Grants injunctions vacated for lack of jurisdiction and failed ultra vires claims

The 4th U.S. Circuit Court of Appeals vacated and remanded injunctions that had blocked the federal government from suspending or terminating dozens of environmental and agricultural grants in early 2025, holding that the U.S. District Court for the District of South Carolina lacked jurisdiction and abused its discretion in granting relief.

The plaintiffs—nonprofit organizations and local governments—had received 38 grants funded largely through the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the American Rescue Plan Act. After President Trump issued executive orders directing agencies to pause, review, and, in some instances, terminate grants tied to environmental justice, equity, and cost-efficiency priorities, federal agencies suspended or ended many of the awards. The plaintiffs sued, asserting claims under the Administrative Procedure Act, several statutes, and the Constitution.

The district court permanently enjoined the government from freezing or terminating 32 grants under the APA and ordered immediate restoration of funding. It also issued a preliminary injunction on nonstatutory “ultra vires” and separation-of-powers theories. The government appealed, and the injunctions were stayed.

The 4th Circuit concluded that the APA claims were, in substance, contract claims seeking reinstatement of specific grants and payment of funds—relief amounting to specific performance. Under the Tucker Act, claims founded upon contracts with the United States fall within the exclusive jurisdiction of the Court of Federal Claims, and the APA’s waiver of sovereign immunity does not permit orders enforcing contractual payment obligations. Relying on recent Supreme Court precedent, the court found no meaningful distinction between those cases and the relief ordered here, and vacated the permanent injunction.

The court also rejected the preliminary injunction based on nonstatutory review and constitutional theories. Applying Dalton v. Specter, it held that allegations that executive officials exceeded statutory authority are statutory—not constitutional—claims and must satisfy the narrow ultra vires standard. Because the relevant statutes did not specifically require funding for these plaintiffs or prohibit suspension or termination of their grants, the plaintiffs were unlikely to succeed.

Vacated and remanded.

The 31 page opinion is The Sustainability Institute v. Trump, Lawyers Weekly No. 001-030-26.