A federal appeals court backed the Trump administration in its effort to have the Environmental Protection Agency cancel billions of dollars in climate change grants that President Biden tried to rush out the door just before his term ended.
The $20 billion — which one EPA employee famously likened to “throwing gold bars off the Titanic” — was part of a broader Biden attempt to “Trump-proof” the government by locking in Democrats’ priorities.
Judge Neomi Rao, a Trump appointee to the Circuit Court of Appeals for the District of Columbia, said the EPA not only shoveled the money out the door, but rewrote its usual rules to make it more difficult for the grants to be revoked in the future.
When the new administration took over, Administrator Lee Zeldin clawed back the grants, including having federal authorities seize a Citibank account to stop any more payments.
Five organizations, which stood to lose $16 billion, sued to stop him, and a lower court sided with them.
Judge Rao, though, said the organizations should have brought their challenge in the Court of Federal Claims, not the regular district court. And she rejected other grounds for the lawsuit.
“EPA’s actions here are well within the Executive Branch’s authority and responsibility to manage the expenditure of funds and to ensure that money appropriated by Congress is properly spent for its intended purposes,” she wrote.
The money was part of Mr. Biden’s 2022 budget-climate law, the Inflation Reduction Act. It included a $27 billion Greenhouse Gas Reduction Fund.
In late 2024, the Biden EPA issued $20 billion in grants. Rather than have the Treasury Department pay as needed, the EPA had the money all disbursed immediately to Citibank to hold.
The Biden EPA also changed the agreements in the month before Mr. Trump took office to remove standard language about being able to terminate the grants because of agency priorities and imposed heightened legal standards for when the grants could be canceled, Judge Rao said.
One EPA employee at the time, in a caught-on-video moment by Project Veritas, said the goal was to “get the money out as fast as possible” before the Trump administration took over.
“It’s like we’re on the Titanic and we’re throwing gold bars off the edge,” he said.
U.S. District Judge Tanya Chutkan, an Obama appointee and frequent combatant with Mr. Trump over the years, ruled in favor of the organizations, saying Mr. Trump had illegally halted the money.
The circuit court vacated that ruling Tuesday in a 2-1 decision, with Judge Gregory Katsas, another Trump appointee, joining Judge Rao.
Dissenting was Judge Cornelia Pillard, who, like Judge Chutkan, was an Obama appointee to the bench.
She said Mr. Zeldin’s attempt to shut down the grants went far beyond what is normal and stretched the limits of the law.
“Those unprecedented and unfounded actions were part of EPA’s hunt for reasons to shut down the congressionally mandated program and claw back the funding that had already been disbursed to plaintiffs and committed to infrastructure projects,” she wrote.
She said some of the groups that sued have had to default on promised loans and ditch planned energy projects.