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Wednesday, April 23, 2025
The EPA argues the Court of Federal Claims should be considering the issue rather than federal district court.
SEATTLE (CN) — A coalition of states urged a federal judge in Washington state on Friday to find the Environmental Protection Agency illegally ended a $7 billion program that would have brought solar energy to more than 900,000 low-income families across the country.
“Congress very intentionally left in place a $7 billion appropriation here. They left in place all this money for the Solar for All program and that has to mean that Congress intended for this program to continue through the life of those grants,” Andrew Hughes, with the Washington State Attorney General’s Office, told U.S. District Judge Tiffany Cartwright.
In October, 23 states sued the EPA, accusing its administrator Lee Zeldin of illegally withdrawing 90% of funds already allocated to recipients across the country, after misinterpreting President Donald Trump’s One Big Beautiful Bill Act. The states say the cancellation of the solar energy program violates the Administrative Procedures Act and the Separation of Powers Doctrine.
Congress established the Solar for All program in 2022 as part of the Inflation Reduction Act, directing the EPA to make competitive grants to states and other entities to deploy solar projects in low-income and disadvantaged areas. By August 2024, the EPA had awarded all of the program funds to the plaintiff states and other grant recipients, spurring the plaintiffs to begin developing their projects.
In August 2025, the EPA abruptly terminated the program and took back the vast majority of the money already awarded. The EPA had obligated $3 billion to the plaintiff states.
The states argue the One Big Beautiful Bill Act didn’t rescind already obligated funds, only unobligated funds appropriated for the solar program. Further, the states accused the EPA of “trying to have their cake and eat it too” by trying to move the case to the Court of Federal Claims.
“I’m very curious to hear how … these sort of ‘Schroedinger’s grant agreements’ can be contracts here and kick us out of this court but not contracts in the Court of Federal Claims and kick us out of that court,” said Hughes.
Grant recipients also sued in October in the U.S. Court of Federal Claims to recover damages for unlawful breaches of the contracts that governed the grant agreements.
Cartwright, a Joe Biden appointee, questioned how the court should proceed hearing a challenge also being heard in the Court of Federal Claims.
“I don’t think there’s any basis for treating the possibility of damages in the Court of Federal Claims as an obstacle to jurisdiction here in this case,” Hughes said. “We’re raising core Separation of Powers issues that are just not going to be touched by the Court of Federal Claims’ decision.”
The EPA argued it was within its right to cancel the program and that any challenge to the cancellation should be heard in the Court of Federal Claims rather than in federal district court.
“What this case boils down to is a loss of grant funding, and plaintiffs never had any right to the grant funding except through their grants,” said I-Heng Hsu with the Justice Department.
The EPA also argues it had to consider what Congress meant when it passed the One Big Beautiful Bill Act.
“The right to grant funding came solely from grant agreements,” Hsu said.
But Cartwright pushed back.
“If Congress wanted to undo all of the grants that had already been obligated, why didn’t they just do that?” Cartwright asked.
The EPA’s stance is that Congress just as easily could have preserved the program. The agency also says the Court of Federal Claims can provide complete relief for the plaintiffs’ claims.
“The United States is not disputing the existence of these grant agreements or that they’re contracts, but plaintiffs are going so far as to say ‘these were not contracts’ in order to escape the jurisdictional bar,” Hsu said.
The agency claims the use of the phrase “claw back” is inaccurate, because the EPA isn’t demanding grant funds already received be returned.
“The obligation is really about EPA stopping immediate access,” Hsu said.
Turning back to the states, Cartwright noted she had trouble finding a precedent to reinstate a terminated grant.
“That’s not what we’re asking for,” Hughes said. “EPA can make a new, lawful decision.”
Cartwright did not indicate when she would rule.
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