The EPA Can Terminate Climate Change Grants to Nonprofits

A divided panel of the U.S. Court of Appeals for the D.C. Circuit vacates a district court injunction barring clawback of climate grants.

This morning a divided panel of the U.S. Court of Appeals for the D.C. Circuit vacated a district court injunction preventing the Environmental Protection Agency from terminating grants given to non-profit organizations by the Biden Administration to promote greenhouse gas reductions and other climate policies. I suspect a petition for rehearing en banc is likely to follow (as might an appeal to the Supreme Court should the en banc D.C. Circuit intervene).

Judge Rao wrote for the panel in Climate United Fund v. Citibank, joined by Judge Katsas. Judge Pillard dissented.

Judge Rao summarizes her opinion as follows:

The Environmental Protection Agency awarded grants worth $16 billion to five nonprofits to promote the reduction of greenhouse gas emissions. Citing concerns about conflicts of interest and lack of oversight, EPA terminated the grants in March 2025. The grantees sued, and the district court entered a preliminary injunction ordering EPA and Citibank to continue funding the grants.

We conclude the district court abused its discretion in issuing the injunction. 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. And while the district court had jurisdiction over the grantees' constitutional claim, that claim is meritless. Moreover, 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. Accordingly, we vacate the injunction.

Her opinion seems quite in line with the way the Supreme Court has been handling cases in which district courts have considered questions Congress has directed to the Court of Federal Claims or administrative entities. While a majority of the D.C. Circuit may disagree with this approach, I doubt a majority of the Supreme Court would. See, for instance, the Court's handling of NIH v. APHA, another case involving grants (and upon which Judge Rao relies).

As noted, Judge Pillard dissents--and at some length. (Her opinion is over twice as long as Judge Rao's opinion for the panel.) From the intro to her 62-page dissent:

On the majority's telling, Plaintiffs bring garden-variety contract claims against EPA's reasonable decisions to terminate their grant awards. That version of events fails to contend with the government's actual behavior and misapprehends Plaintiffs' claims, leading the majority to the wrong conclusion at every step of its review of the district court's preliminary injunction. . . .

In characterizing this case as merely a contract dispute subject to the Tucker Act's jurisdictional bar, the majority baselessly strips the district court of authority to decide these important claims. The majority holds that a plaintiff cannot bring an arbitrary and capricious challenge to any government action that affects something of value that was originally obtained by contract. Maj. Op. 16-18. Doing so undercuts the Constitution's and the APA's checks on the Executive's illegitimate seizure of Plaintiffs' funds and subversion of Congress's will. The government's Tucker Act defense is especially pernicious here. Dismissal of this case presumably will enable the government to carry out its announced plan to immediately and irrevocably seize Plaintiffs' funds. At best, in the unlikely event the government refrains from immediately draining Plaintiffs' frozen accounts, the further delay involved in reinitiating litigation in the Court of Federal Claims will itself irreparably harm the infrastructure projects that cannot move forward and may fail without funding. In these circumstances, "[i]t is no overstatement to say that our constitutional system of separation of powers w[ill] be significantly altered" by "allow[ing] executive . . . agencies to disregard federal law in the manner asserted in this case." Aiken Cnty., 725 F.3d at 267.

Comments

[LexAquilia]

All those Dem politicos getting their gravy train revoked.

F U

[Joe_dallas]

Grants cuts to non-profits who dont provide any actual program services - the horror!

[Malika la Maize]

“dont [sic] provide any actual program services”

Cite?

[JasonT20]

In these circumstances, "[i]t is no overstatement to say that our constitutional system of separation of powers w[ill] be significantly altered" by "allow[ing] executive . . . agencies to disregard federal law in the manner asserted in this case."

The specifics in cases like this seem to hinge on details in the laws that are beyond my knowledge and understanding as a layperson. Even if I did take the time to read the whole ruling, both the majority and dissent, I would undoubtedly need to read much more than that, (the citations, precedents, and relevant statutes) to form any kind of valid opinion myself.

The principle expressed in this quote, however, is something I do have an opinion about that I believe to be valid. The constitutional role of the executive is to carry out the law as passed by Congress. Simple. The executive doesn't have enough to discretion in doing that to say, "You know what, that law is a bad idea, we're not going to do that." Or, "That money that this law passed by Congress says we have to spend -- nah, we're not going to spend that."

Voters have let Presidents usurp Congress's power in increasing amounts and in multiple areas since the beginning. Even worse than Congress writing laws that give the executive branch too much discretion, though, is when neither Congress nor the courts will stop or punish the executive branch when it simply takes that power.

