00:18:28] Speaker 01:
termination provisions, you can put in a contract and it says whatever you want the termination provisions to be, put them in the contract, right?

[00:18:39] Speaker 01:
So any claim

[00:18:42] Speaker 01:
for violation of this reg is going to have, it's going to turn on, you know, it turns on your interpretation of A4, but that's been, there's a contract term that uses exactly the same words as A4, and you're construing that contract every bit as much as you're construing this reg.

[00:19:05] Speaker 01:
So I understand this seems highly artificial to separate them out.

[00:19:10] Speaker 05:
I understand that sort of slippery slope concerns that you are you're getting at.

[00:19:14] Speaker 05:
And I think when you have a claim that's somebody bringing an individual breach of contact contract claim challenging the rationale behind a termination that

[00:19:24] Speaker 05:
that is much harder, a much harder case and looks very different than I think the one that we have here, where we have an agency that has changed, adopted a novel interpretation of this regulation, and then applied that 376 times in the exact same manner.

[00:19:39] Speaker 05:
And so I think you have a different question.

[00:19:41] Speaker 05:
I understand the sort of artificial limitations.

[00:19:44] Speaker 05:
But when you have claims of the sort that we have brought here, which is a normal challenge to agency interpretation of a regulation that this court adjudicates every single day,

[00:19:55] Speaker 05:
um that looks different than the individual uh claim who might be the individual grantee whomever it is who might be challenging the reasons behind the termination decision which was Ingersoll Rand.

[00:20:08] Speaker 01:
Would your answer on jurisdiction be any different if

[00:20:13] Speaker 01:
OJP had just terminated one contract on this rationale to create a test case and then just held off on the others.

[00:20:22] Speaker 05:
I think that would look very different than our case.

[00:20:24] Speaker 05:
And I think that would be a much harder argument for me to stand up there.

[00:20:27] Speaker 01:
Same dynamic.

[00:20:29] Speaker 01:
Your argument is all about, you say it's all about what 2 CFR 200 340 A4 means.

[00:20:36] Speaker 01:
They say it's all about what the incorporated contract term means.

[00:20:41] Speaker 05:
I think that's a much harder case than this one, where you have the relief that we're seeking being specific to a declaration of the unlawfulness of an agency's interpretation that has clearly adopted as its own policy.

[00:20:54] Speaker 05:
We've pled that that is a policy that the agency adopted.

[00:20:57] Speaker 05:
And we have sought declaratory and injunctive relief relative to that interpretation that has, under Kidwell, important independent value here because

[00:21:09] Speaker 05:
Many of our grantees are repeat players in front of OJP.

[00:21:12] Speaker 05:
Vera has had grants for 50 years and has been a federal grantee for 50 years in front of OJP.

[00:21:20] Speaker 05:
HRIA has 10 grants with 10 different federal agencies and CCYJ is right now about to submit an application for funding with OJP.

[00:21:30] Speaker 05:
And so these plaintiffs do have an interest in understanding and obtaining declaratory relief related to what the proper interpretation of that regulation is.

[00:21:39] Speaker 03:
I'm not quite sure I follow the analytical distinction between a claim by one contractor and a one contractor situation and a claim

[00:21:49] Speaker 03:
that's in response to what happened here, if the gravamen of the claim is a violation of this regulation, cause it's still, the regulation is doing the same work.

[00:21:59] Speaker 03:
It's just doing the same work a lot of times instead of once.

[00:22:03] Speaker 03:
And so if we go down to the one, if we just take a strip away that the seriatim one, I mean, cause you could, the agency could have done it by just doing it 340 times in a row instead of one false sweep.

[00:22:15] Speaker 03:
And I think we'd be in basically the same place.

[00:22:17] Speaker 03:
Then if we just look at the one,

[00:22:20] Speaker 03:
then it does seem like there's the dynamic that the claim that is made under the regulation is the very same claim that could be made under the contract.

[00:22:33] Speaker 05:
Well, I don't think, is that assuming that that was actually incorporated into the contract in the way that the regulation required or the situation we have here, but just with one grantee?

[00:22:47] Speaker 03:
Well, I think you could make the same argument no matter what.

[00:22:49] Speaker 03:
I think if it was a single contract and you're in the court of claims, is there anything that you're arguing now that you couldn't argue there as a basis for saying the termination is invalid?

[00:23:01] Speaker 05:
Well, it would be a breach of contract claim.

