## Facts

- Adult stem cell researchers James L. Sherley and Theresa Deisher challenged NIH funding policies that permitted grants for research using human embryonic stem cell (hESC) lines.
- The policies followed a 2009 presidential directive for NIH to support stem cell research, including hESC research, to the extent permitted by law, and NIH’s issuance of 2009 Guidelines establishing eligibility criteria for funding research using certain hESC lines.
- Plaintiffs contended the Guidelines violated the Dickey–Wicker Amendment, an appropriations restriction barring federal funding for “research in which a human embryo or embryos are destroyed, discarded, or knowingly subjected to risk of injury or death.”
- The district court initially dismissed for lack of standing; the D.C. Circuit reversed in part, holding plaintiffs had “competitive standing” based on increased competition for a fixed pool of NIH grant funds.
- On remand, the district court issued a preliminary injunction halting federal funding for hESC research; the D.C. Circuit vacated the injunction, concluding plaintiffs were unlikely to succeed on the merits under Chevron.
- The district court later granted summary judgment for the government; plaintiffs appealed.

## Issues

1. Whether adult stem cell researchers had Article III standing based on competitive injury from NIH’s funding policies.
2. Whether the Dickey–Wicker Amendment unambiguously barred federal funding for research using hESC lines derived through embryo destruction occurring earlier and with nonfederal funds.
3. Whether NIH’s interpretation of Dickey–Wicker was entitled to Chevron deference and was reasonable.
4. Whether the earlier appellate statutory analysis (from the preliminary-injunction appeal) controlled the later merits appeal under law-of-the-case principles.
5. Whether NIH’s promulgation of the 2009 Guidelines was arbitrary or capricious under the Administrative Procedure Act, including NIH’s handling of categorical ethical objections to hESC research.

## Decision

- The D.C. Circuit held plaintiffs had standing based on increased competition for limited NIH funding.
- The D.C. Circuit vacated the preliminary injunction, concluding plaintiffs were unlikely to succeed because Dickey–Wicker was ambiguous and NIH’s reading was reasonable under Chevron.
- The D.C. Circuit affirmed summary judgment for the government, upholding the 2009 Guidelines and continuing federal funding for research using eligible hESC lines.
- The court rejected plaintiffs’ attempt to relitigate the statutory question, holding the preliminary-injunction exception to law-of-the-case did not apply because the prior panel had fully addressed the statutory merits and no extraordinary circumstances justified revisiting it.
- The court rejected APA challenges, holding NIH’s approach was not arbitrary or capricious, including its decision not to engage substantively with comments urging a categorical ban beyond NIH’s delegated task.

## Legal Principles

- Competitive standing exists when a plaintiff alleges a concrete, particularized injury from increased competition for a fixed pool of government benefits, and that injury is traceable to the challenged action and redressable by relief.
- Under Chevron, if a statute is ambiguous on a question committed to an agency’s administration, a court will uphold any reasonable agency interpretation.
- Dickey–Wicker’s phrase “research in which” was treated as ambiguous as applied to downstream research using already-derived hESC lines; NIH could reasonably distinguish between nonfundable embryo-destruction “derivation” and fundable subsequent research using existing lines.
- Law-of-the-case doctrine can bar relitigation of an issue resolved in an earlier appeal; an interlocutory posture does not justify reconsideration when the earlier court fully decided the legal question and no exceptional basis exists.
- Under APA arbitrary-and-capricious review, an agency need only respond to significant comments within the scope of the rulemaking; it may decline to address objections that effectively seek outcomes outside the agency’s statutory mandate as implemented.

## Conclusion

The D.C. Circuit sustained NIH’s 2009 hESC funding Guidelines, holding plaintiffs had standing but were not entitled to relief because Dickey–Wicker did not unambiguously bar funding for research using existing hESC lines and NIH’s contrary interpretation was reasonable and procedurally lawful under Chevron and the APA.


Sherley v. Sebelius, 689 F.3d 776 (D.C. Cir. 2012)