A federal appeals court has sided with the Trump administration in a legal battle over $16 billion in climate grants, allowing on Tuesday the Environmental Protection Agency (EPA) to suspend funding to five nonprofit organizations working toward promoting clean energy products and curbing greenhouse gas emissions. Climate Grants
The decision marks a reversal of a lower court ruling and underscores the federal government’s broad discretion over grant administration. Climate Grants
In a 2-1 decision, the U.S. Court of Appeals for the D.C. Circuit ruled that the District Court “abused its discretion” by issuing an injunction that blocked the EPA from freezing the grants. Judge Neomi Rao, writing for the majority, stated: Climate Grants
“The grantees are not likely to succeed on the merits because their claims are essentially contractual, and therefore jurisdiction lies exclusively in the Court of Federal Claims.”
She added that while the lower court had jurisdiction over constitutional claims, “that claim is meritless,” and emphasized that “the equities strongly favor the government, which on behalf of the public must ensure the proper oversight and management of this multi-billion-dollar fund.” Climate Grants
The grants had been awarded in the final months of the Obama administration to five nonprofit groups—including the Climate United Fund, Coalition for Green Capital, and Justice Climate Fund—to establish a “green bank” model promoting clean energy projects.
After President Trump took office, the EPA initiated a review of the program and moved to halt the funding. The nonprofits sued, claiming the freeze was unlawful. Climate Grants
But the appeals court determined that their case belongs in the U.S. Court of Federal Claims, which deals with contract-related disputes. Climate Grants
Rao noted in the opinion that shortly before the administration change, the EPA had modified the grant agreements “to make it more difficult for the government to terminate the grants.” Climate Grants
The court also referenced internal EPA communications, including a statement from an agency employee who claimed that under Biden, the EPA was “just trying to get the money out as fast as possible,” suggesting a rush to distribute funds ahead of policy shifts.
EPA press secretary Brigit Hirsch welcomed the ruling, adding: “The decision reaffirms EPA’s duty to be an exceptional steward of taxpayer dollars. It’s fantastic to see reason prevail in the court system.”
The nonprofits had sought immediate access to the $16 billion in funds, arguing that the claims court could only offer monetary damages, not injunctive relief. But the majority opinion made clear that district courts do not have the authority to intervene in such cases unless constitutional rights are clearly violated—which the court found they were not.
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Huma Nisar is Associate Editor at Views and News. She also writes opinion articles on health, society and diet.
