A divided federal appeals court has overturned a lower court ruling that blocked the Trump administration from freezing billions of dollars and terminating contracts for nonprofits tasked with running a “green bank” to finance climate-friendly projects.
The decision marks a victory for the administration, which had criticised the programme as a misuse of taxpayer money and sought to reclaim the funding.
Nonprofit groups, including the Climate United Fund, had sued the Environmental Protection Agency (EPA), its administrator Lee Zeldin and Citibank, which held the grant money. They argued that access to the funds was unlawfully denied, paralysing their work and threatening their survival.
But the appeals court concluded that such claims could not be heard in federal district courts. “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 opinion stated.
The panel ruled that the case belongs in federal claims court, dealing a setback to the nonprofits, which had sought swift intervention from the federal judiciary to resume access to the frozen funds.