The fundamental flaw in the Constitution was that the President was never going to be as separate from Congress as they thought he would be. "Factions", as they called what would become political parties, were inevitable. It was therefore inevitable that when the majority in Congress and the President were the same faction, the President would actually control the whole government. Congress was never going to jealously guard its prerogatives and powers from the leader of its faction.

They rejected the idea of Congress choosing the President at the Constitutional Convention because they didn't want a President that would be too beholden to Congress. We got the opposite problem instead.

[Brett Bellmore]

"Or, "That money that this law passed by Congress says we have to spend -- nah, we're not going to spend that.""

But Presidents DID, in fact, routinely exercise that power for most of the nation's history, right up to 1974, treating appropriations as authorization to spend money, not an absolute obligation to spend it.

And it may be no coincidence that the exponential growth of both federal spending, AND the federal debt, kicked off about then.

[Malika la Maize]

Doesn’t it abrogate Congress’ power for them to hammer out appropriations only for the President to say, “nah, I’m, not going to spend in that, but yeah, I’ll spend on this?” How is that faithfully executing the law?

[Krayt]

That's why he couched it in terms of conflicts of interest and lack of oversight, rather than just noping it retroactively.

This is learning to play the game. You learn to facete surface rationales that seem reasonable at first glance ("Yay rational basis!" screetch people who are ag'in this, in other contexts).

It's the world they made. Republicans are slow to realize what's going on, and learn to use the tools used against them.

The people who piloted those techniques then fall back, shocked! Shocked! at the turnabout.

[Krayt]

Of course, faceting a surface rationale to cover the real reasons for power decions is as old as power itself. It is integral to the:

Fundamental Theorem of Government Corruption is not an unfortunate side effect of the wielding of power. It is the purpose of it from day one, ever since some guys picked up clubs and wandered down to two farmers trading at a crossroads, and demanded they pay protection money.

Integral to it!

[JasonT20]

"Fundamental Theorem of Government"

Giving that rant a title in bold and calling it a theorem does not magically turn it into some fundamental truth of human nature.

If that is how you think, then say so. It takes more than an assertion to attribute that thinking to everyone else.

[Krayt]

I push the idea. It is based on observations of most of the Earth, and almost all human history.

Any dictatorship is transparently a kleptocracy. Many nominal democracies are lousy with corruption, hence their economies suck.

The corruption burden is lower in the west, with a free press, but still exists. They just have to hide it better.

That is the upsetting thesis, that government never was about anything but lining your pockets.

[JasonT20]

That is the upsetting thesis, that government never was about anything but lining your pockets.

I assume you meant "their pockets."

You are expressing an opinion that goes beyond cynicism. It's almost nihilistic.

Besides, these kinds of vague, philosophical musings are not going to help us solve real problems or answer real questions. It is a distraction from doing that. Going back to the question raised by the comment you responded to, your answer was:

That's why he [Trump] couched it [a recent rescission order, I take it?] in terms of conflicts of interest and lack of oversight, rather than just noping it retroactively.

This was your answer to Malika's rhetorical question, "How is that faithfully executing the law?" Sounds like you're agreeing that it isn't. That he was just putting a fig leaf over his middle finger to the law as written. Only, you think he was right to do that.

It is no small contradiction, as I see it, that you have such a negative view of government as being an inherently corrupt exercise in power. But then you seem to applaud it when your side ignores the law or at least manipulates it and twists it worse than any pretzel in order to gain and use power the way that they (and you) want.

Or, is this all just projection?

[Stephen Lathrop]

Cynicism about government has always been one of the stronger buttresses supporting despotism. Krayt is fine with the despotism. You will search his commentary in vain for constructive alternatives.

[JasonT20]

It's the world they made. Republicans are slow to realize what's going on, and learn to use the tools used against them.

Keep telling yourself any abuses or manipulation or appearance of corruption is just the Republicans turning the Democrats' tactics against them. Nothing justifies bad behavior better than claiming that someone else behaved badly first! You don't even need to prove that it is true!

[Frank Drackman]

Nixon impounded the funds for the Base Screw-el I attended in 5th grade, 3/4 of the school year was cancelled, they crammed everything into the last month so we wouldn't have to repeat a grade. I got Home Screw-eled that year, just my Mom and me, she got me one of those library desks that had dividers on 3 sides blocking your view, so you had no choice but to study, some basic Math, Science, History (No, Queenie, No English Grammar)texts from the Base Library and some left handed scissors the Pubic Screw-els never seemed to have.
We'd start at 7am, work till noon (with smoke breaks for Mom) and the afternoon was for PE, and not "Red Rover" or Tether Ball, but East German Calisthentics and something called "Fart-lick" then finish up with some long toss and BP.
The next year, I had gone from bottom of the class to the teachers wanting me to start Junior High early (I think they just wanted to get rid of me) and I could snap off a wicked 12-6 Curve, and the rest as they say, is
"His-Straw"
Thanks, "Tricky Dick"

Frink

[DaveM]

"The constitutional role of the executive is to carry out the law as passed by Congress."

