High Court Emergency Docket Hangs Over California Rail Suit

A lawsuit seeking to preserve California’s federal funding for a high-speed rail project prompted debate over the significance of two US Supreme Court emergency docket rulings, leaving the judge to mull whether the rulings resolve the case.

Deputy Attorney General Sharon O’Grady, arguing for California, said the justices’ orders in Department of Education v. California and National Institutes of Health v. American Public Health Association —that concern when a dispute should be heard in the Court of Federal Claims rather than district court—shouldn’t control this case because the rulings involved cases at the preliminary injunction stage, rather than a motion to dismiss.

“They’re asking you to dismiss the whole case based on stay orders that don’t even resolve both cases,” O’Grady said to US District for the Eastern District of California Judge Dale Drozd.

Justice Department attorney Kathryn Barragan, on the other hand, said the cases should control and that the NIH case in particular is “nearly identical” to the dispute at the center of the Monday hearing over high-speed rail funds. The justices in that case were weighing the same question of whether an agreement needs a direct benefit to the US to be heard in the Court of Federal Claims, rather than a district court, she said.

Federal judges have expressed confusion over how to apply the Supreme Court’s orders in motions for emergency relief that are brief or unexplained, particularly the degree to which they are binding precedent.

Drozd didn’t appear to give the NIH opinion—"I think they labeled it as an opinion,” he said—very much weight. It was “very, very brief,” he said.

“Isn’t this case different here?” said Drozd, an appointee of former President Barack Obama. “Plaintiff is seeking relief in the form of an order setting aside the termination decisions and not an order to pay plaintiffs sums due under the cooperative agreements forthwith. Isn’t that different?”

$4 billion

California sued the Department of Transportation in July, seeking to preserve $4 billion in federal funding marked for high-speed rail construction in the state’s Central Valley.

California argues the state’s cooperative agreement with the federal government doesn’t rise to the level of an enforceable contract that would need to be heard in the Court of Federal Claims. The state’s obligations under the agreement don’t directly benefit the federal government, as the state says is required to move the case.

California appears “to concede that the cooperative agreements imposed a variety of duties on plaintiffs in implementing the agreements,” Drozd said.

The federal government argues a direct benefit isn’t necessary for the agreement to be considered a contract.

California’s lawyers on Friday moved to withdraw their motion for a preliminary injunction without prejudice. Though she didn’t explain why on Monday when asked by Drozd, O’Grady said she doesn’t anticipate renewing the motion over the holidays.

Drozd took the matter under submission and said he doesn’t have an estimate on when he’ll rule on DOJ’s motion to dismiss.

The case is CA High-Speed Rail Authority v. Department of Transportation, E.D. Cal., No. 2:25-cv-02004, 11/17/25.