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 (Their lawsuits were originally filed in the Southern District of New York but were voluntarily withdrawn and refiled in the District of Columbia.)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.

Lawsuits challenging EPA's freezing and purported termination of funding under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund.

Climate United Fund v. Citibank, N.A.

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Federal Court Temporarily Enjoined EPA’s Termination of Greenhouse Gas Reduction Fund Grants

Filed

United States of America

District of Columbia

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Federal Court Temporarily Enjoined EPA’s Termination of Greenhouse Gas Reduction Fund Grants

Policy instrument

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Finance