Gabrielle Towson 

ELR Staffer FLS ‘26

On March 13, 2025, the environmental law nonprofit, Earthjustice sued the Trump administration for “unlawfully withholding grant funds appropriated by Congress through the Inflation Reduction Act (IRA).” The lawsuit, brought on behalf of several U.S. farmers and non-profit organizations, challenges the administration’s decision to freeze $18 billion in funding for various programs implemented under the IRA by the U.S. Department of Agriculture (USDA). These areas include agricultural conservation, renewable energy projects for rural communities and farmers, forestry restoration, and fuel reduction. 

The dispute stems from Executive Order “Unleashing American Energy,” signed by President Trump on his first day in office. The Executive Order directs federal agencies to “immediately pause the disbursement of funds appropriated through the IRA” and to review their grants for alignment with the administration’s energy and economic policies. Following this directive, the Office of Management and Budget (OMB) instructed agencies, including the USDA, to halt all IRA grant disbursements, even for existing grantees performing projects with already obligated funds. As a result, agencies cut off grant recipients’ access to payment portals, refused to process invoices, canceled check-in meetings, and failed to respond to grantees’ requests for clarification. According to a recent analysis from the University of Illinois, $12.5 billion of the funds remain unreleased. Six states – Arkansas, California, Minnesota, Missouri, Mississippi, and Texas – stand to lose over $400 million each if this funding is not allocated.

In its lawsuit, Earthjustice argues that the administration’s “indefinite and indiscriminate” withholding of funds violates both the U.S. Constitution and the Administrative Procedure Act (APA). The complaint asserts that the funding freeze is “arbitrary and capricious” and “contrary to law,” exceeding the administration’s executive authority by effectively overriding Congress’s explicit funding directives. According to Earthjustice, the administration’s withholding of funds has had devastating and immediate consequences for Plaintiffs, many farmers, and nonprofit organizations. The abrupt halt in funding has forced some grantees to consider layoffs or furloughs, while others risk abandoning projects they have already invested substantial time and resources into. Additionally, some recipients have been left financially responsible for costs the government promised to cover. 

Earthjustice is now seeking a court order compelling the Trump administration to lift the funding freeze and disburse all previously approved IRA grants. This case highlights broader legal questions concerning executive authority, congressional appropriations, and the limits of administrative discretion. As litigation unfolds, its outcome could have lasting implications for environmental funding, administrative law, and the implementation of congressionally mandated programs under future administrations.