Climate United Fund v. Citibank, N.a.

FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 19, 2025 Decided September 2, 2025
No. 25-5122
CLIMATE UNITED FUND, ET AL.,
APPELLEES
v.
CITIBANK, N.A.,
APPELLANT
ENVIRONMENTAL PROTECTION AGENCY AND LEE M. ZELDIN,
IN HIS OFFICIAL CAPACITY AS ADMINISTRATOR, UNITED
STATES ENVIRONMENTAL PROTECTION AGENCY,
APPELLANTS
Consolidated with 25-5123
Appeals from the United States District Court
for the District of Columbia
(No. 1:25-cv-00698)
Yaakov M. Roth, Acting Assistant Attorney General, U.S.
Department of Justice, argued the cause for appellant
Environmental Protection Agency. With him on the briefs

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were Gerard Sinzdak and Sophia Shams, Attorneys. Sharon
Swingle, Attorney, entered an appearance.
K. Winn Allen argued the cause and filed the briefs for
appellant Citibank, N.A.
Adam G. Unikowsky argued the cause for Private
plaintiffs-appellees. With him on the brief were Vincent Levy,
Kevin D. Benish, Daniel Fahrenthold, Beth C. Neitzel, Jack C.
Smith, Kevin Y. Chen, James M. Gross, Kathryn L. Wynbrandt,
David B. Robbins, Tanner J. Lockhead, Gabriel K. Gillett, Jay
C. Johnson, David J. Zimmer, Eric F. Citron, and Kathleen
Foley.
Teresa A. Reed Dippo argued the cause for State Bank
appellees. With her on the brief were Rob Bonta, Attorney
General, Office of the Attorney General for the State of
California, John D. Echeverria, Supervising Deputy Attorney
General, Diana L. Kim, Deputy Solicitor General, Theodore A.
McCombs and Meghan H. Strong, Deputy Attorneys General,
Keith Ellison, Attorney General, Office of the Attorney
General for the State of Minnesota, Peter N. Surdo, Special
Assistant Attorney General, Catherine Rios-Keating, Special
Assistant Attorney General, Kwame Raoul, Attorney General,
Office of the Attorney General for the State of Illinois, Jane
Elinor Notz, Solicitor General, Alex Hemmer, Deputy Solicitor
General, Aaron Frey, Attorney General, Office of the Attorney
General for the State of Maine, and Emma Akrawi, Assistant
Attorney General,
Samuel R. Bagenstos was on the brief for amicus curiae
Samuel R. Bagenstos in support of appellees.
William J. Cooper was on the brief for amici curiae Impact
Finance Experts in support of appellees.

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Paul DeCamp was on the brief for amicus curiae Professor
Tobias Barrington Wolff in support of appellees.
Thomas Zimpleman, Nanding Chen, and Daniel F.
Jacobson were on the brief for amicus curiae Natural
Resources Defense Council in support of appellees.
Before: PILLARD, KATSAS and RAO, Circuit Judges.
Opinion for the Court filed by Circuit Judge RAO.
Dissenting opinion filed by Circuit Judge PILLARD.
RAO, Circuit Judge: The Environmental Protection
Agency awarded grants worth $16 billion to five nonprofits to
promote the reduction of greenhouse gas emissions. Citing
concerns about conflicts of interest and lack of oversight, EPA
terminated the grants in March 2025. The grantees sued, and
the district court entered a preliminary injunction ordering EPA
and Citibank to continue funding the grants.
We conclude the district court abused its discretion in
issuing the injunction. The grantees are not likely to succeed
on the merits because their claims are essentially contractual,
and therefore jurisdiction lies exclusively in the Court of
Federal Claims. And while the district court had jurisdiction
over the grantees’ constitutional claim, that claim is meritless.
Moreover, the equities strongly favor the government, which
on behalf of the public must ensure the proper oversight and
management of this multi-billion-dollar fund. Accordingly, we
vacate the injunction.

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I.
This case involves EPA grants awarded under the
Greenhouse Gas Reduction Fund, for which Congress
appropriated $27 billion. Inflation Reduction Act of 2022, Pub.
L. No. 117-169, § 60103, 136 Stat. 1818, 2065–67 (formerly
codified at 42 U.S.C. § 7434 (2024)). In August 2024, EPA
awarded $20 billion to eight nonprofits pursuant to two of the
grant programs it created: the National Clean Investment Fund
and the Clean Communities Investment Accelerator. Five of
those grantees are plaintiffs in this case: Climate United Fund
($6.97 billion), Coalition for Green Capital ($5 billion), Power
Forward Communities, Inc. ($2 billion), Inclusiv, Inc. ($1.87
billion), and Justice Climate Fund, Inc. ($940 million).
Each grant was memorialized in an agreement between the
nonprofit and EPA. The grant agreements have an unusual
structure. Typically, grant funds are held by the U.S. Treasury
and disbursed incrementally as grantees use the funds for
program purposes. EPA structured these grants with a
middleman that would hold the funds as a “financial agent” of
the United States. According to EPA, this was the first time the
federal government used a financial agent, as opposed to
Treasury, to carry out this kind of grant program. Treasury
entered a Financial Agency Agreement (“FAA”) with Citibank.
As set forth in the grant agreements, the funds were to be
transferred from Treasury to Citibank in a “two-step
transaction” involving a “drawdown” by the grantee and a
subsequent “disbursement” to the appropriate Citibank
account. J.A. 566. The disbursement by the grantee is deemed
“an allowable cost” under “the EPA award.” Id.
Although the funds are held at Citibank, the grantees’ use
of the funds remains highly restricted. The money may be used
only “for the purposes and under the conditions of the [grant

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agreement],” and “must be maintained” at Citibank until the
end of the grant’s period of performance. J.A. 568. The
grantees’ use of the funds is further restricted by Account
Control Agreements (“ACAs”) between EPA, Citibank, and
each of the grantees. The ACAs give the government a “right
to exclusive control” over the Citibank accounts. J.A. 72. If the
government exercises that right, Citibank must follow the
government’s transfer instructions “without further consent by
the [grantee].” Id. The ACAs expressly acknowledge that
Citibank “act[s] as a financial agent of the United States
pursuant to the authority of the U.S. Department of the
Treasury.” J.A. 71.
The sheer scale of the grant program and the method of
allocating billions of dollars drew public attention and
criticism. The record includes a widely publicized video in
which an EPA employee was recorded describing how “until
recently” his role was to make sure proper “processes are in
place to … prevent fraud and to prevent abuse,” but after the
election of President Donald Trump, EPA was “just trying to
get the money out as fast as possible before they come in
and … stop it all.” J.A. 705 n.1. The employee compared the
situation to “throwing gold bars off the Titanic.”
The month before President Trump’s inauguration, EPA
modified the grant agreements—with no apparent
consideration from the grantees—to make it more difficult for
the government to terminate the grants.1 The week before the
1 In December 2024, the government unilaterally modified the grant
agreements, including by (1) eliminating any reference to
termination for agency priorities; (2) requiring “credible
evidence … of a violation of Federal criminal law” before the
government could exercise its contractual right to terminate for
waste, fraud, or abuse; and (3) giving the grantees an expanded right

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inauguration, EPA amended the ACAs to require Citibank to
“continue to disburse funds” to the grantees, even if the
government exercised its right of exclusive control, if the funds
are “associated with financial obligations ‘properly incurred’”
before the government exercised its right. J.A. 658.
After the change in administration, EPA reviewed the
grants and raised concerns about conflicts of interest during the
award process, the political connections of the chosen grantees,
lack of government oversight and control over tens of billions
of dollars, and last-minute amendments to the grant agreements
and ACAs.2 In February 2025, the FBI recommended to
Citibank that it “place an administrative freeze on the
account(s) associated with” the grantees’ ACAs. As the
government’s financial agent, Citibank complied and stopped
disbursing funds to the grantees. EPA also referred the matter
to the Office of Inspector General for investigation. Shortly
thereafter, EPA terminated the grant agreements.
The grantees sued, seeking to enjoin the terminations as
unconstitutional, unlawful, and arbitrary and capricious. They
sought a preliminary injunction barring EPA from terminating
the grants “except as permitted in accordance with the ACA,
the grant award, and applicable law,” and ordering Citibank to
to cure any nonperformance. There is no serious dispute that these
modifications increased the likelihood that a termination by the
incoming administration would constitute a breach of contract.
2 For example, the Acting Deputy Administrator averred in a letter
to the EPA Inspector General that “the former director of the
[Greenhouse Gas Reduction Fund], personally oversaw a $5 billion
grant to his previous employer, the Coalition for Green Capital –
without recusing himself.” J.A. 670.

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resume disbursements “in accordance with the ACA.” J.A.
171–72.
The district court entered the injunction. It first held that it
had jurisdiction because the grantees’ claims were not
essentially contractual and therefore did not need to be brought
in the Court of Federal Claims. Climate United Fund v.
Citibank, N.A., 778 F. Supp. 3d 90, 107–11 (D.D.C. 2025). On
the merits, the court concluded the grantees were likely to
succeed on their constitutional, regulatory, and arbitrary and
capricious claims. The district court found the balance of harms
supported an injunction because the nonprofits exist “to fulfill
the objectives of a grant” and “sufficient protections [are] in
place” to prevent “reckless spending.” Id. at 117, 120. The
district court further concluded that an injunction “halt[ing] any
unlawful action” serves the public interest. Id. at 121. The court
enjoined Citibank as well, requiring it to disburse funds
according to the relevant agreements.
We administratively stayed the injunction and ordered the
parties to take no action “directly or indirectly” with respect to
the disputed funds, thereby prohibiting the grantees from
making further commitments in reliance on the disputed funds.
We then accelerated consideration of the merits of the appeal.
II.
While this litigation was pending, Congress enacted
legislation repealing the Greenhouse Gas Reduction Fund. See
Pub. L. No. 119-21, § 60002, 139 Stat. 72, 154 (2025)
(repealing 42 U.S.C. § 7434 and rescinding “unobligated
balances of amounts made available to carry out that section”).
Our partial administrative stay did not lift the portion of the
district court’s order enjoining the grant terminations, so the
funds at issue in this case remain at Citibank and remain

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obligated. Congress’s repeal of the Greenhouse Gas Reduction
Fund therefore did not render this appeal moot.
We review the district court’s preliminary injunction for
abuse of discretion, its underlying legal conclusions de novo,
and its findings of fact for clear error. Huisha-Huisha v.
Mayorkas, 27 F.4th 718, 726 (D.C. Cir. 2022). We consider the
same Winter factors the district court applied, which require a
plaintiff seeking a preliminary injunction to establish that it “is
likely to succeed on the merits, that [it] is likely to suffer
irreparable harm in the absence of preliminary relief, that the
balance of equities tips in [its] favor, and that an injunction is
in the public interest.” Id. at 727 (quoting Winter v. NRDC, 555
U.S. 7, 20 (2008)).
III.
The district court erred in concluding the grantees are
likely to succeed on their regulatory, arbitrary and capricious,
and constitutional claims. See Aamer v. Obama, 742 F.3d 1023,
1038 (D.C. Cir. 2014) (describing likelihood of success on the
merits as the “most important factor” when considering a
preliminary injunction). The grantees’ regulatory and arbitrary
and capricious claims can be heard only in the Court of Federal
Claims, and their constitutional claim is meritless.
A.
The grantees first allege the termination of their grants
violated Office of Management and Budget (“OMB”)
regulations and was arbitrary and capricious under the
Administrative Procedure Act (“APA”). As a remedy, they
sought and received an injunction barring the termination of
their grants and restoring access to the funds held by Citibank.
We conclude the district court lacked jurisdiction over these

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claims, which are essentially contractual and therefore must be
heard in the Court of Federal Claims.3
1.
The federal government enjoys sovereign immunity and
may be subject to suit only when it has explicitly waived that
immunity. United States v. Testan, 424 U.S. 392, 399 (1976).
Waivers of sovereign immunity must be strictly construed to
protect the prerogatives of the government and to ensure the
courts stay within the jurisdiction provided by Congress. See
Lane v. Pena, 518 U.S. 187, 192 (1996); Larson v. Domestic &
Foreign Com. Corp., 337 U.S. 682, 703–05 (1949). The
grantees brought their claims in district court, invoking the
APA’s waiver of sovereign immunity, which applies to claims
“seeking relief other than money damages.” 5 U.S.C. § 702.
But this waiver applies only if no “other statute that grants
consent to suit expressly or impliedly forbids the relief which
is sought.” Id. For contract claims against the government, the
Tucker Act establishes review in the Court of Federal Claims,
which may award only damages and cannot provide
3 Although the dissent considers this threshold jurisdictional question
a “diver[sion],” Dissenting Op. 47, our authority to assess the
lawfulness of EPA’s actions of course depends on having
jurisdiction. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94
(1998). Concluding that jurisdiction over most of these claims lies
with the Court of Federal Claims, we do not reach their merits. The
dissent inverts this fundamental limitation on Article III courts by
recounting at great length the integrity and virtue of the previous
administration’s efforts to implement the Inflation Reduction Act
and the alleged misdeeds of the current administration in terminating
the grants. Our jurisdiction, however, rests on law, not on the severity
of the alleged wrongdoing claimed by the grantees and reported by
The Washington Post, The New York Times, and Politico. See
Dissenting Op. 11, 12, 14, 36.

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declaratory or injunctive relief except in narrow circumstances.
See 28 U.S.C. § 1491; Megapulse, Inc. v. Lewis, 672 F.2d 959,
963 n.13 (D.C. Cir. 1982); Walters v. Sec’y of Defense, 725
F.2d 107, 112 n.10 (D.C. Cir. 1983).
When it applies, Tucker Act jurisdiction is exclusive and
precludes jurisdiction in district court under the APA’s waiver
of sovereign immunity.4 See Transohio Sav. Bank v. Dir., Off.
of Thrift Supervision, 967 F.2d 598, 609 (D.C. Cir. 1992). The
Court of Federal Claims is the “single, uniquely qualified
forum for the resolution of contractual disputes.” Ingersoll-
Rand Co. v. United States, 780 F.2d 74, 78 (D.C. Cir. 1985).
Because Congress has limited the forum and the remedies for
contract claims against the government, a litigant whose claim
is essentially contractual cannot “avoid the jurisdictional (and
hence remedial) restrictions of the Tucker Act” by simply
asking for injunctive relief in district court. Megapulse, 672
F.2d at 967; Transohio, 967 F.2d at 613 (“[T]he APA does not
waive sovereign immunity for contract claims seeking specific
relief.”).
This jurisdictional inquiry cannot turn on a plaintiff’s
preferred characterization of its claim, lest we “upset the
carefully modulated waiver of sovereign immunity and grant
of remedies for breach of contract embodied in the Tucker
Act.” Int’l Eng’g Co., Div. of A-T-O v. Richardson, 512 F.2d
573, 580 (D.C. Cir. 1975); see also McKay v. United States,
4 The Tucker Act contains one exception to this rule, not relevant in
this suit involving billions of dollars. Damages claims not exceeding
$10,000 may be brought in district court, although the Tucker Act’s
remedial restrictions still apply. See 28 U.S.C. § 1346(a)(2); Int’l
Eng’g Co., Div. of A-T-O v. Richardson, 512 F.2d 573, 577 n.4 (D.C.
Cir. 1975); see also Contract Disputes Act of 1978, Pub. L. No. 95-
563, §§ 3(a), 10(a), 14(a), 92 Stat. 2383, 2383–84, 2388–89 (limiting
exception to non-procurement claims).

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516 F.3d 848, 851 (10th Cir. 2008) (“[I]n the contract context,
a distinct line of authority preserves the sovereign’s immunity
from being compelled to perform obligations it prefers to
breach and compensate financially, holding that what are ‘in
essence’ claims for breach of contract cannot circumvent the
Tucker Act and its prohibition on equitable relief by being
artfully pled as something else.”).
To determine whether jurisdiction was proper in the
district court, we must therefore assess whether the grantees’
claims are essentially contractual. Megapulse, 672 F.2d at 967–
68. The fact that the grantees’ “complaint nowhere mentions
breach of contract … cannot alone suffice to establish
jurisdiction in the District Court.” Ingersoll-Rand, 780 F.2d at
77. Instead, for each claim we consider (1) whether “the source
of the rights” asserted is contractual or is “based on truly
independent legal grounds” and (2) whether “the type of relief
sought” is a typical contract remedy. Megapulse, 672 F.2d at
968–71; see Transohio, 967 F.2d at 609.
2.
The grantees first allege EPA’s termination of their
agreements violated OMB regulations. By terminating for
“agency priorities,” EPA allegedly relied on a basis for
termination not set forth in the grant agreements, in violation
of 2 C.F.R. § 200.340(a)(4). Furthermore, EPA allegedly failed
to provide written notice of termination as required by 2 C.F.R.
§ 200.341(a). Despite the grantees’ characterization, their
claims are essentially contractual and therefore the district
court lacked jurisdiction to hear them.
First, the source of the grantees’ right to the relief they seek
is their agreements, which are contracts for Tucker Act
purposes. See Dep’t of Educ. v. California, 145 S. Ct. 966, 968
(2025) (per curiam); Columbus Reg’l Hosp. v. United States,

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990 F.3d 1330, 1338–41 (Fed. Cir. 2021); see also Medina v.
Planned Parenthood S. Atl., 145 S. Ct. 2219, 2231 (2025)
(explaining that courts have historically described federal
grants as contracts). Each grantee’s right to the funds arises
“only upon creation and satisfaction of its contract with the
government; in no sense d[oes] it exist independently of that
contract.” Spectrum Leasing Corp. v. United States, 764 F.2d
891, 894 (D.C. Cir. 1985). While the grantees attempt to
ground their claims in OMB guidance, the substance of these
claims may be understood “as entirely contained within the
terms of the contract” or in principles of contract law.
Ingersoll-Rand, 780 F.2d at 78.
The claim that EPA violated 2 C.F.R. § 200.340(a)(4)
expressly refers to and incorporates the grant agreements. The
grantees interpret this OMB guidance as prohibiting the
government from terminating based on agency priorities unless
the grant agreements reserve the right to terminate on those
grounds. Even assuming this is what the guidance requires, the
grantees’ claim turns on the government’s rights under the
agreements—a question of contract interpretation that the
parties fiercely dispute. Because this claim perforce
incorporates the grant agreements, it is not based “solely” on
the regulation or on “truly independent legal grounds.”
Ingersoll-Rand, 780 F.2d at 78; Megapulse, 672 F.2d at 969–
70.
The claim that EPA failed to give proper notice of
termination in violation of 2 C.F.R. § 200.341(a) is not an
independent legal ground for a slightly different reason. This
allegation “could be phrased” as a claim that the government
stopped performing on the contract without sufficient warning.
Ingersoll-Rand, 780 F.2d at 78. Federal contract law addresses

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when defective notice by the government is actionable,5 and
therefore the substance of the grantees’ claim can be analyzed
“solely on contract principles.” Ingersoll-Rand, 780 F.2d at 78.
As we have explained, the fact that the government’s
termination of a contract “also arguably violates certain other
regulations does not transform the action into one based solely
on those regulations.” Id. Indeed, “[i]f the mere allegation” of
violations of the regulations governing federal contracting and
grantmaking “were to bring claims of this type within the
jurisdiction of the district court, Congress’ intent to limit
contract remedies against the government to damages in the
[Court of Federal Claims] would be effectively circumvented.”
Id. (cleaned up). Because the substance of the grantees’ notice
claim sounds in federal contract law, the claim is essentially
contractual and can be heard only in the Court of Federal
Claims. The grantees cannot avoid the Tucker Act’s
jurisdictional channeling by disguising a breach of contract
claim as a claim that the government violated the regulations
governing grantmaking.
Furthermore, the guidance documents on which the
grantees rely likely do not create enforceable private rights
because they merely set out principles for agencies to follow
when making grants. See Guidance for Federal Financial
Assistance, 89 Fed. Reg. 30046, 30089–90 (Apr. 22, 2024).
These guidance provisions fall within subtitle A of Title 2,
which sets forth OMB’s “guidance to Federal agencies on
5 See, e.g., Decker & Co. v. West, 76 F.3d 1573, 1579 (Fed. Cir. 1996)
(“[H]arm should accompany a defect in an otherwise proper
termination notice in order for the contractor to seek relief based on
that defect.”); Philadelphia Regent Builders v. United States, 634
F.2d 569, 572–73 (Ct. Cl. 1980) (declining to treat government’s
termination as defective because government’s regulatory violations
were “harmless technical defects”).

