Obama Judge Rules Against Trump Admin’s Cancellation of ‘Green’ Projects
A federal judge on Monday handed the Trump administration a legal setback, ruling that its decision to cancel billions of dollars in clean-energy grant funding was unlawful and violated constitutional equal protection principles.
The lawsuit was brought by the city of St. Paul, Minnesota, alongside a coalition of environmental and energy advocacy groups after the Department of Energy and the Office of Management and Budget announced in October that roughly $7.5 billion in clean-energy grants would be rescinded. The canceled funding had been allocated to hundreds of projects nationwide, including battery manufacturing facilities, hydrogen technology initiatives, electric grid upgrades, and programs aimed at reducing carbon emissions.
In a written opinion, U.S. District Judge Amit P. Mehta, an Obama appointee, concluded that the administration’s decision-making process “lacked a rational connection” to its stated policy objectives. Mehta pointed to evidence showing that the overwhelming majority of terminated grants were awarded to recipients located in states that did not support President Donald J. Trump in the 2024 election, while comparable projects in states that did back Trump were largely spared.
According to the judge, treating grant recipients differently based on geography and the political preferences of their states amounted to a violation of the Fifth Amendment’s guarantee of equal protection.
“Defendants freely admit that they made grant-termination decisions primarily—if not exclusively—based on whether the awardee resided in a state whose citizens voted for President Trump in 2024,” Mehta wrote.
“There is no rational relationship between that classification and Defendants’ stated governmental interest. Defendants’ decisions to terminate Plaintiffs’ grants therefore, violate the Fifth Amendment,” he added.
As part of the ruling, the court ordered the restoration of seven specific grants totaling tens of millions of dollars. However, Mehta rejected separate claims that the administration’s actions also violated First Amendment protections.
The Department of Energy pushed back on the decision, maintaining that the review process was lawful and policy-driven. A department spokesperson said officials evaluated projects individually and concluded that many failed to advance national energy priorities or deliver sufficient returns for taxpayers. The agency said it “stands by our review process” and disagreed with the court’s ruling.
Plaintiffs argued that the grant cancellations were politically motivated and punitive, citing public statements and the geographic pattern of terminations as evidence. They contended that rescinding funding based on where recipients were located constituted unconstitutional discrimination and undermined communities relying on affordable energy development.
The ruling marks a broader challenge to the administration’s efforts to rein in green energy programs inherited from the Biden era. On the same day, another federal judge allowed work to resume on a major offshore wind project that had been paused, signaling increased judicial scrutiny of the administration’s energy policy shifts.
The decision also comes amid ongoing Republican debates over how aggressively to unwind former President Joe Biden’s climate agenda. Over the summer, Sen. Lisa Murkowski (R-AK) worked to preserve select provisions of Biden’s climate legislation as Republicans pursued spending cuts to finance their reconciliation package, Politico previously reported.
Murkowski urged a “more cautious and conscientious approach,” warning against using a “big hammer” to eliminate green energy tax credits embedded in Biden’s trillion-dollar Inflation Reduction Act (IRA).
Passed in 2022 without a single Republican vote, the IRA is now facing significant reductions as GOP lawmakers search for savings to support President Trump’s legislative priorities. House Republicans have proposed slashing billions in clean-energy subsidies enacted under the Biden administration, including tax credits for electric vehicles and environmentally friendly home upgrades such as heat pumps, energy-efficient windows, and doors.
The proposal would also phase out tax credits for hydrogen production, advanced manufacturing, and nuclear energy—moves that have divided right-of-center energy policy experts. In addition, the bill seeks to eliminate “transferability,” a provision allowing project sponsors to sell tax credits to third parties, and includes safeguards aimed at preventing Chinese companies from benefiting from the subsidies.