A federal appeals court upheld a lower court ruling preventing the National Institutes of Health (NIH) from imposing a 15 percent cap on overhead payments to research institutions.[1] The justices expressed skepticism about the Trump administration's arguments during a hearing in November 2025.[1] The dispute concerns billions of dollars that could be missing out on universities, medical centers and other grant recipients to cover infrastructure and administrative support for federally funded research.[1] The plaintiffs are 22 states, along with universities and academic groups, who say the NIH policy violates the federal Due Process Act and existing congressionally approved budgets.[1] A lower court in April 2025 converted the preliminary injunction to permanent, preventing the NIH from implementing the limit.[4] Courts have issued similar rulings against attempts by the National Science Foundation (NSF) and the Department of Energy to impose the same caps on overhead costs.[4]