Professor Greg Sisk on the Trump Administration's Failure to Transfer Federal Grant Litigation to the Court of Claims

Professor Sisk suggests that in jurisdictional disputes in litigation against the Trump Administration, an earlier answer would be better.

Federal grant recipients and beneficiaries have filed multiple suits in federal district court challenging the Trump Administration's grant cancellations. Insofar as these suits seek the disbursement or payment of promised funds, it would seem jurisdiction lies in the Court of Federal Claims. Yet the Trump Administration has not (as yet) sought to transfer any of these cases.  Why not?

Professor Greg Sisk is one of the nation's foremost authorities on civil litigation with the federal government. Indeed, he wrote the hornbook on the subject. He is also the Associate Dean for Research and Pio Cardinal Laghi Distinguished Chair in Law at the University of St. Thomas School of Law.

Below is a guest post by Professor Sisk exploring this question.

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Given my study of civil litigation with the federal government, the current bevy of lawsuits challenging various Trump Administration initiatives falls right into my scholarly wheelhouse. From mass firings (reductions in force) of federal employees to immigration battles and beyond to spending disputes, nearly every day brings me something new to watch with interest. At the still early stage for most of these lawsuits, the focus has been on procedural and jurisdictional questions, which are grist for my litigation-with-the-federal-government mill.

Take, for example, the proliferation of lawsuits in federal district courts around the country provoked by the Trump Administration's cancellation of thousands of federal government grants amounting to billions of dollars. In addition to other defenses, the Department of Justice regularly asserts that (1) grants are simply contracts and (2) contract disputes involving the federal government fall within the exclusive jurisdiction of the special Court of Federal Claims under the Tucker Act, 28 U.S.C. § 1491.

The Supreme Court has weighed in on this jurisdictional choice, at least preliminarily on the so-called shadow docket and at least with respect a lawsuit where the plaintiffs are disappointed grant recipients. Granting the government a stay of a district court injunction to resume payments on certain grants, the Supreme Court ruled in Department of Education v. California that the government was likely to prevail on its subject matter jurisdiction argument. The Supreme Court majority viewed the grant claims in that case as grounded in contract and thus within the exclusive jurisdiction of the Court of Federal Claims.

Why then has the Department of Justice repeatedly failed to act in the multitude of grant dispute lawsuits filed in multiple district courts by simply moving to transfer to the Court of Federal Claims?

Few have written more scholarly works on the Tucker Act and the Court of Federal Claims than have I (e.g., here and here). And yet I confess that I am perplexed by the government's failure to initiate a special statutory process tailored to resolve this very kind of jurisdictional puzzle.

In 1988, Congress adopted a particular procedural mechanism to achieve a prompt resolution of this category of jurisdictional questions. Under 28 U.S.C. 1292(d)(4), if the federal government moves in district court to transfer a case to the Court of Federal Claims under the Tucker Act, that motion stays further proceedings in the district court until 60 days after the judge rules on the transfer motion (admittedly with a key exception I'll note below). Further, if the district court denies the motion to transfer, the government then may file an immediate interlocutory appeal on the jurisdictional question — and that appeal bypasses the regional circuit and goes directly to the U.S. Court of Appeals for the Federal Circuit.

Now there is an exception in this jurisdictional statute that allows the district court during that stay period to grant preliminary relief when expedition is necessary. That of course means that the government couldn't avoid the possible issuance of temporary injunctive relief in these grant cancellation cases. But it would prevent the district court from proceeding to the merits, presumably halting discovery, and again would provide for an immediate appeal for expeditious resolution of the jurisdictional question in the Federal Circuit.

The United States has used this interlocutory appeal provision repeatedly over the past three decades, turning to the Federal Circuit with its nationwide jurisdiction to solidify the authority of the Court of Federal Claims over claims that are in essence attempts to obtain money from the federal government. This jurisdictional issue is hardly new — it is the longstanding question of whether a case involves a "disguised" Tucker Act claim that has been wrongly brought in district court. The Federal Circuit has issued several key jurisdictional precedents in these interlocutory appeals.

As shameless self-promotion, I am especially familiar with this appellate jurisdiction statute because I wrote Subsection 1292(d)(4) when I served in the Department of Justice. I convinced my DOJ superiors to promote my draft to the House Judiciary Committee where it was eventually adopted in judicial reform legislation in 1988. As I say in a footnote in my hornbook on this statutory subsection, my colleagues for a time honored/teased me by referring to these interlocutory appeals as "Sisk Appeals."

Anyway, so why is the government repeatedly failing to take the step of moving in the district court to transfer to the Court of Federal Claims, which then triggers a stay from moving to the merits and allows an interlocutory appeal to the Federal Circuit if the motion is denied?

Three possible reasons occur to me, but none are satisfying.

First, perhaps the Department of Justice has been so emptied of experienced civil litigators that the few remaining lawyers are too overwhelmed to initiate this procedural step or insufficiently versed in statutory procedures to be aware of it. Reports are that the Federal Programs Branch in DOJ's Civil Division, which ordinarily would handle this class of lawsuits, has lost about 70 percent of its lawyers.

Second, perhaps the Trump DOJ is wary of the Federal Circuit for some reason and wishes to avoid an interlocutory appeal going there, thus being willing to wait for the case to move through to the regional circuit to decide the jurisdictional question. But at the end of the day, this strategy would work only to delay and not to change the path of the litigation. If the government is right in its objection to jurisdiction in the district courts, then the longstanding remedy (even if neither party asks) is to transfer the case to the Court of Federal Claims under 28 U.S.C. § 1631. And since all appeals from the Court of Federal Claims go to the Federal Circuit, then that appellate destiny cannot be avoided.

Third, perhaps the DOJ is less confident in its jurisdictional position than it pretends to be and so is willing to simply drag things out. This last strikes me as the least plausible explanation, since the government has not hesitated to go to the Supreme Court and seek a stay based, in part, on this jurisdictional argument.

Whatever the reason for the government's failure to invoke the jurisdictional resolution statute, I cannot think of what would measure up as a good reason.

As Justice Scalia once wrote, in a dissent endorsing the jurisdictional control of the Court of Federal Claims over past-due money claims, "[n]othing is more wasteful than litigation about where to litigate, particularly when the options are all courts within the same legal system that will apply the same law." For that reason, swifter resolution of such jurisdictional disputes is always preferable.

The federal courts rightly expect the highest in ethical behavior from federal government lawyers. The Department of Justice should be facilitating prompt resolution of the jurisdictional dispute. Section 1292(d)(4) is waiting to make that happen.