Columbia University Funding Lawsuit: Vacatur and Settlement

The Columbia University funding lawsuit ended without a ruling on the merits. Filed in March 2025 by two faculty unions to block the Trump administration’s cancellation of roughly $400 million in federal grants and contracts, the case was dismissed three months later for lack of standing, then vacated as moot on appeal in May 2026 after Columbia itself settled with the government for $221 million and a long list of policy concessions.

What the Administration Cut

On March 7, 2025, the Departments of Justice, Health and Human Services, and Education, together with the General Services Administration, announced the “immediate cancellation” of about $400 million in federal grants and contracts to Columbia, citing the university’s handling of antisemitism during campus protests over the Israel-Hamas war.¹ The agencies called it a “first round” and noted Columbia held more than $5 billion in total federal grant commitments.²

The cut represented a meaningful share of Columbia’s $1.3 billion in annual federal funding. The National Institutes of Health terminated hundreds of active research grants. Columbia laid off at least 180 employees whose salaries depended on federal grants, the chemistry department lost several postdoctoral NIH fellowships, and the chemical engineering department cut its incoming PhD class from about 22 students to 11. At least one federal agency reportedly told its program managers not to review any Columbia applications.³

Two months later, in May 2025, the HHS Office for Civil Rights issued a formal notice alleging Columbia had violated Title VI of the Civil Rights Act by acting with “deliberate indifference” toward harassment of Jewish students from October 2023 onward.⁴ That notice arrived after the funding cuts, not before them, which became a central point of dispute in the litigation.

Who Sued and Why

On March 25, 2025, the American Association of University Professors and the American Federation of Teachers filed suit in the U.S. District Court for the Southern District of New York. The case, American Association of University Professors v. Department of Justice, No. 1:25-cv-02429, was brought on the unions’ behalf by the nonprofit Protect Democracy and the law firm Altshuler Berzon LLP.⁵

Columbia itself was not a plaintiff. The unions represented affected faculty and researchers whose grants had been terminated or whose work depended on them.

The complaint raised several claims. The unions argued the cancellation violated the First Amendment by using financial coercion to punish campus speech and reshape faculty hiring and admissions along ideological lines. They alleged Administrative Procedure Act violations, contending the agencies had bypassed required rulemaking procedures and acted arbitrarily. They invoked Fifth Amendment due process, arguing Columbia received no notice or hearing before losing its grants. Additional claims rested on the Tenth Amendment, the Spending Clause, and separation of powers, with the unions contending the executive branch had usurped Congress’s power of the purse.⁶

The unions sought a preliminary and permanent injunction restoring funding, along with declaratory relief, damages, and attorneys’ fees. Amicus briefs came in from the Foundation for Individual Rights and Expression, which invoked the Supreme Court’s 2024 decision in NRA v. Vullo on unconstitutional financial coercion,⁷ and later from the ACLU, the Cato Institute, the Rutherford Institute, the New York Civil Liberties Union, and the National Coalition Against Censorship, who jointly argued the government was imposing “ideological litmus tests” on curricula, research, and faculty hiring.⁸

Why the District Court Dismissed the Case

On June 16, 2025, U.S. District Judge Mary Kay Vyskocil denied the preliminary injunction and dismissed the case without prejudice. Standing was the core problem. The unions, the judge held, were “inserting themselves into a quarrel between the Executive Branch and non-party Columbia.”⁹

Judge Vyskocil reasoned that federal grants are contracts with the university, not with individual researchers, so the unions’ members were not direct parties harmed by the cuts. She found their claims of chilled speech too “subjective and speculative” to establish an injury-in-fact, noting that affected professors were continuing to speak out publicly. She also suggested Columbia could cover the gap with endowment or private funds, and said the executive branch was permitted to terminate grants “inconsistent with agency priorities.”¹⁰ On the legal theory, she concluded the funding cuts had not been conducted under Title VI at all, but under a federal regulation permitting termination when an award “no longer effectuates the program goals or agency priorities.”¹¹