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government-wide policies for the award and administration of
Federal financial assistance.” 2 C.F.R. § 1.100(a). “Publication
of the OMB guidance in the [Code of Federal Regulations]
does not change its nature—it is guidance, not regulation.” Id.
§ 1.105(b). But in any event, as the dissent concedes,
Dissenting Op. 58, these regulatory claims are essentially
contractual, and we have no jurisdiction to consider them.
Second, the Court of Federal Claims has exclusive
jurisdiction because the remedy the grantees seek is contractual
in nature. The grantees requested an injunction barring EPA
from terminating the grants, “except as permitted in accordance
with the ACA, the grant award, and applicable law,” and
ordering Citibank to resume disbursements “in accordance
with the ACA.” The grantees maintain they own the funds and
seek an injunction barring unlawful interference, rather than an
order for specific performance. But the grantees’ “ownership”
of the funds goes only as far as the grant agreements and the
ACAs permit. And the funds are held by Citibank, which acts
as a fiduciary of the government. Despite their characterization,
in substance, the grantees are seeking specific performance of
their agreements with the government.6 As then-Judge Scalia
6 The dissent’s only legal argument that we have jurisdiction turns
on the claim that the grantees have “title” to the billions of dollars in
government funding. To demonstrate the grantees’ ownership,
however, the dissent relies on the grant agreements and the ACAs—
that is, on the disputed and ongoing contracts that govern the parties’
relationship. Dissenting Op. 48. The dissent’s argument merely
reinforces that this dispute is contractual and belongs in the Court of
Federal Claims. And even assuming the grantees had somehow
secured title, that would simply mean the grantees might have a
Takings Clause claim for damages, a claim they have not made and
which in any event would also have to be brought in the Court of
Federal Claims. See Knick v. Township of Scott, 139 S. Ct. 2162,

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explained, “[t]he waiver of sovereign immunity in the [APA]
does not run to actions seeking declaratory relief or specific
performance in contract cases.”7 Sharp v. Weinberger, 798
F.2d 1521, 1523 (D.C. Cir. 1986). “[A] complaint involving a
request for specific performance must be resolved by the
[Court of Federal] Claims.” Ingersoll-Rand, 780 F.2d at 80.
In sum, the grantees cannot manufacture district court
jurisdiction through artful pleading. Because the grantees’
regulatory claims are essentially contractual, they must be
heard in the Court of Federal Claims.
3.
Nor can the grantees repackage their contract claims by
invoking the APA’s bar on arbitrary and capricious action. The
grantees’ arbitrary and capricious claims are also essentially
2170, 2173 (2019) (explaining the Tucker Act “provides the standard
procedure for bringing [takings] claims” against the federal
government and that “[e]quitable relief [is] not available” if
“monetary relief … under the Tucker Act” is).
7 The dissent’s reliance on Sharp is entirely misplaced. In Sharp,
there was no dispute that the plaintiff was a military officer, that he
had an interest in his employment, and that the deprivation of that
interest without due process could be litigated in district court under
Sampson v. Murray, 415 U.S. 61, 71 (1974). See Sharp, 798 F.2d at
1523. Here, by contrast, the rights and interests of the grantees are
disputed. The grantees assert they “performed” on their contracts
when Treasury deposited federal funds at Citibank, the government’s
financial agent. Even overlooking the oddity of this argument,
whether the grantees have performed depends entirely on the terms
of the disputed contracts—a question that must be adjudicated in the
Court of Federal Claims.

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contractual, considering both the source of the legal right
asserted and the remedy sought.
The grantees assert the government acted arbitrarily
because it “offered no facts or individualized reasoning to
justify” the grant terminations. And the grantees insist they can
challenge the sufficiency of the government’s reasons for
terminating the grants separately from the issue of whether the
terminations were allowed under the agreements. But this court
has expressly and repeatedly rejected attempts to manufacture
district court jurisdiction by framing contract claims as
violations of the APA’s bar on arbitrary and capricious action.
See Ingersoll-Rand, 780 F.2d at 77–78; Richardson, 512 F.2d
at 580. Despite the grantees’ characterizations, the remedy they
seek is specific performance of their contracts, and they have
identified no right to that relief that is “truly independent” of
the grant agreements. Megapulse, 672 F.2d at 970.
As already discussed in reference to the grantees’
regulatory claims, the grantees seek to set aside their grant
terminations, which means they seek specific performance.
Ingersoll-Rand, 780 F.2d at 79–80. This is a “typical contract
remedy” that indicates a claim is “founded upon a contract for
purposes of the Tucker Act.” Spectrum Leasing, 764 F.2d at
894–95; see also Transohio, 967 F.2d at 613.
The APA’s substantive bar on arbitrary and capricious
action does not give the grantees an independent right to
specific performance of their grant agreements. To the extent
the grantees argue the government acted arbitrarily by failing
to follow the terms of the grant agreements, that argument can
be evaluated only by “reference to and incorporation of” the
agreements. Richardson, 512 F.2d at 578. The source of the
right asserted is therefore not “truly independent” of the
contracts. Megapulse, 672 F.2d at 970.

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To the extent the grantees argue the terminations were
arbitrary regardless of whether they were permitted under the
agreements, that challenge turns, in substance, on principles of
federal contract law. That law prohibits the government from
“dishonor[ing], with impunity, its contractual obligations”
even when a contract allows the government to terminate for
convenience. Maxima Corp. v. United States, 847 F.2d 1549,
1553 (Fed. Cir. 1988) (cleaned up). The grantees’ argument
that the termination was arbitrary and capricious is simply a
claim that EPA breached the grant agreements by terminating
with “impunity.” That claim must be brought in the Court of
Federal Claims.
The grantees insist the APA gives them an independent
right to be free of arbitrary agency action, including contract
terminations. But we have long rejected the idea that the APA’s
general bar on arbitrary and capricious action subjects contract
terminations to a parallel review scheme in district court.8 See
Ingersoll-Rand, 780 F.2d at 77–78; Richardson, 512 F.2d at
580 (“[D]ecisions made by contracting officers pursuant to
contract clauses fall outside the contemplation of the [APA].”).
The APA’s bar on arbitrary and capricious action did not
“destroy the Court of [Federal] Claims by implication.”
Richardson, 512 F.2d at 580 (cleaned up).
8 The dissent’s analysis focuses on the grantees’ “theory of relief”
and concludes that because the grantees have “legitimate” APA
claims and request injunctive relief, the district court has jurisdiction.
Dissenting Op. 56–57. But Supreme Court and circuit precedent
require that we look beyond plaintiffs’ characterization of their
claims and determine whether the claims are “based on truly
independent legal grounds,” not simply whether plaintiffs have made
good faith legal arguments. See Megapulse, 672 F.2d at 969–70. On
this central question, the dissent has nothing to offer.

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In sum, district courts have no jurisdiction to hear claims
that the federal government terminated a grant agreement
arbitrarily or with impunity. Claims of arbitrary grant
termination are essentially contractual and fall outside the
APA’s waiver of sovereign immunity.
This conclusion is reinforced by the Supreme Court’s
recent decision in a stay posture that a very similar arbitrary
and capricious challenge to federal grant terminations likely
could not be brought in district court. See Dep’t of Educ., 145
S. Ct. at 968. In that case, state plaintiffs sued in district court
and claimed the Department of Education’s decision to
terminate several grants was arbitrary and capricious under the
APA. The district court enjoined the terminations. The Court
stayed the injunction on the ground that the district court likely
lacked jurisdiction over the APA claims because “the Tucker
Act grants the Court of Federal Claims jurisdiction over suits
based on ‘any express or implied contract with the United
States.’” Id. (quoting 28 U.S.C. § 1491(a)(1)). The Supreme
Court has doubled down on this conclusion in another case
staying an injunction against discretionary grant terminations:
“The [APA]’s ‘limited waiver of [sovereign] immunity’ does
not provide the District Court with jurisdiction to adjudicate
claims ‘based on’” the plaintiffs’ grants “or to order relief
designed to enforce any ‘obligation to pay money’ pursuant to
those grants.” Nat’l Institutes of Health v. Am. Pub. Health
Ass’n, No. 25A103, 2025 WL 2415669, at *1 (Aug. 21, 2025)
(quoting Dep’t of Educ., 145 S. Ct. at 968).
The Court’s reasoning requires respect and strongly
supports our conclusion that the grantees’ arbitrary and
capricious challenge to the grant terminations is a disguised
contract claim that cannot be heard in district court. See Trump
v. Boyle, 145 S. Ct. 2653, 2654 (2025) (“Although our interim
orders are not conclusive as to the merits, they inform how a

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court should exercise its equitable discretion in like cases.”);
Priests for Life v. HHS, 808 F.3d 1, 25 (D.C. Cir. 2015)
(Kavanaugh, J., dissenting from denial of rehearing en banc)
(explaining that Supreme Court stay orders are “extremely
strong signals”); see generally Trevor N. McFadden & Vetan
Kapoor, The Precedential Effects of The Supreme Court’s
Emergency Stays, 44 Harv. J. L. & Pub. Pol’y 827, 831 (2021)
(arguing some emergency orders are “authoritative with
respect to future cases considering the same legal questions”).
In the face of this overwhelming authority, the grantees
nonetheless maintain that jurisdiction over their arbitrary and
capricious claims is proper. But the two cases on which they
rely cannot support that conclusion.
The grantees point out that this court reviewed an agency’s
grant termination under the APA’s arbitrary and capricious
standard in Kansas City v. Department of Housing and Urban
Development, 923 F.2d 188, 193 (D.C. Cir. 1991). But the
court in that case made no mention of the Tucker Act, nor did
it engage with our decisions in Richardson and Ingersoll-Rand.
This drive-by jurisdictional holding does not bind us. Steel Co.
v. Citizens for a Better Env’t, 523 U.S. 83, 91 (1998). Just one
year later, we extensively considered the jurisdictional
framework and “decline[d] to overrule this Court’s very
specific holdings that the APA does not waive sovereign
immunity for contract claims seeking specific relief.”
Transohio, 967 F.2d at 613. As the Supreme Court’s stay order
in Department of Education confirms, Kansas City is an outlier
and does not support district court jurisdiction over the
grantees’ arbitrary and capricious claims.
Second, the grantees point to Maryland Department of
Human Resources v. Department of Health and Human
Services, which held that a state agency could maintain an

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20
arbitrary and capricious claim in district court to challenge the
federal government’s withholding of grant funds. 763 F.2d
1441, 1451, 1453 (D.C. Cir. 1985). In that case, the federal
government was required by law to pay block grant funds to
Maryland according to a statutory formula. See 42 U.S.C.
§§ 1397a(a)–(b), 1397b(b) (1982). We explained that
Maryland’s claim was not contractual for purposes of the
Tucker Act because it “turn[ed] on the interpretation of statutes
and regulations rather than on the interpretation of an
agreement negotiated by the parties.” Maryland, 763 F.2d at
1449. There was no “contract within the meaning of the Tucker
Act”—only statutes and regulations that dictated how much
Maryland was entitled to receive, how the funds could be spent,
and under what circumstances the federal government could
withhold payment. Id.
By contrast, these grant agreements are “contracts” within
the meaning of the Tucker Act because they include the
traditional contract elements of offer, acceptance, and
consideration. See, e.g., Dep’t of Educ., 145 S. Ct. at 968;
Columbus Reg’l Hosp., 990 F.3d at 1338–41. The grantees do
not suggest that any of these elements is lacking. Moreover, the
Inflation Reduction Act did not specify who was to receive
money from the Greenhouse Gas Reduction Fund or in what
amount. Those determinations were to be made “on a
competitive basis” at the discretion of the EPA Administrator.
42 U.S.C. § 7434(a) (2024). The grantees obtained federal
funds only because they were awarded discretionary EPA
grants, the terms of which are governed by the grant
agreements. See Nat’l Institutes of Health, 2025 WL 2415669,
at *4 (Gorsuch, J., concurring in part and dissenting in part)
(explaining that Department of Education “controls” when a
district court seeks to remedy “the government’s denial of
previously awarded discretionary grants”). The dispute over
the termination of these agreements does not turn solely, or

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really at all, on the statute, and the relief sought is continued
performance of the agreements.
In short, the grantees cannot circumvent the Court of
Federal Claims by arguing that EPA’s termination of the grants
was arbitrary and capricious in violation of the APA.
4.
Finally, the grantees cannot bring their regulatory or
arbitrary and capricious claims in district court by arguing that
the EPA Administrator acted ultra vires. The grantees invoke
the Larson-Dugan doctrine, which, like the Ex parte Young
exception to state sovereign immunity, holds that sovereign
immunity does not bar suits against federal officers whose
“powers are limited by statute” and whose actions go “beyond
those limitations” or are “constitutionally void.” Larson, 337
U.S. at 689, 701–02; see also Dugan v. Rank, 372 U.S. 609,
621–23 (1963). The grantees insist Administrator Zeldin
exceeded his lawful authority by terminating the agreements in
violation of the OMB guidance provisions and the APA’s bar
on arbitrary and capricious action. We disagree.
The Supreme Court in Larson recognized that the ultra
vires exception to sovereign immunity does not apply to
contract claims: “The Government, as representative of the
community as a whole, cannot be stopped in its tracks by any
plaintiff who presents a disputed question of property or
contract right.” 337 U.S. at 704. As already explained, the
grantees’ regulatory and arbitrary and capricious claims
essentially allege the government (1) violated the terms of the
grant agreements and (2) acted with impunity. If proven, these
claims establish breach of contract. They do not establish that
the government (or any official) acted in excess of statutory
limits or in contravention of the Constitution, as is required to

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invoke the Larson-Dugan exception.9 See Larson, 337 U.S. at
695 (squarely rejecting the contention that “an officer given the
power to make decisions” only has sovereign immunity when
he “make[s] correct decisions”).
The grantees cannot bootstrap district court jurisdiction
through the ultra vires exception to sovereign immunity
because their regulatory and arbitrary and capricious claims are
essentially contractual.
B.
The grantees also maintain that EPA violated the
“Separation of Powers” by not enforcing the Inflation
Reduction Act, citing In re Aiken County, 725 F.3d 255 (D.C.
Cir. 2013). The grantees contend that Congress directed how
and when the Greenhouse Gas Reduction Fund appropriations
were to be spent and that EPA violated those directives by
canceling the grant agreements. Although the district court had
jurisdiction over this claim, it is unlikely to succeed on the
merits.
As an initial matter, this is not a constitutional claim at all,
but rather a claim that EPA violated the Inflation Reduction
Act. Claims that agency officials acted in excess of their
statutory authority do not ipso facto allege violations of the
“Separation of Powers.” See Dalton v. Specter, 511 U.S. 462,
9 This is consistent with the general principle that “[i]t is not illegal
for a party to breach a contract.” United States v. Blankenship, 382
F.3d 1110, 1133 (11th Cir. 2004). “The duty to keep a contract at
common law means a prediction that you must pay damages if you
do not keep it[]—and nothing else.” United States v. Winstar Corp.,
518 U.S. 839, 919–20 (1996) (Scalia, J., concurring) (quoting
Holmes, The Path of the Law (1897), in 3 The Collected Works of
Justice Holmes 391, 394 (S. Novick ed. 1995)).

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474 (1994) (distinguishing between “claims that an official
exceeded his statutory authority, on the one hand, and claims
that he acted in violation of the Constitution, on the other”); cf.
5 U.S.C. § 706(2) (distinguishing judicial review of agency
action “contrary to constitutional right, power, privilege, or
immunity” and action “in excess of statutory jurisdiction,
authority, or limitations”). As we recently explained, when a
“supposed separation-of-powers violation turns entirely on
whether [executive] officials violated the governing
statutes, … Dalton requires us to analyze the claim as an ultra
vires one.” Nat’l Treasury Emps. Union v. Vought, No. 25-
5091, 2025 WL 2371608, at *19–20 (D.C. Cir. Aug. 15, 2025);
see also Glob. Health Council v. Trump, No. 25-5097, 2025
WL 2326021, at *6–9 (D.C. Cir. Aug. 13, 2025). The grantees
here allege violations of the statute, not the Constitution, and
we decline to adopt a principle that would convert every
statutory challenge to agency action into a constitutional claim.
We conclude EPA did not violate the Inflation Reduction
Act when it terminated these grants. The grantees have
identified no statutory provision that barred the cancellation of
the grants. In relevant part, the Inflation Reduction Act
“appropriated to the Administrator” $20 billion “to make
grants[] on a competitive basis” and provided that the funds are
“to remain available until September 30, 2024.” 42 U.S.C.
§ 7434(a) (2024). The grantees interpret these provisions as a
mandate that EPA spend the full $20 billion, a mandate that
EPA allegedly violated when it cancelled grants after the
September 2024 appropriation deadline. But even assuming the
statute required EPA to obligate all $20 billion by the
appropriation deadline, EPA did so. EPA later cancelled the
grants, but the Act does not limit the Administrator’s discretion
to withhold or terminate grants. And EPA repeatedly
represented that it planned to recommit the funds.

