Morning Report

October 14, 2025 — Morning Report

Oct 14, 2025

1014 AM TT

Pete Hegseth stopped paying for the buildings, supercomputers, and support staff that universities use to do DOD research. He called all of it "indirect costs" — and then called "indirect costs" wasteful. A judge issued a final judgment on Friday that he's wrong, has to pay, and cannot use the knowledge gap about accounting terminology to get out of it.

The American Association of Universities sued DOD/Hegseth over his decision to reclassify and refuse to pay "indirect costs" associated with DOD-funded university research. Indirect costs cover the infrastructure required to conduct the research: the buildings in which new materials for life-saving armor are developed, the supercomputers used to defend against cyberattacks, the support staff keeping labs running, the custodians. Hegseth's position: these are indirect, therefore they are wasteful bureaucratic fat. The court's response: that's not what indirect costs means as an accounting term. The court found that Hegseth had "seized on" the knowledge gap — most people don't know that indirect costs is a term of art in federal contracting with a specific meaning — to label legitimate research infrastructure expenses as waste. Months earlier, the court had issued a preliminary injunction making essentially the same finding; unusually, the government did not appeal or fight the PI. On October 10, the court issued a summary judgment — a final order on the merits — requiring DOD to resume paying indirect costs. Bryan noted the government's unusual passivity: their decision not to fight the PI may signal they know they're on the wrong side of this one.

Federal contracting lawAPA (arbitrary and capricious rulemaking)

Constitutional question: This case is primarily statutory and administrative rather than constitutional, but the pattern it exemplifies has a constitutional dimension: the APA requires that executive agencies follow their own rules and provide reasoned explanation for departing from established frameworks. When an agency redefines terms of art to justify funding cuts without legal authority or adequate explanation, the APA's arbitrary-and-capricious standard functions as the constitutional-tier safeguard that courts use to check executive overreach in the spending and contracting sphere.

Bowe v. US 24-5438 · 24-5438

A man filed a habeas petition in 2016. It was denied. Then a statute changed — not the Constitution, a statute. He wants to file a second habeas petition based on that statutory change. But the rule is: you get a second bite at habeas only if the Constitution changed or new facts emerged. Not a statute. And the government almost agrees with him — so SCOTUS had to appoint someone to argue the other side.

SCOTUS oral argument preview. Bowe filed a habeas corpus petition in 2016 raising claims about his criminal conviction; the petition was denied. After that denial, a federal statute related to his offense changed — creating a stronger legal basis for his claim. He sought authorization to file a second habeas petition based on the statutory change. The problem: under 28 U.S.C. § 2255, prisoners seeking to file a second or successive federal habeas petition must satisfy one of two conditions — either (1) the claim involves newly discovered evidence, or (2) the claim relies on a new rule of constitutional law, previously unavailable and made retroactively applicable by the Supreme Court. A statutory change that isn't a constitutional change doesn't fit either prong. A further procedural issue: authorization to file a successive habeas petition normally must come from the Court of Appeals, not directly from SCOTUS — raising a threshold question of whether the Supreme Court has jurisdiction at all. In an unusual development, the government essentially agreed with Bowe on the central issue (with minor caveats), prompting SCOTUS to appoint an amicus curiae (Mitchell) to argue the opposing position — that the bar on successive petitions applies even when a statute changes.

Habeas corpussuccessive petition bar (28 U.S.C. § 2255(h))constitutional vs. statutory change as basis for successive petition

Constitutional question: Habeas corpus is a constitutional right (Art. I, §9 and the Suspension Clause protect it from legislative elimination), but Congress has broad authority to define the procedural framework for its exercise. The successive-petition bar reflects Congress's interest in finality; the exception for new constitutional rules reflects the Constitution's trump status over prior adjudications. The question of whether a statutory change can open the successive-petition door implicates the boundary between legislative and constitutional change — and how far Congress can restrict courts' ability to correct errors it has itself made through subsequent legislation.

MARGOT REVIEW NOTES

Ellinburg v. US 24-482 · 24-482

A man was convicted in 1995 and ordered to pay restitution for 20 years. He paid for 20 years. He thought he was done. But while he was in prison, Congress quietly changed when the 20 years starts — from the date of conviction to the date of release. Now the government says his 20 years has just started. The question: is restitution punishment, or is it civil? Because the ex post facto clause only covers punishment.

SCOTUS oral argument preview. Ellinburg was convicted in 1995 and ordered to pay approximately $7,600 in restitution to his victim. Under the law at sentencing, restitution payments were due over 20 years from the date of judgment. Ellinburg was incarcerated for many years, made regular payments on a prison income (approximately a quarter of the total), and in 2016 — the 20-year mark from his 1995 conviction — believed his restitution obligation was complete. But Congress had amended the restitution statute in 1996, shortly after his sentencing, to start the 20-year clock from the date of release rather than the date of judgment. When Ellinburg was released in 2022, the government came after him for the remaining balance, arguing the 20-year window had just begun. Bryan flagged two complicating details: the statute changed just one year after sentencing (1995 and 1996 overlap in the timeline), and once again, the government declined to defend its position vigorously, so SCOTUS appointed John Bash as amicus curiae to argue the strongest case against Ellinburg — that restitution is a civil remedy, not punishment, and the ex post facto clause doesn't apply. Ellinburg's strongest argument: if he fails to pay, he goes back to jail. A civil penalty you can be imprisoned for sounds more like punishment than a civil remedy.

Ex post facto clause (Art. I, §9)civil vs. criminal penalty distinction

Constitutional question: Article I, §9's ex post facto prohibition is an absolute bar — Congress cannot impose harsher criminal punishment for conduct that predates the law. The civil/criminal distinction is the gateway: once conduct is labeled criminal punishment, even Congress cannot retroactively change the terms. The case forces SCOTUS to clarify where restitution sits on the civil/criminal spectrum — a question with implications for the entire federal restitution system, which operates similarly across many criminal statutes.

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