Trump Administration Asks for Pause on Green Grant Restoration

The Trump administration is asking the Fourth Circuit to put on hold a federal court order to reinstate millions in green grants to cities and nonprofits, arguing that the judge lacked authority to do so.

The US Supreme Court’s decision in Department of Education v. California held that similar claims to restore congressionally allocated funds for education-related grants belong in the USCourt of Federal Claims. Thus the US District Court for the District of South Carolina lacked jurisdiction to prohibit agency heads from pulling climate grant funds, the government said Thursday.

The lower court “improperly disregarded that recent and instructive precedent and bafflingly recast plaintiffs’ claims seeking access to grant funds as claims not founded on those grants,” the Justice Department said in an emergency stay motion in the US Court of Appeals for the Fourth Circuit.

The case is one of several challenges pending in both district and appeals courts alleging the Trump administration overstepped its authority in retracting funds Congress previously allocated. The lawsuits seek to access funds tied to criminal justice programs, immigration, and health services.

Judge Richard M. Gergel issued a permanent injunction May 19 to restore money for climate projects, water quality, and more for 17 cities and nonprofit plaintiffs under the Administrative Procedure Act. The ruling also included a preliminary injunction under the separation of powers and nonstatutory review clauses of the US Constitution.

“The perpetuation of unlawful agency action is contrary to the public interest, and there is a substantial public interest in having governmental agencies abide by the federal laws that govern their existence and operations,” Gergel, an Obama appointee, said in a written order filed the next day.

The grants at issue were allocated under the Inflation Reduction Act and Infrastructure Investment and Jobs Act. Recipients include cities such as Nashville, Baltimore, and San Diego, as well as nonprofit groups like the Sustainability Institute, Conservation Innovation Fund, and the Rural Advancement Foundation.

The Southern Environmental Law Center represents the nonprofits. Cities are represented by the Public Rights Project and the city attorney’s office represents San Diego.

The case is The Sustainability Inst. v. Trump, 4th Cir., No. 25-01575, emergency stay motion 5/22/25.