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24
The grantees and the dissent insist EPA’s promise to
recommit the funds was hollow because the Inflation
Reduction Act appropriation had lapsed by the time EPA
terminated the grants, and therefore EPA had no ability to
recommit the funds. But the grantees cite no authority for the
proposition that when an agency cancels a grant after an
appropriation has lapsed, any recommitment of those funds
requires deobligation and a new appropriation by Congress.
Indeed, such a categorical rule would be inconsistent with the
longstanding position of the Government Accountability
Office—a legislative agency—that the Executive Branch may
issue replacement contracts even after an appropriation has
lapsed. See Funding of Replacement Contracts, 68 Comp. Gen.
158, 158 (Dec. 19, 1988); see also 31 U.S.C. § 1552(a)
(providing that appropriation account does not close until five
years after an appropriation expires).
In fact, the Executive often issues replacement contracts
after terminating for convenience, a practice the Comptroller
General has approved for decades.10 See U.S. General
Accounting Office, Principles of Federal Appropriations Law
3d ed., vol. 1, 5-28–5-33 (Jan. 2004) (discussing history of
replacement contracts and associated Comptroller General
opinions). Moreover, the rule the grantees assert would be
inconsistent with this court’s recognition that the government
gets “a second chance to obligate” even after an appropriation
has lapsed if a court sets aside the original, timely obligation.
Population Inst. v. McPherson, 797 F.2d 1062, 1071 (D.C. Cir.
1986). Considering the longstanding practice of the political
branches, as well as our precedent, we are not persuaded that
10 The Comptroller General opinion the dissent cites is inapposite
because it involves new obligations, not replacement grants. See
Dissenting Op. 41. Replacement grants do not require a new
obligation of funds.

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25
the government lacks authority to recommit the funds after
termination.11
The district court’s determination that the grantees were
likely to succeed on their “constitutional” Inflation Reduction
Act claim rests on both factual and legal error. The court found
that “EPA seeks to dismantle these grant programs in their
entirety as a policy matter.” Climate United Fund, 778 F. Supp.
3d at 115. This factual determination was not supported by any
evidence in the record and rested only on the district court’s
assertion that EPA “suspended all eight grants.” Id. at 116. But
the suspension of the grants standing alone cannot demonstrate
EPA was shutting down the statutory programs without
congressional approval. Indeed, EPA repeatedly stated that it
planned to recommit the grant money with greater oversight
and accountability, contradicting the district court’s shutdown
finding. Absent any clear evidence to the contrary, EPA’s
representations were entitled to a presumption of regularity.
See Am. Fed’n of Gov’t Emps., AFL-CIO v. Reagan, 870 F.2d
723, 727 (D.C. Cir. 1989).
Rather than credit EPA’s statements or explain why the
presumption of regularity was overcome, the district court
simply declared EPA was shutting down the programs. The
court disregarded the government’s interest in prudent
management of the grant programs and the government’s
representations that it planned to properly supervise, rather
11 We need not consider for purposes of this appeal whether the
recent repeal of the Greenhouse Gas Reduction Fund, and the
recission of “unobligated balances,” affects EPA’s ability to
recommit the funds at issue here. If the repeal of the statute bars EPA
from recommitting the funds, it stands to reason that the repeal also
relieves EPA of any statutory obligation to do so.

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26
than abandon, the grantmaking process.12 The district court’s
conclusory factual finding of program dismantlement was
clearly erroneous. See United States v. Microsoft Corp., 253
F.3d 34, 118 (D.C. Cir. 2001) (explaining that even on clear
error review the court is not required to “accept findings that
are utterly deficient”).
Because EPA issued the grants in accordance with the
Inflation Reduction Act, and there is no evidence the agency
sought to dismantle the programs without congressional
approval, In re Aiken County cannot support the grantees’
claims. In that case we issued a writ of mandamus because for
years the Nuclear Regulatory Commission flagrantly
disregarded statutory commands, failed to spend appropriated
funds, and plainly stated it had no intention of complying with
its statutory obligations. In re Aiken County, 725 F.3d at 257–
59. By contrast, EPA entered the grant agreements before the
appropriation expired in September 2024, in compliance with
any requirement in the Inflation Reduction Act to spend funds.
EPA subsequently terminated the agreements because of its
concerns about lack of oversight and potential conflicts of
interest during the award process.
EPA’s actions here are well within the Executive Branch’s
authority and responsibility to manage the expenditure of funds
and to ensure that money appropriated by Congress is properly
spent for its intended purposes. The grant terminations may be
12 The district court also ignored the government’s evidence of
mismanagement of the grant funds, such as the damning “gold bars”
video, which further supports EPA’s good faith in deciding to
terminate the grants and recommit the funds with proper supervision
and accountability. See J.A. 107 n.1. Moreover, the dissent focuses
primarily on EPA’s actions against these grantees, but the repeated
recounting of these actions tells us little about whether EPA will
recommit the funds through a more robust process.

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27
challenged on the merits as a breach of contract, but nothing in
the Inflation Reduction Act prevented EPA from taking care
that the grant programs be faithfully executed.
The grantees’ false invocation of the separation of powers
cannot justify this preliminary injunction, which bars EPA
from carrying out basic executive functions to ensure the
prudent and effective management of substantial public
funds.13
IV.
The district court also abused its discretion in applying the
remaining Winter factors: irreparable harm to the plaintiff, the
balance of the equities, and the public interest. While some
grantees may be forced to shutter their operations during the
litigation, their harms do not outweigh the interests of the
government and the public in the proper stewardship of billions
of taxpayer dollars.
A.
The loss of grant funds during this litigation is not
irreparable because the harm is compensable through money
damages. The district court concluded the grantees would
suffer irreparable harm because their “purpose” and “business
operations … depend[] on their grant money.” Climate United
Fund, 778 F. Supp. 3d at 117. But it is well-established that
“economic loss does not, in and of itself, constitute irreparable
harm.” Mexichem Specialty Resins, Inc. v. EPA, 787 F.3d 544,
555 (D.C. Cir. 2015) (cleaned up). Pecuniary injuries can be
13 The grantees also argue EPA will violate the Appropriations
Clause if it reobligates the funds after terminating the grant
agreements. The district court did not base its preliminary injunction
on this argument, so we do not address it.

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28
redressed through money damages if a plaintiff proves its case.
We have recognized only one exception, for pecuniary loss that
“threatens the very existence of the movant’s business.”
Wisconsin Gas Co. v. FERC, 758 F.2d 669, 674 (D.C. Cir.
1985). This exception generally applies when government
action threatens the existence of an independent private entity.
See, e.g., Alpine Sec. Corp. v. Fin. Indus. Regul. Auth., 121
F.4th 1314, 1329 (D.C. Cir. 2024) (finding irreparable harm
when a financial services firm would be forced to shutter if
regulatory action took effect during litigation).
The grantees do not fall within this exception. The
nonprofit entities that may need to suspend operations are
entities that were created solely for the purpose of applying for
and spending these federal grants. So while their “existence
relies on grant money” as the district court held, that is because
these entities were established to benefit from government
largesse. Creating such an entity cannot establish an
irrevocable claim to government funds or an entitlement to
injunctive relief preventing the Executive Branch from
supervising and managing those funds. In short, the existential
threat alleged by the grantees does not amount to irreparable
harm.
EPA terminated the grants because of concerns about the
integrity of the grantmaking process. While litigation is
pending, the grantees may have to scale down their operations
or return to the operational status they had before they received
federal funds. Although this causes some harm, the harm is
readily compensable through damages and therefore is not
irreparable.
B.
The balance of the equities and the public interest factors
similarly favor the government. The injunction harms the

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29
government and the public interest by preventing the Executive
Branch from properly and prudently managing billions of
dollars in public funds. The grantees have an interest in
continued access to government funding. But the government
and the public have a stronger interest in protecting the public
fisc and eliminating the appearance of impropriety around
these grant programs.
Moreover, if the grant terminations are later determined to
be a breach of contract, the government may be required to pay
damages to the grantees, which would substantially, if not
entirely, redress the grantees’ interim injuries. By contrast, if
the government’s position is eventually vindicated, it will have
no apparent means to recover funds spent down while the
litigation has run its course. See Nat’l Institutes of Health, 2025
WL 2415669, at *1 (Order) (recognizing irreparable harm to
the government because the grant “funds cannot be recouped
and are thus irrevocably expended”) (cleaned up). The
government’s (and the public’s) harm from an erroneous
injunction is thus irreparable in a way that the grantees’ harm
from an erroneous contract termination is not.
Finally, Congress has explicitly channeled breach of
government contract claims to the Court of Federal Claims and
limited remedies to damages. See Megapulse, 672 F.2d at 967
(“The Court of [Federal] Claims may neither grant declaratory
nor injunctive relief.”) (cleaned up). The district court has no
jurisdiction over these claims, and even the Court of Federal
Claims lacks authority to issue injunctive relief. The public
interest favors limiting federal courts to the jurisdiction and
remedies provided by Congress. See Trump v. CASA, Inc., 145
S. Ct. 2540, 2562 (2025) (“When a court concludes that the
Executive Branch has acted unlawfully, the answer is not for
the court to exceed its power, too.”).

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30
The same considerations support vacating the injunction
as to Citibank. The district court did not find that the grantees
were likely to succeed on any of their independent claims
against Citibank, which involve breach of contract, conversion,
and replevin. To the contrary, the court found that “Citibank
performed its obligations under the FAA in accordance with its
responsibilities as a financial agent of the United States.”
Climate United Fund, 778 F. Supp. 3d at 116. The injunction
against Citibank merely serves to stop Citibank from following
the government’s instructions, which the district court
considered unlawful. Because we conclude the injunction
against the government should be vacated, the derivative
injunction against Citibank must be vacated as well.
* * *
For the foregoing reasons, we vacate the district court’s
injunction and remand the case to the district court for further
proceedings consistent with this opinion.
So ordered.

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P ILLARD, Circuit Judge, dissenting: On the majority’s
telling, Plaintiffs bring garden-variety contract claims against
EPA’s reasonable decisions to terminate their grant awards.
That version of events fails to contend with the government’s
actual behavior and misapprehends Plaintiffs’ claims, leading
the majority to the wrong conclusion at every step of its review
of the district court’s preliminary injunction.
Three years ago, Congress passed the Inflation Reduction
Act. One of the law’s signature provisions directs the
Environmental Protection Agency to distribute $20 billion in
grants for investment in projects to develop clean energy
infrastructure and manufacturing capacity. Congress
structured the Greenhouse Gas Reduction Fund to provide jobs
while reducing greenhouse gas emissions and improving air
quality, especially in low-income and underinvested
communities. EPA distributed the grant money by the fall of
2024, as Congress required.
After the change in administration, in response to
President Trump’s directives to terminate the “Green New
Deal,” new leadership at EPA decided to take back the money
already awarded to Plaintiffs. Plaintiffs were holding and
spending the money exclusively as Congress intended. Yet
EPA—in conjunction with counterparts at the Department of
Justice, the FBI, and the U.S. Treasury—opened spurious
criminal and civil investigations into the Greenhouse Gas
Reduction Fund and pressured Citibank into “voluntarily”
freezing Plaintiffs’ accounts even though the government
lacked probable cause to impose such a freeze. EPA then
attempted to take back Plaintiffs’ money by “terminating” all
eight grants, comprising the entire $20 billion congressionally
mandated program, 24 hours before the government was due in
district court for a hearing on Plaintiffs’ application for a
temporary restraining order. Those unprecedented and
unfounded actions were part of EPA’s hunt for reasons to shut
down the congressionally mandated program and claw back the

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2
funding that had already been disbursed to Plaintiffs and
committed to infrastructure projects. EPA’s termination letter
claims the agency conducted a “comprehensive review” but
fails to identify any contract breach or violation of law by
Plaintiffs.
So far, EPA has succeeded in depriving Plaintiffs of access
to their funding for six months. The freeze has already caused
Plaintiffs to default on promised loans and scuttled affordable
housing and energy projects implementing Congress’s vision.
EPA has done all that without presenting to any court any
credible evidence or coherent reason that could justify its
interference with Plaintiffs’ money and its sabotage of
Congress’s law.
Plaintiffs challenge EPA’s action to gut the Greenhouse
Gas Reduction Fund as contrary to the Constitution’s
separation of powers. Fundamental to our “constitutional
system of separation of powers” is the “settled, bedrock
principle[]” that neither the President nor his “subordinate
executive agencies” may “decline to follow a statutory mandate
or prohibition simply because of policy objections.” In re
Aiken Cnty., 725 F.3d 255, 259, 267 (D.C. Cir. 2013); U.S.
Const. art. I, §§ 1, 9, cl. 7; U.S. Const. art. II, § 3. Yet that is
just what EPA decided to do and has begun to effectuate here.
The record strongly supports the district court’s determination
that EPA has frozen and attempted to repossess billions of
dollars’ worth of lawfully spent money for no substantiated
reason other than disagreements with Congress’s policy
determination—grounds that are entirely inapposite and
inadequate, and that the government does not defend here. The
agency has no lawful basis—nor even a nonfrivolous assertion
of any basis—to interfere with funding that, pursuant to
Congress’s instructions, already belongs to Plaintiffs, who in
turn have committed it to energy infrastructure development

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3
and advanced manufacturing projects according to Congress’s
plan.
That constitutional violation alone justifies the district
court’s injunction. The injunction is independently warranted
by the arbitrary and capricious character of EPA’s actions.
Plaintiffs challenge EPA’s taking of their funds under an
irrational process with only pretextual justifications. That is a
quintessential APA claim that belongs in the district court, and
on which Plaintiffs are likely to succeed.
Defendants insist that this is a government contract dispute
that we must dismiss because, under the Tucker Act, only the
Court of Federal Claims has authority to decide it. Our Tucker
Act precedents do not support that contention. They direct us
to analyze whether a claim is “at its essence” contractual and,
if it is, to cede jurisdiction to the Court of Claims for its expert
“knowledge of the government contracting process.”
Ingersoll-Rand Co. v. United States, 780 F.2d 74, 76, 78 (D.C.
Cir. 1985). That analysis, turning on the source of the right
Plaintiffs assert and the nature of the relief they seek—here,
constitutional and statutory claims to retain already-disbursed
funds to which they remain lawfully entitled—confirms the
jurisdiction of the district court. Megapulse, Inc. v. Lewis, 672
F.2d 959, 968-69 (D.C. Cir. 1982). The majority
acknowledges the district court’s jurisdiction over Plaintiffs’
constitutional claims. And nothing in the Tucker Act or
binding precedent interpreting it supports the majority’s view
that Plaintiffs’ APA claim is transformed into a contract claim
and ousted from the district court’s jurisdiction merely because
it seeks to prevent EPA’s capricious interference with funds
that Plaintiffs obtained through and must spend consistently
with a contract. Maj. Op. 16-18.

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4
In characterizing this case as merely a contract dispute
subject to the Tucker Act’s jurisdictional bar, the majority
baselessly strips the district court of authority to decide these
important claims. The majority holds that a plaintiff cannot
bring an arbitrary and capricious challenge to any government
action that affects something of value that was originally
obtained by contract. Maj. Op. 16-18. Doing so undercuts the
Constitution’s and the APA’s checks on the Executive’s
illegitimate seizure of Plaintiffs’ funds and subversion of
Congress’s will. The government’s Tucker Act defense is
especially pernicious here. Dismissal of this case presumably
will enable the government to carry out its announced plan to
immediately and irrevocably seize Plaintiffs’ funds. At best, in
the unlikely event the government refrains from immediately
draining Plaintiffs’ frozen accounts, the further delay involved
in reinitiating litigation in the Court of Federal Claims will
itself irreparably harm the infrastructure projects that cannot
move forward and may fail without funding. In these
circumstances, “[i]t is no overstatement to say that our
constitutional system of separation of powers w[ill] be
significantly altered” by “allow[ing] executive . . . agencies to
disregard federal law in the manner asserted in this case.”
Aiken Cnty., 725 F.3d at 267.
BACKGROUND
A. The Greenhouse Gas Reduction Fund
In 2022, Congress passed the Inflation Reduction Act. The
Act establishes the $27 billion Greenhouse Gas Reduction
Fund and directs the Environmental Protection Agency (EPA)
to distribute that money for investment in projects to deploy
solar and electric energy technology throughout the country,
especially in low-income and disadvantaged communities.
Pub. L. No. 117-169, 136 Stat. 1818, 2065-67 (2022) (codified

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5
at 42 U.S.C. § 7434). The program was intended to reduce
greenhouse gas emissions, improve air quality, and “improve
health outcomes, lower energy costs, and create high-quality
jobs for Americans—all while strengthening [the] country’s
economic competitiveness and ensuring energy security.”
Notice of Funding Opportunity (NOFO) 3 (J.A. 1735).
Achieving that vision would “require a tremendous
amount of financing and private capital for greenhouse gas-
and air pollution-reducing projects across the country.” Id.
Because the private sector has historically been hesitant to
invest in clean energy projects, Congress designed the
Greenhouse Gas Reduction Fund to finance clean energy
projects “in partnership with, and by leveraging investment
from, the private sector.” 42 U.S.C. § 7434(c)(3)(A).
Specifically, Congress directed EPA to spend $20 billion by
September 2024 to fund nonprofit financial institutions, which
in turn must use the funds either to recruit private investment
for clean energy programs or to assist community projects to
reduce air pollution. Id. § 7434(a)(2)-(3), (c)(3).
Pursuant to Congress’s directive, in July 2023, EPA
created two funding programs: the National Clean Investment
Fund (NCIF) program, to identify and deploy nonprofit lenders
to use public seed money to attract private investment for tens
of thousands of energy-efficient affordable housing,
transportation, and electricity projects throughout the country;
and the Clean Communities Investment Accelerator (CCIA)
program, to identify and deploy nonprofit organizations to use
public seed money to enable community lenders to invest in
clean energy projects in low-income and underinvested
communities.
EPA conducted a rigorous, competitive selection process,
which included review of applicants’ detailed program plans

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6
and budgets, organizational capacity, and experience managing
third-party capital and financial risk. EPA selected eight
nonprofits—lenders and community organizations—capable
of carrying out those aims. The approved workplans and
budgets of the applicants EPA selected describe how those
organizations will use the federal funds they have since
received to expand access to—and recruit private investment
for—affordable construction and renovation of energy-
efficient businesses, schools, municipal buildings, healthcare
facilities, public housing, and transportation, particularly in
rural, Tribal, and low-income areas.
In compliance with the September 2024 deadline Congress
imposed, EPA obligated the grant funds for both programs by
the summer of 2024. To enable the grantees to recruit private
investment—as Congress required, 42 U.S.C.
§ 7434(c)(3)(A)—EPA deposited the grant funds in accounts
opened in the grantees’ names at Citibank. Unlike EPA’s
traditional disbursement system, that structure gave the
grantees title to the full amount of the award funds up front,
allowing those funds to serve as assets for the grantees to rely
on to raise private capital by reducing financial risk for private
investments. See Impact Finance Experts Amicus Br. 7-14.
The Plaintiff grantees’ legal title to their award funds is
spelled out in Account Control Agreements between EPA,
Citibank, and each grantee. Those agreements specify that
Citibank “maintains the Accounts for the [grantee]” and state
that the grantee is “the Bank’s customer with respect to the
Accounts and [] the entitlement holder with respect to all
financial assets credited . . . to the Accounts.” Account Control
Agreement § 1 (J.A. 1144). The Account Control Agreements
accordingly direct that Citibank “shall comply with all
instructions” it receives from the grantees. Id. § 2 (J.A. 1145).
The grantees’ title to the award funds is also reflected in

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Citibank’s Financial Agency Agreement with Treasury, which
requires Citibank to act as the government’s “financial agent”
to achieve Congress’s goal by, among other things, establishing
“accounts in the names of the three NCIF and five CCIA grant
recipients” and maintaining a “customer relationship” with
each grantee. Financial Agency Agreement Ex. A § I.A.1
(J.A. 2145).
Under those agreements, EPA retained a security interest
in the grantees’ award funds that allows it to assert control over
the money in certain circumstances if—and only if—it issues a
Notice of Exclusive Control, which it undisputedly has not
done. Form of Notice of Exclusive Control (J.A. 1152); Oral
Arg. Tr. 28:6-22. EPA has only an unexercised security
interest; it does not own the funds in the grantees’ accounts.
See United States v. Whiting Pools, Inc., 462 U.S. 198, 209-10
(1983); Cent. Va. Cmty. Coll. v. Katz, 546 U.S. 356, 392 n.8
(2006) (Thomas, J., dissenting) (noting the distinction between
“the government possess[ing] merely a secured interest in the
property” and “own[ing] the funds”).
In addition to serving as the mechanism for conveying to
the grantees legal title to the award funds, the financial agent
structure affords EPA greater oversight of the grantees’ use of
the funds than it would have had under the default
disbursement system: While EPA’s traditional disbursement
system reports only the amounts withdrawn by the recipient
and the remaining award funds, the financial agent structure
allows EPA real-time “view access,” enabling it to see the
grantees’ and their subrecipients’ accounts to follow how much
they are spending, with all amounts broken down by budget
category, and to see income in the form of portfolio earnings
and loan repayments. Bafford Decl. ¶ 33 (J.A. 372).

