Judge orders federal agencies to release billions of dollars from two Biden-era initiatives

BOSTON — A federal judge on Tuesday ordered the Trump administration to release billions of dollars meant to finance climate and infrastructure projects across the country.

U.S. District Judge Mary McElroy, who was appointed by President Donald Trump during his first term, sided with conservation and nonprofit groups and issued a preliminary injunction until she rules on the merits of the lawsuit. The injunction is nationwide.

McElroy concluded that the seven nonprofits demonstrated that the freeze was “arbitrary and capricious” and that the powers asserted by the federal agencies, including the White House’s Office of Management and Budget, in halting the payouts were not found in federal law.

“Agencies do not have unlimited authority to further a President’s agenda, nor do they have unfettered power to hamstring in perpetuity two statutes passed by Congress during the previous administration,” she wrote.

The nonprofits said that an executive order issued by Trump resulted in projects funded by the 2021 Infrastructure Investment and Jobs Act 2022 Inflation Reduction Act being put on hold. As a result, funding from many federal agencies has been frozen for everything from urban forestry projects to weatherization programs to lead pipe remediation and has resulted in “serious and irreversible harm” to many groups.

Diane Yentel, the president and CEO of the National Council of Nonprofits and a plaintiff in the lawsuit, welcomed the decision.

“This funding freeze has already caused serious harm in communities, as nonprofits that provide critical services to our country’s most vulnerable have been forced to scale back operations, cancel projects, and consider laying off staff,” Yentel said. “This injunction offers much-needed relief and a path forward.

Plaintiffs argued the freeze violated the Administration Procedure Act and contradicts a directive from the budget office that said the pause in funding in the executive order didn’t apply to all the funding. They also said there is no statutory provision that allows the federal agencies to freeze the funding.

The federal government responded that Congress gave agencies broad latitude to select recipients for the funding and that the plaintiffs failed to show that three of the seven agencies they sued have caused them any harm. They also argued that plaintiffs can’t seek relief through this lawsuit since they are already pursuing a similar challenge in a different court.