The ruling drew immediate criticism from legal scholars. A group of eight Columbia Law School professors published an analysis arguing the judge had failed to draw reasonable inferences in the plaintiffs’ favor at the preliminary injunction stage. They pointed to the layoff of 180 researchers as concrete evidence of harm, called the suggestion that Columbia’s endowment could fill the gap “not based on any record evidence,” and argued that government coercion of the university should not foreclose injured faculty from seeking relief.¹¹

The Second Circuit Vacatur

The unions appealed the same day. By July 2025, however, Columbia had reached its own settlement with the administration, restoring most of the frozen funding and removing the controversy at the center of the case. In March 2026 the parties filed a joint motion to dismiss the appeal as moot.

On May 14, 2026, the Second Circuit granted the motion. It dismissed the appeal, vacated the district court’s order, and remanded with instructions to dismiss the case as moot. The majority applied the Munsingwear doctrine, which holds that when a case becomes moot through no fault of the appealing party, the lower court’s ruling should generally be wiped clean so it cannot “spawn any legal consequences.” The court reasoned that the government’s own settlement with Columbia had made the lawsuit “largely superfluous” and that the unions had been forced to withdraw their claims because the primary relief they sought had already been achieved through third-party action rather than voluntary abandonment.¹²

Judge Steven Menashi dissented, calling the vacatur “unprecedented.” In his view, the unions had voluntarily chosen to withdraw their claims and therefore forfeited the equitable remedy of vacatur under the Supreme Court’s Bancorp standard. He argued the majority’s approach rewarded a losing party for walking away from an appeal and let them erase an unfavorable ruling they had originally sought to overturn.¹²

The practical effect of the vacatur is that Judge Vyskocil’s standing analysis carries no precedential weight. Future faculty or union challenges to federal funding cuts at other universities begin from a clean slate on that question.

The Settlement That Ended the Case

Columbia announced its resolution agreement with the federal government on July 24, 2025. The financial terms totaled roughly $221 million: a $200 million payment to the government spread over three annual installments of about $66 million, plus a separate $21 million fund to settle an Equal Employment Opportunity Commission investigation into workplace harassment and discrimination against Jewish employees since October 2023.¹³ In exchange, the government reinstated most terminated grants and restored Columbia’s eligibility for future federal funding.¹⁴

Columbia did not admit wrongdoing and expressly stated it did not agree with the government’s conclusion that it had violated Title VI.¹⁵

The non-financial terms reached deep into university operations:

Columbia agreed to incorporate the International Holocaust Remembrance Alliance definition of antisemitism into the work of its Office of Institutional Equity, using it as a factor in adjudicating anti-discrimination cases.¹³
A new senior vice provost, Miguel Urquiola, was tasked with a review of regional studies programs starting with Middle East studies. The agreement also required new faculty affiliated with the Institute for Israel and Jewish Studies.¹⁶
Protests inside academic buildings were barred, and masked demonstrators must show identification on request. Columbia committed to employing public safety officers with arrest powers.¹⁶
Columbia agreed to end programs promoting “unlawful efforts to achieve race-based outcomes, quotas, diversity targets, or similar efforts,” and to refrain from considering race, color, sex, or national origin in hiring.¹⁶
The university agreed to ask prospective international students about their reasons for studying in the United States and to share information about disciplinary actions involving visa holders with the federal government upon request.¹⁷
Students were removed from judicial panels, and the disciplinary process was restructured.¹⁶

The agreement included an academic autonomy clause stating that nothing in it gave the government authority to dictate faculty hiring, admissions decisions, or the content of academic speech.¹⁵

Compliance is overseen by an independent monitor. Bart Schwartz of Guidepost Solutions was the original appointee; in January 2026 he was replaced by Charles J. Cooper, founding partner of Cooper & Kirk and a former assistant attorney general under Reagan. Columbia said the switch was made for “administrative and logistical reasons” related to billing.¹⁸

