Appeals Court Hands Trump Administration Victory in $16B Climate Grant Dispute

A federal appeals court ruled Tuesday that a lower court wrongly blocked President Donald Trump’s administration from pausing billions in climate-related grants, Fox News reported.

The D.C. District Court had previously issued an injunction preventing Trump officials from halting $16 billion in environmental funding. On Tuesday, the D.C. Circuit Court reversed that decision, finding that the lower court exceeded its authority and that the Environmental Protection Agency (EPA) acted within its responsibility to ensure “proper oversight” of the funds.

“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,” Judge Neomi Rao wrote in the opinion.

She added, “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.”

The dispute centers on grants created during the previous administration to five nonprofit organizations; the Climate United Fund, Coalition for Green Capital, Power Forward Communities, Inc., Inclusiv, Inc., and Justice Climate Fund, Inc., for reducing greenhouse gas emissions.

After Trump took office, the EPA began reviewing the program and sought to stop distributing funds. The five groups sued, and the district court initially sided with them. Judge Rao noted that just a month before Trump’s inauguration, the EPA altered the grant terms “to make it more difficult for the government to terminate the grants.”

The ruling also referenced testimony from an EPA staffer who admitted that after Trump’s 2016 victory, officials under then-President Joe Biden were “just trying to get the money out as fast as possible.” Rao wrote that the employee likened the rush to “throwing gold bars off the Titanic.”

Following that revelation, the Trump EPA decided to end the program.

“It’s fantastic to see reason prevail in the court system,” an EPA spokesperson told Fox News Digital. “EPA has a duty to be an exceptional steward of taxpayer dollars. Administrator Zeldin canceled these grants due to well-documented concerns about self-dealing and conflicts of interest, unqualified recipients, and intentionally reduced agency oversight. 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.”

The Climate United Fund denounced the ruling, with CEO Beth Bafford writing: “While we are disappointed by the panel’s decision, we stand firm on the merits of our case: EPA unlawfully froze and terminated funds that were legally obligated and disbursed. 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 for communities across the country that stand to benefit from clean, abundant, and affordable energy. This is not the end of our road.”

The other four nonprofits did not immediately comment.

The canceled grants are part of a broader Trump administration initiative to curb federal spending. In July, the EPA announced plans to reduce its workforce by nearly a quarter and shutter its research and development division.

“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 of protecting human health and the environment while Powering the Great American Comeback,” EPA Administrator Lee Zeldin said in July.