But Katsas and Rao also had hard questions for EPA, including over its concession that it has made no specific allegations of wrongdoing by the recipients themselves.
EPA and the grant recipients have been fighting over the funds for over two months.
The Trump administration has plowed ahead with canceling these and around 800 other smaller grants nonetheless.
Rao argued the case was “a dispute about who has title” to the money — the recipients or EPA.
“Why isn’t that a contract question that should go to the Court of Federal Claims?” she asked.
Gregory Katsas and Neomi Rao, the other two panelists who were appointed to the bench during President Donald Trump’s first term, were more skeptical of permitting recipients to spend funds while legal proceedings are ongoing.
In an attempt to ascertain what is in the best interests of the public, Rao stated, “The government would be out of these billions of dollars if the money were to go out and then the government were to ultimately prevail.”.
However, EPA also faced tough questions from Katsas and Rao, including the agency’s acknowledgement that it hasn’t specifically accused the recipients of wrongdoing.
Katsas asked, “What is your stated basis for termination on the theory that there is no breach, no waste, fraud, or abuse — with a contract structure that might facilitate that?”. In the grant agreement, I’m not sure I see that. “”.
Instead of citing specific cases, EPA can cite “structural risk of waste and abuse,” said Yaakov Roth, acting assistant attorney general for the civil division of EPA.
For more than two months, EPA and the grantees have been at odds over the money. In the U.S., things reached a breaking point. S. Obama-appointed Judge Tanya Chutkan declared last month in the District Court for the District of Columbia that EPA had illegally terminated the grants and that the recipients ought to have access to their money. Transfer requests totaling at least $625 million are still pending for the groups, though it’s possible that the amount has increased since it was revealed in mid-April.
One of the Biden administration’s most notable climate accomplishments, which Democrats set up in the Inflation Reduction Act to be required before Trump could retake power, will be determined by the outcome of the legal battle. Notwithstanding, the Trump administration has moved quickly to cancel these and about 800 other smaller grants.
House Republicans’ reconciliation bill, which passed out of committee last week, included a repeal of the GGRF authority; however, it has not yet been approved by the House or sent to the Senate.
Although EPA maintains that its terminations were legal, its main legal contention is that they can only be contested as a breach of contract, which would require hearings before a specialized tribunal under the Tucker Act, a federal law. S. . The Federal Claims Court.
Roth stated, “We are in disagreement as to whether the contract has been terminated in accordance with its terms.”. They receive nothing if we are correct. They receive damages if they are correct. We’re not contesting that, either. However, it must be a separate court. “”.
Following Chutkan’s disagreement and ruling that she had jurisdiction, EPA promptly filed an appeal with the DdotC. The circuit.
Katsas and Rao’s decision earlier this month that terminated grants from the U.S. A. A number of radio stations had contracts with Agency for Global Media that needed to be brought before the Court of Federal Claims. Pillard disagreed with the full D.C in those instances. Later, the Circuit stayed their decision.
During the arguments over EPA’s actions on Monday, the two judges said similar things.
Rao maintained that the case was “a dispute about who has title” to the funds—EPA or the recipients. She questioned, “Why shouldn’t the Court of Federal Claims handle that contract question?”.
The groups feel that EPA has a “security interest,” but otherwise “it’s our money, and we’re seeking to vindicate our property interest in that money,” responded Adam Unikowsky, a lawyer at Jenner and Block who represents the grant recipients. “”.
Katsas, however, also said he was having trouble noticing the difference.
He remarked, “I don’t know where the boundary between property and contract issues is.”. We’re discussing the Tucker Act and contract claims, and it doesn’t really matter if the government’s obligation is to pay money out of the treasury—which leads to a host of other problems—or if it’s just a standard contract obligation. A claim is a contract claim if that is the case. “.”.
Pillard posed the most challenging questions for EPA, pointing out that Zeldin had terminated the grants “with zero substantiation that any fraudulent activity is occurring” during the one-day extension that the Trump administration had requested for the case’s initial hearing. She also pointed out that EPA sent questionnaires to grant recipients regarding their activities, and the agency did not wait until the deadline for responses.
EPA’s decision to swiftly terminate the grants and the litigation surrounding the freeze, according to Roth, “were two completely separate processes that were playing out at the same time.”. “.”.
The requirement that EPA send the recipients a questionnaire, he continued, “really confirms the problem with the way these grants are structured, because they should not have to do that.”. They ought to have access to that information. “.”.
However, Pillard didn’t seem to be convinced, later telling the grantees that she thought their theory that EPA actually ended the grants as a “pretextual” reason to end a program the Trump administration didn’t like was “fairly solid ground.”.
She also disputed EPA’s claims that the GGRF program’s structure was dubious.
Pillard argued that the grant programs were set up in this manner by the Biden administration to allow the recipient groups to expand the impact of the spending by leveraging private funds. If there is anything unlawful about that model, we ought to be aware of it. I don’t see any evidence of the structural issues that the government claimed to be depending on here, though, and I don’t see anything to that effect after how many months. “.”.
Roth retorted that although the arrangement could be made to allow for that use of the funds, EPA would have “additional rights in terms of being able to approve the expenditures to sub-grantees and sub-sub-grantees.”. “”.
No “meaningful evidence” of wrongdoing has been discovered by criminal investigations into the activities of Biden officials in creating the program and allocating the funds, according to a Friday New York Times story. A senior prosecutor who didn’t think there was enough justification resigned after the investigation was started back in February.
Biden officials, Zeldin has long maintained, had directed the money to groups with ties to influential Democrats or former employers. However, officials and recipients claim that proper ethical measures were taken to stop self-dealing.
The Times’ report was not brought up during the debate on Monday.
EPA’s defeat prior to the DdotC. Last week, Zeldin made it apparent that he would file an appeal.
During a Senate appropriations hearing, he stated, “We are not going to assume that the United States Supreme Court will agree with that district court; the Supreme Court is the highest court in the land.”.