Reactions to the Settlement

AAUP President Todd Wolfson called the settlement an “unprecedented disaster” and a “stunning breach of the independence of colleges and universities.”¹⁹ Columbia law professor David Pozen said the agreement gave “legal form to an extortion scheme” and noted that “no established legal process was followed.”²⁰ The Knight First Amendment Institute at Columbia called the deal an “astonishing transfer of autonomy and authority to the government.”²¹

Some faculty defended the deal. Professors Jacob Fish and Howard Worman argued it was essential to restore the federal funding that sustains Columbia’s research enterprise and to prevent a broader faculty exodus.²⁰ The University Senate was not involved in the negotiations, which frustrated faculty who saw the process as bypassing shared governance.

Where Things Stand

Columbia released its first semiannual compliance report on April 1, 2026. Of the settlement’s 23 provisions, 18 were marked “complete” or “satisfied to date,” with five still “in progress.” Jim Glover, a dean at the Climate School, was designated resolution administrator. Cooper, the independent monitor, was conducting a comprehensive audit of admissions data.²²

Nearly 99 percent of the grants cut in spring 2025 have been restored. But Columbia now faces separate exposure from the administration’s fiscal year 2027 budget proposal, which would cut federal science agency budgets by more than $15 billion, including reductions of over 50 percent at the National Science Foundation and 13 percent at NIH. Congress rejected a similar attempt for fiscal year 2026, and lawmakers are scheduled to vote on the new proposals in September 2026.²³

The AAUP-AFT case is closed. Because the Second Circuit vacated the district court’s ruling, no binding precedent came out of the litigation itself. The legal questions raised by the unions about coerced funding cuts, executive bypass of Title VI’s procedures, and the First Amendment limits on conditioning federal grants on campus speech remain undecided by a federal court on the merits.

1
U.S. Department of Education. DOJ, HHS, ED and GSA Announce Initial Cancelation of Grants and Contracts to Columbia University Worth $400 Million
2
Columbia Spectator. Trump Administration Cuts $400 Million in Federal Funding to Columbia
3
Chemical & Engineering News. Columbia University Chemical Scientists Dismayed
4
CNN. Columbia University HHS Civil Rights Violation
5
Protect Democracy. Faculty Unions Sue Trump Administration
6
Civil Rights Litigation Clearinghouse. American Association of University Professors v. Department of Justice
7
Protect Democracy. Amicus Brief of FIRE
8
ACLU. Amicus Brief in AAUP v. United States Department of Justice
9
Columbia Spectator. Federal Judge Dismisses AAUP and AFT Lawsuit Against Trump Administration Over Columbia Funding Cuts
10
The Guardian. Trump Administration Columbia Lawsuit Dismissed
11
Knight First Amendment Institute. The District Court Opinion in the AAUP Case Gets Just About Everything Wrong
12
U.S. Court of Appeals for the Second Circuit. AAUP v. U.S. Department of Justice, No. 25-1529
13
Columbia University. Resolution Agreement Frequently Asked Questions
14
White House. Fact Sheet: President Donald J. Trump Secures Major Settlement With Columbia University
15
Columbia University Office of the President. Resolution of Federal Investigations and Restoration of University’s Research Funding
16
New York Times. Columbia Trump Settlement What to Know
17
PBS NewsHour. Columbia University Makes Deal With Trump Administration
18
Columbia Spectator. Lawyer Who Argued for State Ban on Same-Sex Marriage Named New Independent Monitor
19
AAUP. Columbia University Settlement: Unprecedented Disaster
20
Columbia Spectator. Faculty React to Columbia’s $200 Million Settlement With Trump Administration
21
Knight First Amendment Institute. What the Columbia Settlement Really Means
22
Columbia Spectator. In First Report on Active Compliance With Trump Deal, Columbia Mandates Civil Discourse Attestation
23
Columbia Spectator. Columbia Stands to Lose Tens of Millions as White House Reopens Push to Cut Science Funding