First Circuit Court of Appeals Upholds Block on NIH Cuts F&A in APLU, AAU, & ACE Litigation

On January 5, the First Circuit Court of Appeals issued a decision earlier this week affirming the District Court for Massachusetts in the lawsuit challenging NIH’s actions to cap facilities and administration cost reimbursements. Per the First Circuit decision, “In sum, we conclude that the district court properly exercised subject-matter jurisdiction over the plaintiffs’ claims. We also hold that NIH’s attempt, through its Supplemental Guidance, to impose a 15% indirect cost reimbursement rate violates the congressionally enacted appropriations rider and HHS’s duly adopted regulations. The district court’s decision is therefore affirmed.”

The ruling is the result of lawsuits, including the challenge APLU initiated February 10, 2025 with the Association of American Universities (AAU) and the American Council on Education (ACE), as contesting  NIH’s action limiting Facilities and Administrative (F&A) reimbursements (indirect cost rate) to a 15% rate for the agency’s research grants. As the lawsuit was considered in the First Circuit, it was consolidated with similar challenges of other plaintiffs.

APLU, AAU, ACE also filed lawsuits challenging cuts to F&A reimbursements at the National Science Foundation, Department of Defense, and Department of Energy. Presently, the DOD and DOE cases remain pending in the First Circuit. APLU continuously updates a webpage tracking developments in the litigation.