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Other oversight mechanisms provide further, detailed
confirmation of grantees’ lawful use of their funds. Grantees
provide extensive reporting to EPA on their spending. They
make quarterly, semi-annual, and annual written reports
regarding their transactions and progress against their EPA-
approved workplans, plus quarterly conflict-of-interest
reporting. They attend oversight, planning, and compliance
meetings with EPA at least weekly. They submit to EPA
withdrawal certifications attesting to the propriety of each draw
request to Citibank and to its necessity for their workplan. And
grantees are also subject to third-party financial audits and
audits for federal grant compliance. Id. ¶ 35 (J.A. 372-73).
The plaintiffs in this suit are five of the eight NCIF and
CCIA grantees, as well as several of their subgrantees. Since
mid-2024, they have been putting the grant money to work,
committing to loans for projects around the country that will,
for example:
• develop and renovate hundreds of energy-efficient
affordable housing units;
• fund low-cost loans to small business and homeowners
to finance heating and cooling systems and backup
battery storage;
• build a fleet of 500 American-made electric trucks to
be conveniently and affordably available for lease by
small businesses and independent contractors; and
• provide backup power sources to rural hospitals to
reduce the risks of harm to patients due to power
outages.
Those projects will help cut energy costs for consumers and
small businesses, create jobs, ameliorate the affordable-

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housing crisis, and improve air quality in low-income and less
developed communities.
Plaintiffs’ projects provide benefits to people and
communities the value of which is many times greater than
their cost to the public fisc. Congress structured these
programs to enable each dollar of public funding spent to
attract multiple dollars of private funding. One Plaintiff, for
example, estimates that it will generate up to $4 of private
investment for every $1 of federal funds invested in projects.
Another Plaintiff’s workplan obligates it to mobilize $14 of
private investment for every $1 of federal funding awarded to
the Plaintiff. As of December 2024, it had already achieved a
private-public capital mobilization ratio of nearly 7:1. But
those projects—as well as many of the Plaintiffs’ ability even
to remain in business—cannot continue without Plaintiffs’
access to the funds EPA awarded them. Plaintiffs’
vulnerability to the freeze of their federal grant money is
particularly acute given that many of the Plaintiffs were formed
specifically to participate in the grant programs and as such do
not have other sources of funding.
B. EPA’s Actions
EPA’s campaign to seize the grant money already owned
by Plaintiffs began shortly after the new administration took
office, in response to its directives. On January 20, 2025,
President Trump issued Executive Order 14154. Exec. Order
14154, 90 Fed. Reg. 8353, 8357 (Jan. 29, 2025). Section 7 of
the Executive Order, entitled “Terminating the Green New
Deal,” directs “[a]ll agencies” to “immediately pause the
disbursement of funds appropriated through the Inflation
Reduction Act of 2022.” Id. Reacting to the E.O., EPA froze
“all disbursements for unliquidated obligations funded by . . .
the Inflation Reduction Act”—i.e., legally binding funding

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10
commitments that had not yet been disbursed. Memorandum
from EPA Acting Chief Fin. Officer Gregg Treml Regarding
Inflation Reduction Act and Infrastructure Inv. & Jobs Act
Funding Action Pause (Jan. 27, 2025), https://perma.cc/5R6X-
LY4B; U.S. GOV ’T ACCOUNTABILITY OFF ., GAO-05-734SP, A
GLOSSARY OF TERMS USED IN THE F EDERAL B UDGET P ROCESS
45, 70 (2005), https://perma.cc/AC5H-C7K6.
Despite that funding freeze—which was later enjoined by
several district courts, see Woonasquatucket River Watershed
Council v. U.S. Dep’t of Agric., 778 F. Supp. 3d 440, 479
(D.R.I. 2025); New York v. Trump, 769 F. Supp. 3d 119, 146-
47 (D.R.I. 2025); Nat’l Council of Nonprofits v. Off. of Mgmt.
& Budget, 775 F. Supp. 3d 100, 130-31 (D.D.C. 2025)—EPA
could not freeze the funds that Congress had appropriated for
the NCIF and CCIA programs because those funds had already
been given to Plaintiffs and were held in their Citibank
accounts. Nonetheless, EPA Administrator Lee Zeldin made
clear his intent to take back the funds disbursed through those
programs.
On February 12, Zeldin released a public statement video
in which he described the NCIF and CCIA grant programs as a
“scheme” by the “Biden EPA” to “park[]” 20 billion dollars at
an outside financial institution in order to “obligate all of the
money in a rush job with reduced oversight.” Lee Zeldin
(@EPALeeZeldin), X (Feb. 12, 2025, 7:52 PM),
https://perma.cc/PU5X-PUBP. Zeldin asserted that the bank
“must immediately return” the money in Plaintiffs’ Citibank
accounts so that EPA could “reassume responsibility” over the
funds. Id. He also vowed to refer the grant programs for
investigation by EPA’s Office of the Inspector General and the
Justice Department to redress “[t]he days of irresponsibly
shoveling boatloads of cash to far-left activist groups in the
name of environmental justice and climate equity.” Id. The

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next day, EPA issued a press release repeating those statements
and reiterating that “Administrator Zeldin is calling for
termination of the financial agent agreement, and for the
immediate return of the entire fund balance to the United States
Treasury to ensure EPA oversight.” Press Release, EPA,
Administrator Zeldin Announces that Billions of Dollars
Worth of “Gold Bars” Have Been Located at Outside Financial
Institution (Feb. 13, 2025), https://perma.cc/48VN-PLYE.
Five days later, the Department of Justice took up Zeldin’s
cause, seeking to use its criminal prosecutorial powers to cut
off Plaintiffs’ access to their funds despite the lack of probable
cause to do so. The Justice Department first asked the Chief of
the Criminal Division of the Washington, D.C., U.S.
Attorney’s Office, Denise Cheung, to open a criminal
investigation into whether the NCIF and CCIA grants had been
“unlawfully” awarded, so that the government could prevent
the “contract awardees [from] continu[ing] to draw down” their
funds from their Citibank accounts. Read the Resignation
Letter by Denise Cheung, A Veteran D.C. Federal Prosecutor,
WASH. P OST (Feb. 18, 2025), https://perma.cc/8NMY-DRWE.
When Cheung informed the Justice Department that probable
cause to open a grand jury investigation did not exist, the
Justice Department asked her to instead issue a letter requesting
that Citibank freeze Plaintiffs’ funds.
While Cheung worked in coordination with the FBI to
draft the freeze request letter to Citibank, she informed the
Justice Department that the government lacked probable cause
to believe that Plaintiffs’ accounts were subject to government
seizure. Id. The FBI, too, expressed “concern about the current
lack of evidence of any apparent crime and the need to send out
any such freeze letter.” Id. Despite that advice, the FBI sent
the freeze letter to Citibank that night, “recommend[ing]” that
Citibank freeze each of the NCIF and CCIA grantees’ and

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12
subgrantees’ accounts for 30 days. FBI Freeze Ltr. (J.A. 99-
103).
Shortly after the letter went out, then-U.S. Attorney for the
District of Columbia, Ed Martin, directed Cheung to
immediately send a second letter to Citibank ordering—rather
than merely recommending—that it freeze the accounts
pursuant to a criminal investigation by the Justice Department.
When Cheung explained that the evidence was insufficient to
support such a letter, she was asked to resign for refusing to
send the letter. She resigned the next day.
Undeterred, Martin personally submitted a seizure warrant
application to a D.C. magistrate judge. Spencer S. Hsu,
Maxine Joselow & Nicolás Rivero, FBI Takes Up EPA Probe
amid Pushback from Judge, Prosecutors, W ASH . P OST (Feb.
27, 2025), https://perma.cc/E2JR-G4GF. The judge rejected
the seizure warrant application as unsupported by probable
cause. Id. Around the same time, the Deputy Attorney General
asked at least one other U.S. Attorney’s office to open a grand
jury investigation into the NCIF and CCIA grant programs and
seek a court-ordered bank freeze, but, like Cheung, those other
prosecutors refused the requests as unsupported. Id. As the
government eventually told the district court, the “effort to . . .
put a criminal freeze on the money” was “obviously”
unsuccessful “because that didn’t happen.” Mar. 12 TRO Hr’g
Tr. 26:5-9 (J.A. 199).
Despite having received multiple, independent
assessments that there was no probable cause to believe that
“any apparent crime” had been committed in connection with
Plaintiffs’ funds, EPA continued without basis to press for
investigations of Plaintiffs, and then pointed to the very
existence of those investigations as if they supported its efforts
to indefinitely prevent Plaintiffs from accessing their funds.

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13
EPA’s Acting Deputy Administrator Chad McIntosh referred
the “GGRF program” to the EPA Office of Inspector General
for a “full investigation” into what he termed a “pattern of
reckless financial management, blatant conflicts of interest,
astonishing sums of tax dollars awarded to unqualified
recipients, and severe deficiencies in regulatory oversight
under the prior administration.” Mar. 2 Ltr. to EPA OIG 2 (J.A.
107). Fifteen minutes after sending the referral letter, in an act
of arrant bootstrapping, McIntosh forwarded the letter to
Citibank with a baseless cover email characterizing the GGRF
program as being “riddled with self-dealing, conflicts of
interest, extraordinarily unqualified recipients, improperly
reduced government oversight, and much more.” Mar. 2 EPA
Ltr. to Citibank (J.A. 105).
Meanwhile, Citibank continued to block disbursements of
Plaintiffs’ funds. But—given the government’s lack of success
in convincing any prosecutor or court that probable cause
existed to support a criminal freeze—that was only a
“voluntar[y] pause[]” pursuant to the FBI’s “recommendation”
from two weeks earlier. Mar. 2 EPA Ltr. to EPA OIG (J.A.
106). To ensure that Citibank continued the freeze, EPA asked
Treasury to instruct Citibank “not to disburse funds from any
of the GGRF accounts prior to the end of the day Sunday,
March 9, 2025.” Mar. 4 Treasury Ltr. to Citibank (J.A. 111);
see also Opp’n to Mot. for TRO 7, Climate United Fund v.
Citibank, No. 25-cv-698, Dkt. No. 16 (D.D.C. Mar. 12, 2025)
(hereinafter Opp’n to Mot. for TRO).
That same day—March 4—Zeldin posted from his official
EPA X account: “The money is now FROZEN and DOJ/FBI is
investigating.” Lee Zeldin (@EPALeeZeldin), X (Mar. 4,
2025, 6:02 PM), https://perma.cc/3KRB-FS77. EPA also sent
detailed requests to Plaintiffs for information and documents it
claimed to need to inform its “Compliance and Oversight

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14
Review” of the Greenhouse Gas Reduction Fund. Mar. 4 EPA
Ltr. to Climate United (J.A. 674-77). Plaintiffs’ responses
were due by March 28 at noon. Mar. 4 EPA Ltr. to Climate
United (J.A. 675).
By March 9, as Treasury’s funding freeze directive was set
to expire, Justice Department officials worked with EPA and
Treasury to craft emails to Citibank that would achieve the
government’s “short-term objective [] to prevent disbursement
of the grant funds” by “making reference to the ongoing
criminal investigation and EPA’s civil investigation” into the
Greenhouse Gas Reduction Fund. Mar. 9 Emails,
https://perma.cc/84PV-RUQA (reported in Alex Guillén,
Quest to Retake $20B in Climate Money Puts Trump Agencies
at ‘Significant’ Risk, Attorney Warned, P OLITICO (Apr. 23,
2025), https://perma.cc/BY4Q-J39A). The Justice Department
officials admitted that those investigations had not
“uncover[ed] . . . criminal conduct or other improprieties” that
could justify the government’s interference with Plaintiffs’
money but advised that, before the government would have to
defend the freeze in court, it would “make . . . arguments about
how those claims sound in contract and should be pursued in
another forum.” Id.
The Justice Department recognized that, “[a]t some point,
we will need to raise defenses, but the criminal and civil
investigations may fill that out over the intervening period.” Id.
That is, in the Justice Department’s candid estimation, the
government had not turned up any wrongdoing that could
justify its action to “prevent disbursement of the grant funds.”
Id. Rather, it pursued criminal and civil investigations in the
hopes of uncovering “criminal conduct or other improprieties”
that could justify freezing Plaintiffs’ accounts.

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15
In response to the Justice Department’s instructions, EPA
sent a letter to Citibank the next day instructing it to “pause the
processing of payment instructions for the GGRF accounts
until further notice.” Mar. 10 EPA Ltr. to Citibank (J.A. 65).
EPA stated that it was “working to review and develop
additional account controls to address concerns regarding
potential fraud and/or conflicts of interest related to the
[GGRF], including based on incoming responses to oversight
questions EPA issued to grant recipients on March 4, 2025,”
and asserted that “[t]he GGRF is also the subject of an ongoing
criminal investigation by the U.S. Department of Justice and an
investigation by the EPA Office of Inspector General (OIG).”
Id. EPA advised Citibank that, until “additional account
controls are developed and implemented . . . and given the
ongoing investigations into the GGRF, it is critical that the
Bank not resume processing payment instructions for the
GGRF accounts.” Id. EPA stated further that “[t]his interim
account control will be rescinded as soon as reasonably
practicable once EPA completes its review and implements
additional account controls through additional instructions as
necessary.” Id.
Meanwhile, Plaintiffs had already been unable to access
the money in their bank accounts for over two weeks—a period
that has now stretched to more than six months. And because
the terms of the grant awards generally prohibited Plaintiffs
from withdrawing funds unless they would be spent in the
following fourteen business days, Plaintiffs were starting to run
out of money to make payroll, pay the rent on their offices, and
pay third-party contractors for essential auditing, legal, and IT
security services. On top of that, without access to their
funding, they would soon be unable to meet their commitments
under loans for projects they had already agreed to finance.
Some of those loan payments could be requested by borrowers
at any time; if borrowers requested a loan draw-down while

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16
Plaintiffs could not access their funds, Plaintiffs would be
forced to default on those loans, imperiling the projects.
Plaintiffs remained unable to access the money in their
accounts. They repeatedly requested an explanation from EPA
or Citibank as to why their funds were inaccessible. They
received no substantive reply. Climate United, for example,
sent three emails, left a voicemail, and mailed a hard-copy
letter to Citibank between February 19 and March 3 before
finally receiving a response stating only that Citibank had
“received [Climate United’s] correspondence” and was
“awaiting further guidance” from EPA. Bafford Decl. ¶¶ 42-
51 (J.A. 376-78). When Climate United contacted EPA on
February 20, the agency at first offered Climate United a
meeting the following week, only to reschedule the meeting
three times before cancelling it and becoming entirely non-
responsive to Climate United’s efforts to get in touch.
At the same time that EPA was refusing to respond to
Plaintiffs’ requests for information, Zeldin made multiple
public statements in which he claimed to have “seen [] a lot of
self-dealing, a lot of conflicts of interest,” described the
Greenhouse Gas Reduction Fund as a “clear-cut case of waste
and abuse” and a “criminal” scheme, and vowed that EPA was
“not going to rest” until it had “recover[ed]” the grant awards.1
After three weeks of being kept in the dark without access
to their funds, Plaintiffs “had no choice but to sue.” Mar. 12
TRO Hr’g Tr. 14:8 (J.A. 187). Climate United sued first. It
named Citibank, EPA, and Zeldin in its March 8 complaint and
1 Sunday Morning Futures (@SundayMorningFutures), X (Feb. 23,
2025, 11:21 AM), https://perma.cc/6H9Y-L7H8; Rapid Response
47 (@RapidResponse47), X (Feb. 25, 2025, 10:16 AM),
https://perma.cc/V37L-84WC.

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17
informed them that it intended to move for a temporary
restraining order on March 10.
Despite that advance notice, when the district court
preliminarily scheduled a hearing for March 11, the
government emailed Climate United’s counsel asking for “the
courtesy of agreeing to ask the Court to push back these
deadlines by 24 hours.” Bafford Decl. ¶ 55 (J.A. 379-80).
When Climate United agreed to EPA’s request “as a
professional courtesy,” EPA used the 24-hour delay to send
each of the grantees identical letters stating that their grants
were terminated, effective immediately. Climate United Fund
v. Citibank, 775 F. Supp. 3d 335, 343 (D.D.C. 2025); J.A. 390-
91 (termination letter). The government then argued that the
case should be dismissed as moot because the relief Plaintiffs
sought—an injunction preventing EPA from terminating the
awards—was no longer available, as EPA had already
purported to terminate the awards.
Rejecting EPA’s attempt to moot the case, the district
court granted a temporary restraining order. It found that EPA
had failed to provide any logical explanation for terminating
Plaintiffs’ grant awards. Climate United, 775 F. Supp. 3d at
346-48. Instead, in declarations and two live hearings before
the district court, EPA cited allegations of criminal activity and
fraud that the court held were unsupported by any credible
evidence. Id. at 347-48; see also id. at 346 (“EPA Defendants
proffered no evidence to support their basis for the termination
. . . .”). Rather than proffer any credible evidence, EPA merely
pointed to the ongoing investigations by EPA’s Office of the
Inspector General, the Department of Justice, and the FBI—
each of which EPA had instigated based on the same
unsubstantiated allegations for which it could not provide any
credible evidence to the district court. Id. at 348 n.4; see also
Opp’n to Mot. for TRO 21.

