Introduction

In Department of Education v. California, the U.S. Supreme Court, in a per curiam opinion, granted the federal government’s application for a stay pending appeal of a time-limited temporary restraining order (TRO) issued by the District of Massachusetts. The TRO had halted the Department of Education’s abrupt, largely unexplained termination of over 100 previously awarded teacher-training grants under the Teacher Quality Partnership (TQP) and Supporting Effective Educator Development (SEED) programs and required the Department to continue paying “past-due” and accruing obligations.

The case arises amid a rapid internal directive by the Acting Secretary of Education to review issued grants—explicitly including diversity, equity, and inclusion (DEI) practices—and the Department’s swift issuance of boilerplate termination letters two days later. Eight States sued under the Administrative Procedure Act (APA), alleging arbitrary-and-capricious agency action, and obtained a TRO preserving the status quo. The government sought emergency relief from the Supreme Court after both the district court and the First Circuit denied a stay.

The Supreme Court’s order does more than halt the TRO. It sends a strong signal on two fronts: first, that a TRO with the hallmarks and effects of a preliminary injunction may be treated as appealable; and second, that the APA’s waiver of sovereign immunity does not authorize district courts to compel the payment of federal grant funds—a species of relief the Court likens to enforcing a contractual obligation—thereby channeling such claims toward the Court of Federal Claims under the Tucker Act. Justice Kagan and Justice Jackson (joined by Justice Sotomayor) each filed forceful dissents criticizing the emergency intervention, the jurisdictional framing, the equities, and the majority’s reliance on Great-West.

Summary of the Opinion

• The Court grants a stay pending appeal of the district court’s March 10, 2025 TRO (as extended), which had restored the pre-termination status quo and compelled the Department to continue grant payments.
• The TRO is construed as akin to a preliminary injunction and therefore appealable based on its characteristics and the litigation posture.
• On the merits for stay purposes, the government is likely to succeed in showing that the district court lacked jurisdiction under the APA to order the payment of money; the APA’s sovereign-immunity waiver does not extend to claims for money damages or where another statute implies that the relief is forbidden (5 U.S.C. §702), and such payment claims instead fall under the Tucker Act (28 U.S.C. §1491(a)(1)) in the Court of Federal Claims.
• Equities and irreparable harm: the government is unlikely to recover grant funds once disbursed and no bond was required; respondents have the wherewithal to maintain programs or else any harm is self-imposed and thus not grounds to deny a stay (citing Cuomo v. NRC).
• The stay remains effective through the First Circuit’s disposition and, if certiorari is sought, until the Supreme Court’s final judgment; it automatically terminates if cert is denied.
• The Chief Justice would deny the application. Justice Kagan dissents, emphasizing Bowen’s district-court channel for APA actions and doubting the Great-West reliance. Justice Jackson, joined by Justice Sotomayor, dissents at length, challenging appealability, exigency, equities, and the Department’s unexplained mass terminations as likely arbitrary and capricious.

Analysis

Precedents Cited and Their Influence

• Sampson v. Murray, 415 U.S. 61 (1974): The per curiam leans on Sampson to recharacterize the TRO as an appealable preliminary injunction when the order has the “hallmarks” of a preliminary injunction and when the basis for the order is “strongly challenged.” This supports immediate appellate intervention notwithstanding the nominal label “TRO.”
• Abbott v. Perez, 585 U.S. 579 (2018): Cited to underscore that orders with the practical effect of preliminary injunctions can be immediately reviewable, reinforcing the Court’s threshold recharacterization.
• 5 U.S.C. §702 (APA sovereign immunity waiver): The majority emphasizes the waiver’s limits—it does not apply to “money damages” and does not apply if another statute “expressly or impliedly forbids the relief.” This is the jurisdictional keystone for shunting payment claims away from the APA/district court track.
• Bowen v. Massachusetts, 487 U.S. 879 (1988): Bowen holds that district courts can entertain APA suits even when setting aside agency action would result in disbursement of funds, characterizing the relief as “specific” rather than “money damages.” The per curiam acknowledges Bowen but narrows its reach by contrasting Bowen’s “set aside” posture with orders that effectively enforce payment obligations.
• Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204 (2002): Although not an APA case, Great-West distinguished between permissible equitable relief and impermissible attempts to obtain money damages; it described an order to “enforce a contractual obligation to pay money” as outside the equitable rubric. The per curiam imports that logic: orders compelling grant payments resemble enforcement of monetary obligations rather than classic APA “set-aside” relief.
• Tucker Act, 28 U.S.C. §1491(a)(1): Confers jurisdiction on the Court of Federal Claims for monetary claims founded upon “any express or implied contract with the United States.” The majority suggests grant-payment claims, at least when styled as compelled disbursements, fit Tucker Act contours better than APA review in district court.
• Cuomo v. NRC, 772 F.2d 972 (D.C. Cir. 1985) (per curiam): Invoked for the principle that self-imposed costs do not count as irreparable harm for stay purposes; used here to diminish the respondents’ irreparable-harm showing.
• Hollingsworth v. Perry, 558 U.S. 183 (2010) (per curiam) and Nken v. Holder, 556 U.S. 418 (2009): These cases supply the modern stay standard (likelihood of success, irreparable harm, balance of equities, and public interest), which the Court applies in granting the stay.

