U.S. District Court Grants Preliminary Injunction Restoring Seven Federal Grants to the American Academy of Pediatrics, Citing Retaliation for Constitutionally Protected Activity | Insights

Authors:

Mark Barnes , Leslie A. Thornton , Andrea Millard

In mid-December 2025, the Centers for Disease Control and Prevention (“CDC”) and the Health Resources and Services Administration (“HRSA”)—both agencies of the U.S. Department of Health and Human Services (“HHS”)—terminated seven federal grants that had been awarded to the American Academy of Pediatrics (“AAP”), representing about two-thirds of AAP’s federal funding for the year (almost $12 million).¹ As with most federal award terminations over the last year, the agencies reasoned in their termination notices that the awards no longer effectuate agency or HHS priorities pursuant to 2 C.F.R. § 200.340(a)(4).

AAP filed suit in the U.S. District Court for the District of Columbia (Case No. 25-cv-4505), asserting that the cancellations violated the First Amendment (retaliation for protected activity, viewpoint discrimination), the Fifth Amendment (Equal Protection Clause), the Administrative Procedure Act, and the spending power. In its complaint, AAP argued that HHS used its power to terminate grants in a retaliatory manner, designed to chill AAP’s speech on topics for which AAP’s views differ from those of current HHS leadership. AAP specifically pointed to HHS’s dislike of AAP’s positions on issues such as access to gender-affirming medical care and vaccines, quoting directly from Secretary Kennedy and other HHS officials and advisors, who have accused AAP of “malpractice,” of “practicing evil,” and of being “morally wrong” and “vaccine-fanatics.”

As noted by AAP in its complaint, these award terminations were effectuated just as Congress and federal agencies announced certain new restrictions on gender-affirming care:

On December 17, 2025, the U.S. House of Representatives passed H.R. 3492 (Protect Children’s Innocence Act) to criminalize certain interventions it characterizes as “genital or bodily mutilation” or “chemical castration.” These actions build on prior initiatives, including Executive Order 14187 (Jan. 28, 2025) directing HHS to curtail such care and CMS letters (Apr. 11, 2025 and May 28, 2025) to state Medicaid directors and hospitals, all of which have faced challenge from various stakeholders.
On December 18, 2025, Secretary Kennedy declared that providers of gender-affirming care to minors are out of compliance with professionally recognized standards of health care, signaling that HHS may exclude such providers from federal health care programs, although the declaration itself did not affect any exclusions.²
On December 19, 2025, CMS issued two notices of proposed rulemaking to restrict coverage and participation for specified procedures for minors under Medicare, Medicaid, and CHIP, with comments due by February 17, 2026.³

On January 11, 2026, Judge Beryl Howell granted preliminary relief, enjoining defendants from enforcing or giving effect to the award terminations, including the enforcement of closeout obligations, and from re-obligating funds used to support the affected AAP awards, as well as requiring defendants to ensure that CDC and HRSA disburse award funds “in the customary manner and in customary timeframes.”⁴ The court found that AAP is likely to succeed on its First Amendment retaliation claim, emphasizing “substantial and undisputed” evidence that statements and actions by HHS leadership reflected a retaliatory motive tied to AAP’s protected advocacy on childhood vaccination and gender‑affirming care. HHS’s stated rationale—realignment with agency priorities—was deemed not plausible, particularly because the affected grants had nothing to do with those contested topics and similarly situated grantees’ awards were not terminated. The court also credited evidence that CDC and HRSA program staff were unaware of the terminations and that the cancellations would cause irreparable harm to AAP, including an abrupt layoff of 10% of staff.⁵

We will continue to monitor developments in this area and provide updates as additional information becomes available. Please contact the authors or your usual Ropes & Gray advisor if you have any questions.

AAP lawsuit demands HHS restore $12 million in grants; calls decision ‘retaliation’ for defense of evidence-based care, AAP News (Dec. 24, 2025), available at https://publications.aap.org/aapnews/news/34072.
HHS Acts to Bar Hospitals from Performing Sex-Rejecting Procedures on Children, HHS (Dec. 18, 2025), available at https://www.hhs.gov/press-room/hhs-acts-bar-hospitals-performing-sex-rejecting-procedures-children.html.
Medicare and Medicaid Programs; Hospital Condition of Participation: Prohibiting Sex-Rejecting Procedures for Children, Federal Register (Dec. 19, 2025), available at https://www.federalregister.gov/documents/2025/12/19/2025-23465/medicare-and-medicaid-programs-hospital-condition-of-participation-prohibiting-sex-rejecting; Medicaid Program; Prohibition on Federal Medicaid and Children's Health Insurance Program Funding for Sex-Rejecting Procedures Furnished to Children, Federal Register (Dec. 19, 2025), available at https://www.federalregister.gov/documents/2025/12/19/2025-23464/medicaid-program-prohibition-on-federal-medicaid-and-childrens-health-insurance-program-funding-for.
American Academy of Pediatrics v. U.S. Department of Health and Human Services, 1:25-cv-04505, (D.D.C.), available at https://democracyforward.org/wp-content/uploads/2026/01/Opinion-Granting-PI.pdf.
The court also rejected HHS’s reliance on the U.S. Supreme Court’s recent per curiam orders from its emergency docket, in Department of Education v. California, 604 U.S. 650 (2025) and National Institutes of Health v. American Public Health Association, 145 S. Ct. 2658 (2025). Judge Howell applied the D.C. Circuit’s Megapulse test (Megapulse, Inc. v. Lewis, 672 F.2d 959 (D.C. Cir. 1982)), holding that AAP’s First Amendment challenge may proceed in district court because it seeks prospective relief to remedy a constitutional violation, not specific performance or money damages within the Court of Federal Claims’s Tucker Act jurisdiction.