Sustainability Institute v. Trump

The Fourth Circuit Court of Appeals vacated and remanded a district court’s injunctions that enjoined federal defendants from freezing or terminating funding awarded to plaintiffs under the Inflation Reduction Act and other laws. Regarding the permanent injunction granted on the plaintiffs’ Administrative Procedure Act (APA) claims, the Fourth Circuit ruled that the district court lacked jurisdiction because the plaintiffs’ claims were essentially contractual in nature and subject matter jurisdiction therefore was vested exclusively in the Court of Federal Claims. The Fourth Circuit found “no meaningful difference” between the district court’s order and the district court’s order in Department of Education v. California, in which the Supreme Court stayed the district court order pending appeal, finding that the federal government was likely to succeed in showing that the district court lacked jurisdiction to enjoin termination of federal grants because the APA’s “limited waiver of immunity” did not extend to enforcing contractual obligations to pay money. The Fourth Circuit concluded that the Supreme Court’s subsequent decision in National Institutes of Health v. American Public Health Association “further confirmed” the conclusion that the district court in this case lacked jurisdiction. Regarding the plaintiffs’ claims that the federal defendants’ actions violated separation of powers and the Presentment Clauses of the Constitution and were ultra vires, the Fourth Circuit found that the constitutional claims were merely statutory claims “recast” as constitutional claims and therefore were not reviewable. The Fourth Circuit further found that because the plaintiffs failed to identify a specific prohibition on the freezing or termination of their grants, their ultra vires claim did not fall within “the painstakingly delineated procedural boundaries” of nonstatutory ultra vires review. Because the district court had focused on the freezing and termination of the plaintiffs’ particular grants, the Fourth Circuit did not express a view on the merits of the plaintiffs’ “program cancellation” theory, which alleged that the defendants effectively terminated entire programs that were statutorily mandated. The Fourth Circuit indicated the district court could consider this theory on remand.

On May 20, 2025, the federal district court for the District of South Carolina ordered Trump administration defendants to immediately restore access to 32 terminated or frozen grants under the Inflation Reduction Act, Infrastructure Investment and Jobs Act, or other “mandatory legislation.” The defendants did not contest judgment on the merits of the plaintiff’s Administrative Procedure Act (APA) claims but opposed the injunctive relief. The court granted judgment to the plaintiffs on the APA claims, based on the “full record” and the defendants’ concession, finding that the plaintiffs produced “substantial, highly persuasive evidence to support their claims that their grant funds were frozen and/or terminated because Defendants disfavored previously authorized congressional appropriations and that such actions were outside of the legal authority of the agency Defendants and in violation of the Constitution’s separation of powers.” The court further concluded that a stay of the injunctive relief was not appropriate, finding that the defendants were unlikely to succeed on their challenges to the court’s jurisdiction. The court also found that the federal defendants did not demonstrate irreparable injury; in addition, the court cited harms to the plaintiffs as well as the public interest in upholding the rule of law. The court also found that it had jurisdiction over the plaintiffs’ nonstatutory review claims of separation of powers violation and ultra vires action, which the court described as a “mirror image[]” of the plaintiffs’ APA claims that the defendants no longer contested. The court found that the plaintiffs had standing for the nonstatutory review claims and granted preliminary injunctive relief on the basis of the nonstatutory review claims. The court concluded, however, that the plaintiffs did not meet the standard for preliminary injunctive relief for six grants that were awarded under the U.S. Department of Agriculture’s (USDA’s) Partnerships for Climate Smart Commodities. The defendants said the grant funds were from general appropriations and that USDA therefore had “broad discretion in the use of these funds” that was different from the appropriations under mandatory legislation. The defendants appealed the order, as well as the court’s April order finding that it had subject matter jurisdiction over the case.

In an April 29, 2025 order, the federal district court for the District of South Carolina concluded that it had subject matter jurisdiction over a lawsuit challenging the freezing of funds for 38 grants under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA). The court found that the “essence” of the plaintiffs’ claims was not contractual in nature and that the claims therefore fell “plainly within the jurisdiction” of the district court under the Administrative Procedure Act, and not in the Court of Federal Claims under the Tucker Act. The court also rejected the federal defendants’ contentions that Congress intended to commit the IRA and IIJA funding to the agencies’ discretion and that there was therefore no subject matter jurisdiction under the Administrative Procedure Act. The court’s order also directed the defendants to supplement the record with six categories of documents to allow for “greater specification of the reasons for the proposed termination of certain grants and a better understanding of the present status of several other grants.”