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18
By the time Plaintiffs moved for a preliminary injunction
a week later, EPA was still unable to provide anything more
than “unsubstantiated reasons” for freezing their money and
revoking their awards. Climate United Fund v. Citibank, 778
F. Supp. 3d 90, 114 (D.D.C. 2025); see also Apr. 2 PI Hr’g Tr.
47:8-14 (J.A. 876) (“[Court to EPA:] I’ve asked you
repeatedly, and you’ve been very candid with me, in saying that
you don’t know what the evidence is of waste, fraud and abuse
and violation of the law and corruption and all of that. And I
still don’t. I mean, here we are weeks in, and as far as I—
you’re still unable to proffer me any information with regard to
any kind of investigation, malfeasance.”).
In fact, once it had to answer in court, EPA abandoned its
previous arguments that the terminations were necessary due
to “substantial concerns regarding program integrity” and
“programmatic fraud, waste, and abuse.” Opp’n to Mot. for
TRO 21. Instead, EPA maintained that its “bases for
termination were the grants’ structure and terms” and that its
termination decision “reflected no more than a decision based
on reasons of policy,” not anything to do with Plaintiffs’
“noncompliance” or “conduct.” Opp’n to PI 34-35, 38 (J.A.
503-04, 507) (internal quotation marks omitted); see also
Climate United, 778 F. Supp. 3d at 115 (“Now, in a shift in
position, [EPA Defendants] contend that the termination was
based on the agency’s changed priorities.”).
The district court preliminarily found that EPA froze and
terminated Plaintiffs’ grant awards in violation of the APA as,
despite being “repeatedly pressed on the issue,” EPA “offer[ed]
no rational explanation for why it suspended the grants and
then immediately terminated the entire NCIF and CCIA grant
programs overnight.” Climate United, 778 F. Supp. 3d at 114.
And the court held that EPA violated the constitutional
separation of powers by seeking to “effectively unilaterally

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19
dismantle a program that Congress established.” Id. at 116.
Specifically, it found that “suspend[ing] all eight grants
comprising the entire NCIF and CCIA programs,” coupled
with “the agency’s public statements . . . regarding the future
of the program,” showed that EPA “seeks to dismantle these
grant programs in their entirety as a policy matter”
notwithstanding the agency’s hollow representations in court
that it intended to re-obligate the funds following the
terminations. Id at 115-16.
By the time the district court granted the preliminary
injunction in mid-April, Plaintiffs’ inability to access their
funding threatened to permanently unravel projects that
depended on funding commitments they had incurred before
EPA’s actions to undo the GGRF. A project to renovate 192
affordable housing units in Virginia could lose its $4 million in
committed Department of Housing and Urban Development
(HUD) funding if a subgrantee cannot fulfill its funding
obligations by September. Donovan Decl. ¶ 19 (J.A. 437-38).
Projects to construct a community health center in New Jersey
and to renovate a historic hotel into 63 rental apartments in
rural Iowa were slated to lose their state tax credits and collapse
if they did not receive a subgrantee’s planned funding by July.
Moon Decl. ¶¶ 19, 25-26 (J.A. 465-67). And construction of
302 affordable housing units in Texas and 236 units in
Maryland will not move forward, and will eventually collapse,
without a subgrantee’s committed funding. Donovan Decl.
¶ 17 (J.A. 436-37).
Those harms have only continued to mount as the funding
freeze has persisted, and for some projects, it is likely already
too late. Due to one subgrantee’s inability to access its grant
funds, a 106-unit affordable housing renovation lost its state
tax credits in May, increasing the project’s cost and placing the
project in jeopardy. Mayopoulos Decl. ¶¶ 5-6, Climate United,

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20
No. 25-cv-698, Dkt. No. 112-1 (D.D.C. May 12, 2025)
(hereinafter Mayopoulos Supp. Decl.). Another project to
construct a 160-home subsidized rental apartment community
in Detroit most likely lost its critical HUD housing assistance
commitment because of a subgrantee’s inability to provide a
promised $4 million bridge loan in June. Id. at ¶¶ 7-8; Brown
Decl. ¶ 18 (J.A. 437). And a $34 million project to build 90
rental homes in Texas was projected to fall through due to a
subgrantee’s inability to provide its $3.6 million of committed
funding by the end of June. Moon Decl. ¶¶ 20-21 (J.A. 465).
In addition to undermining existing projects, EPA’s
actions will soon put many of the Plaintiffs themselves out of
business, preventing accomplishment of the projects Congress
intended them to fund. Without access to their funding,
Plaintiffs are unable to make payroll, pay their bills, or keep
current on their rent. Climate United, 778 F. Supp. 3d at 117-
20. Due to EPA’s interference with Plaintiffs’ ability to make
payroll, many employees have started looking for other jobs,
left voluntarily, or been laid off. For instance, one Plaintiff has
laid off or lost approximately 50% of its staff, and one of its
subgrantees was “forced to act financially as though the GGRF
award does not exist” by laying off 36 of its employees.
Mayopoulos Supp. Decl. ¶¶ 2-3. And because Plaintiffs cannot
pay their bills, third-party contractors have started to withdraw
essential services, including critical accounting, financial
management, and award compliance services. Simply put,
without access to their funds, Plaintiffs cannot keep their doors
open, much less honor their loan commitments.
More harmful still, faced with EPA’s threats to claw back
Plaintiffs’ funds, existing partners have begun to shun
Plaintiffs’ funding offers, pulling out of near-final deals and
stopping working on Plaintiffs’ projects. After eight weeks of
negotiations, an Alaska-based community finance institution

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21
had agreed to a $10 million loan from one of the Plaintiffs; all
that was left to officially close the deal was the board’s
approval. Following EPA’s actions, the board refused to
approve the loan. That same plaintiff had completed
negotiations with a local green bank in the Midwest to help
finance a different project, with only board approval
outstanding. The board met the day after Zeldin’s February 12
comments on X and voted against the loan because of Zeldin’s
public threats and vow to end the NCIF program. A
philanthropic entity interested in investing $250 million in a
partnership with one of the Plaintiffs broke off discussions
following EPA’s actions. Co-investment and collaboration is
critical to Plaintiffs’ ability to carry out Congress’s directive to
efficiently finance projects to benefit the public by lowering
“greenhouse gas emissions and other forms of air pollution in
partnership with, and by leveraging investment from, the
private sector.” 42 U.S.C. § 7434(c)(3)(A).
DISCUSSION
An accurate understanding of the program Congress
enacted, together with the complete lack of evidence to support
EPA’s false assertions of improper use or deficient oversight
of federal expenditures, confirms that the district court’s
decision to preliminarily enjoin EPA’s unlawful actions is
unassailable. Based on nothing more than the President’s
announced vendetta against the “Green New Deal,” EPA
determined to cut off access to money that was already
disbursed to Plaintiffs and that they were using—pursuant to
Congress’s explicit directions as implemented by EPA—to
expand access to solar- and electric-powered housing, cars,
buildings, and power generation. The Constitution does not
allow the President or his subordinate executive agencies to
unilaterally decide to take back money that Congress has
appropriated and the agency already lawfully spent merely

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22
because the Executive Branch disagrees with Congress’s
policy choices. Neither do the laws governing federal agencies
allow them to initiate specious criminal investigations in hopes
of digging up pretextual justifications to cover up that
unconstitutional action, let alone rely on the very existence of
those investigations to interfere with Plaintiffs’ lawful use of
their money.
EPA’s violations of law are so clear that the agency hardly
contests them. And the imminent, irreversible harm to
Plaintiffs is incontrovertible. These circumstances cry out for
preliminary injunctive relief, as the district court rightly
recognized. The majority’s contrary conclusion accepts the
government’s gambit to strip district courts of jurisdiction over
the government’s blatant violations of basic principles of
constitutional and administrative law.
Plaintiffs received the funds at issue here via federal grant
awards. Absent EPA’s unjustified interference, the money in
Plaintiffs’ accounts is theirs to spend in conformity with the
terms of the funding agreement. The government has expressly
and repeatedly disclaimed any allegation that Plaintiffs have
violated those terms. Neither has EPA attempted to regain
control of the money by asserting its security interest in
Plaintiffs’ funds.
EPA has instead frozen and purported to terminate the
grant awards based on shifting, post-hoc, and unsupported
allegations. Plaintiffs thus challenge EPA’s actions as arbitrary
and capricious, and based on pretextual justifications. In no
way is that claim “in essence” a contract claim over which the
district court lacks jurisdiction. The reality that Plaintiffs
obtained the funds by government contract does not mean that
claims they raise against the government’s interference with
their lawful use of those funds sound in contract. Our binding

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precedent makes clear that just because Plaintiffs “would have
no claims to assert” if they had never received the funds
through a grant does not mean that they assert a “contract
right.” Crowley Gov’t Servs., Inc. v. Gen. Servs. Admin., 38
F.4th 1099, 1110 (D.C. Cir. 2022).
The court’s holding to the contrary is unsupportable. The
court falls short today in its Article III duty to independently
say what the law is and thereby hold the Executive Branch to
account. Such “[a]bdication of responsibility is not part of the
constitutional design.” Clinton v. City of New York, 524 U.S.
417, 452 (1998) (Kennedy, J., concurring).
A. Likelihood of Success
1. APA
EPA’s conduct is arbitrary and capricious. Agencies may
not offer “contrived reasons” for their decisions, Dep’t of Com.
v. New York, 588 U.S. 752, 785 (2019), nor can they make any
decision that “runs counter to the evidence before the agency,
or is so implausible that it could not be ascribed to a difference
in view or the product of agency expertise,” Motor Vehicle
Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 43 (1983). It is beyond dispute that an agency’s own
patently unfounded criminal investigations against private
companies cannot be invoked to justify the factually baseless
and legally unauthorized taking of the companies’ funds. By
all indications, that is exactly what EPA did here.
Following the President’s instructions to cut off funding to
clean energy projects, EPA vowed to “reassume responsibility”
of the NCIF and CCIA grant funds. To that end, without
probable cause to suspect any criminal wrongdoing related to
the grant programs, EPA—in coordination with the Justice
Department and the FBI—first pressured Citibank into

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voluntarily freezing Plaintiffs’ accounts by referring to
“possible criminal violations,” including “[c]onspiracy to
defraud the United States” and “wire fraud.” FBI Freeze Ltr.
(J.A. 99-101). Not satisfied that Citibank’s voluntary freeze
would hold, the agencies attempted to open a criminal
investigation into the grants and impose a freeze of Plaintiffs’
funds based on suspected criminal conduct. When those efforts
came to nothing, EPA instructed the agency’s Office of
Inspector General to open a civil investigation, immediately
sent the referral—including its unfounded allegations of “self-
dealing, conflicts of interest, [and] extraordinarily unqualified
recipients,” J.A. 105—to Citibank, and instructed Citibank to
keep the accounts frozen until EPA was able to establish
sufficient account controls.
When that account freeze expired, the agencies again
referenced “potential fraud” and ongoing criminal and civil
investigations to Citibank as support for an indefinite
continuation of its account freeze, ostensibly to enable EPA to
evaluate Plaintiffs’ responses to its oversight questions. Mar.
10 EPA Ltr. to Citibank (J.A. 65). But the very next day—
weeks before those responses were due, and mere hours before
a hearing on Climate United’s TRO motion—EPA used the 24-
hour delay, which it had requested as a “professional courtesy,”
to abruptly announce its putative termination of all the NCIF
and CCIA awards. EPA then argued that the court should
dismiss Climate United’s suit as moot on the ground that EPA
had terminated its grant.
When EPA could not point the court to any evidence
supporting its allegations of fraud, Climate United, 775 F.
Supp. 3d at 346-47, it changed its tune. EPA argued to the
district court and then to us that it terminated the grants not
because any “particular plaintiff has engaged in a particular act
that constitutes fraud,” but only because of “EPA’s lack of

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oversight tools to ensure that the money wasn’t abused.” Oral
Arg. Tr. 103:9-15; see also Apr. 2 PI Hr’g Tr. 39:4-15 (J.A.
868). EPA insisted that its oversight concern did not in any
way depend on Plaintiffs’ “noncompliance” or “conduct”—
despite the termination letters’ references to “fraud, waste, and
abuse” as a basis for the termination. PI Opp. 34-35, 38 (J.A.
503-04, 507); Termination Ltr. (J.A. 390).
Each of those actions is consistent with EPA’s unlawful
pursuit of a “short-term objective [] to prevent disbursement of
the grant funds” that had nothing to do with any valid concerns
about fraud or oversight, and everything to do with the
agency’s desire to carry out President Trump’s directive to
block implementation of Congress’s environmental policy.
Mar. 9 Emails, https://perma.cc/84PV-RUQA. That is
demonstrated most clearly by EPA’s pursuit of criminal and
civil investigations that it hoped would “uncover . . . criminal
conduct or other improprieties” to substantiate its asserted
justifications for freezing Plaintiffs’ funds. Id. It pursued those
baseless (and fruitless) investigations against the advice of at
least two experienced federal prosecutors the EPA consulted
and the ruling of a magistrate judge that there was no probable
cause to believe any improper conduct had occurred.
Equally revealing is EPA’s double-speak: EPA claimed
publicly and in communications to the parties that its actions
were justified because the program is a “criminal” scheme and
a “clear-cut case of waste and abuse” that is “riddled with self-
dealing, conflicts of interest, extraordinarily unqualified
recipients . . . and much more,” even as EPA insisted to the
district court, which rebuked it for utterly failing to substantiate
those allegations, and to our court, that it was not “accusing”
and has never “accuse[d] the plaintiffs of waste, fraud and
abuse.” Apr. 2 PI Hr’g 39:12-13 (J.A. 868); Oral Arg. Tr.
27:15-18. Such shifting and contradictory representations

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further show that the oversight concerns EPA emphasizes as its
sole basis for terminating the awards are post-hoc and
pretextual. Oral Arg. Tr. 27:15-21.
The timing of the termination letters similarly undermines
EPA’s purported oversight concerns. Only the day before
terminating the grants, EPA instructed Citibank to extend the
“voluntary” funding freeze while it waited for Plaintiffs’
responses to its oversight questions—answers it claimed to
need in order to evaluate “concerns regarding potential fraud
and/or conflicts of interest.” Mar. 10 EPA Ltr. to Citibank (J.A.
65). Later that day, Climate United moved for a TRO to
prevent EPA from terminating the awards, among other
requested relief. Instead of waiting for Plaintiffs’ responses to
its oversight questions—which EPA had given Plaintiffs
another several weeks to submit—EPA abruptly terminated the
grants the next day, less than 24 hours before the district court’s
scheduled TRO hearing.
That sequence of events—terminate first, gather data
later—is emblematic of EPA’s approach throughout the events
underlying this litigation. It is fundamentally at odds with the
APA’s requirement of reasoned decision making. An agency
must, at a minimum, “examine the relevant data and articulate
a satisfactory explanation for its action including a rational
connection between the facts found and the choice made.”
State Farm, 463 U.S. at 43 (internal quotation marks omitted).
By EPA’s own admission, it decided to terminate the awards
before gathering the relevant oversight data, just as it decided
to freeze Plaintiffs’ money and launch criminal investigations
without any reason to believe that Plaintiffs were engaged in
“criminal conduct or other improprieties.” Mar. 9 Emails. At
every turn, EPA’s actions demonstrate that its purported
reasons for terminating the grant—its “substantial concerns
regarding program integrity, the award progress, [and]

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programmatic fraud, waste, and abuse,” Gov. Br. 33—are
entirely pretextual. Deciding the outcome before investigating
the facts, unleashing the government’s prosecutorial power on
private citizens with no basis to think fraud or crime occurred
and, having uncovered no evidence, giving contrived and
contradictory reasons for predetermined and unsupported
agency action is quintessentially arbitrary and capricious. See
Dep’t of Com., 588 U.S.at 782-85.
EPA argues that it had legitimate concerns about its ability
to ensure that the grant funds were being spent lawfully,
making its decision to suddenly terminate the awards
reasonable. Gov. Br. 33-34. But the oversight issues it cites
are contradicted by the record. EPA’s explanation not only
“runs counter to the evidence before the agency” and “is so
implausible that it could not be ascribed to a difference in view
or the product of agency expertise,” State Farm, 463 U.S. at
43, but is patently pretextual.
EPA points to the use of Citibank as a financial agent, the
distribution of grant funding to subgrantee organizations, and
modification of the agreement between the presidential
election and inauguration as raising “serious concerns” about
EPA’s ability to oversee Plaintiffs’ use of the funds. Gov. Br.
9-11. From EPA’s telling, unqualified grantees were awarded
enormous sums of federal grant funding with virtually no
oversight. That narrative finds no support in the record.
Start with EPA’s allegation that Plaintiffs are
“extraordinarily unqualified recipients” who “had no prior
track record.” Mar. 2 EPA Ltr. to Citibank (J.A. 105); Gov. Br.
6. That is a grave mischaracterization. Recipients were
coalitions of some of the country’s most reputable nonprofits
with decades of relevant experience. They formed coalitions,
structured as newly formed subsidiaries, to accommodate the

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demands of the role that Congress envisioned for the grantees.
That organizational design enables the subsidiary to adopt
policies and structures most conducive to leveraging private
capital—one of Congress’s key goals for the program—while
benefitting from the experience and infrastructure of the parent
organizations. Bafford Decl. ¶ 8 (J.A. 363). Climate United,
for instance, is a coalition of three nonprofits with thirty to fifty
years of experience each who have collectively managed nearly
$30 billion of private and institutional capital to increase
environmental sustainability. Id. ¶ 7 (J.A. 363). Power
Forward Communities is a coalition of five nonprofits—
including household names like United Way and Habitat for
Humanity—with more than a century of combined experience
financing, managing, and implementing affordable housing
projects. Its coalition partners’ past projects total more than
$100 billion and have successfully added approximately 1.5
million affordable homes and apartments across the United
States for Americans in need. Mayopoulos Decl. ¶ 3 (J.A.
452).
Those coalitions are led by people of proven experience
and integrity. Power Forward Communities itself is led by a
former President and CEO of Fannie Mae who was also
General Counsel of Bank of America; one of its subgrantees is
led by a former director of the U.S. Office of Management and
Budget and HUD Secretary; and another of its subgrantees is
led by a former Senior Vice President at Wells Fargo who also
served as Vice President at the Federal Reserve Bank of San
Francisco. Such impressive leadership and proven track
records make the coalitions eminently suited to fulfill
Congress’s objectives. It is disingenuous of EPA to insinuate
that the coalition structure implies Plaintiffs’ lack of
qualifications when it is “common practice for established
organizations to set up subsidiaries for specific projects and
programs”; coalition applicants were specifically invited to

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apply for the grants by EPA; and the coalition partners and their
leaders are extraordinarily qualified to administer the grant
awards. Bafford Decl. ¶ 8 (J.A. 363); NOFO at 6 (J.A. 1738).
Nothing in the record materially disputes any of that.
Nor do EPA’s purported concerns about conflicts of
interest hold water. Start with the example selected by the
majority. Maj. Op. 6 & n.2. The majority highlights that, in
urging its Office of Inspector General to open an investigation
into the grant program, EPA’s Acting Deputy Administrator
alleged that “Jahi Wise, the former director of the GGRF,
personally oversaw a $5 billion grant to his previous employer,
the Coalition for Green Capital [(CGC)]—without recusing
himself.” Mar. 2 Ltr. to EPA OIG (J.A. 107). But the record
squarely contradicts that allegation. Consistent with “EPA
Order 5700.5A1, EPA’s Policy for Competition of Assistance
Agreements, and the rigorous ethics and conflict-of-interest
review carried out by EPA during the review and selection
process for GGRF funding . . . Mr. Wise was recused from
reviewing, evaluating, selecting, or approving funding on any
grant competition for GGRF funding for which CGC submitted
an application.” Hopson Decl. ¶ 22 (J.A. 421). That is, in
addition to recusing himself from CGC’s application for
funding, “Mr. Wise did not even review applications from
CGC’s competitors for GGRF funds.” Id. Even EPA
recognizes that its speculation about conflicts of interest does
not support its termination decision. Indeed, after failing to
present the district court with any evidence of fraud, conflicts
of interest, or anything even approaching “waste, fraud, and
abuse,” EPA pivoted to argue that its decision to terminate the
grants was solely “based on reasons of policy” and did not have
anything to do with Plaintiffs’ “noncompliance” or “conduct.”
PI Opp. 34-35, 38 (J.A. 503-04, 507) (internal quotation marks
omitted).