You have a valid point. You would have to find a specific instance where not continuing these specific grants to these specific recipients would in fact prevent a particular clause in the law from being carried out.

Like you, I am not nearly knowledgeable enough about the facts to argue whether this could done. My hunch is it could not be. Congress has been asking the executive branch to work out implementation details for decades. No doubt some valid rationale could be found for this rescission.

[Malika la Maize]

Why not just “X dollars shall be spent to or on Y” suffice? Congress doesn’t just have the power to make laws, it has appropriations power.

[JasonT20]

Congress has been asking the executive branch to work out implementation details for decades.

I think this is what laws like the APA (Administrative Procedures Act) are for. To spell out, in law, how the executive is supposed to go about making the rules and regulations needed to implement a complex law passed by Congress.

The executive gets accused of acting "arbitrarily and capriciously" when it breaks its own rules, among other things. So, while it might not be written into the law how these grants work in full detail, I bet there are existing rules that this administration or previous ones put in place for it.

[Joe_dallas]

did the statute passed by congress name specific organizations or was it broad language that any organization meeting certain criteria was eligible?

[JasonT20]

My understanding of this case is that these are organizations that had been awarded the grants and actually got the money, and now the granting agency wants the (presumably unspent) money back.

So, I would assume that they met eligibility criteria.

[Joe_dallas]

pages 3-9 lays out a compelling case of bypassing normal oversight and efforts to remove any controls to prevent fraud or wasted expenditures.

page 5 has this tid bit;

The sheer scale of the grant program and the method of allocating billions of dollars drew public attention and criticism. The record includes a widely publicized video in which an EPA employee was recorded describing how “until recently” his role was to make sure proper “processes are in place to … prevent fraud and to prevent abuse,” but after the election of President Donald Trump, EPA was “just trying to get the money out as fast as possible before they come in and … stop it all.” J.A. 705 n.1. The employee compared the situation to “throwing gold bars off the Titanic.”

[JasonT20]

Great. You read the majority opinion. How did the dissent answer that?

[JasonT20]

Nevermind looking it up. I found it for you. p 36

Neither does the “gold bars” video, which Zeldin repeatedly referenced in public comments smearing Plaintiffs, provide any plausible basis for sincere oversight concerns on the part of EPA’s new leadership. In the November 2024 Project Veritas video, an EPA staffer is shown saying to a peer on a Tinder date (who was surreptitiously filming him) that EPA was “trying to get the money out as fast as possible” before Trump’s inauguration. [reference to an article about this video - Lisa Friedman, An Offhand Remark About Gold Bars, Secretly Recorded, Upended His Life, N.Y. TIMES (July 1, 2025), https://perma.cc/FHM4-94R9 Whatever the staffer may have meant, those comments cannot have been referring to awards under the Greenhouse Gas Reduction Fund because those had been fully obligated as of August 2024 (in accordance with Congress’s September 2024 deadline). “EPA Awards $27B in Greenhouse Gas Reduction Fund Grants to Accelerate Clean Energy Solutions, Combat the Climate Crisis, and Save Families Money,” EPA (Aug. 16, 2024), https://perma.cc/Z7ER-RV7A. Anyone with a basic familiarity with the GGRF program would understand that a video of a staffer’s bluster at a bar in November is irrelevant to the grants at issue here.

[JasonT20]

pages 3-9 lays out a compelling case of bypassing normal oversight and efforts to remove any controls to prevent fraud or wasted expenditures.

The dissent goes into a lot of detail to respond to that case. If you thought that was compelling, then it only seems fair to read the dissent.

[John F. Carr]

Considering all the recent litigation the Supreme Court should establish a firm rule: federal courts may never issue a preliminary injunction ordering the government to pay money. Courts can decide summary judgment motions and enter judgment in months rather than years if they want to. It happened with the law firm blacklist litigation.

[John F. Carr]

I enjoyed this footnote on the necessity to decide jurisdiction before merits:

Our jurisdiction, however, rests on law, not on the severity of the alleged wrongdoing claimed by the grantees and reported by The Washington Post, The New York Times, and Politico.

[Malika la Maize]

Seems like Hannity wrote the footnote to me.

[Stephen Lathrop]

The Supreme Court, with a policy-dazzled eye to supporting Trump, has been breaking new ground making up novel jurisdictional innovations, and using them to decide cases the way the Court majority prefers, without a glance at the merits. That matters a lot when the merits question implicates fundamental Constitutional precepts such as the power of the purse. The Court has no proper power to reduce that by even a jot or a tittle.

