Climate United Fund v. Citibank, N.A.

–

–

–

In the April 16 memorandum opinion supporting the April 15 preliminary injunction order, the district court first concluded that the plaintiffs—both grantees and their subgrantees—had demonstrated standing. The district court also again concluded that it—and not the Court of Federal Claims—had jurisdiction over the plaintiffs’ claims. The district court distinguished the case from Department of Education v. California, in which the Supreme Court on April 4 stayed a district court’s temporary restraining order blocking the termination of education-related grants and requiring the payment of grant obligations. The court noted that although the Supreme Court had stated that “the [Administrative Procedure Act’s (APA’s)] waiver of sovereign immunity does not apply to claims seeking money damages or to orders ‘to enforce a contractual obligation to pay money,’” the Court had further stated that “a district court’s jurisdiction ‘is not barred by the possibility’ that an order setting aside an agency’s action may result in the disbursement of funds.” The district court went on to characterize the relief sought by the plaintiffs in these cases as “equitable relief” that included “reinstatement of their grants and the recovery of specific money.” The court also rejected the contention that the plaintiffs were improperly challenging funding decisions that were committed to agency discretion by law and not subject to review under the APA. The court further found that the plaintiffs were likely to succeed on the merits of their APA claims that EPA acted arbitrarily and capriciously by failing to explain its reasoning and acting contrary to its regulations when it suspended and terminated the plaintiffs’ grants. In addition, the court found that the plaintiffs were likely to succeed on their constitutional claims because EPA lacked the authority “to effectively unilaterally dismantle a program that Congress established.” The court also found that the plaintiffs made a sufficient showing of imminent and irreparable harm without release of the grant funds and that the balance of the equities and public interest favored an injunction. The court did not impose a bond on the plaintiffs.

–

–

On April 15, 2025, a federal district court in the District of Columbia granted a motion for a preliminary injunction barring the termination of grants awarded by the U.S. Environmental Protection Agency (EPA) under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund programs. The court also enjoined EPA, Citibank, and other parties from taking actions to restrict the plaintiff grantees’ access to the funds and directed Citibank to disburse properly incurred funds.

–

–

–

–

–

–

–

–

On March 18, 2025, the federal district court for the District of Columbia issued a temporary restraining order (TRO) enjoining the U.S. Environmental Protection Agency (EPA) from taking actions to implement the termination of three nonprofit financial institutions’ (plaintiffs’) grants under the National Clean Investment Fund (NCIF). The TRO also enjoined Citibank from moving or transferring the grant funds. EPA established the NCIF under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund to provide financing for clean technology projects. EPA awarded the grants to the three plaintiffs under the NCIF in April 2024, and the grant funds were disbursed to accounts at Citibank pursuant to agreements between Citibank and the U.S. Department of the Treasury and between Citibank, EPA, and the plaintiffs. After EPA Administrator Lee Zeldin announced on February 12, 2025 that EPA planned to take control of the grant funds, Citibank stopped releasing funds to the plaintiffs. Plaintiff Climate United Fund filed a lawsuit on March 8 and filed a TRO motion two days later. The other two plaintiffs—Coalition for Green Capital and Power Forward Communities, Inc.—filed their lawsuits on March 10 and March 11, respectively. (Their lawsuits were originally filed in the Southern District of New York but were voluntarily withdrawn and refiled in the District of Columbia.) On March 11, EPA sent letters to the plaintiffs advising them that it was terminating the grants effective immediately. In its decision granting the TRO motion, the court rejected the EPA defendants’ argument that jurisdiction for the plaintiffs’ lawsuits challenging the terminations lay with the Court of Federal Claims. The court concluded that the plaintiffs were challenging agency action, not bringing “simple breach of contract claims.” The court also rejected EPA’s contention that the TRO request was moot because EPA terminated the grants after the TRO motion was filed. On the merits of the TRO request, the court found that because it could not find that EPA complied with the required procedures and regulations governing the termination of federal awards, the plaintiffs showed a substantial likelihood of success on the merits. The court also found that the plaintiffs made a sufficient showing of irreparable harm because the plaintiffs were reliant on the grant funds for both day-to-day activities and the financing of projects and would have to cease operations without the funds. In addition, the court concluded that balancing the equities and the public interest supported granting a TRO. The court found that a TRO preserving the status quo would not significantly harm EPA or Citibank and that there was a public interest in ensuring governmental agencies abide by federal laws.

–

–

–

–

–

–

–

–