Department of Education v. California

Majority reasoning

The majority held that the district court's order had the practical characteristics of a preliminary injunction — not merely a temporary restraining order — and was therefore subject to appellate review. The Court reasoned that the government was likely to succeed in showing the district court lacked jurisdiction, because the APA's waiver of the government's immunity from suit does not extend to orders that effectively enforce a contractual obligation to pay money. The majority noted that such money-payment claims belong in the Court of Federal Claims under the Tucker Act, not in a federal district court under the APA. On the balance of harms, the Court found that once grant funds are paid out, the government is unlikely to recover them, while the plaintiff states — having represented they have the financial means to keep their programs running — could seek repayment in the proper court if they ultimately win. The majority concluded that any harm the states suffered by choosing to shut down programs rather than continue funding them would be self-imposed and not a proper basis for blocking the stay.

Dissent reasoning

Justice Kagan argued that the Court should not have intervened at this early stage. She noted that the government never defended the legality of canceling the grants, and that the states consistently represented the grant terminations had already forced them to cut teacher training programs. She wrote that the general rule under existing precedent (Bowen v. Massachusetts) is that APA suits can proceed in district court even when a remedy might result in the payment of funds, and that the Court's sole counter-authority — Great-West Life — was not an APA case at all, making the majority's jurisdictional reasoning underdeveloped and possibly wrong. She also warned that deciding complex legal questions on an emergency docket, with minimal briefing and no oral argument, increases the risk of error, and that nothing about this case required the Court's immediate intervention. Justice Jackson, joined by Justice Sotomayor, argued separately that the Court lacked jurisdiction over the TRO in the first place, since TROs are ordinarily not appealable and this one was set to expire in three days. She contended the government showed no concrete, irreparable harm — there was no evidence grantees had rushed to draw down funds during the 25 days the TRO was already in effect, and the government has legal tools to recoup any funds paid out. She further argued that the underlying grant terminations were likely unlawful because the Department issued identical boilerplate termination letters two days after an internal review directive, without individualized reasoning, without pre-termination notice, and without giving recipients a chance to correct any problems — exactly the kind of arbitrary agency action the APA prohibits. She criticized the Court for intervening to resolve procedural side questions while allowing the government to avoid scrutiny of whether its core conduct was lawful.