[thesafesurfer]

Oh Happy Days!!!

[vaadu]

What percentage of the funds goes into the pocket of the administrators or gets siphoned off as it moves from one NGO to the next?

[Joe_dallas]

Likely quite a bit - lots of slush counted as program services. See USAID for example.

[Mr. Bumble]

Why do you think they're screaming so loud.
Gravy train is screeching to a halt.

[bernard11]

So now they are baselessly accused of being criminals.

Standard tactic for Trump and his cultists.

[Joe_dallas]

Standard tactic
Ignore the corruption, waste use of taxpayer money for a leftist slush find

[Mr. Bumble]

Just who accused anyone of being criminals?

[bernard11]

What percentage of the funds goes into the pocket of the administrators or gets siphoned off as it moves from one NGO to the next?

Sounds like a serious accusation to me.

Ignore the corruption, waste use of taxpayer money for a leftist slush find

Facts not in evidence. You apparently don't understand that your claims require proof. Or are you so convinced by Trumpist claims you need no more?

Standard tactic. Just state a bunch of accusations. Worry about evidence later. Because Bookkeeper Joe couldn't possibly be wrong.

[Stephen Lathrop]

You did Bumble. "Gravy train," is rightly interpreted to mean criminal diversions of appropriations for personal gain.

[Purple Martin]

Judges Rao and Katsas strike again. They, at least, remain in the minority of federal judges still granting Trump's DoJ minions an unearned Presumption of Regularity, not bothering with validating the veracity of what they claim in court.

On that, Judge Pillard disagrees:

On the majority's telling, Plaintiffs bring garden-variety contract claims against EPA's reasonable decisions to terminate their grant awards. That version of events fails to contend with the government's actual behavior and misapprehends Plaintiffs' claims, leading the majority to the wrong conclusion at every step of its review of the district court's preliminary injunction. . . .

...which would probably be the opinion of the en banc D.C. Circuit if they bothered, which they might not because Prof. Adler is likely right when he says:

[Rao's] opinion seems quite in line with the way the Supreme Court has been handling cases in which district courts have considered questions Congress has directed to the Court of Federal Claims or administrative entities. While a majority of the D.C. Circuit may disagree with this approach, I doubt a majority of the Supreme Court would.

[Frank Drackman]

5 “Non Profits” got $16 Billion and didn’t make a profit???!!!!
OK I guess that’s why you’d go into being a Non Profit, but I am Curious (Yellow)
I’ll bet a competent IRS Investigator could find way more than 34 Felonies

Frink

[Darth Buckeye]

Gold bars off the Titanic. Tens of billions of dollars doled out by a political hack to politically connected organizations that can best be called “non-profits” in name only.

[Archibald Tuttle]

If I was POTUS, I would make an immediate decree, "No more grants of any kind to any party without language clearly stating that I have the power to change my mind and stop giving that money for any reason or no reason."

[David Nieporent]

You understand that "decrees" are for kings, not presidents, right?

[denizen]

If Congress actually wants to spend the money, couldn't it identify the recipients? If Congress is going to tell the executive to just figure out how to spend the money, it seems a proper presidential power to determine that his subordinates' decision was wrong—even during a prior administration. I don't really see how that's a power of a king in the sense of something contrary to our system of government.

[Stephen Lathrop]

Congress does not generally, "Just tell the executive to just figure out how to spend the money." Your unfounded belief that is happening examples what is wrong with the decision.

[Kazinski]

They should come craft another recession bill to make it clear these funds are no longer appropriated. There seems to be a solid 5 Justice majority on the SC requiring the Court of Claims to hear these cases, but the Court of Claims may eventually release the funds.

But in the meantime there should be an aggressive audit of these non profits, which would be in order because of the sheer magnitude of federal funds they have already received. If any violations of self dealing or fraud are found then that may lead to a settlement, which would end the case before its heard by the CC.

I don't care what your political priors are, any right thinking person should be disturbed at the idea of 16 billion in taxpayer funds being given to 5 non profits for any reason. That's about 50$ from every man, woman, child, non-binary, and illegal alien in the country, and 329 million of them want their 50$ back.

[Sarcastr0]

They should craft a law wherein Trump gets everything he wants forever.

[Does it occur to you Congress may not be as on-board with burning down everything as your crazy ass is?]

[F.D. Wolf]

The Democrat judges on the D.C. Circuit keep trying to treat the APA as some magic talisman that confers jurisdiction upon them regardless of the actual nature of the case, when jurisdiction is clearly in another court or administrative body (e.g., tariff cases, federal contract cases, habeas cases, federal employment cases). The Supreme Court keeps slapping them down, but they just don't seem to care.