Small victory in relation to the trillions being wasted, but let's take it anyway

jumpin’ bureaucrats!

D.C. Appeals Court Lifts Injunction Barring Trump From Cutting Climate Funds

Stop filing claims lawsuits in district courts. Go to the Court of Federal Claims, whose purpose is *literally* in its name.

Mary Chastain, LegalInsurrection:

A three-judge panel of the D.C. District Court of Appeals voted 2-1 to lift an injunction stopping President Donald Trump’s administration from slashing $16 billion in climate funds.

Judges Gregory Katsas and Neomi Rao, who authored the opinion, voted in favor of the administration.

Rao wrote (emphasis added):

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.

Background

The case revolved around the grants awarded by the EPA under the Greenhouse Gas Reduction Fund in August 2024:

In August 2024, EPA awarded $20 billion to eight nonprofits pursuant to two of the grant programs it created: the National Clean Investment Fund and the Clean Communities Investment Accelerator. Five of those grantees are plaintiffs in this case: Climate United Fund ($6.97 billion), Coalition for Green Capital ($5 billion), Power Forward Communities, Inc. ($2 billion), Inclusiv, Inc. ($1.87 billion), and Justice Climate Fund, Inc. ($940 million).

Instead of taking the usual route through the Treasury Department, Biden’s EPA used a middleman as a “financial agent” to hold the funds:

Treasury entered a Financial Agency Agreement (“FAA”) with Citibank. As set forth in the grant agreements, the funds were to be transferred from Treasury to Citibank in a “two-step transaction” involving a “drawdown” by the grantee and a subsequent “disbursement” to the appropriate Citibank account. J.A. 566. The disbursement by the grantee is deemed “an allowable cost” under “the EPA award.”

Then Biden’s EPA changed the rules of grant agreements when Trump won in November, making it harder for the department to terminate the grants.

It started crashing down after Trump took over. The FBI told Citibank to freeze the accounts associated with the grants.

Citibank complied. The EPA canceled the grants.

We then learned that Biden’s climate czar, John Podesta, funneled around $20 billion to recently founded environmental groups in 2022.

Litigation

The Republican controlled Congress repealed the Greenhouse Gas Reduction Fund during litigation.

The panel ruled that the regulatory, arbitrary, and capricious claims can only be heard in the Court of Federal Claims.

“Because the substance of the grantees’ notice claim sounds in federal contract law, the claim is essentially contractual and can be heard only in the Court of Federal Claims,” explained Rao. “The grantees cannot avoid the Tucker Act’s jurisdictional channeling by disguising a breach of contract claim as a claim that the government violated the regulations governing grantmaking.”

Second, the Court of Federal Claims has exclusive jurisdiction because the remedy the grantees seek is contractual in nature. The grantees requested an injunction barring EPA from terminating the grants, “except as permitted in accordance with the ACA, the grant award, and applicable law,” and ordering Citibank to resume disbursements “in accordance with the ACA.” The grantees maintain they own the funds and seek an injunction barring unlawful interference, rather than an order for specific performance. But the grantees’ “ownership” of the funds goes only as far as the grant agreements and the ACAs permit. And the funds are held by Citibank, which acts as a fiduciary of the government. Despite their characterization, in substance, the grantees are seeking specific performance of their agreements with the government. As then-Judge Scalia explained, “[t]he waiver of sovereign immunity in the [APA] does not run to actions seeking declaratory relief or specific performance in contract cases.” “[A] complaint involving a request for specific performance must be resolved by the [Court of Federal] Claims.”