WASHINGTON— A federal appeals court ruled that the Trump administration can cancel nearly $16 billion in green energy grants, overturning a lower court order that had forced the government and Citibank to keep making the payments.
The decision affects more than 100 credit unions that had been awarded grants from the funds.
In a separate case, as the CU Daily reported here, Inclusiv filed a lawsuit in April against the Environmental Protection Agency (EPA) and Citibank, seeking declaratory and injunctive relief against what it alleged was the EPA’s “baseless attempt to terminate a program created and funded by Congress.”
Inclusiv was one of five Clean Communities Investment Accelerator (CCIA) award recipients under the Greenhouse Gas Reduction Fund (GGRF) that have been unable to draw Congressionally allocated funds. Inclusiv was selected for a $1.87 billion award in April 2024.
New Ruling
In a 2-1 decision, the D.C. Circuit found that U.S. District Judge Tanya Chutkan lacked authority to block the administration’s actions, Courthouse News reported. The panel said disputes over the grants fall under the jurisdiction of the U.S. Court of Federal Claims, which can award damages but not compel ongoing payments.
“While the district court had jurisdiction over the grantees’ constitutional claim, that claim is meritless,” Circuit Judge Neomi Rao wrote for the majority, Courthouse News reported. “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.”
Three Organizations Involved
The case involves three organizations awarded money under the Greenhouse Gas Reduction Fund, a program created through President Joe Biden’s Inflation Reduction Act. Climate United received $6.97 billion, the Coalition for Green Capital $5 billion, and Power Forward $2 billion for clean energy projects nationwide.
Congress repealed the program July 4 as part of Trump’s “Big, Beautiful Bill,” legislation that also rolled back other Biden-era climate initiatives.
According to Courthouse News, Rao, joined by fellow Trump appointee Judge Gregory Katsas, noted evidence that EPA staff rushed to finalize grant agreements after Trump’s election. One employee was recorded comparing the process to “throwing gold bars off the Titanic,” according to court documents.
After Trump took office in January, the EPA launched a review alleging conflicts of interest, political ties among grantees, and last-minute contract changes. The FBI recommended freezing the groups’ Citibank accounts in February, and the EPA’s inspector general opened an investigation.
‘Waste & Abuse’
EPA Administrator Lee Zeldin formally terminated the grants, citing “programmatic fraud, waste and abuse” and what he described as inadequate oversight. He pointed to improper allocation of funds and efforts to circumvent monitoring systems, Courthouse News reported.
The groups sued to block the terminations, and Chutkan issued an injunction in March requiring the government to continue funding. The appeals court decision lifts that order, allowing the administration to withhold payments while litigation continues in the Court of Federal Claims.
