In a 2-1 order, the Fourth Circuit Court of Appeals granted the federal government’s emergency motion to stay a district court’s injunction requiring the government to restore the plaintiffs’ access to funding from 32 grants awarded under the Inflation Reduction Act or Infrastructure Investment and Jobs Act. The Fourth Circuit found that the government was likely to succeed on its argument that the district court did not have subject matter jurisdiction over the plaintiffs’ claims, which instead should have been brought in the Court of Federal Claims because the plaintiffs’ claims were based on contracts—the grant agreements—not the statutes. The Fourth Circuit also found that the government demonstrated irreparable harm because it would not be able to recoup the funds it was being forced to disburse. One judge dissented due to the “novel” nature of the jurisdictional questions, which “could end up being resolved in favor of either party after full briefing and argument.” The dissenting judge did not think the defendants made a sufficiently “strong showing” that were likely to succeed on appeal. The plaintiffs filed a petition for rehearing en banc on June 10, 2025.

Community groups' and cities' lawsuit alleging that the Trump administration had unlawfully and arbitrarily frozen federal grant funds, including for programs and projects to reduce greenhouse gas emissions.

Sustainability Institute v. Trump

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Fourth Circuit Stayed District Court Injunction Requiring Restoration of IRA and IIJA Grant Funds

Filed

United States of America

South Carolina

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Fourth Circuit Stayed District Court Injunction Requiring Restoration of IRA and IIJA Grant Funds

Policy instrument

Impacted group

Economic sector

Finance