By Kennedy Maize
The Trump administration’s shoot from the hip approach to governance has suffered more foot wounds at the hands of the U.S. courts. A federal district court judge in Washington last week (Apr. 15) reversed EPA’s order to freeze $27 billion in funds allocated last year under the 2022 Inflation Reduction Act to small non-profit groups working on energy efficiency and clean energy products.
At the same time, the U.S. District Court in Rhode Island upturned the administration’s first order of business stopping all funding under the Biden administration’s two landmark laws, the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA).
The Biden administration’s EPA program – the “Greenhouse Gas Reduction Fund” – also known as the “green bank” — had the funds held in Citibank. In February, groups the Biden EPA had chosen to have access asked Citibank to release funds. The bank refused, citing orders from Trump’s new EPA administrator, Lee Zeldin, freezing the funds and killing the Biden program.
Zeldin had attacked the Biden program since his first days in office, which began on Jan. 29. Based initially on a December 2024 Project Veritas video where a former EPA employee said the Biden administration deposited the funds at Citibank to protect them against a move by the incoming Trump administration to claw them back. The employee called it akin to “throwing gold bars off the Titanic.”
On Feb. 13, Zeldin issued a press release (Zeldin’s EPA issues press releases with the same flurry as Trump issues executive orders) headlined “Administrator Zeldin Announces that Billions of Dollars Worth of ‘Gold Bars’ Have Been Located at Outside Financial Institution.”
Zeldin made it a signature example of his intent to root out “waste, fraud, and abuse” in the federal environmental programs, particularly those aimed at climate change. Further “gold bars” news releases followed on Feb. 15, Feb. 21, March 3, and March 11. The March 11 release announced Zeldin had “terminated” the grants.
A Feb. 20 New York Times article reported, “The situation escalated on Tuesday, when Denise Cheung, a top federal prosecutor in Washington, D.C., abruptly resigned after she refused to open a criminal investigation into an unnamed government vendor and freeze unspent assets. The vendor is believed to be Citibank, and the assets in question are thought to be the $20 billion identified by Zeldin’s team.”
The funds were held in Citibank in the specific accounts of the groups that won the awards. When Citibank refused to release funds to Climate United Fund, Coalition for Green Capital, and Power Forward Communities, Inc., they and several other groups sued Citibank in the U.S. District Court for the District of Columbia. They argued that EPA had failed to follow the Administrative Procedures Act (APA), as well as committing Constitutional violations.
In March, Judge Tanya Chutkan issued a temporary restraining order to EPA and ordered the bank to release some $650 million in scheduled withdrawals. The plaintiffs then followedthat with a request for a preliminary injunction on EPA action.
Ruling in favor of the groups, Judge Tanya Chutkan wrote, “Since mid-February 2025, Plaintiffs have attempted to draw on funds from their respective accounts to no avail. For weeks, despite repeated inquiries to Citibank and EPA, Plaintiffs received little to no communication from EPA or Citibank regarding their inability to access their funds. Overnight, billions of dollars appropriated by Congress were frozen. As a result, nationwide projects were halted, workplans were disrupted, and millions of dollars in approved transactions with committed partners could not be disbursed.”
Chutkan said, “It is undisputed that EPA can, and agencies do, terminate grants, but they must do so lawfully and in accordance with relevant regulations, the U.S. Constitution, and applicable law. The APA does not exist to review the actions of “other contracting parties”—it exists to review government action. See Loper Bright Enters. v. Raimondo, 603 U.S. 369, 371 (2024) (‘Congress in 1946 enacted the APA ‘as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices.’)”
EPA, Chutkan wrote, acted arbitrarily and capriciously, without evidence supporting a decision to kill the grants and terminate the entire program. The agency also violated the Constitution, specifically the separation of powers. “At this point,” she ruled, “the record does indicate that EPA seeks to dismantle these grant programs in their entirety as a policy matter.” That’s the job of Congress, not administrative agencies.
Chutkan ordered Citibank to release the funds.
EPA said it would appeal. The next day (Apr. 17) the U.S. Court of Appeals for the District of Columbia granted a delay in Chutkan’s order for a week, “pending appeal.” That’s a normal step by the appeals court.
The day before Chutkan’s ruling, Judge Mary S. McElroy of the U.S. District Court for the District of Rhode Island ruled against a fleet of Trump’s agencies and named officials for the administration’s “funding freeze” attempt to shut down much of the federal government’s spending, starting with the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. Those laws passed by Congress appropriated “billions of dollars for infrastructure, agriculture, energy, climate, and housing initiatives. The laws established that federal agencies would largely be responsible for administering these 2 funds.”
Then came January 20, 2025 when Trump entered the White House for the second, non-contiguous, term. The order went out from Trump’s Office of Management and Budget to start the process of clawing back billions of federal dollars by cutting off the spigot of dollars for the IIJA and IRA.
McElroy wrote, “It quickly became clear that these actions were part of a much larger effort that extended beyond IIJA and IRA funding—an effort now colloquially known as the federal ‘funding freeze.’ Next came a whirlwind of litigation.”
A bevy of affect nonprofit groups sued under the APA. The administration’s actions, McElroy ruled, were arbitrary and capricious and thus illegal. She issued a nationwide preliminary injunction. She found “that the Government failed to provide a rational reason that the need to ‘safeguard valuable taxpayer resources’ justifies a sweeping pause of all already-awarded IIJA and IRA funds with such short notice.”
McElroy’s order applies to the Department of Agriculture, the Department of Energy, the Department of Interior, the EPA, the Department of Housing and Urban Development, the Office of Management and Budget and its director, Russell Voght, and Kevin Hassett, who heads the White House’s National Economic Council.
Trump’s appointment of Lee Zeldin, 45, to head EPA was a surprise. He was a back-bench Long Island Republican member of the House, without any expertise in environmental law or issues. As a state legislator from 2011-2014, he had a largely moderate record.
Zeldin was elected to Congress in 2014 and quickly moved hard right. He came to Trump’s attention as a strident defender of the president during his first impeachment. He later acknowledged that Trump had lost the 2020 election. On environmental issues, his ranking by the green-oriented League of Conservation Voters was a dismal 14%.
Chutkan, 62, was born in Kingston, Jamaica. She has a law degree from the University of Pennsylvania Law School. After a brief stint in private practice, she spent 1991 to 2002 as a District of Columbia public defender. She then went back into private practice, focusing on civil litigation and antitrust law.
President Obama appointed Chutkan to the D.C. Circuit Court in 2014. Her most prominent case was presiding over the August 23 criminal trial of Trump over the failed attempts to overturn the 2020 presidential election, culminating in the Jan. 6 2021 riot at the U.S. Capitol. The case never went to trial and was dismissed when Trump won the 2024 election.
McElroy, 59, earned her law degree from Suffolk University Law School in Boston in 1992. She spent most of her career as a public defender, first for Rhode Island and then as a federal public defender for Massachusetts, New Hampshire, and Rhode Island, and then again for the Rhode Island public defender’s office.
McElroy, a Democrat, was first nominated to the federal bench by President Obama at the end of 2015. The Senate Judiciary Committee approved the nomination by voice vote but it stalled short of floor action as the 2016 presidential election year kicked off. The nomination expired in January 2017 when the 114th Congress expired. President Trump renominated her in April 2018 and she won committee approval by a 19-3 vote, with Republicans Mike Lee of Utah, Josh Hawley of Missouri, and John Kennedy of Louisiana voted no. She took office in October 2019.
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