# Fourth Circuit Routes Grant Dispute to District Court

The Fourth Circuit held that Arlington and Fairfax County school boards’ challenge to U.S. Department of Education grant-payment restrictions belongs in federal district court because the claims concern statutory compliance rather than contractual rights. The ruling clarifies the forum for this dispute but leaves broader uncertainty about where grant disputes should be litigated and what remedies may be available. For agencies, grantees, and contractors working with federal education funding, the distinction can affect how funding restrictions and grant-related legal risks are assessed.

- Procurement and grant-management teams should distinguish claims about statutory compliance from claims based on contractual rights when assessing potential dispute forums.
- Grantees and contractors should account for possible differences in forum and remedies when evaluating grant terms and funding restrictions; the ruling addresses these school boards’ challenge and does not establish a universal rule for all grant disputes.

**Jurisdictions:** federal
**Industries:** Education
**Topics:** Grants & Funding
**Published:** October 19, 2026

### Government Entities
- U.S. Department of Education (ED)
- Arlington County School Board
- Fairfax County School Board
- U.S. Court of Appeals for the Fourth Circuit (Fourth Circuit)
- U.S. Court of Federal Claims (COFC)

### Key Quotes
> will probably have to speak again in order to clarify how the issue should be analyzed and bring more uniformity to the law being made by the lower federal courts.
> — Steven D. Gordon, attorney at Holland & Knight LLP