Arizona v. EPA

The federal district court for the Western District of Washington granted summary judgment to the U.S. Environmental Protection Agency (EPA) in a suit filed by state recipients of grants under EPA’s terminated Solar for All program. The court determined that it lacked subject matter jurisdiction over the claims and dismissed them without prejudice. Per the Tucker Act, breach-of-contract suits against the US government can only be brought in the Court of Federal Claims. The Tucker Act also bars Administrative Procedure Act (APA) claims for injunctive and declaratory relief that function as “disguised” breach-of-contract claims. The court reasoned that the states’ APA claims for nonmonetary relief essentially challenged the rescission of their Solar for All grants and so derived from rights created by contract. Further, although the states sought an order reversing EPA’s termination of the Solar for All program rather than direct reinstatement of their grants, Congress had already decided to halt the program going forward. If granted, the order would only have the effect of ordering specific performance of the terminated contracts by requiring disbursement of the withheld funds. The court determined that since the APA claims functioned as contract claims and would essentially grant contractual relief by distributing the funds to the states, the Tucker Act required the suit to be heard in the Court of Federal Claims. The court also dismissed the states’ constitutional and ultra vires claims as being inextricable from the APA claims.

In the case challenging the termination of the Solar for All program in federal district court for the Western District of Washington, the court denied the federal defendants’ motion to transfer the case to the federal district court for the District of Columbia where an earlier lawsuit had been filed by Harris County, Texas. The court found that “first-to-file” factors weighed against transfer, noting the differences between the parties in each case and the fact that a third case had been filed in the District of Rhode Island before Harris County v. EPA was filed. In addition, the court found that factors of convenience and fairness were either neutral or leaned against transfer.

State recipients of grants under the Solar for All program filed a lawsuit in the federal district court for the Western District of Washington seeking a declaration that EPA’s actions terminating the program were unlawful and injunctive relief prohibiting EPA from implementing the unlawful actions and ordering EPA to reinstate the program and provide necessary administrative report to grant recipients. They asserted violations of the Administrative Procedure Act and of separation of powers constraints and the Constitution’s Appropriations Clause. They also asserted a non-statutory review ultra vires claim that EPA acted in excess of its authority.