DC Circuit revives EPA climate grants case ahead of bigger funding brawl

By Alex Guillén | 07/21/2026 01:27 PM EDT

The decision could have implications for a separate but related fight over the $20 billion Greenhouse Gas Reduction Fund grants.

The E. Barrett Prettyman U.S. Courthouse is seen.

The U.S. Court of Appeals for the District of Columbia Circuit said a lower court judge should have decided first whether the lawsuit was mooted by the GOP megalaw's rescission of funds. Francis Chung/POLITICO

A federal appeals court has sent a lawsuit challenging EPA’s termination of almost $3 billion in climate grants back to a lower bench.

The U.S. Court of Appeals for the District of Columbia Circuit said Tuesday the district court should have determined whether the case had been mooted by Republicans’ repeal last summer of the Inflation Reduction Act before dismissing the case.

Citing that procedural error, the D.C. Circuit avoided taking a position on the question of mootness or the lower court judge’s decision to boot the case on other grounds. But the decision does hint at which issues the appellate court will prioritize in a separate high-profile challenge over a $20 billion pot of funding under the IRA’s Greenhouse Gas Reduction Fund.

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At issue in this case is a $2.8 billion IRA program that funded dozens of environmental and climate justice block grants.

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