Two Judges Order Federal Agencies to Unfreeze Climate Money

Two court rulings on Tuesday unfroze hundreds of millions of dollars in federal climate funds, a win for nonprofit groups that have been denied access to money they were promised under the Biden administration.

Judge Tanya S. Chutkan of the federal court for the District of Columbia on Tuesday ordered the immediate release of up to $625 million in climate grants that have been frozen since mid-February under the $20 billion Greenhouse Gas Reduction Fund. The fund is also known as the “green bank” program and has been a major target of Lee Zeldin, the administrator of the Environmental Protection Agency.

Separately, Judge Mary S. McElroy of the federal court for the District of Rhode Island ordered five federal agencies to unfreeze environmental and infrastructure funding that had been awarded to nonprofits during the Biden administration.

In her ruling, Judge McElroy said the nonprofits had demonstrated in court that the indefinite freeze, put in place by the Trump administration, “was neither reasonable nor reasonably explained.” She added that the nonprofits were likely to be able to prove that the freezes were “fundamentally arbitrary.”

The lawsuits are among many filed against the Trump administration’s moves to freeze billions of dollars in funding that had been awarded through two laws passed in 2021 and 2022, the Infrastructure Investment and Jobs Act and the Inflation Reduction Act.

Various judges have ordered the administration to unfreeze funds, but the administration has cited legal loopholes to avoid doing so. Administration officials have said the pauses are necessary to align with executive orders President Trump has issued since taking office.

The $20 billion Greenhouse Gas Reduction Fund, which was authorized under the Inflation Reduction Act and finalized before last November’s presidential election, represents roughly twice the E.P.A.’s budget for 2025.

Mr. Zeldin seized on the program early in his tenure, citing a hidden-camera video filmed in December in which an E.P.A. staffer likened the outgoing Biden administration’s efforts to spend federal money to tossing gold bars off the Titanic. The video was released by Project Veritas, a conservative group known for using covert recordings to embarrass its political opponents.

Mr. Zeldin called for the funds to be returned to the federal government. Citibank, which holds the money on behalf of the grant recipients, froze the accounts. The nonprofit grant recipients then sued the E.P.A. and Citibank last month.

Citibank declined to comment on Wednesday.

The E.P.A. is allowed to freeze the grants if it uncovers evidence of waste, fraud or abuse. Judge Chutkan, who was nominated by President Barack Obama, asked the agency to produce evidence of that, but it has not offered anything concrete, despite investigations by the Department of Justice, the F.B.I. and the agency’s Office of Inspector General.

Judge Chutkan’s order, which was released late Tuesday, calls for the release of funds that were “properly incurred before the mid-February suspension of plaintiffs’ funds.”

A court filing from the E.P.A. estimated the total withdrawal requests at up to $625 million. On Wednesday morning, grant recipients were still trying to figure out exactly which transaction requests would be honored.

Beth Bafford, chief executive of Climate United, one of the nonprofits that sued, said that the decision “gives us a chance to breathe after the E.P.A. unlawfully, and without due process, terminated our awards and blocked access to funds that were appropriated by Congress and legally obligated.”

The group, a national investment fund based in Maryland, said it intended to use the grants for projects in solar energy in Arkansas and hydropower in Alaska.

The E.P.A., which did not immediately comment on the ruling on Wednesday, has notified that court that it will appeal.

In the Rhode Island lawsuit, filed in March, the named defendants include the departments of Agriculture, Energy and Interior, as well as the E.P.A. , the Department of Housing and Urban Development, the Office of Management and Budget, and the agency heads.

None of the agencies immediately commented on the ruling.

Six nonprofits had filed the suit. They argued that their work had been hamstrung by the uncertainty created by the funding freeze.

Examples of harm cited in the lawsuit included nonprofits having to furlough employees and pause projects, with no ability to plan for the future.

“We are pleased that a federal court has seen the Trump administration’s freeze of congressionally approved funds for what it is, another abuse of executive power,” said Skye Perryman, chief executive of Democracy Forward, a legal group focused on challenging the Trump administration. It worked with co-counsel DeLuca, Weizenbaum, Barry & Revens, a firm based in Providence, R.I., on the case.

Judge McElroy, who was appointed by President Trump in 2018, imposed a deadline of 5 p.m. E. D.T on Wednesday for the agencies to report back on their compliance with the order.