Judge Orders EPA to Fund $20 Million Climate Grant for Nevada Tribe

A federal judge has ordered the Environmental Protection Agency to comply with its statutory obligations to administer the Environmental and Climate Justice Block Grant Program through 30 September 2026, after ruling the agency violated a prior court order by refusing to release funds a court had already found were illegally cancelled. The decision could restore $20 million in federal funding rescinded from the Walker River Paiute Tribe in Nevada, part of a broader $2.8 billion programme authorised by Congress under the 2022 Inflation Reduction Act. US District Judge Richard Mark Gergel issued the two-page order Wednesday, and an EPA spokesperson said the agency is reviewing the decision.

 

Why the Court Called the Termination Unlawful

 

A federal court had previously found last month that the EPA's decision to terminate the Environmental and Climate Justice Block Grant Program was "arbitrary and capricious and unlawful," a legal standard applied when an agency's action lacks a reasoned basis or fails to follow proper administrative procedure. That earlier ruling established the termination itself was improper, but the judge stopped short of ordering the EPA to fully restore the programme, noting that doing so would presumably require ordering the agency to rehire staff who had administered it, a step the court described as impractical.

That distinction created space for dispute over what compliance with the ruling actually required. The EPA argued the order "does not compel further action" and declined to reinstate the grants, prompting the plaintiffs to return to court. Gergel's new order rejects that interpretation, making clear the agency must administer the programme as Congress directed through the funding period's end date, even if the precise mechanism for doing so remains up to the agency to determine.

 

Read more: Australia to Criminalise Modern Slavery Failures for Firms Over A$100 Million

 

What the Termination Meant for One Tribal Community

 

The programme's termination in Nevada eliminated a $20 million EPA grant that would have funded a multi-year climate resiliency plan delivering water, energy and food infrastructure to approximately 1,200 tribal members living on the Walker River Reservation. The funding was specifically earmarked to weatherise and improve energy efficiency and climate resilience for 150 homes, roughly 30 percent of all existing homes on the reservation, alongside a water infrastructure project intended to protect health and safety.

That scale of impact, nearly a third of the reservation's housing stock losing planned weatherisation and efficiency upgrades, illustrates why the funding dispute carries direct consequences beyond the legal question of administrative procedure. The Nevada Clean Energy Fund, the nonprofit that would have administered the grant, is not a party to the lawsuit but said it is following the case and its impact on Nevada closely.

 

Explore OneStop ESG Marketplace: Regulation and Compliance

 

The Broader Policy Context

 

The programme was terminated in May 2025 following two executive orders issued by President Trump targeting federal funding for renewable energy and diversity, equity and inclusion efforts. That policy context frames the litigation as part of a broader legal and political dispute over the scope of executive authority to unwind congressionally authorised spending programmes, an issue that has surfaced across multiple federal grant programmes beyond this one.

Toby Merrill, litigation director for the Public Rights Project, one of the parties to the lawsuit, said the order made clear the EPA must follow the law rather than repeat arguments the court had already rejected. Bryan Cordell, executive director of the Sustainability Institute, which filed the original lawsuit on behalf of a separate South Carolina home-repair and weatherisation project, said the EPA has multiple options for releasing the funds without necessarily rehiring the staff who previously administered the programme.

 

What Happens Next

 

Cordell pointed to an earlier sign of the funding process moving once the court first ruled the termination illegal, saying the EPA had reopened treasury accounts allowing his organisation to recover approximately $75,000 in already-spent funds over the past month, and said his general sense was that funds could move relatively quickly once the agency acts. He described the practical harm of the delay in stark terms, noting that households have been left waiting for weatherisation and infrastructure improvements while the funding dispute continues. Whether the EPA complies with this latest order by restoring the Walker River Paiute Tribe's grant and the broader programme's remaining allocations before the September 2026 funding deadline, or continues resisting through further legal challenge, will determine whether this ruling translates into actual infrastructure delivered to the affected communities in the time remaining.