BOSTON — After two hours of arguments involving the Trump administration and three groups of plaintiffs, a federal judge on Friday upheld an order preventing the Trump administration from enforcing a limit on the indirect costs that the National Institutes of Health pays its grant recipients.
The temporary restraining order, which was set to expire on Monday, has been extended until U.S. District Judge Angel Kelley reaches a final decision on whether to grant an injunction against the proposed change.
Should the proposed 15% limit on indirect costs be enacted, it could potentially impact $4 billion or more in research funding for universities and various biomedical research organizations. This new funding policy was announced on Friday evening, February 7, and was intended to take effect the following Monday. However, three lawsuits were filed that weekend, leading Judge Kelley to issue a nationwide restraining order on the change.
In the two weeks leading up to the hearing, researchers and institutions raised concerns about the ramifications of the proposed change. Prior to the hearing, several groups submitted amicus briefs in support of the lawsuits, including a coalition of mayors led by Boston Mayor Michelle Wu and another by MassBio, which advocates for 1,700 life science companies based in Massachusetts. An open letter circulating among researchers nationwide regarding the potential consequences of the funding cuts collected over 1,000 signatures in just 48 hours.
The plaintiffs, which encompass 22 state attorneys general, universities, hospitals, and their associated organizations, contended that the indirect cost cap was not established in accordance with NIH regulations and contradicts laws enacted by Congress meant to prevent such a measure. They further argued that allowing the 15% cap to be implemented would result in “irreparable harm.”
Prior to the hearing, 16 attorneys general issued a joint statement asserting, “The Trump administration’s attempt to reduce research funding at thousands of institutions across the country is not only unlawful; it threatens public health, our economy, and our competitiveness. There are laws protecting this funding, and the president cannot simply disregard those laws.”
The Trump administration addressed the three cases collectively, claiming the district court lacks jurisdiction over the issue, that it fulfilled its responsibilities by releasing updated guidance, and that the plaintiffs failed to prove there would be “irreparable injury” if the restraining order were lifted.
During the hearing, both sides debated the legality of the proposed change and the extent of its potential impacts on indirect cost capping. Brian Lea, the attorney representing the Trump administration, asserted that the funds saved on indirect costs would be redirected towards new grants, thereby lessening the impact. He insisted this approach differed from previous attempts during the Trump administration’s first term in 2017 to impose limitations on indirect costs.
The plaintiffs contended that this action violates the Administrative Procedure Act, which specifies how federal agencies should implement proposed regulatory changes, characterizing the 15% cap as “arbitrary and capricious.” They argued that lifting the temporary restraining order would lead to irreparable harm.
To reinforce their argument, attorneys presented declarations from various institutions, including hospitals and universities, submitted to the court detailing the prospective consequences of capping indirect costs. John Beuker, one of the plaintiffs’ attorneys, highlighted possible ramifications such as closing essential facilities like restrooms, halting the acceptance of graduate students, and discontinuing clinical trials.
“I felt the judge asked questions indicating she recognized the potential impact this could have. While we don’t know her ruling yet, I believe she paid attention to our arguments,” remarked Timothy Leshan, chief external relations and advocacy officer for the Association of Schools and Programs of Public Health, outside the courtroom after the hearing.
Jeremy Berg, former editor of Science and a past director of the National Institute of General Medical Sciences, part of NIH, expressed optimism but no surprise at Kelley maintaining the restraining order. He stated his confidence that the 15% cap on indirect cost cuts would ultimately be overturned in court.
“I was quite hopeful going into it that the plaintiffs had a compelling case,” he conveyed to STAT post-hearing. “Nothing I heard dissuaded me.”
Judge Kelley did not specify when she would decide on the potential injunction or whether the cap will proceed, nor did she offer any comments suggesting her likely ruling. “I have a lot of work to do,” she stated while exiting the courtroom.
Jonathan Wosen contributed reporting.
