Trump Administration Gets Order to Restore Climate Grants Halted

The Trump administration doesn’t have to restore green grants to cities and nonprofits while its appeal from a district court order to do so is pending, a federal appeals panel ruled.

The US Court of Appeals for the Fourth Circuit on Thursday granted the government’s motion to stay a permanent injunction to reinstate millions in grant funds on Thursday, finding the administration “is likely to succeed in showing that the district court lacked subject matter jurisdiction” under the Tucker Act.

The appeals court categorized the distribution of Inflation Reduction Act funds as contract agreements, and the Tucker Act requires such implied federal contracts to proceed in the US Court of Federal Claims.

Nashville, Baltimore, San Diego, and other cities and nonprofit groups alleged the administration unlawfully withheld funds authorized by President Joe Biden’s landmark infrastructure laws in violation of the Administrative Procedure Act. But the grants in this case hinge on specific agreements made between agencies such as the Environmental Protection Agency and Department of Transportation and awardees, Judge Allison Jones Rushing wrote for the Fourth Circuit.

“While the appropriation statutes authorize the agencies to award grants, it is the operative grant agreements which entitle any particular plaintiff to receive federal funds,” the appeals court order said.

Rushing said this case mirrored Department of Education v. California, where the US Supreme Court blocked a ruling requiring the Education Department to cover the cost of two teacher training programs.

Judge Paul V. Niemeyer concurred in the stay decision.

Judge Toby Heytens dissented, stating the Trump administration “failed to carry the burden of showing that the circumstances justify” a stay on distributing funds for climate projects and water quality.

Heytens disagreed with the majority in likening the green grants to the Education Department’s case. The terms of each individual grant were at issue in that case, whereas the plaintiffs here argue that the agencies “categorically terminated all ‘equity-related’ grants and contracts without individualized regard to the terms,” he said.

The nonprofit plaintiffs are represented by the Southern Environmental Law Center. The cities are represented by the Public Rights Project, while San Diego is represented by the city attorney’s office.

The case is The Sustainability Inst. v. Trump, 4th Cir., No. 25-01575, order 6/5/25.