By Nate Raymond
(Reuters) -President Donald Trump's administration can proceed with terminating more than $16 billion in grants awarded to non-profit groups to fight climate change, a U.S. federal appeals court ruled on Tuesday.
Trump's predecessor Joe Biden's signature 2022 Inflation Reduction Act had awarded the grants aimed at reducing greenhouse gas emissions. The Environmental Protection Agency under Trump had sought to terminate the grants.
By a 2-1 vote, a panel of the U.S. Court of Appeals for
the District of Columbia Circuit ruled that a lower-court judge lacked jurisdiction to hear the case brought by five of eight of the non-profits who had collectively been awarded $20 billion under the law's Greenhouse Gas Reduction Fund program.
The EPA and a lawyer for the plaintiffs did not immediately respond to a request for comment.
The EPA under administrator Lee Zeldin maintained the program did not align with the agency's priorities, and it cited concerns with potential fraud, waste and abuse. The FBI and Justice Department under Trump also investigated the program.
The grant funds were being held by Citibank and had been awarded to Climate United Fund, Coalition for Green Capital, Power Forward Communities, Inclusiv and Justice Climate Fund. They sued after access to their collective funding worth over $16 billion was frozen.
U.S. District Judge Tanya Chutkan in Washington issued a preliminary injunction in April, holding that the Trump administration's actions were unlawful and requiring Citibank to disburse the funds.
That ruling was put on hold by the appeals court while it considered the case, and on Tuesday, a majority of the three-judge panel concluded that Chutkan abused her discretion by issuing that order. Both judges in the majority were appointed by Trump.
U.S. Circuit Judge Neomi Rao, writing for the majority, said that because the grant recipients' case was essentially contractual in nature, the case largely belonged not before Chutkan but a specialist court that hears monetary claims against the government, the Court of Federal Claims.
While Chutkan did have jurisdiction to hear a claim that the EPA violated the U.S. Constitution by not abiding by Congress' funding decisions in the Inflation Reduction Act, Rao said the agency did no such thing, as nothing in the law limited Zeldin's discretion to withhold or terminate grants.
(Reporting by Nate Raymond; Editing by Howard Goller)