[00:23:04] Speaker 05:
And I don't know that you actually could get to the relief that we are seeking, which is declaratory and injunctive relief regarding the government's interpretation of that.

[00:23:17] Speaker 01:
So the Court of Federal Interpretive question.

[00:23:20] Speaker 05:
Could you get that relief?

[00:23:22] Speaker 03:
Not the relief, but on the on can you could you get any relief on the same ground that you're asserting now, which is that, hey, you terminated my contract.

[00:23:30] Speaker 03:
I'm looking at these regulations that are also in the contract.

[00:23:35] Speaker 03:
can't do it on these basis.

[00:23:37] Speaker 03:
It's just not allowed.

[00:23:38] Speaker 03:
Now, I'll bracket your point about exactly what the relief would be that ensues from that, but I'm just trying to get to the claim that would be made, the violation that would be asserted.

[00:23:48] Speaker 03:
I'm not saying that this would end the case for you because you could still have some other arguments, but for these purposes,

[00:23:59] Speaker 03:
It seems like you could allege the same wrongness in the court of claims as you allege now.

[00:24:06] Speaker 03:
Now you could say, well, look, even if that's true, we still have the regulatory one and it doesn't matter that they're overlapping.

[00:24:12] Speaker 03:
It doesn't matter enough that they're overlapping, that you could bring it in both places.

[00:24:15] Speaker 03:
We're choosing to style our one against the regulation rather than against the contract.

[00:24:18] Speaker 03:
You could say the relief is different, but I'm just trying to get at

[00:24:21] Speaker 03:
the wrong, the legal error, the unlawfulness or breach would come from the same place.

[00:24:28] Speaker 05:
Yes, that's correct.

[00:24:30] Speaker 05:
And I think part of why that arises in cases in the Court of Federal Claims is damages are sufficient to remedy the harm, which I understand you're bracketing the relief.

[00:24:43] Speaker 05:
And the damages that are available in the Court of Federal Claims would be sufficient to remedy that violation of the regulation.

[00:24:51] Speaker 03:
So can I ask, suppose that B, instead of saying, must clearly and unambiguously specify, suppose it just says something like, whether the grant arrangement has been complied with will turn on basic principles of contract law.

[00:25:09] Speaker 03:
And then could you say, well, I'm bringing a regulatory claim that that regulation has been violated.

[00:25:19] Speaker 05:
because the agency didn't rely on principles of contractual law?

[00:25:22] Speaker 05:
Or instead of clearly, there's that language doesn't exist in?

[00:25:28] Speaker 03:
Yeah, I guess what I'm getting at, forget the hypo because I think it doesn't work.

[00:25:33] Speaker 03:
Scratch that.

[00:25:35] Speaker 03:
I guess what I'm getting at is it just seems to me that clearly and unambiguously is just a thing that we do when we interpret contracts.

[00:25:43] Speaker 03:
It's a canon of construct, you can use it.

[00:25:45] Speaker 03:
There's all kinds of contract doctrines that can be placed in regulation.

[00:25:48] Speaker 03:
And I don't know that what we would say is because we're asserting there's a violation of this thing that's in the regulation, which is just a way we interpret contracts, then it becomes a regulatory claim as opposed to a contractual claim that would go to the court of claims.

[00:26:03] Speaker 05:
I think it still would have to be a regulatory claim.

[00:26:06] Speaker 05:
And the question here is whether or not that was included in the grant agreement itself.

[00:26:14] Speaker 05:
We're not talking about clear and unambiguous.

[00:26:19] Speaker 05:
It is, is this language included within the grant agreement, or is it not?

[00:26:24] Speaker 05:
And that's not the sort of thing that would require or even call upon the court of federal claims expertise.

[00:26:31] Speaker 05:
um in trying to determine whether or not principles of contract law apply or or otherwise.

[00:26:37] Speaker 05:
I don't know if that answered your question.

[00:26:43] Speaker 03:
Yeah, no, I think it did.

[00:26:47] Speaker 03:
We'll give you some time for rebuttal.

[00:26:48] Speaker 02:
Thank you.

[00:27:02] Speaker 02:
Good morning, your honors.

[00:27:04] Speaker 02:
Excuse me, and may it please the court.

[00:27:05] Speaker 02:
Brian Springer on behalf of the federal government.

[00:27:07] Speaker 02:
I'd like to pick up where I think some of the discussion is focused today, that binding precedent from this court and recent state rulings from the Supreme Court dictate that plaintiffs grant termination claims fall within the Tucker Act and belong in the court of federal claims.