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EPA’s characterization of the grants’ funding structure as
an “unusual and apparently improper” “scheme [to] remove[]
$20 billion from governmental oversight in the days, weeks,
and months before a new administration took office” is
similarly unfounded. Mar. 2 Ltr. to EPA OIG (J.A. 107). As
explained above, Plaintiffs received their awards as lump-sum
payments which they held in accounts at Citibank, subject to a
security interest held by EPA. That financial structure was
specifically chosen to enable Plaintiffs to carry out Congress’s
directive to act “in partnership with, and by leveraging
investment from, the private sector.” 42 U.S.C. § 7434(c)(3).
If the grant funds are to help attract private financing for clean
energy projects, either by recruiting private co-investors or
offering credit enhancements that make projects less risky for
private investors, the funds need to be Plaintiffs’ own assets
and reflected on their balance sheets as such. See Impact
Finance Experts Amicus Br. 3, 9-14; Bafford Decl. ¶¶ 29, 32
(J.A. 370-72). Under EPA’s standard grant disbursement
system, in contrast, a recipient’s balance sheet reflects only the
portions of the award that have already been expended, rather
than the full award amount. Adherence to the agency’s default
payment system would have impeded Plaintiffs’ ability to
recruit private capital. To effectuate Congress’s direction, EPA
instead deposited the full award amount in Citibank accounts
opened in Plaintiffs’ and their subgrantees’ names. That way,
their balance sheets reflected Plaintiffs’ ownership of the full
amount of the award, even as they drew down funds from the
account only as needed and in compliance with their
obligations to fund projects and cover administrative costs.
That funding mechanism was contemplated by EPA as
early as July 2023—long before any potential change in
administration. See NOFO 55-56 (J.A. 1787-88)
(contemplating departures from standard EPA practice,
including a “one-time or periodic balance-sheet

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capitalization(s)”). And there is nothing improper about it.
Rather, “federal financial agents” like Citibank are “routinely
appointed” and are specifically authorized by statute.
Transactive Corp. v. United States, 91 F.3d 232, 236 (D.C. Cir.
1996); 12 U.S.C. § 265. Most relevant to EPA’s litigating
position, the financial agent structure affords EPA more
oversight than the agency’s standard payment system.
Citibank’s interface displays these grantees’ and subgrantees’
expenditures broken down by budget category and provides
EPA with full, real-time view access into each of the grantees’
and subgrantees’ accounts. Those oversight features are absent
from EPA’s standard disbursement system, which reports only
the amount of money drawn down by the recipient. EPA’s
determination that the “prior administration’s designation of a
financial agent . . . untenably reduced EPA’s oversight” has it
backwards. Gov. Br. 10.
In the same vein, EPA asserts that, because some
subgrantees may distribute award funds to other entities, EPA
lacks the “visibility to see how [the subgrantees are] making
those decisions or how that money is being used.” Oral Arg.
Tr. 34:2-4; see also Gov. Br. 10. That concern inexplicably
disregards the many ways in which EPA can oversee the
subgrantees’ activities. EPA approved detailed budgets and
workplans that specify how the subgrantees will use the grant
money. Just like the grantees, every subgrantee must certify,
under threat of “prosecution under 18 U.S.C. 1001 and other
applicable criminal, civil and administrative sanctions,” that
each requested withdrawal of funds from its Citibank account
is “necessary to execute against the workplan for the Subaward
Agreement supported with EPA funding.” Subgrantee
Account Control Agreement, Ex. B (J.A. 1189). And
subgrantees’ progress against that workplan is tracked and
reported in quarterly, semi-annual, and annual reports to EPA.
For instance, Rewiring Community Investment Fund—a

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Power Forward Communities subgrantee—describes how its
inability to access its funding will prevent it from fulfilling its
obligations under its EPA-approved workplan, which include
“establish[ing] a loan loss reserve to encourage lenders to
provide loans with significantly discounted interest rates” to
households for energy-efficient, clean heating and cooling
systems. Matusiak Decl. ¶ 19 (J.A. 447). Moreover, many of
the subgrantees are financial institutions that are themselves
subject to extensive regulation and oversight by the Federal
Reserve, Office of the Comptroller of the Currency, Federal
Deposit Insurance Corporation, and state regulators. JCF Ltr.
at 3 (May 21, 2025).
To the extent EPA takes issue with the fact that grantees
may provide “subgrants to others, who then pass it through to
others,” that is the structure that Congress, not the prior
administration, chose to adopt. See 42 U.S.C. § 7434(b)(2)
(“The eligible recipient shall provide funding” to “entities that
provide financial assistance to qualified projects at the State,
local, territorial, or Tribal level or in the District of Columbia,
including community- and low-income-focused lenders and
capital providers.”).
Tellingly, when one of the Plaintiffs responded to EPA’s
asserted concerns about its ability to oversee subgrantees by
proposing restructuring the $770 million of its grant funding
that was slated for distribution to subgrantee community
lenders, EPA ignored it. JCF Ltr. at 2-3. Under the proposal,
the vast majority of the Plaintiff’s money would remain
unspent in a segregated trust or escrow account that EPA could
monitor. Instead of being distributed to the community lenders
to lend directly, the funds would be used to secure the loans
made by those community lenders to small businesses and
communities looking to finance clean energy projects. In that
way, the grant funds could have advanced the programs’ goals

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while largely staying put in an account monitored by EPA.
EPA did not respond to the letter, despite repeated follow-up
from the Plaintiff. Id. at 1. That lack of engagement further
suggests that EPA’s purported oversight concerns are not the
real reason it terminated Plaintiffs’ grant awards.
At bottom, each of EPA’s specific examples of oversight
concerns is refuted by the record. And its broad-brush
argument is simply untenable in light of the detailed oversight
mechanisms available to EPA. EPA’s assertions that it had
such grave oversight concerns that it had to cancel the grant
awards overnight run aground on a conceded lack of any
indication that Plaintiffs were out of compliance with the award
terms, let alone that they were engaging in any conflicts of
interest, fraud, or criminal activity. In addition to the real-time
visibility Citibank provides EPA into Plaintiffs’ and their
subgrantees’ accounts, EPA receives quarterly, semi-annual,
and annual reports detailing Plaintiffs’ transactions, activities,
progress against their workplans, and expenditures by budget
category, as well as mandatory quarterly conflict-of-interest
reporting by Plaintiffs and their subgrantees. Bafford Decl.
¶ 35(a) (J.A. 373). Before it purported to halt the program and
itself disengaged from constructive communication, EPA had
also held meetings with Plaintiffs “at least weekly, and, at
times, two to three times per week,” to discuss their “program
plans, reporting, oversight, and compliance with the EPA
Terms and Conditions.” Id. ¶ 35(b) (J.A. 373); Arabshahi
Decl. ¶ 34 (J.A. 1981). On top of those controls, Plaintiffs are
subject to third-party audits and to “transaction testing” by
EPA, in which EPA conducts a “systematic examination and
verification of every dollar spent by [the grantee] to ensure they
comply with the grant’s terms, conditions, and applicable
regulations.” Bafford Decl. ¶ 35(g), (h) (J.A. 373).

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EPA and the majority make much of the fact that the grant
awards were amended in December 2024 and January 2025,
claiming that these “last-minute” modifications in the waning
days of the Biden administration were implemented to “make
it more difficult for the government to terminate the
agreements.” Maj. Op. 5; see Gov. Br. 10, 34. EPA
specifically contends that the original terms of the awards
allowed it to terminate them “based on [a] change in policy
priorities,” per the version of EPA’s General Terms and
Conditions in place before October 2024—a contention the
majority credits. Oral Arg. Tr. 102:17-25; see Maj. Op. 5 n. 1.
That is incorrect.
The original grant agreements, signed in August 2024—
months before the election—already incorporated the
termination provision from EPA’s now-operative General
Terms and Conditions. Those General Terms and Conditions
allow terminations of federal awards based on a change in
policy priorities only when that basis for termination is “clearly
and unambiguously” set forth in the award agreement itself. 2
C.F.R. § 200.340(a)(4), (b) (emphasis added). (Neither the
EPA nor the majority contends that the award agreement itself,
apart from the referenced regulation, allows the awards to be
terminated based on a change in policy priorities.) The
December 2024 amendment to the grant award thus did not
alter the permissible bases for termination, which had never
allowed termination for changed policy priorities.
Plaintiffs’ original award agreements specifically stated
that, “[n]otwithstanding the General Term and Condition
‘Termination,’ [otherwise in effect before October 1, 2024,]
EPA maintains the right to terminate the Assistance Agreement
only as specified in . . . the version of 2 CFR 200.340
applicable to EPA grants as of July 1, 2024, pursuant to 89 Fed.
Reg. 55262 (July 3, 2024).” J.A. 552 (emphasis added). The

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version of the regulation the awards incorporated from the
outset was the one providing “that an agency may terminate a
Federal award if it no longer effectuates the program goals or
agency priorities (e.g. unilateral termination) but only when
such language is clearly and unambiguously included in the
terms and conditions of the award,” 89 Fed. Reg. 55,262,
55,263 (July 3, 2024) (emphasis added).
EPA adopted that constraint pursuant to OMB’s invitation
to agencies to opt into the revised rule before its default
October 1, 2024, effective date. As of July 2024, EPA
announced in the Federal Register that it had “decided to apply
the revised version of 2 CFR 200.340 to EPA financial
assistance agreements awarded or amended to add funds on or
after July 1, 2024.” 89 Fed. Reg. at 55263. The December
amendment thus imposed no new limit on EPA’s “control over
[the] grant funding.” Gov. Br. 10.
The timing of the amendment also is entirely innocuous.
EPA had explained shortly after the awards were announced in
April 2024 that it would share draft award terms that month,
and that it “expected the terms to change based on awardee
feedback, to ensure they were clear and would be viable for
awardee workplans.” Bafford Decl. ¶ 19 (J.A. 367). EPA
accordingly planned to communicate a “final” set of award
terms in late June, followed by an iterative process during the
fall and winter of 2024 in which EPA would receive grantees’
suggested modifications based on their experience
implementing the programs. Id. ¶¶ 17-20 (J.A. 366-68).
Despite EPA’s and the majority’s insinuations to the contrary,
nothing about the timing or content of those amendments
supports Defendants’ assertion that they were intended to
reduce the agency’s oversight or control in the next
administration.

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Neither does the “gold bars” video, which Zeldin
repeatedly referenced in public comments smearing Plaintiffs,
provide any plausible basis for sincere oversight concerns on
the part of EPA’s new leadership. In the November 2024
Project Veritas video, an EPA staffer is shown saying to a peer
on a Tinder date (who was surreptitiously filming him) that
EPA was “trying to get the money out as fast as possible”
before Trump’s inauguration. Lisa Friedman, An Offhand
Remark About Gold Bars, Secretly Recorded, Upended His
Life, N.Y. TIMES (July 1, 2025), https://perma.cc/FHM4-94R9.
Whatever the staffer may have meant, those comments cannot
have been referring to awards under the Greenhouse Gas
Reduction Fund because those had been fully obligated as of
August 2024 (in accordance with Congress’s September 2024
deadline). “EPA Awards $27B in Greenhouse Gas Reduction
Fund Grants to Accelerate Clean Energy Solutions, Combat the
Climate Crisis, and Save Families Money,” EPA (Aug. 16,
2024), https://perma.cc/Z7ER-RV7A. Anyone with a basic
familiarity with the GGRF program would understand that a
video of a staffer’s bluster at a bar in November is irrelevant to
the grants at issue here.
In sum, the record makes clear that EPA’s abrupt
termination of the grant awards on the eve of the TRO hearing
cannot rationally be explained by reference to the agency
leadership’s professed oversight concerns. That alone shows
that the agency violated the APA, as EPA’s explanation for its
decision to terminate the awards “runs counter to the evidence
before” it. State Farm, 463 U.S. at 43. Far more troubling,
EPA’s dogged pursuit of criminal investigations unsupported
by probable cause and its unsubstantiated public accusations of
criminal activity strongly suggest that the agency’s professed
oversight concerns are pretextual. EPA’s refusals to discuss its
declared concerns with Plaintiffs themselves, engage with their
responses, or even wait to consider how they would answer its

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oversight questions give the lie to its widely trumpeted
concerns. Contrived, baseless justifications for the grant
terminations do not satisfy the “reasoned explanation
requirement of administrative law,” which “is meant to ensure
that agencies offer genuine justifications for important
decisions, reasons that can be scrutinized by courts and the
interested public.” Dep’t of Com., 588 U.S. at 785. The
Supreme Court has made clear that “[a]ccepting contrived
reasons would defeat the purpose of the enterprise.” Id. “If
judicial review is to be more than an empty ritual, it must
demand something better” by way of reasoned explanation than
the false statements EPA broadcast to build a sensationalist
public narrative in its favor. Id.
2. Separation of Powers
It is equally clear that EPA’s actions violate the
Constitution. Our constitutional system of separation of
powers rests on the idea that national “policy is for Congress
and the President to establish as they see fit in enacting statutes,
and for the President and subordinate executive agencies . . . to
implement within statutory boundaries.” Aiken Cnty., 725 F.3d
at 257. “Money is the instrument of policy,” Clinton, 524 U.S.
at 451 (Kennedy, J., concurring), and it is Congress—not the
executive branch acting unilaterally—that has “exclusive
power over the federal purse,” Rochester Pure Waters Dist. v.
E.P.A., 960 F.2d 180, 185 (D.C. Cir. 1992). Only Congress
may authorize “money [to] be paid out of the Treasury.”
Cincinnati Soap Co. v. United States, 301 U.S. 308, 321
(1937). And when it does so, the executive “may not ignore”
those funding directives “merely because of policy
disagreement with Congress.” Aiken Cnty., 725 F.3d at 260.
To hold otherwise would allow “the executive [to] possess
an unbounded power over the public purse of the nation,” 2

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J OSEPH S TORY, C OMMENTARIES ON THE C ONSTITUTION OF THE
UNITED S TATES § 1348, at 215 (Thomas Cooley ed., 4th ed.
1873)—the very concentration of power the Appropriations
Clause was intended to prevent. See Cincinnati Soap Co., 301
U.S. at 321. It is thus incontrovertible that, “[a]bsent
congressional authorization, the Administration may not
redistribute or withhold properly appropriated funds in order to
effectuate its own policy goals.” City & Cnty. of San Francisco
v. Trump, 897 F.3d 1225, 1235 (9th Cir. 2018). As then-Judge
Kavanaugh explained, it is a “settled, bedrock principle[] of
constitutional law” that neither the President nor his
“subordinate executive agencies” may “decline to follow a
statutory mandate or prohibition simply because of policy
objections.” Aiken Cnty., 725 F.3d at 259. Insofar as the
majority defends a prerogative of EPA to cancel the grants for
policy reasons, the majority’s assertion that “the [Inflation
Reduction] Act does not limit the Administrator’s discretion to
withhold or terminate grants,” Maj. Op. 23, squarely conflicts
with Aiken.
Congress in the Inflation Reduction Act appropriated
federal funds for the Greenhouse Gas Reduction Fund and
instructed EPA “to make grants” by September 30, 2024, to
“nonprofit organization[s] that [are] designed to provide
capital, leverage private capital, and provide other forms of
financial assistance for the rapid deployment of low- and zero-
emission products, technologies, and services.” 42 U.S.C.
§ 7434(a) (providing funds “to remain available until
September 30, 2024” and instructing EPA to make the
described grants), (c)(1)(A) (specifying that “eligible
recipients” must be able to leverage private capital). The
statute specifies that grantees, working in partnership with the
private sector and with local communities, must provide
funding and other assistance to housing and infrastructure
projects designed to reduce greenhouse gas emissions. Id.

