A federal appeals court rebuked an Obama-appointed Judge on Tuesday and ruled that the Trump administration can move forward with terminating $16 billion in Biden-era climate grants doled out under a program that is currently under investigation.

The court determined that it does not have the authority to rule on the matter and that Tanya Chutkan, an Obama-appointed district court judge, abused her power in blocking the administration from clawing back the funds. The grantees could appeal the ruling, which would continue the months-long legal battle between the Environmental Protection Agency (EPA) and the grantees of former President Joe Biden’s multi-billion and highly scrutinized signature climate law.

“This is certainly a welcome development in this saga. This program was ill-conceived, poorly thought out, and horribly executed. This ruling reveals merely another example of those flaws, with the plaintiffs attempting to forum shop their way out of the myriad procedural and administrative defects over the program’s lifespan,” Michael Chamberlain, director of the government watchdog group Protect the Public’s trust, told the Daily Caller News Foundation. “We applaud the EPA and Administrator Zeldin for aggressively seeking to rein in this program, likely saving the taxpayers billions of dollars that otherwise would have been the subject of waste, abuse, and cronyism.”

Citibank by audreystreb

The panel of judges concluded 2-1 that “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.”

“For the foregoing reasons, we vacate the district court’s injunction and remand the case to the district court for further proceedings consistent with this opinion,” the Tuesday ruling reads. “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.”

The Greenhouse Gas Reduction Fund (GGRF) awarded billions to green groups linked to Democrat donors and insiders, which EPA Administrator Lee Zeldin has flagged for conflict-of-interest concerns. The program continues to be investigated by the EPA’s inspector general, the Department of Justice and the Federal Bureau of Investigation.

EPA froze the 129 Citibank accounts holding the money in February, and in response, several grantees sued the agency and Citibank, arguing that the freeze lacked legal justification and that the EPA had acted appropriately in distributing the funds. An appeals court then intervened to stay the earlier ruling in April that would have forced the EPA to free the frozen funds.

Notably, President Donald Trump’s One Big Beautiful Bill Act also called for the repeal of the GGRF in July.

Zeldin has pointed to the program as an example of Biden-era wasteful and reckless spending on numerous occasions, frequently referencing a covertly recorded video from the conservative activist group Project Veritas in which a former EPA official likened distributing taxpayer funds to throwing “gold bars off the titanic.”

“It’s fantastic to see reason prevail in the court system. EPA has a duty to be an exceptional steward of taxpayer dollars. Administrator Zeldin cancelled these grants due to well documented concerns about self-dealing and conflicts of interest, unqualified recipients, and intentionally reduced agency oversight,” an EPA spokesperson told the DCNF. “The gold bar recipients were wrong about jurisdiction all along and wrong to act so entitled to these precious public funds that belong to hardworking American taxpayers.”

Climate United, the Coalition for Green Capital and Power Forward Communities were some of the major green groups connected to Democratic donors and high-level officials suing the EPA and Zeldin over the issue.

“While we are disappointed – albeit unsurprised – by the panel’s decision, we stand firm on the merits of our case: EPA unlawfully froze and terminated funds that were legally obligated and disbursed,” Climate United CEO Beth Bafford said in a statement provided to the DCNF. “This is another hurdle in our fight to lower energy costs for those who need it most while creating jobs for hardworking Americans, but we will continue to press on for communities across the country that stand to benefit from clean, abundant, and affordable energy. This is not the end of our road.”

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