[00:27:21] Speaker 02:
That any asserted substantive right to the payment of federal funds by the plaintiffs is created in the first instance by the grant agreements, not by some other source of law.

[00:27:31] Speaker 03:
When you say binding precedent, are you referring to Climate United?

[00:27:36] Speaker 02:
I think Climate United is one example.

[00:27:37] Speaker 02:
I think this result also follows from this court's decisions in Spectrum and in Ingersoll-Rand.

[00:27:44] Speaker 02:
I think those cases address similar circumstances to what we have in this case.

[00:27:49] Speaker 03:
I guess I'm asking the question, do you think Climate United is binding?

[00:27:52] Speaker 02:
I do think climate united is binding on this panel.

[00:27:58] Speaker 03:
Obviously, there's other people on the panel who have expertise in climate united, but I guess my question is,

[00:28:05] Speaker 03:
It came up in the context of a likelihood threshold.

[00:28:09] Speaker 03:
Now, it may or may not be totally persuasive in the way it conducted the analysis.

[00:28:15] Speaker 03:
And there's, of course, you can find language in the opinion that you could say, well, that's not really just a likelihood statement.

[00:28:21] Speaker 03:
That seems like a pretty certain statement.

[00:28:23] Speaker 03:
I get that.

[00:28:25] Speaker 03:
And I think you can do that a lot of times.

[00:28:27] Speaker 03:
But if it comes up actually in a likelihood context,

[00:28:30] Speaker 03:
and it doesn't profess to do more than that in any particular place.

[00:28:34] Speaker 03:
I'm not sure why it's actually binding.

[00:28:36] Speaker 03:
And you may be familiar with it.

[00:28:38] Speaker 03:
We've had a line of cases where you can take something that comes up in that context and the court can just affirmatively say, by the way, this is just a legal proposition.

[00:28:47] Speaker 03:
Yes, it comes up in the likelihood context.

[00:28:49] Speaker 03:
It's a PI context.

[00:28:51] Speaker 03:
But because there'd be no point,

[00:28:52] Speaker 03:
For the district court to go through something else, we're just going to go ahead and ripen this into a definitive conclusion at the end of the day too.

[00:28:58] Speaker 03:
There's decisions that have done that, but this climate united didn't do that.

[00:29:03] Speaker 03:
So on the, on the, just a narrow question of whether it's in fact binding as opposed to as persuasive as it might well be or not be, depending on your perspective, why is it binding?

[00:29:12] Speaker 02:
I think it's binding to the extent of what the court says in that case.

[00:29:17] Speaker 02:
I mean, I do think there are parts where the court is sort of talking in legal terms and making determinations about law.

[00:29:23] Speaker 02:
But even if this court didn't think that Climate United was binding, again, this result follows directly from

[00:29:28] Speaker 02:
the recent Supreme Court stay rulings as well as this court's previous cases in spectrum and Ingersoll ran among others.

[00:29:36] Speaker 02:
And so, you know, I think even if you were to think that there was some reason to treat Climate United as not binding or as a different presenting a different circumstance, the same result, you know, would follow in this case.

[00:29:47] Speaker 01:
And suppose I think it's binding or persuasive on the specific points, which are the arbitrary and capricious point and the contrary to law point based on the express incorporation.

[00:30:09] Speaker 01:
Are there respects in which you think

[00:30:15] Speaker 01:
This case is stronger than Climate United.

[00:30:21] Speaker 01:
Because Climate United is still pending in bank, and I don't know what we're going to do.

[00:30:26] Speaker 01:
But we could just say, Climate United is persuasive on those points, period, full stop.

[00:30:32] Speaker 01:
Or we could say, your case is stronger.

[00:30:36] Speaker 02:
I mean, I think even if this court were to sort of set Climate United aside, the result should still be what the district court reached in this case because of this court's prior precedent.

[00:30:46] Speaker 01:
Same reasons articulated in Climate United were...

[00:30:50] Speaker 02:
You know, I mean, I think for the same basic reasons as we're given in climbing, I mean, again, this case looks identical to the Supreme Court's, you know, recent state rulings, both in NIH, you know, the part that was about the grant terminations, as well as the Supreme Court's decision in California.

[00:31:06] Speaker 02:
And I think that plaintiffs, you know,

[00:31:08] Speaker 02:
attempts to distinguish this court's previous decisions and Ingersoll Rand, which had, you know, an aspect to it about regulations and about the violation of regulations and also to distinguish spectrum, you know, are adult.

