In a significant legal development, the U.S. Court of Appeals for the D.C. Circuit has decided to reopen the case concerning the Environmental Protection Agency’s (EPA) suspension of federal grants, impacting funds allocated to tribal communities. This move comes after a September ruling that initially favored the EPA and Citibank was vacated.
The order issued on Wednesday mandates a new round of oral arguments scheduled for February 24, 2026. The full court, rather than a smaller panel, will now reassess the legality of the EPA’s decision to halt grants under the National Clean Investment Fund and the Clean Communities Investment Accelerator programs.
A partial administrative stay, which was first implemented in April, remains in effect, keeping the grants frozen while legal proceedings continue. The prior decision had criticized the district court for overreaching by ordering continued funding, suggesting that many claims should be addressed by the U.S. Court of Federal Claims instead.
“Everyone deserves access to financing for clean energy projects that create good jobs, reduce pollution, and lower energy bills,” said Climate United CEO Beth Bafford in a statement to Tribal Business News. “For over nine months, EPA’s unlawful actions have prevented us from delivering clean, affordable energy to hardworking Americans across the country.”
The conflict originated in early 2025 when the EPA terminated the grants, prompting Citibank to freeze the related accounts amid concerns about oversight and conflicts of interest. The nonprofits involved subsequently sued, arguing the freeze was unlawful and endangered clean-energy initiatives.
Initially, a federal district court sided with the grantees, mandating the continuation of funding. However, in September, the D.C. Circuit panel vacated this injunction, citing jurisdictional issues and a low likelihood of the plaintiffs succeeding on the merits. With the latest order, this ruling is now void, and the case will be revisited by the full court.
The ongoing legal battle creates uncertainty for lenders and developers planning solar projects and efficiency upgrades. Tribal and community lenders have reported delays in projects originally slated for 2025.
The EPA has defended its measures as essential for safeguarding public resources, while Citibank maintains it acted following an FBI recommendation linked to the EPA’s review.
This case is part of broader legal challenges against the EPA’s grant cancellations. The Solar for All program, aimed at expanding solar access for low-income households, also faces litigation after its termination by the Trump administration in 2025, which claimed the One Big Beautiful Bill Act revoked the EPA’s authority to administer the program.
Lawsuits have been filed by state, labor, and nonprofit groups seeking reinstatement of these grants. The outcomes of these cases, including the Climate United dispute, are anticipated later in 2026.
Bafford expressed determination to continue advocating for community interests, stating, “We will continue to press forward on behalf of the communities we serve, and we look forward to the judges’ reconsideration of our case so we can get back to work.”
Original Story at tribalbusinessnews.com