Once the court had accepted that plaintiffs had standing to contest the actions of the NIH, it proceeded to consider the merits of their claims. Professor Abbs and the Board put forward several legal theories challenging the right of the NIH to conduct its investigation without affording them the right to hearings and to examine its documents and witnesses. The first was that Professor Abbs and the Board had a right to federal funding that was equivalent to the right of a property owner's right to his or her property:
"Plaintiff Abbs contends that he has a constitutionally protected property interest that derives from the interrelationship of federal funding with his career advancement and income. He asserts that he will suffer a loss of income and a loss of opportunities for professional advancement if federal funding is taken from him or becomes more difficult to obtain. As important as such funding is to plaintiff Abbs, however, it does not constitute a constitutionally protected property interest unless his claim to it is legally enforceable by contract or under state or federal law."
"As to future federal funding, plaintiff Abbs has no enforceable right to receive grants or awards, whatever his status as a researcher. Such funding is always discretionary with the funding agency. As to the current grants, he is not the grantee and can claim no property rights in the funding for these grants. Pursuant to 45 C.F.R. Part 74, the plaintiff Board of Regents is the grantee of the awards and the entity that has the legal and financial responsibility for the grant funds and that bears the initial costs of paying for personnel, space and facilities. There is no evidence that Abbs would incur any personal financial injury if current funding for his research were suspended or terminated."
". . . Plaintiff Abbs argues that even if he is not the grantee of the funds, he has a protectible interest in them arising from his status as the intended beneficiary of the funding. . . . The grant awards made to the Board of Regents are not made for his benefit, but for the benefit of the public that may enjoy the fruits of his research."
". . . At most, the government could be said to have created 'rights' for its awardees that entitle them not to be barred from competing for future government grants and not to lose current grant funding without due process. These are the benefits that cannot be taken away without a determination of cause made after a full hearing. The lesser sanctions and the interim actions that plaintiffs are challenging are not subject to any such determinations, but may be imposed within the essentially unfettered discretion of defendants."
"The Board contends it has a property interest in current grants and in noncompeting applications and noncompeting extensions. Its asserted property interest in plaintiff Abbs's current grants is based on the commitments the Board has made to NIH in connection with the grants that are funding plaintiff Abbs's research, under which it has agreed to abide by certain terms and conditions of the grant and in return is guaranteed the funds that the Public Health Service has committed for the approved budget period. Its asserted property interest in extension funding for the X-ray microbeam laboratory rests on the fact that the application is for a noncompeting extension under the Public Health Service's grants administration procedure that does not compete with other projects and can be granted administratively."
"Whatever commitments the Board of Regents has made to the X-ray microbeam laboratory, and however critical continued federal funding is to the Board's support of the laboratory, the Board does not have a legally enforceable right to future funding for the laboratory that would give it a constitutionally protected property interest. Although the Board argues that such grants are awarded 'essentially automatically,' 42 C.F.R. s 52.6(b)(3) provides explicitly that '[n]either the approval of any application nor the award of any grant commits or obligates the United States in any way to make additional, supplemental, continuation or other award with respect to any approved application or part of an approved application.' In the light of this regulatory language, it cannot be said that even noncompeting continuation grants are legally enforceable by the grantee."
"The Board does have a protected property interest in the funding already in place. If there is a reasonable possibility that previously committed funds will be terminated or subjected to recoupment as a result of the investigation of Abbs, the Board has a right to procedural due process protections. Defendants contend that there is no likelihood that any current grants will be terminated or suspended as a result of the investigation. More important, argue defendants, if there were a threatened suspension or termination of any current grant, the Board would have the due process protections of the termination procedures . . . none of which have been challenged by plaintiffs as being inadequate."
"I conclude that, because the only arguable property interest the Board has is in its current grants on which Abbs is the principal investigator, and because adequate procedures exist to protect the Board in the event of termination or suspension of funding, the Board has no cognizable property interest at risk in the investigative proceedings against Abbs."
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