A federal judge on Wednesday indefinitely blocked the Environmental Protection Agency (EPA) from clawing back billions of dollars in Biden-era climate grants.
U.S. District Tanya Chutkan said the EPA may not suspend or terminate the green grant awards nor limit access to those funds while a lawsuit challenging the effort to recoup the money moves forward.
She also ordered Citibank, which received the funds but refused to disburse them at the government’s request, to unfreeze the climate groups’ funds.
However, Chutkan directed Citibank to refrain from releasing any funds until Thursday afternoon. After that, the groups will be able to use that money to finance climate-friendly projects.
The administration has already appealed her decision, which she said would be explained in a forthcoming memorandum.
Through the 2022 Inflation Reduction Act, the EPA was given $20 billion for grants to financial institutions to fund climate-friendly projects.
The Biden administration gave that $20 billion out to eight institutions that are tasked with dispersing it for projects that aim to mitigate climate change. Several of those grantees sued after Trump’s EPA issued contract termination notices to the eight groups.
The Trump administration froze those grants, saying they should not have been dispersed.
Chutkan’s order unfroze $14 billion of the $20 billion total. Her decision comes after she previously blocked Citibank from returning the funds to the U.S. Treasury and said that the EPA cannot terminate the grants while the issue plays out in court.
“The money was dispersed,” said Vincent Levy, a lawyer for Coalition for Green Capital, said during a hearing earlier this month. “It belongs to us.”
The groups celebrated Chutkan’s order in a statement late Tuesday.
“Today’s decision gives us a chance to breathe after the EPA unlawfully — and without due process — terminated our awards and blocked access to funds that were appropriated by Congress and legally obligated,” Climate United Fund CEO Beth Bafford said in a written statement.
“After a year-long application process, we were hired to do a job that we’ve done for decades: investing in communities and strengthening markets,” Bafford added. “We want to get back to work.”
The EPA has claimed that the funds were being held up due to waste, fraud and abuse, but during a hearing last month, it was not able to provide evidence to back up those claims, and Chutkan has said it has not demonstrated them to be true.
“You’ve been very candid with me in saying you don’t know what the evidence is of waste, fraud and abuse, and violations of the law, and corruption, and all of that,” Chutkan said to government lawyers. “And, you know, and I still don’t (know).”
The Justice Department argued the judge does not have jurisdiction to hear the case, contending that the only relief Chutkan could offer is to direct the government not to terminate the contract.
“And unfortunately, that’s not relief this Court has the authority and jurisdiction to provide,” DOJ lawyer Marcus Sacks said.
A different federal judge previously declined to reinstate refugee resettlement contracts cancelled between the government and U.S. Conference of Catholic Bishops after determining federal courts lack jurisdiction in contractual matters.