A D.C. appeals court on Tuesday ruled that the lower court abused its discretion in issuing an injunction that blocked the Trump administration from freezing billions of dollars and terminating contracts for nonprofits managing a climate-focused “green bank.”
The nonprofits, including Climate United Fund, had sued the EPA, Administrator Lee Zeldin, and Citibank, which held the grant funds, arguing that the freeze had stalled their work and threatened basic operations.
The court found the nonprofits were unlikely to succeed on the merits because their claims are primarily contractual, meaning jurisdiction lies exclusively with the Court of Federal Claims. While the district court could hear the grantees’ constitutional claim, the panel deemed it meritless.
“In sum, district courts have no jurisdiction to hear claims that the federal government terminated a grant agreement arbitrarily or with impunity. Claims of arbitrary grant termination are essentially contractual,” the majority wrote.
The appeals court added that the equities strongly favor the government, which must ensure proper oversight of the multi-billion-dollar fund, and accordingly vacated the injunction.