Legal Reasoning

The Court proceeds in two principal steps—threshold appealability, then stay merits—and grounds the stay in jurisdictional and remedial limits on the APA, reinforced by equitable considerations.

1. TRO as appealable preliminary injunction. Although appellate courts generally lack jurisdiction over TRO appeals, the Court identifies “hallmarks” of a preliminary injunction in the district court’s order: it is not merely preserving evidence or preventing short-term deterioration but affirmatively compels the ongoing disbursement of funds and rests on a contested legal rationale. Citing Sampson and Abbott, the Court treats the order as appealable to reach the stay factors.
2. Limits of the APA’s sovereign-immunity waiver and Tucker Act channeling. Central to the Court’s analysis is that §702’s waiver has boundaries. While Bowen permits district courts to set aside unlawful agency action even if money will flow as a consequence, the per curiam distinguishes relief that compels payments as such. Relying on Great-West’s discussion of attempts to enforce monetary obligations—cast as akin to contract enforcement—the Court signals that orders requiring an agency to “pay out past-due grant obligations and to continue paying obligations as they accrue” fall outside §702’s waiver. Instead, the Tucker Act provides the appropriate forum: the Court of Federal Claims for money claims based on express or implied contracts (with the caveat that grants can resemble cooperative agreements with contractual features).
3. Stay equities and irreparable harm. The government’s risk of unrecoverable funds if forced to disburse, coupled with the district court’s denial of a bond, weighs in favor of a stay. Respondents, by contrast, asserted in litigation that they could maintain operations, undercutting irreparable-harm arguments. If they choose not to do so, the Court treats that as self-imposed injury not cognizable in the stay calculus (citing Cuomo).
4. Scope and duration of relief. The Court issues a stay pending the First Circuit’s resolution and, if certiorari is sought, through the Supreme Court’s final judgment; it terminates automatically upon cert denial.

The Dissents’ Critiques

• Justice Kagan: Emphasizes that APA actions ordinarily proceed in district court even when the practical consequence is disbursement (Bowen). She argues the majority’s reliance on Great-West—an ERISA case not arising under the APA—is “under-developed” and potentially wrong, and that the record shows concrete harms to state programs. She would not grant emergency relief.
• Justice Jackson (joined by Justice Sotomayor): Argues the Court lacks jurisdiction to review a standard, time-limited TRO and notes the district court was already expediting a preliminary-injunction ruling. She sharply disputes any “emergency” and underscores that the Department offered no merits defense of its mass terminations. On the merits, she previews that the terminations are likely arbitrary and capricious: opaque, boilerplate rationales; apparent lack of pre-termination process; and tension with statutory directives encouraging training for diverse student populations. She warns that using the emergency docket to police remedial nuances while sidestepping merits encourages strategic avoidance of accountability.

