By David Thomas and Mike Scarcella
Aug 5 (Reuters) – A judge on Wednesday ordered the U.S. government to cover a university association’s legal fees after the group won a court ruling that blocked President Donald Trump’s administration from capping some reimbursements related to defense research.
U.S. District Judge Brian Murphy in Boston awarded more than $450,000 in attorney fees to the Association of American Universities under a 1980 federal law that allows litigants to recover their legal costs from the government in some civil cases.
Twelve universities and three academic trade groups, including the AAU, sued the U.S. Department of Defense in May 2025 after the department said it would cap at 15% the rate at which universities can be reimbursed for “indirect costs” of funded research, such as costs for facilities, equipment and research staff serving multiple projects. The AAU and the other plaintiffs argued that the new policy was unlawful.
Murphy issued a temporary restraining order blocking the reimbursement cap in June 2025 and entered judgment for the AAU and other plaintiffs in December. The U.S. appealed but then dropped it.
Murphy ruled on Wednesday the AAU’s fee award was warranted because the Defense Department’s policy was not “substantially justified.” The department in its legal arguments pointed to similar rate caps that were announced by the National Institutes of Health and U.S. Department of Energy as a basis for its own policy but ignored that those rate caps were also blocked by other judges, Murphy said.
“The ostrich burying his head in the sand is manifestly unreasonable,” Murphy wrote.
Murphy rejected the U.S. Justice Department’s argument that the AAU did not qualify for fees because its members are research universities like Harvard and Yale that have large endowments. He found that the AAU independently funded the lawsuit, spending over $2 million. Murphy did find that the AAU’s initial fee request of $530,000 was “slightly excessive” and reduced the award.
Spokespersons for the AAU and the Defense Department declined to comment. Two of the AAU’s lawyers, Paul Clement of Clement & Murphy and Lindsay Harrison of Jenner & Block, did not immediately respond to requests for comment. The Justice Department also did not immediately respond.
The legal fees were awarded under the Equal Access to Justice Act, which allows individuals and small organizations in civil actions to recover a limited amount of fees from the federal government if they win a final judgment and the government’s position was not “substantially justified.”
The university association is one of several parties that have sought fees under the EAJA after winning civil cases against the Trump administration over its policies.
(Reporting by David Thomas)
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