Key Points

  • The Fourth Circuit held, 2-1, that the Tucker Act did not deprive the district court of jurisdiction over every claim in the Fairfax County and Arlington school boards' APA complaints.
  • The majority held that the districts' challenges to their Title IX violation findings and high-risk, reimbursement-only designations rest on Title IX rather than on grant terms, and that some requested relief is not contractual.
  • The court distinguished Department of Education v. California, NIH v. American Public Health Association, and its own Sustainability Institute and Solutions in Hometown Connections decisions as grant-termination cases, and pointed to 20 U.S.C. §§ 1683 and 1234g as congressional review provisions for Title IX enforcement.
  • Judge Richardson dissented, arguing that the districts' claims seek advance payment under their grant contracts and belong exclusively in the Court of Federal Claims.
  • The judgment was vacated and remanded; the department's other jurisdictional and merits objections, including ripeness, were left for the district court.

A federal appeals court on Oct. 15 revived lawsuits by the Fairfax County and Arlington school boards challenging the Education Department's decision to label them "high-risk" grant recipients over policies that let transgender students use bathrooms and locker rooms matching their gender identity. The court held that the suits do not belong exclusively in the Court of Federal Claims, the tribunal that hears contract claims against the government.

A divided three-judge panel of the 4th U.S. Circuit Court of Appeals vacated a ruling by U.S. District Judge Rossie David Alston Jr. in Alexandria, Virginia. Judge Alston had dismissed both suits on his own initiative after concluding that the Tucker Act, which sends contract claims against the United States for more than $10,000 to the Court of Federal Claims, stripped the district court of jurisdiction. Judge Rushing wrote the majority opinion, joined by Chief Judge Diaz. Judge Richardson dissented.

The decision separates the school boards' suits from recent cases, including Supreme Court orders in Department of Education v. California and National Institutes of Health v. American Public Health Association, holding that challenges to terminated federal grants likely belonged in the Court of Federal Claims. The majority concluded that the districts' complaints turn on whether they are violating Title IX, the federal law barring sex discrimination in federally funded education programs, rather than on the terms of any grant.

The dispute began in February 2025, when the department's Office for Civil Rights received a complaint about the two districts' policies and opened an investigation. The districts defended the policies, arguing that Title IX actually required them under the 4th Circuit's 2020 decision in Grimm v. Gloucester County School Board. In a 21-page letter of findings, the office concluded that the districts were violating Title IX and that Grimm "does not shield" them.

The office sent the districts a draft resolution agreement requiring them to rescind their policies and to issue a memorandum defining terms including "male" and "female." When the districts refused, the department began administrative proceedings seeking to suspend or terminate their federal funding. It also designated them high-risk and put their department grants on a reimbursement basis, requiring each district to pay expenses with non-federal money before drawing down grant funds.

The districts sued under the Administrative Procedure Act, the law that lets courts set aside unlawful agency action. They asked the court to set aside the high-risk designations, to declare that their policies comply with Title IX, and to bar further enforcement. Relying on those orders, the district court found that the districts based their complaints around "requests to order the payment of money."

Judge Rushing wrote that the districts do not claim any grant entitles them to advance payment. Their claim, the opinion said, is that "the Department cannot place them on reimbursement status as a penalty for violating Title IX when, in their view, they are not violating the statute." The source of that asserted right, the court held, "is statutory, not contractual."

The majority also said the districts sought relief that does not sound in contract, such as a declaration that their policies are lawful. Even if the district court could not order the department to "immediately pay" denied funds, the court said, that limit did not doom the complaints as a whole. Citing Justice Barrett's controlling opinion in the NIH case, the majority wrote that the approach taken there "cautions against dismissing an entire complaint when only one claim or request for relief may fall beyond the district court's jurisdiction."

The court also cited two statutes in which Congress gave federal courts power to review Title IX funding cutoffs and other enforcement actions. "This framework of agency enforcement and judicial review is materially different from the context in which the Government terminated the grants" in the earlier cases, Judge Rushing wrote. The parties agree that no funds have yet been denied, and the majority noted that a suit over a denied reimbursement request "may raise different jurisdictional questions."

In dissent, Judge Richardson wrote that the districts' "demand for prepayment under their grant contracts is the gravamen of their claims." The dissent continued: "Plaintiffs cannot bypass Congress' choice and sneak into district court by dressing up a contract claim in statutory clothes."

Judge Richardson argued that because Title IX is a Spending Clause statute, which binds recipients only through their acceptance of federal funds, the districts' objection to its enforcement is a complaint about their bargain with the government. "Title IX provides the reason why the Department changed how it pays the districts," Judge Richardson wrote. "The majority confuses the reason with the right."

The dissent faulted the majority for not naming the surviving claims. "We are left, then, with a claim that must not be named. I do not envy the district court's task of identifying it," Judge Richardson wrote. In a footnote, the dissent said that once the advance-payment claims fall away, only the department's letter and the start of administrative proceedings remain, and neither is final agency action reviewable under the APA.

The majority responded that the request to block further enforcement "may be vulnerable to dismissal for other reasons," but said that decision belongs to the district court. Virginia and 20 other states filed an amicus brief supporting the government; civil rights groups including the NAACP backed the districts.

Timothy J. Heaphy of Willkie Farr & Gallagher LLP argued for the school boards. Abhishek Kambli of the Justice Department argued for the government, and Virginia Attorney General Jason S. Miyares appeared on the brief for the Commonwealth of Virginia as amicus.

The case now returns to Judge Alston. The appeals court decided only the Tucker Act question, saying the department's other threshold objections to jurisdiction and to the merits remain open and that "nothing in our decision should be construed as ruling on those contentions, which we leave for the district court to address in the first instance."