On August 4, 2026, the U.S. Court of Appeals for the D.C. Circuit, sitting en banc, ruled that the Trump EPA likely violated the law when it terminated grants and moved to claw back money under the $20 billion Greenhouse Gas Reduction Fund, the Biden-era “green bank.” In a short unsigned opinion, six of the court's ten judges upheld the April 2025 preliminary injunction against the clawback that a three-judge panel had vacated in September 2025.
EPA Administrator Lee Zeldin had accused Climate United Fund and the other nonprofits picked to run the program of mismanagement and potential fraud, froze billions held in a Citibank account, and terminated their grants. U.S. District Judge Tanya Chutkan found that when asked for evidence of fraud, the agency did not provide it. The majority found that terminating the grants based on a policy disagreement likely violated the Inflation Reduction Act, the law that created the fund. The four dissenting judges said that after Trump's 2025 tax-and-spending law repealed the provision behind the fund and rescinded unobligated money, the EPA likely would have authority to end the grants, and one judge in the majority said that law complicated access to funds going forward.
The ruling is a legal setback for the administration but not a final loss, and the nonprofits did not get immediate access to their money: the decision was put on hold for several days to give the EPA time to ask the Supreme Court to step in. The EPA said it was reviewing the judgment and considering next steps. Climate United said, “there remains no legal basis for terminating our grant award and clawing back funds that were already disbursed in our bank accounts” (see In Court, the Administration Admits It Canceled 284 Clean-Energy Grants Based Solely on Whether a State Voted for Trump).
Correction (October 2, 2026): The entry described the dissent as arguing that Trump's spending law undercut the injunction as a whole; reporting says the four dissenters would not have kept the injunction because the repeal likely restored the EPA's authority to end the grants, while one majority judge also flagged the law's effect on future access. A Smart Cities Dive source was mislabeled as August 2026; it is from December 2025, when the full court agreed to rehear the case.