HHS Funding Termination Ruled Unlawful: Courts Grant Preliminary Injunction

A U.S. District Court for the District of Rhode Island has granted a motion for a preliminary injunction against the Department of Health and Human Services (HHS) and Secretary of Health and Human Services, Robert F. Kennedy Jr. This ruling comes after HHS unilaterally terminated access to $11 billion in funding allocated to 23 states and the District of Columbia for public health initiatives.

The preliminary injunction requires HHS to continue providing access to funding and prevents it from "tak[ing] any action to reinstitute" terminations "for the same or similar reasons." The court found that HHS exceeded its statutory authority and acted in excess of its authority by terminating funds without providing adequate notice and opportunity for a hearing.

Key Takeaways:

• HHS's termination of funding without explicit congressional authorization was deemed likely unlawful.
• State entity grant recipients and healthcare industry stakeholders should closely monitor HHS actions to ensure compliance with statutory authority.
• HHS and its sub-agencies may be required to adhere to procedural requirements, including providing notice and conducting hearings, before terminating funding.
• Companies should ensure procedural compliance in their interactions with federal agencies.
• HHS and its sub-agencies' decisions lacking a rational basis or reasonable explanation are unlikely to be upheld when challenged.
• Healthcare industry participants should document reliance interests and advocate for reasoned decision-making.
• The court's emphasis on the public interest in maintaining health funding highlights the importance of these programs.
• Industry stakeholders should, where possible, align their operations with public health priorities to improve positioning should further litigation challenges to federal agency action be deemed necessary.

Statistics:

• $11 billion in funding was terminated by HHS without prior notice.
• 23 states and the District of Columbia received funding for public health initiatives.
• HHS distributed funds across two sub-agencies, the Center for Disease Control (CDC) and the Substance Abuse and Mental Health Services Administration (SAMHSA).
• The remaining funds had multiple purposes, including providing immunizations to vulnerable populations, strengthening emergency preparedness for future health threats, and providing mental health and substance abuse services.

Sources:

• 2025 WL 1426226 (D.R.I. May 16, 2025)
• 42 U.S.C. § 300x-55(e)
• 42 U.S.C. § 300x-55(g)