EPA argues that the Court of Federal Claims should consider the case rather than a federal district court.
SEATTLE (CN) – A coalition of states asked a federal judge in Washington state on Friday to find that the Environmental Protection Agency illegally ended a $7 billion program that would have brought solar power to more than 900,000 low-income families across the country.
“Congress very purposefully left in place a $7 billion appropriation here. They left in place all this money for the Solar for All program, and that must mean Congress intended that program to continue for 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 countries unsuspecting EPA, accusing its administrator Lee Zeldin of illegally withdrawing 90% of funds already allocated to recipients across the country after misrepresenting President Donald Trump’s bill for a big nice bill. The states say the cancellation of the solar energy program violates the Administrative Procedures Act and the Separation of Powers Doctrine.
Congress created the Solar for All program in 2022 as part of the Inflation Reduction Act, directing the EPA to award competitive grants to states and other entities to locate solar projects in low-income and disadvantaged areas. By August 2024, EPA had awarded all program funds to the plaintiff states and other grantees, prompting the plaintiffs to begin development of their projects.
In August 2025, the EPA abruptly terminated the program and took the vast majority of the money already awarded. The EPA had ordered $3 billion from the plaintiff states.
United argue The Big Beautiful Bill did not repeal the already obligated funds, only the unobligated funds appropriated for the solar program. The states further 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 kinds of ‘Schroedinger grant agreements’ can be contracts here and get us out of this court, but not contracts in the Court of Federal Claims and get us out of that court,” Hughes said.
Grant recipients too unsuspecting in October in the US Court of Federal Claims to recover damages for illegal breach of contract governing the grant agreements.
Cartwright, a Joe Biden appointee, questioned how the court should proceed with 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 a bar to jurisdiction here in this case,” Hughes said. “We’re raising substantive Separation of Powers issues that simply won’t be affected by the Court of Federal Claims decision.”
EPA arguing was within its rights to cancel the program and that any challenge to the cancellation should be heard in the Court of Federal Claims and not in federal district court.
“What this case boils down to is a loss of grant funding, and the plaintiffs never had any right to the grant funding except through their own grants,” said I-Heng Hsu with the Justice Department.
EPA also argues that it should have considered what Congress meant when it passed the Big Beautiful Act.
“The right to grant funding came only from the grant agreements,” Hsu said.
But Cartwright backed off.
“If Congress wanted to undo all the grants that were already obligated, why didn’t they do it?” Cartwright asked.
EPA’s position is that Congress could just as easily have maintained the program. The agency also says the Court of Federal Claims can provide full relief on plaintiffs’ claims.
“The United States is not disputing the existence of these grant agreements or that they are contracts, but the plaintiffs are going so far as to say ‘these were not contracts’ to escape the legal hurdle,” Hsu said.
The agency contends that the use of the phrase “claws back” is inaccurate because EPA does not require the return of grant funds already received.
“The enforcement is really about denying EPA immediate access,” Hsu said.
Turning to the states, Cartwright noted that she had difficulty finding a precedent to reinstate a discontinued grant.
“That’s not what we’re looking for,” Hughes said. “The EPA can make a new, legal decision.”
Cartwright did not say when he would rule.
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