The US Court of Appeals for the DC Circuit ruled Tuesday that claims arising out of the cancellation of grants under the Greenhouse Gas Reduction Fund and the Environmental Protection Agency (EPA) should be resolved in the US Court of Federal Claims (CFC) because the claims are primarily contractual.

In its judgement, the court noted that, “[b]ecause Congress has limited the forum and the remedies for contract claims against the government, a litigant whose claim is essentially contractual cannot ‘avoid the jurisdictional (and hence remedial) restrictions of the Tucker Act’ by simply asking for injunctive relief in district court.” The Tucker Act establishes jurisdictional limits for the CFC.

The grantees asserted that the EPA violated regulations under the Office of Management and Budget (OMB) regulations, which the grantees claim do not allow the EPA to terminate grants based on agency priorities unless this term is written into the grant agreement. The court found that this claim was primarily contractual, even if the EPA did not give written notice. The court further stated that the OMB regulations do not create an enforceable private right of action because they “merely set out principles for agencies to follow when making grants.” It was further alleged that the EPA acted “arbitrarily and capriciously” under the Administrative Procedure Act by offering “no facts or individualized reasoning” to justify the termination.

The court dismissed this constitutional claim because the grantees sought specific performance of their contracts, which is not “truly independent” of their grant contracts to warrant a separate Administrative Procedure Act claim.

In April, emails involving attorneys within President Donald Trump’s administration were leaked, in which the attorneys corresponded about how they could keep the nonprofit groups implicated in the Greenhouse Gas Reduction Fund from spending the grant funding.