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§ 7434(b). EPA is constitutionally obligated to administer
those grants; it cannot unilaterally decide to get rid of the grant
programs based on the Administration’s policy preference to
“[t]erminat[e] the Green New Deal.” 90 Fed. Reg. at 8357.
The district court found that EPA sought to do just that. It
found that “EPA seeks to dismantle these grant programs in
their entirety as a policy matter,” as shown by EPA’s public
expressions of determination to shut down the grant program,
and as confirmed by its action to terminate “all eight grants
comprising the entire NCIF and CCIA programs.” Climate
United, 778 F. Supp. 3d at 116. The district court’s factfinding
is amply supported by the record, and the majority’s conclusion
that it was clearly erroneous cannot be squared with EPA’s
remarkable conduct in this case. Maj. Op. 25-26.
As already discussed, EPA’s actions at every turn reveal
its determination to permanently defund the Greenhouse Gas
Reduction Fund programs for no more reason than that
President Trump announced that goal. See 90 Fed. Reg. at
8357 (directing agencies to “Terminat[e] the Green New Deal”
by preventing the “disbursement of funds appropriated through
the Inflation Reduction Act”). Without any further planning,
consideration, or explanation, EPA acted to prevent Plaintiffs
from accessing their funds. Current agency leadership has
demonized the recipients as if the President’s policy
preferences alone license them to slander as fraudulent or
criminal any grantee whose activities do not align with those
preferences. No matter that all evidence confirms that
Plaintiffs were spending their money precisely as Congress
intended and authorized.
Indeed, EPA’s hasty decisions to freeze and terminate the
grant awards with no evidence of noncompliance and no
communication with Plaintiffs cannot be explained as anything

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other than a decision to do what the President said he wanted
only because he said so. The decision to terminate the grants
just hours before the district court had a scheduled occasion to
rule on whether to restore or preserve Plaintiffs’ access to their
award funds is hard to explain as anything but a bald effort to
rewrite the statute and undo what was done in compliance with
it. Those are not legitimate means to advance the new
President’s policy agenda. Why terminate grant awards that
had been made and were being carried out as Congress
intended unless EPA’s real disagreement was with Congress’s
legislated policy choice to fund “green energy” projects?
The majority chides the district court for discounting
EPA’s representations that it intended to reconstitute the grant
programs with increased oversight. Maj. Op. 25-26. At oral
argument, EPA disavowed any “frontal assault on the
appropriation or Congress’s objective,” insisting that the
agency “intends, as consistent with principles of appropriations
law, to continue to make these funds available in a permissible
way and in a way that comports with the oversight principles
that it thinks are important here.” Oral Arg. Tr. at 25. But, as
discussed below, since the appropriation’s deadline to obligate
the funds has passed, EPA retains at most a narrow authority to
make “replacement” grants and cannot obligate the funds
anew.
In any event, the district court had ample basis not to credit
EPA’s representations that it will spend the funds as Congress
intended. The court observed EPA’s track record throughout
this case of making slanderous and insupportable public
statements and disavowing them in court in favor of self-
serving contradictory representations. The court knew that
EPA instigated unsupported criminal and civil investigations to
hunt for justifications to claw back Plaintiffs’ money and
observed that the agency remained unable to provide any

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evidence to support its very public assertions of
mismanagement and insufficient oversight. Presented with
EPA’s actions and its patent inability to justify them on any
other basis, the district court was on unassailably solid
evidentiary footing in finding that EPA’s actions had nothing
to do with its professed oversight concerns. EPA simply
sought to “dismantle these grant programs in their entirety as a
policy matter.” Climate United, 778 F. Supp. 3d at 115.
EPA’s “repeated[] represent[ations] that it planned to re-
commit the funds,” Maj. Op. 23, ring entirely hollow in light
of its patent inability to do so. See Bagenstos Amicus Br. 3-11.
It is an “elementary principle” of federal appropriations law
that “a federal agency’s budget authority lapses on the last day
of the period for which funds were obligated.” W. Va. Ass’n of
Cmty. Health Ctrs, Inc. v. Heckler, 734 F.2d 1570, 1576 (D.C.
Cir. 1984). Here, Congress specified that the appropriation for
the Greenhouse Gas Reduction Fund would “remain available
until September 30, 2024.” 42 U.S.C. § 7434(a)(1), (2), (3).
The appropriation thus expired on that date, after which EPA
could no longer use the funding to incur new obligations. See
Off. of Nat. Res. Revenue-Coop. Agreements, B-321297, 2011
WL 3343023, at *3 (Comp. Gen., Aug. 2, 2011).
Federal appropriations law thus bars EPA from
terminating the awards and then re-obligating the funds to
reconstitute the Greenhouse Gas Reduction Fund programs.
“If an agency deobligates funds after the expiration of the
period of availability, the funds are not available for new
obligations.” Continued Availability of Expired Appropriation
for Additional Project Phases, B-286929, 2001 WL 717355, at
*3 (Comp. Gen., Apr. 25, 2001). In other words, once EPA
terminates the grant awards, it will no longer have the authority
to make new grant awards to fulfill its statutory obligations.
The majority suggests that Congress’s repeal last month of the

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Greenhouse Gas Reduction Fund could affect EPA’s asserted
authority to recommit the funds and thereby relieve it of any
obligation to do so. Maj. Op. 25 n. 11. It does neither. The
statute rescinds only “unobligated” funds: Obligated funds,
like those at issue here, are unaffected. One Big Beautiful Bill
Act (OBBBA), Pub. L. No. 119-21, § 60002, 139 Stat. 72, 155
(2025). See generally July 7, 2025, Neitzel Ltr. to Clerk of
Court Cislak (noting that Senator Capito described the
proposition that OBBBA might “claw back money” as
“ridiculous”) (quoting Josh Siegel, Q&A: Sen. Shelley Moore
Capito, incoming EPW chair, (Nov. 20, 2024),
https://perma.cc/T4KC-8MQ9). It is the federal appropriations
rule, not the repeal legislation, that prevents EPA from
recommitting the funds.
EPA’s assertions that it will nonetheless fulfill Congress’s
plan by labeling its re-obligations as “replacement grants,”
Reply Br. 17, are empty promises. The majority, too, cites
replacement-grant authority as evidence of EPA’s intent to
continue the program with new grantees rather than terminate
it. Maj. Op. 24 & n.10. To qualify as a replacement grant, the
re-obligation would have to be “substantially identical in scope
and purpose to the original grant.” The Honorable Lawton
Chiles U.S. Senate, B-164031, 1976 WL 10353, at *4 (Comp.
Gen. June 25, 1976). Those requirements cannot be met by
new grants that materially alter the financial structure, number
of grantees, or other oversight controls—meaning that EPA
would have to retain the very features it claims prompted the
agency to interfere with Plaintiffs’ grants. See NRDC Amicus
Br. 9-13.
The majority reasons that, because “there is no evidence
the agency sought to dismantle the programs without
congressional approval, In re Aiken County cannot support the
grantees’ claims.” Maj. Op. 26. The majority’s factual premise

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is unsupported, and the validity of Plaintiffs’ separation of
powers claim follows from Aiken County. We held in Aiken
County that executive agencies violate the constitutional
separation of powers when they refuse to spend money
appropriated by Congress because they disagree with
Congress’s policy choice. 725 F.3d at 260. There, as here,
Congress appropriated funds for a particular effort (there,
assessing applications to store nuclear waste; here, making
competitive grants) and set a statutory deadline for the agency
to act. Id. at 257-58. When the agency refused to adhere to the
statute due to “policy disagreement[s] with Congress,” we held
that refusal violated the Constitution, posing a threat to
undermine “our constitutional system of separation of powers”
that supported judicial intervention. Id. at 260, 267.
EPA’s attempts to dismantle the statutorily mandated
NCIF and CCIA programs due to the current agency
leadership’s policy disagreements with Congress run afoul of
the Constitution in the same way. In rejecting Plaintiffs’
separation of powers claim, the majority says that it is
“declin[ing] to adopt a principle that would convert every
statutory challenge to agency action into a constitutional
claim.” Maj. Op. 23. That may well be advisable, but it does
not describe the rule of Aiken County that properly applies here.
The majority cannot choose to “decline” to apply our binding
precedent. Wherever the line between constitutional and
statutory claims lies, Aiken County squarely holds that EPA’s
actions violated the Constitution.
B. Irreparable Injury and Balance of Equities
Baseless allegations of fraudulent or criminal activity,
coupled with EPA’s unfounded interference with Plaintiffs’
grant funds, threaten enormous harm to Plaintiffs and, more
importantly, to the communities, businesses, and individuals

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across the United States who stand to benefit from the uses of
the money that Congress prescribed. Without access to their
grant awards, Plaintiffs are already out of money to make
payments for rent, third-party contractors, and insurance
policies critical to continue operating, and many of the
Plaintiffs will permanently shutter in the coming months.
Plaintiffs have already been forced to defer compensation for,
lay off, withdraw offers from, and lose employees with
specialized expertise that “cannot be replaced easily, if at all.”
Supp. Bafford Decl. ¶ 7 (J.A. 954).
Absent funding from Plaintiffs, major projects already
underway will fold—projects intended to create demand for
and boost the global competitiveness of U.S. advanced electric
manufacturing capability, provide critically necessary
affordable housing and infrastructure, lower energy costs,
improve air quality, and reduce climate risks across the United
States. If the agency succeeds in taking back the funding
provided under the Act, many of those projects will not be able
to raise capital from other sources and will irrevocably fail.
That is particularly likely because Congress directed grantees
to invest in “qualified projects that would otherwise lack access
to financing.” 42 U.S.C. § 7434(b)(1). As just a single
example, one subgrantee community lender has set up projects
to install clean-energy microgrids at churches, community
centers, and nursing homes in rural Georgia, Mississippi, and
Alabama to provide sustained power during outages of existing
power sources. Without the subgrantee’s promised funds,
those projects are at risk of being left undone. The projects
were intended to provide vulnerable populations with “energy
independent safe havens for residents and community
members” during increasingly common extreme weather
events; instead, when blackouts inevitably happen, “[o]xygen
machines that would be powered by solar panels during a
blackout will turn off” and “[e]ssential medications that require

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refrigeration will warm and spoil.” Parker Decl. ¶¶ 35-37 (J.A.
950).
EPA’s unlawful actions are not just an enormous loss to
Plaintiffs and the American people. They defy Congress’s
objectives for authorizing and funding the Greenhouse Gas
Reduction Fund: to provide financial assistance to pollution-
reducing projects “in partnership with, and by leveraging
investment from, the private sector.” 42 U.S.C. § 7434
(c)(3)(A). By directing Citibank to freeze Plaintiffs’ money,
the government is making it impossible for Plaintiffs to serve
as reliable funding partners, ruining their prospects for securing
future partnerships, favorable loan terms, qualified staff, and
federal grant funding. As one Plaintiff explained:
To be an effective financing counterparty, CGC (or
any organization) must have certainty of funding
sources, be able to move efficiently and reliably in
negotiations, and be viewed as credible by involved
parties. CGC is made ineffective if potential partners
cannot rely on when CGC’s capital will become
available. No credible counterparty will take this
funding risk, or be willing to be associated financially
with CGC.
Kauffman Decl. ¶ 13 (J.A. 429). That reputational harm is
devastating to Plaintiffs. Because “part of [Plaintiffs’] purpose
is to bridge market failures and attract private co-investment to
projects that might otherwise be deemed too risky, confidence
in [Plaintiffs’] commitments as . . . investor[s] is vital to
achieving buy-in from private sector investors. . . . The longer
the freeze on [Plaintiffs’] funds continues, the more difficult it
will be for [them] to originate deals and secure co-investors.”
Id. ¶¶ 18, 23 (J.A. 430-31). Worse, the agency’s action
contrary to Congress’ enactment sets off a cycle of skepticism.

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When Plaintiffs’ hard-won partnerships with private investors
and community lenders initially hesitant to fund clean-energy
projects evaporate, those partners will be all the more reluctant
to invest in similar ventures in the future. Plaintiffs “have had
to work hard to build relationships and to earn a reputation as
[] trustworthy, reliable lending institution[s],” and the “knock-
on effects” of the damage EPA has caused to their reputations
“will delay adoption and therefore achievement of GGRF’s
mission.” Parker Decl. ¶¶ 25-26 (J.A. 947).
These harms are the very definition of irreparable injury.
Once a lender’s reputation as a stable source of promised
funding is compromised, it is difficult, if not impossible, to
repair. Indeed, investors and loan applicants have already
pulled out of near-final agreements due to the uncertainty over
whether Plaintiffs will be able to access their funds. Projects
underway that miss key deadlines due to Plaintiffs’ inability to
make good on their loan commitments will be shut down
permanently.
More broadly, the distrust bred by EPA’s actions will
make it exceedingly difficult to revive the coordination and
cooperation between nonprofit organizations, private investors,
private businesses, and community lenders critical to carrying
out Congress’s objective of building important projects at low
public cost by spending government grant money to leverage
private investment. What is more, without a court-ordered
injunction, the government’s actions portend that EPA will
drain the money from Plaintiffs’ accounts with no apparent
avenue for Plaintiffs to reclaim it. Once EPA successfully
terminates the awards and moves the funds back to Treasury—
as it intends to do as soon as the district court’s injunction is
lifted, see Oral Arg. Tr. 4:14-16—it is unlikely that a court
would be able to order their return to Plaintiffs or take any other
action to fulfill the agency’s congressional mandate. See City

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of Houston, Tex. v. Dep’t of Hous. & Urb. Dev., 24 F.3d 1421,
1426 (D.C. Cir. 1994) (explaining that “a court cannot reach”
funds that have reverted to Treasury “in order to award relief”
when the appropriation authorizing their expenditure has
expired); 42 U.S.C. § 7434(a) (appropriations for GGRF grant
programs expired on September 30, 2024); see also generally
Bagenstos Amicus Br. (explaining that EPA cannot re-obligate
the grant funds, nor can a court order it to do so, because the
appropriation authorizing those funds expired in September
2024). Under such circumstances, any eventual judicial
declaration that the terminations were unlawful would be a
hollow victory.
On the other side of the ledger, the government claims that
allowing Plaintiffs to access their funding will cause
“substantial and irreparable harm to the public fisc.” Gov. Br.
41. But as the government itself submits, its “bases for
termination were the grants’ structure and terms” which
“reflected no more than a decision based on reasons of policy,”
not anything to do with Plaintiffs’ “noncompliance” or
“conduct.” PI Opp. 34-35, 38 (J.A. 503-04, 507) (internal
quotation marks omitted). The government insists that it is
“not accusing anybody of fraud.” Oral Arg. Tr. 27:16. That is,
the government no longer disputes that Plaintiffs are using the
award funds as initially instructed by EPA, and as mandated by
Congress. It is hard to see how the public is harmed by
Plaintiffs’ use of money allotted by Congress to carry out its
duly enacted policies.
C. Tucker Act
The government attempts to divert this court’s attention
from its brazenly unlawful actions by arguing that the district
court lacked jurisdiction over Plaintiffs’ APA claims. But the
district court at a minimum had jurisdiction over Plaintiffs’

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meritorious separation of powers claim. That alone provides
jurisdiction for the preliminary injunction.
In any event, the majority’s conclusion that the Tucker Act
bars Plaintiffs’ arbitrary and capricious claim under the APA is
wrong. Plaintiffs are not seeking reinstatement of their grant
awards or any other form of specific performance of contracts.
Nor are they seeking payment of funds from the Treasury.
Their suit challenges the government’s decision to illegally
seize their property—money in bank accounts opened in their
names, in which the government has only a security interest
(which it has not exercised). The grant awards define that
money as “gross income earned by” Plaintiffs, meaning that
title to the money passed to Plaintiffs when the award funds
were deposited in their Citibank accounts. Grant Award at 53
(J.A. 1134) (quoting 2 C.F.R. § 200.1).
Plaintiffs’ title to the funds in their accounts is cemented
by the Account Control Agreements between Citibank, EPA,
and each grantee, which specify that Citibank “maintains the
Accounts for [Plaintiffs],” and that Plaintiffs are “the
entitlement holder[s] with respect to all financial assets
credited from time to time to the Accounts.” J.A. 1144.
Citibank’s status as a “fiduciary of the government,” Maj. Op.
14—in which capacity it promises to maintain accounts for
Plaintiffs, allow them to “access and use funds” in their
accounts, and provide view access to EPA, Financial Agency
Agreement Ex. A §§ I.A.1, I.D.1 (J.A. 2145, 2149)—changes
nothing about Plaintiffs’ title to the money in their accounts.
That Citibank has a contractual obligation to the government to
serve as a custodian of Plaintiffs’ funds does not mean that the
government owns the funds.
Indeed, Plaintiffs’ title to the award funds, which allows
the award to serve as a liquid asset instead of an inherently

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risky “expected income stream,” is critical to Congress’s
decision to equip grantees to attract private investment and is
one of the reasons EPA selected the financial agent structure.
Impact Finance Experts Amicus Br. 3, 7-14. Plaintiffs thus
seek an equitable remedy “for the recovery of specific property
or monies,” which stands in contradistinction to money
damages, Bowen v. Massachusetts, 487 U.S. 879, 893 (1988)
(internal quotation marks omitted) (emphasis added), the
“prototypical contract remedy,” Crowley, 38 F.4th at 1107.
The nature of the relief that Plaintiffs seek—recovery of
property that is lawfully theirs—suffices to resolve the Tucker
Act question against the government. Land v. Dollar, 330 U.S.
731 (1947), reflects that longstanding principle. There, the
plaintiff sought an injunction preventing the U.S. Maritime
Commission from selling shares of stock that the plaintiff
alleged it owned under a contract with the Commission. Id. at
734. The Court held that the district court had jurisdiction over
the case even though the plaintiff’s alleged right to the disputed
property originated in a contract and depended on interpreting
the contract in its favor. The Court nonetheless recognized that
the plaintiff’s “claim rests on [its] right under general law to
recover possession of specific property wrongfully
withheld”—a claim sounding in tort, not contract. Id. at 735-
36. That was so even though the government possessed and
had “record title” to the property. Id. at 737. As the Court
explained:
[P]ublic officials may become tort-feasors by
exceeding the limits of their authority. And where
they unlawfully seize or hold a citizen’s realty or
chattels, recoverable by appropriate action at law or
in equity, he is not relegated to the Court of Claims
to recover a money judgment. The dominant interest
of the sovereign is then on the side of the victim who

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may bring his possessory action to reclaim that which
is wrongfully withheld.
Id. at 738.
We acknowledged in Megapulse, Inc. v. Lewis the line
drawn in Land v. Dollar between claims to property acquired
by contract—which may proceed in district court—and claims
to enforce rights to contractual proceeds, which must proceed
in the Court of Claims under the Tucker Act: “The Supreme
Court many years ago recognized a private party’s cause of
action outside the Tucker Act to challenge the statutory
authority of federal officials to claim ownership rights in
property allegedly transferred during the course of a contract.”
672 F.2d at 968-69. That principle confirms the district court’s
jurisdiction here. Moreover, these cases underscore that a
claim to recover property need not be framed as an
unconstitutional taking to proceed in district court.
Plaintiffs claim that EPA has unlawfully interfered with
their previously disbursed funds in violation of, inter alia, the
APA. Appellee Br. at 15. Plaintiffs assert that EPA has
“unlawfully seize[d]” their property, and they seek an
injunction to “reclaim that which is wrongfully withheld.”
Dollar, 330 U.S. at 738. This case is even clearer in that regard
than Land v. Dollar itself, because the government has neither
title to nor possession of the disputed funds. Plaintiffs’ action
is one to recover their property. It does not seek any money
from the Treasury. It is not a contract action so is not
“relegated to the Court of Claims.” Id. As in Megapulse,
Plaintiff’s “position is ultimately based, not on breach of
contract, but on an alleged governmental infringement of
property rights and violation of [a statute].” 672 F.2d at 969.
The Supreme Court itself recently recognized that
distinction in Department of State v. AIDS Vaccine Advocacy

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Coalition, where it declined to stay a district court order
requiring the government to issue payments owed to plaintiffs
for foreign aid work they had already completed. 145 S. Ct.
753 (2025). The government argued there, as here, that the
plaintiffs essentially sought to enforce a government contract
so must proceed, if at all, in the Court of Claims. See id. at 756
(Alito, J., joined by Thomas, Gorsuch, and Kavanaugh, JJ.,
dissenting from the denial of the application to vacate the
district court’s order). The Court was unpersuaded that the
government thus was likely to establish a sovereign immunity
bar against the district court’s jurisdiction. Id. at 753. Like the
grantees here, the plaintiffs in AIDS Vaccine Advocacy
Coalition brought APA and constitutional challenges to
defendants’ interference with their existing entitlement to grant
funding. Their claims depended not on breach of their
contracts, but on the unlawfulness of the government’s
actions. The district court’s jurisdiction over Plaintiffs’ APA
and constitutional claims here is even clearer than it was in
AIDS Vaccine Advocacy Coalition, because here, unlike there,
payment was already made.
Those same facts—that Plaintiffs seek an injunction
preventing the government from interfering with money the
government has already properly disbursed to them—renders
inapplicable the Supreme Court’s emergency stay orders in
National Institutes of Health v. American Public Health Ass’n,
No. 25-A-103, 2025 WL 2415669 (Aug. 21, 2025), and
Department of Education v. California, 145 S. Ct. 966 (2025).
I respect the reasoning of those orders where they apply, but no
part of the district court’s injunction in this case “order[s] the
payment of money” from the Treasury or requires the
government to “pay out past-due grant obligations” or to
“continue paying obligations as they accrue.” Dep’t of Ed., 145
S. Ct. at 968. And, unlike plaintiffs in National Institutes of
Health, Plaintiffs here need not seek to enforce the

