Court of Appeals upholds block on Trump Administration from clawing back dollars for clean-energy projects

U.S. Court of Appeals for the D.C. Circuit, ruling en banc, upholds preliminary injunction in AG Ellison’s March 2025 lawsuit against illegal Trump attempt to block congressionally approved funding for state projects designed to reduce greenhouse gases

August 6, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison has won another victory in the March 2025 lawsuit he filed against the Trump Environmental Protection Agency’s illegal efforts to stop the flow of congressionally approved funds to state-based projects to reduce greenhouse gases. On August 4, the U.S. Court of Appeals for the District of Columbia Circuit, ruling en banc, upheld a preliminary injunction that a federal district court granted in April 2025 that blocked the EPA from enforcing its termination of those grant funds. In so doing, the court reversed a prior ruling of a three-judge appellate panel that had overturned the preliminary injunction, and within a week will lift the existing stay on the enforcement of the injunction.

“I’m glad the full circuit court upheld the preliminary injunction we won in this case more than a year ago,” Attorney General Ellison said. “When the Trump Administration makes improper end-runs around the rule of law and the Constitution, as they did here, I will take them to court and hold them accountable to keep protecting Minnesotans.”

In March 2025, Attorney General Ellison led a coalition of four state attorneys general in suing the Trump EPA over its cancellation of grant funding that Congress had previously appropriated to support clean-energy projects in states. Attorney General Ellison sued on behalf of the Minnesota Climate Innovation Funding Agency (MnCIFA), a State-created, public “green bank” whose purpose is to stimulate the development of clean energy and greenhouse gas emissions-reduction projects and help overcome existing market barriers to these projects, and the attorneys general of California, Illinois, and Maine did the same on behalf of green banks in their states. Through a subgrant from the Coalition for Green Capital (CGC), MnCIFA was awarded funds from the Greenhouse Gas Reduction Fund, a federal source of funds that Congress created as part of the 2022 Inflation Reduction Act, and stood ready to deploy those funds until the EPA blocked their release.

In April 2025, a federal district court in the District of Columbia issued a preliminary injunction in the case, blocking the EPA from enforcing its prior notice of termination and unlawfully terminating the plaintiffs’ grant awards. The court also blocked Citibank, where EPA had deposited the funds, from moving the funds out of the accounts that had been established for the plaintiffs’ grant funds.

In September 2025, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit overturned the preliminary injunction on a vote of 2-1, despite one judge’s strong dissent. Attorney General Ellison and the coalition subsequently asked the full Court of Appeals for the District of Columbia Circuit for an en banc review of the three-judge panel’s ruling. The circuit court accepted the coalition’s request and heard oral arguments en banc in September 2025 and issued its ruling overturning the three-judge panel and upholding all paragraphs of the district court’s preliminary injunction on August 4, 2026.

The Trump Administration EPA could appeal the decision to the U.S. Supreme Court, or the case could head back to the federal district court for further proceedings.