[00:31:20] Speaker 01:
You got a lot of data points cutting in your favor, but those are stay opinions too.

[00:31:26] Speaker 01:
I mean, one could say those aren't binding either.

[00:31:29] Speaker 02:
I mean, that isn't true, obviously, of Ingersoll-Rand and Spectrum and the Supreme Court's decisions.

[00:31:34] Speaker 02:
Right.

[00:31:35] Speaker 02:
I mean, obviously, that's true of the Supreme Court's decision.

[00:31:37] Speaker 02:
I mean, again, I think the fundamental question that's being asked in these cases is the one of what is the substantive source of the right to payments.

[00:31:45] Speaker 02:
And here, that is the grant agreements.

[00:31:47] Speaker 02:
I think that follows from megapulse.

[00:31:48] Speaker 02:
That follows from Spectrum.

[00:31:50] Speaker 02:
That follows from Ingersoll-Rand.

[00:31:53] Speaker 02:
I think that's the way that all of these cases.

[00:31:56] Speaker 01:
A template that's incorporated into the contract.

[00:31:59] Speaker 02:
Your honor, right here where exactly that in the contract, it says that this reg applies and the government invoked it as a basis to terminate these contracts and plaintiffs here are challenging the invocation of that reg in this circumstance.

[00:32:18] Speaker 02:
I'm happy to answer any questions.

[00:32:21] Speaker 02:
Otherwise.

[00:32:28] Speaker 03:
Thanks.

[00:32:32] Speaker 03:
Steven will give you three minutes for rebuttal.

[00:32:37] Speaker 05:
Thank you.

[00:32:38] Speaker 05:
I'll be briefed.

[00:32:39] Speaker 05:
So I understand the government to be saying that these claims are identical to the ones that were raised in the NIH decision and therefore our claims also fail.

[00:32:52] Speaker 05:
If that is true then under NIH still presently the court allowed APA claims to proceed forward similar to the ones that we have made which is a question about you know it's an arbitrary and capricious claim but here whether or not

[00:33:09] Speaker 05:
an agency has properly interpreted its regulation as a classic APA claim that is allowed to proceed for it under the NIH decision presently.

[00:33:18] Speaker 05:
And I think one response to your earlier question about principles of contract law,

[00:33:25] Speaker 05:
The regulation imposes principles and limitations on the government's behavior that are in addition to and supersede contractual.

[00:33:34] Speaker 05:
There are additional limitations that are placed on the government when it is engaged in agreements regarding federal funding.

[00:33:42] Speaker 05:
What's the extra?

[00:33:45] Speaker 05:
the regulations, the limitations imposed on the government by the regulations, in particular section 200, 340.

[00:33:53] Speaker 05:
And we are seeking declaratory injunctive relief regarding that regulatory authority that is generally and prospectively applicable both to the grantees here who have a continuing and ongoing relationship with OJP

[00:34:08] Speaker 05:
and to other grantees in the future.

[00:34:12] Speaker 03:
But you said it does something beyond the contracts and what is the thing that it does beyond the contracts?

[00:34:17] Speaker 05:
I just meant that it places a limitation on the government that is, you know, contract law is the floor.

[00:34:24] Speaker 05:
And the government has chosen to bound itself in an additional manner by promulgating and then adopting these regulations that bind its behavior in that way.

[00:34:35] Speaker 05:
And when it does so, and we bring a challenge, an APA challenge to... I see.

[00:34:41] Speaker 03:
So your point is that the very fact of the regulations is something over and above what

[00:34:44] Speaker 03:
would otherwise be in existence because of the contracts.

[00:34:47] Speaker 05:
Correct.

[00:34:47] Speaker 05:
Exactly.

[00:34:47] Speaker 05:
Precisely.

[00:34:48] Speaker 05:
And one final thing, the fact that these funds must be used in accordance with grant terms does not mean that plaintiffs' only right to protect them arises out of contract law.

[00:35:00] Speaker 05:
And we believe that the sorts of APA claims that we've made here are of the sort that should be allowed to continue after NIH.

[00:35:09] Speaker 05:
No further questions?

[00:35:10] Speaker 03:
Thank you, counsel.

[00:35:11] Speaker 03:
Thank you to both counsel.

[00:35:12] Speaker 03:
We'll take this case in person.