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A federal appeals court has ruled that the Trump administration acted unlawfully when it ordered the freezing of bank accounts belonging to eight climate-focused nonprofits in February 2025. The court determined that the EPA lacked the authority to reclaim approximately $20 billion in funding that had already been distributed to these organizations’ accounts, allowing the groups to regain access to their money while the case proceeds.
The disputed funds were allocated through the Inflation Reduction Act to establish the Greenhouse Gas Reduction Fund, a program designed to advance clean energy initiatives. The Trump EPA had argued it possessed the power to claw back the money by citing the One Big Beautiful Bill Act, which repealed the provision creating the fund. However, six of ten judges on the D.C. Circuit Court of Appeals rejected this reasoning, stating that once money has been properly disbursed and obligated, the government cannot use new legislation to reclaim it. The court suggested the EPA was attempting to reverse the funding purely based on policy disagreement rather than legal authority.
Despite the legal victory, many of these organizations have already suffered significant consequences during the account freeze. Several nonprofits have been forced to implement substantial workforce reductions, with some reducing their staff to just a handful of employees. The EPA has seven days to file an appeal to the U.S. Supreme Court, leaving the matter potentially unresolved in the near term.
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Originally reported by Techcrunch →
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