Impact and Forward-Looking Consequences

Although procedurally styled as a stay order, the Court’s reasoning carves a consequential path for grant litigation and APA remedies:

• Remedial channeling from APA to Tucker Act for compelled payments: District courts now face a clear signal that orders effectively compelling the disbursement of federal grant funds are beyond the APA’s remedial scope. Litigants should expect the government to invoke §702’s limits and the Tucker Act to challenge district-court jurisdiction over payment-focused relief.
• Bowen narrowed, Great-West elevated in the grant context: The decision does not overrule Bowen, but it narrows its reach by differentiating “set aside” relief from “pay money” commands. Great-West’s logic against enforcing monetary obligations is deployed to frame grant-payment orders as contract-like—and thus Tucker Act territory—even though Great-West arose outside the APA.
• Strategic pleading and remedy design: Plaintiffs challenging grant terminations should craft relief to (i) set aside the termination decisions; (ii) bar their application; and (iii) remand for reasoned decision-making—rather than demand affirmative, immediate payments. Where money is sought as such, parallel or subsequent proceedings in the Court of Federal Claims may be necessary.
• Heightened attention to bonds and recoupment risk: The Court’s emphasis on irretrievability and the lack of a bond will likely prompt agencies to press for Rule 65(c) bonds and to frame disbursement risks as irreparable harm in stay practice.
• TRO appealability in substance: Orders labeled TROs that require ongoing payments or have the functional sweep of preliminary injunctions are more likely to be treated as appealable, accelerating appellate and Supreme Court review.
• Substantive APA review remains open: The Court did not resolve the merits of the APA challenge. If the First Circuit affirms or if cert is later granted, issues previewed in the dissents—notice, explanation, individualized reasoning, consistency with statutory objectives, and regulatory preconditions for termination (2 C.F.R. part 200; 34 C.F.R. §75.253)—will be ripe for full appellate analysis.
• Emergency docket practice: The dissents’ concerns reinforce an ongoing institutional debate: when should the Court intervene on an emergency basis to police threshold and remedial questions absent full merits briefing, especially where the district court’s order is short-lived?

Complex Concepts Simplified

• Administrative Procedure Act (APA): A statute letting parties challenge federal agency actions as unlawful, including as “arbitrary and capricious.” It waives sovereign immunity for certain non-monetary relief, enabling courts to set aside agency action and remand.
• APA Sovereign-Immunity Limits (5 U.S.C. §702): The waiver does not apply to “money damages” and does not apply if another statute “expressly or impliedly forbids the relief.” This pushes claims seeking payment obligations into other legal channels.
• Money Damages vs. Specific Relief: “Specific relief” (e.g., set-aside and remand) is classically equitable and often available under the APA. “Money damages” (a substitute remedy payable in cash) are not. The per curiam treats compelled disbursement orders as akin to enforcing a monetary obligation, tipping them into the “money damages”/non-APA bucket.
• Tucker Act and Court of Federal Claims: The Tucker Act authorizes monetary claims against the United States founded on contracts, statutes, or regulations. If relief is fundamentally about payment, litigants usually must proceed in the Court of Federal Claims.
• TRO vs. Preliminary Injunction: A TRO is short-term, often issued quickly to preserve the status quo. A preliminary injunction typically follows fuller briefing and lasts longer. Courts may treat a TRO as an appealable preliminary injunction if, in substance, it functions like one.
• Stay Pending Appeal: A court may pause a lower-court order while an appeal proceeds if the movant shows likelihood of success, irreparable harm absent a stay, a favorable balance of equities, and alignment with the public interest.
• Self-Inflicted Harm Doctrine: Injuries a party could avoid through its own actions generally do not count as “irreparable” when courts decide whether to grant or deny a stay or injunction.

Conclusion

Department of Education v. California is formally a stay order, but it meaningfully reshapes expectations about how and where litigants may obtain relief in grant disputes. Two guideposts emerge:

• District courts, proceeding under the APA, may set aside unlawful agency action; but when the remedy crosses into compelling the government to pay grant funds, the APA’s waiver likely does not apply. Those payment claims belong, if at all, in the Court of Federal Claims under the Tucker Act.
• TROs that compel ongoing disbursements or otherwise bear the practical features of preliminary injunctions can be treated as appealable, enabling swift appellate and Supreme Court intervention.

The dissents forcefully caution that the Court has moved too quickly on an emergency docket, with incomplete briefing and no argument, and they preview serious APA defects in the Department’s mass terminations: absence of individualized explanations, apparent disregard of procedural safeguards, and potential conflict with statutory aims. Those merits remain for another day. For now, the Court’s remedial and jurisdictional signal is clear: frame APA challenges around setting aside unlawful decisions and remanding—do not expect district courts to order the Treasury to open the spigot mid-litigation. Where funds themselves are at issue, prepare to litigate in the Court of Federal Claims.