A federal appeals court on Tuesday sided with the Trump administration in a key EPA climate grants ruling, finding a lower court wrongly blocked the government from withholding $16 billion in funds.
Court Cites Jurisdictional Error
The D.C. Circuit Court determined the lower court overstepped its authority by issuing the injunction.
The ruling stated the nonprofits’ claims are contractual in nature and therefore belong in the Court of Federal Claims.
“We conclude the district court abused its discretion in issuing the injunction,” Judge Neomi Rao wrote in the court’s opinion. “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.“
The court also found the grantees’ constitutional claim to be “meritless.” The opinion added 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.“
EPA Climate Grants Ruling Backs Oversight
An EPA spokesperson said the agency canceled the $16 billion in grants due to well-documented concerns about self-dealing and EPA grant conflicts of interest. The agency also cited unqualified recipients and intentionally reduced agency oversight as reasons for the cancellation.
In the court’s opinion, Judge Rao noted that one EPA employee compared the prior administration’s rush to disburse funds to “‘throwing gold bars off the Titanic.’”
The records show that one month before Trump took office, the EPA under President Joe Biden modified the agreements “to make it more difficult for the government to terminate the grants.“
“It’s fantastic to see reason prevail in the court system,” the EPA spokesperson stated. “The gold bar recipients were wrong about jurisdiction all along and wrong to act so entitled to these precious public funds that belong to hardworking American taxpayers.“
Nonprofits Vow to Continue Fight
The case began after the Trump administration withholds climate grants that had been awarded to five nonprofits, including the Climate United Fund. The funds were intended to help promote the reduction of greenhouse gas emissions.
The Climate United Fund expressed disappointment with the DC Circuit Court EPA ruling. Beth Bafford, the organization’s CEO, stated the EPA unlawfully froze and terminated funds that were legally obligated.
“This is another hurdle in our fight to lower energy costs for those who need it most while creating jobs for hardworking Americans, but we will continue to press on,” Bafford said. She added, “This is not the end of our road.“
Broader Changes at Environmental Agency
EPA Administrator Lee Zeldin framed the grant review as part of a larger effort to ensure the agency delivers on its mission. “Under President Trump’s leadership, EPA has taken a close look at our operations to ensure the agency is better equipped than ever to deliver on our core mission,” Zeldin said.
The move to cancel the grants aligns with other significant changes at the agency. In July, the EPA announced plans to cut its workforce by 23% and to close its research and development office.