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government’s “obligation to pay money,” 2025 WL 2415669,
at *1, because these Plaintiffs’ money was already paid before
Defendants interfered with it.
Rather, what Plaintiffs seek here is to unfreeze their funds
and to enjoin EPA from unlawfully interfering with them based
on the President’s announced policy disagreement with
Congress’s objectives. In doing so, Plaintiffs challenge EPA’s
decision to replace Congress’s legislated policy choice with
one aligning with the President’s directions. See Executive
Order 14154 (ordering agencies to “Terminat[e] the Green
New Deal” by stopping the “disbursement of funds”); J.A. 507
(Defendants opposition to motion for preliminary injunction
describing contract terminations as “reflect[ing] no more than
a decision based on reasons of policy”) (internal quotation
marks omitted); Climate United, 778 F. Supp. 3d at 115-16
(finding that EPA “seeks to dismantle these grant programs in
their entirety as a policy matter”). To the extent National
Institutes of Health applies here, it supports the district court’s
jurisdiction over the policy-based interference with Plaintiffs’
funds. See National Institutes of Health, 2025 WL 2415669, at
*2 (Barrett, J., concurring) (asserting that a district court likely
has jurisdiction over challenges to an agency’s policies).
Binding precedent of this court anchors the district court’s
jurisdiction. Our “longstanding test for determining whether a
claim falls within the exclusive jurisdiction of the Claims Court
pursuant to the Tucker Act” confirms that the Tucker Act does
not displace the district court’s jurisdiction over Plaintiffs’
arbitrary and capricious claim. Crowley, 38 F.4th at 1106. We
explained in Megapulse that, in order to preserve the Court of
Claims’ exclusive jurisdiction over “actions based on
government contracts,” a plaintiff whose “claims against the
United States are essentially contractual” cannot be allowed to
“avoid the jurisdictional (and hence remedial) restrictions of

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the Tucker Act by casting its pleadings in terms that would
enable a district court to exercise jurisdiction under a separate
statute.” 672 F.2d at 967. Whether a “particular action” is “‘at
its essence’ a contract action depends both on [1] the source of
the rights upon which the plaintiff bases its claims, and upon
[2] the type of relief sought (or appropriate).” Id. at 968. That
is a flexible, context-specific inquiry that directs us to
“determine if the claim so clearly presents a disguised contract
action that jurisdiction over the matter is properly limited to the
Court of Claims.” Id.
Starting with the first prong, to determine whether the
“source of the rights” of a claim is contractual, we consider
whether the plaintiff’s arguments turn on the terms of the
contract. In Perry Capital LLC v. Mnuchin, for instance, we
concluded that the plaintiff’s claims were not “a disguised
contract action” because the plaintiff did not “seek to enforce
any duty imposed upon [the government] by the [relevant
contract],” nor did it “contend [the government] breached the
terms” of the contract or “invoke” the contract in any other
meaningful way. 864 F.3d 591, 619 (D.C. Cir. 2017) (internal
quotation marks omitted). Similarly, in Megapulse, we were
“convinced” that the plaintiff’s claims were not “disguised”
contract claims by the fact that the plaintiff did not “claim a
breach of contract” and based its “request for relief” on non-
contractual documents. 672 F.2d at 969.
Plaintiffs’ APA challenge to Defendants’ arbitrary and
capricious action is clearly not a “disguised contract action.”
Their claim is not premised on EPA’s violation of the grant
agreements’ termination provisions, nor on its failure to
perform any duty “imposed” on EPA by the grant award.
Rather, Plaintiffs assert that they are entitled to relief because
EPA froze and seeks to seize their funds based on pretextual,
internally inconsistent, and unfounded reasons. See, e.g.,

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Plaintiffs’ Mot. for Preliminary Injunction (PI Mot.) 29 (J.A.
327) (arguing that “the record leading up to the termination”—
for example, the fact that EPA purported to terminate the grants
several days after professing a “lack of critical information”
about “concerns regarding potential fraud” that would be
informed by an ongoing compliance review—“highlights the
pretextual nature of EPA’s stated invocation of waste, fraud,
and abuse”). According to Plaintiffs, and as supported by the
record, EPA acted entirely outside the bounds of acceptable
agency action by first deciding to seize the money Plaintiffs
had been awarded and then casting about for after-the-fact
justifications—including pressuring Citibank into freezing
Plaintiffs’ funds without any basis, notice, or explanation, and
directing DOJ and FBI to open criminal investigations into
Plaintiffs’ grant performance without probable cause, or any
grounds whatsoever. See PI Mot. 1-4 (J.A. 299-302).
That is precisely the type of arbitrary and capricious action
the APA is designed to address. As the Supreme Court
explained in Department of Commerce v. New York, agency
action is arbitrary and capricious when the agency’s “stated
rationale was pretextual,” because “contrived reasons . . .
defeat the purpose of” the “reasoned explanation requirement
of administrative law.” 588 U.S. at 773-74, 785. The non-
contractual “essence” of Plaintiffs’ APA claim has been clear
since Plaintiffs filed their complaint and sought a preliminary
injunction. They have from the outset sought to show that
EPA’s vague, unsupported, and irrational justifications are
merely “pretextual cover to shut down a program approved by
Congress that the new Administration does not like.” PI Mot.
29 (J.A. 327). That was clear to the district court from the very
first hearing. See Mar. 12 TRO Hr’g Tr. 9:17-18 (J.A. 182)
(district court observing that the terminations have “a ready,
fire, aim” feel). Plaintiffs seek relief based on a quintessential
claim of arbitrary and capricious agency action. The APA, and

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not the contractual terms of the grants EPA awarded them, is
the “source of the rights upon which the plaintiff bases its
claims.” Megapulse, 672 F.2d at 968.
As for the second prong of the Megapulse analysis—the
“type of relief sought”—we have described the “crux of this
inquiry” as “boil[ing] down to whether the plaintiff effectively
seeks to attain . . . monetary relief from the federal
government.” Crowley, 38 F.4th at 1107. As explained above,
Plaintiffs do not seek money from the Treasury; they seek only
to get the government’s hands off their money. To the extent
the injunction preventing the government from interfering with
or seizing their funds “require[s] the same governmental
restraint that specific []performance might require in a contract
setting,” that is an “insufficient basis to deny a district court the
jurisdiction otherwise available and the remedial powers
otherwise appropriate.” Megapulse, 672 F.2d at 971.
Both prongs of the Megapulse analysis thus point to the
same conclusion: Plaintiffs’ claim of arbitrary and capricious
agency action is not a “disguised” contract action that must be
heard by the Court of Claims. That conclusion comports with
our longstanding recognition that the Tucker Act was a
response to “congressional intent to provide a single, uniquely
qualified forum for the resolution of contractual disputes.”
Ingersoll-Rand, 780 F.2d at 78. The “unique expertise of the
Court of Claims” lies in its “knowledge of the government
contracting process,” id.; it is a “specialized forum” for
awarding “damages for the Government’s past acts,” Bowen,
487 U.S. at 905 n.42, 908 (internal quotation marks omitted).
It is far outside the specialized expertise of the Court of
Claims to resolve these Plaintiffs’ request for injunctive relief
halting EPA’s naked pursuit of its preferred policy outcome in
disregard for the evidence before it and its statutory mandate.

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Plaintiffs’ claim that EPA violated the APA’s ban on arbitrary
and capricious agency action—a claim for which they seek
injunctive relief, not payment from the Treasury—is well
within the district court’s remit.
That Plaintiffs would have no right to the money to begin
with but for the grant awards, which are government contracts,
does not alter that conclusion. We have squarely held that the
fact that a plaintiff “would have no claims to assert” absent a
government contract does not mean that the plaintiff asserts a
“contract right.” Crowley, 38 F.4th at 1110 (explaining that
imposing such a “‘but-for’ test for identifying the source of the
right . . . contravenes Megapulse’s express rejection of the
argument that the mere existence of such contract-related
issues converts the action to one based on the contract”)
(internal quotation marks omitted); see also Transohio Sav.
Bank v. Dir., Off. of Thrift Supervision, 967 F.2d 598, 610
(D.C. Cir. 1992) (“[L]itigants may bring statutory and
constitutional claims in federal district court even when the
claims depend on the existence and terms of a contract with the
government.”), abrogated on other grounds as recognized in
Perry Capital, 864 F.3d at 620.
At bottom, the government suggests that Plaintiffs’ real
complaint is that EPA terminated their grant awards—not that
it acted arbitrarily and capriciously in doing so—making its
claim “in essence” a contract claim. It is obviously true that
Plaintiffs are injured by the terminations. But it does not follow
that Plaintiffs therefore assert contractual claims. When EPA
began its campaign to undo the GGRF, it had already
performed on the contracts by disbursing the funds, which by
then belonged to Plaintiffs. The fact that those funds may only
be used in accordance with grant terms does not mean
Plaintiffs’ only legal right to protect them arises from contract.
As explained above, Plaintiffs’ theory of relief is that EPA

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carried out the funding freeze and purported terminations to
replace Congress’s policy choice with its own preferred
approach, without regard for whether its actions were
supported by evidence or reason. That is a classic claim of
arbitrary and capricious agency action in violation of the APA.
That is what makes the APA, and not their grant awards, the
“source of the rights upon which the plaintiff[s] base[] [their]
claims.” Megapulse, 672 F.2d at 968.
Because Plaintiffs bring legitimate APA and constitutional
claims over which the district court has jurisdiction, I would
not reach their ultra vires theory. But to the extent the majority
concludes that Plaintiffs’ ultra vires claim fails because
Plaintiffs “essentially” allege only a breach of contract, the
majority errs. Maj. Op. 21-22. For all the reasons discussed
above, Plaintiffs’ claims are not “essentially” contractual.
Citing Ingersoll-Rand, the majority posits that Plaintiffs’
allegations of pretextual agency action are contract claims
because “that challenge turns, in substance, on principles of
federal contract law”—that is, Plaintiffs’ pretext argument
could be rephrased as a claim that EPA “dishonor[ed], with
impunity, its contractual obligations.” Maj. Op. 17. But
Plaintiffs’ APA claim is not “essentially” contractual just
because EPA’s arbitrary and capricious action included grant
terminations. The majority appears to read Ingersoll-Rand as
establishing a rule that any claim that could be
reconceptualized as a contractual violation that overlaps even
in part with the claim Plaintiffs actually bring is necessarily a
disguised contract claim. See Maj. Op. 16. Ingersoll-Rand
announces no such rule, and any effort to interpret it to do
squarely conflicts with our binding precedent.
In Ingersoll-Rand, the government terminated its contract
with the plaintiff “for convenience,” as allowed under the terms

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of the contract. Id. at 75. The plaintiff sued, alleging that the
termination violated several regulations constraining the
government’s ability to cancel and administer federal
acquisition contracts, and that those regulatory violations
meant that the termination was arbitrary and capricious. Id. at
77. We held that the “essential rights at stake” were contractual
because the regulations themselves—the violation of which
was allegedly arbitrary and capricious—concerned the
conditions under which the government could terminate the
contract. Id. at 77-78. In effect, the plaintiff had relied on
regulations circumscribing the government’s behavior during
the solicitation and performance of contracts to challenge the
validity of the contract’s termination-for-convenience
provision. The plaintiff’s claim thus “call[ed] for knowledge
of the government contracting process” and fell “within the
unique expertise of the Court of Claims.” Id. at 78. In that
context, in which the plaintiff’s claim centered on the
intricacies of the government’s contracting process and the
interaction between contracting regulations and the terms of the
plaintiff’s contract, it made sense to hold that the plaintiff’s
ability to “challenge the termination based solely on contract
principles” supported our determination that its claim
“sound[ed] genuinely in contract.” Id. (internal quotation
marks omitted).
Ingersoll-Rand thus establishes that claims that invoke
regulations governing federal contracting to challenge
government action taken pursuant to a contract are “in essence”
contractual and belong in the Court of Claims, where that
court’s expertise in government contracting is particularly
relevant. And it supports the majority’s conclusion that claims
based on violations of regulations governing termination
procedures are “in essence” contract claims, which is likely
correct. See Maj. Op. 11-13. But that does not describe
Plaintiffs’ arbitrary and capricious claim. Ingersoll-Rand

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decidedly does not stand for a general rule that any claim that
could have been framed as a breach of “principles of federal
contract law” must be brought in the Court of Federal Claims”
Maj. Op. 17—a rule that could not be squared with our other
relevant decisions.
That is illustrated most clearly by Sharp v. Weinberger,
798 F.2d 1521 (D.C. Cir. 1986), a decision authored by then-
Judge Scalia and decided the year after Ingersoll-Rand. The
plaintiff in Sharp challenged a Department of Defense policy
removing him from the Ready Reserve where he served
pursuant to a contract—the Ready Reserve Service Agreement.
798 F.2d at 1521-23. The plaintiff alleged that the policy
breached his contract and violated a statute governing the
Ready Reserve, and that the contract gave him a “vested
property interest” in serving in the reserves that the government
“sought to deny without due process.” Id. at 1523. The
plaintiff’s requested relief included a declaration that the policy
was “contrary to statute or in the alternative that it effects a
material breach of the Ready Reserve Service Agreement,” as
well as a declaration that the government’s “failure to honor
the terms of that contract deprived [the plaintiff] of due
process.” Id. We held that, while the Tucker Act barred the
district court’s jurisdiction over the plaintiff’s breach of
contract claim, it did not displace the district court’s
jurisdiction over the plaintiff’s claims that the policy was
“contrary to regulations, statutes and the Constitution.” Id.;
accord Transohio, 967 F.2d at 610. That is, the plaintiff’s
statutory, regulatory, and constitutional claims that he had been
unlawfully deprived of his contractual right to serve in the
Ready Reserve were not “in essence” contractual even though
his right to serve in the first place depended on contract, and he
expressly brought one claim as a pure breach of contract.

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The majority’s view of Ingersoll-Rand cannot be
reconciled with Sharp. Allen Sharp’s statutory, regulatory, and
constitutional claims not only could be based on contract
principles, but in fact were also framed that way. If the
majority’s rule were right, the district court could not have
exercised jurisdiction over his due process claim. The same
analysis is confirmed in Megapulse itself. There, the plaintiff
alleged that the government’s plan to distribute his data
violated the Trade Secrets Act and deprived him of his property
without due process. 672 F.2d at 962-63. That claim, too,
could have been based solely on contract principles, as the
government had made a contractual promise not to disseminate
the plaintiff’s “limited rights” data. Id. at 962. But that
counterfactual did not preclude us from holding—nor even
factor into our conclusion—that the district court had
jurisdiction over the plaintiff’s claim. See id. at 966-71.
Indeed, in Megapulse, we expressly rejected the idea that
the Tucker Act means that “an agency action may not be
enjoined, even if in clear violation of a specific statute, simply
because that same action might also amount to a breach of
contract.” Id. at 971. Rather, district courts have jurisdiction
over and can enjoin agency action that violates the APA, even
if that action also “amounts to” a breach of contract. Id. That
is the situation here: Plaintiffs claim that EPA’s termination
was arbitrary and capricious because it relied on pretextual and
unsupported justifications, not because it violated the grant
award’s termination provision. The fact that the government’s
arbitrary and capricious decision making could be reframed as
a claim that “EPA acted with ‘impunity’ when terminating the
grants” does not transform the claim into a contract action.
In relegating to the Court of Claims any statutory,
regulatory, or constitutional claim merely because it arguably
could to some extent be reframed as a contract action, the

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majority’s rule precludes district court jurisdiction and
injunctive relief for a wide swath of claims that—like
Plaintiffs’ claim that EPA’s actions to freeze their accounts and
terminate their grants were arbitrary and capricious—are
simply not contract claims. Such a rule effects an
unprecedented expansion of the Tucker Act that is divorced
from the “congressional intent to provide a single, uniquely
qualified forum for the resolution of contractual disputes,”
Ingersoll-Rand, 780 F.2d at 78, and it strips district courts of
jurisdiction over all manner of claims over which they have the
relevant expertise. It also threatens to “preclude any review at
all of constitutional claims seeking equitable relief, where the
constitutional claims stem from contracts,” thereby raising
“serious constitutional question[s].” Transohio, 967 F.2d at
611 (internal quotation marks omitted). And it flies in the face
of our cases’ longstanding refrain that “the mere fact that a
court may have to rule on a contract issue does not, by
triggering some mystical metamorphosis, automatically
transform an action . . . into one on the contract and deprive the
court of jurisdiction it might otherwise have.” Crowley, 38
F.4th at 1107 (quoting Megapulse, 672 F.2d at 968). Such a
rule is unsupported by our precedent, prevents the court from
making “rational distinctions between actions sounding
genuinely in contract and those based on truly independent
legal grounds,” and runs directly counter to our
acknowledgement that, “[a]lthough it is important on the one
hand to preserve the Tucker Act’s limited and conditioned
waiver of sovereign immunity in contract actions, we must not
do so in terms so broad as to deny a [district] court jurisdiction
to consider a claim that is validly based on grounds other than
a contractual relationship with the government.” Megapulse,
672 F.2d at 968-70.
As applied in this case, the majority’s conclusion that
Plaintiffs’ claims are merely contract claims ignores what the

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agency did and describes a claim that Plaintiffs did not bring.
This case is not an attempt to reframe EPA’s termination or
violation of some grant awards as unlawful agency action.
Indeed, throughout this litigation, there has hardly been any
dispute that the government did breach the terms of the grant
awards. That is not what this case is about. Plaintiffs challenge
EPA’s asserted power to take baseless and unjustifiable actions
to pursue its desired ends—here, the termination of the grant
awards—regardless of the means it must employ to get there.
It is beyond dispute that questions of such significance to the
way our government operates are not relegated to the exclusive
jurisdiction of the Court of Claims.
CONCLUSION
Embracing a misguided and breathtakingly expansive
conception of the Tucker Act, the majority allows the
government to seize Plaintiffs’ money based on spurious and
pretextual allegations and to permanently gut implementation
of major congressional legislation designed to improve the
infrastructure, health, and economic security of communities
throughout the country. The injunction the district court put in
place is eminently supported by Plaintiffs’ likelihood of
success on both their APA and constitutional claims, the
irreparable harm that will befall them, and the unlawful
nullification of Congress’s duly enacted policy—all of which
inure to the detriment of the American people. I respectfully
dissent.

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