Court Rulings Affirm Agency Procedural Safeguards for Climate Infrastructure Funds

JD Supra Environment & Energy

Filed January 23rd, 2026

Detected March 28th, 2026

Summary

Federal courts have ruled that agencies must follow procedural requirements when administering climate infrastructure funds. Decisions in Washington and D.C. invalidated agency actions that froze EV-charging funding and terminated DOE grants based on political affiliation, impacting billions in infrastructure projects.

View original document View source feed page

What changed

Recent federal court rulings have affirmed that executive agencies must adhere to procedural safeguards and constitutional constraints when distributing funds for climate-focused infrastructure projects. Specifically, a U.S. District Court in Washington invalidated the Department of Transportation and Federal Highway Administration's freeze on National Electric Vehicle Infrastructure (NEVI) funding, citing violations of the Administrative Procedure Act for failing to provide required notice and opportunity for states to address concerns. In a separate case, a D.C. District Court found the Department of Energy violated the Fifth Amendment's equal protection clause by terminating over $7.5 billion in environmental project grants based on the political leanings of the states where projects were located.

These decisions have significant implications for businesses in the energy and infrastructure sectors. Agencies are now barred from withholding funds without following statutory procedures, potentially restoring billions in obligated funding for states and projects. Companies should monitor agency guidance and actions related to domestic content requirements for EV charging stations and other infrastructure grants, as well as be aware of the potential for legal challenges based on procedural fairness and equal protection principles in the administration of federal funds.

What to do next

Review agency actions related to NEVI and DOE grant programs for procedural compliance.
Monitor proposed changes to domestic content requirements for EV charging infrastructure.
Assess potential impacts of these rulings on ongoing and future infrastructure projects.

Source document (simplified)

March 27, 2026

Recent Rulings Confirm Procedural Safeguards for U.S. Energy Infrastructure

LinkedIn Facebook X Send Embed

Federal courts have issued a series of rulings in recent weeks affirming that executive agencies must comply with procedural requirements and constitutional constraints when administering funds committed during the Biden administration for infrastructure projects aligned with President Biden's climate change policies. These decisions have significant implications for businesses operating within the broader energy and infrastructure sectors and should continue to be monitored as government actions continue.

EV-Charging Infrastructure Funding

On January 23, 2026, U.S. District Judge Tana Lin of the Western District of Washington issued a final ruling holding that the Department of Transportation and the Federal Highway Administration acted unlawfully when they froze funding under the National Electric Vehicle Infrastructure ("NEVI") Formula Program. State of Washington et al. v. U.S. Department of Transportation et al., No. 2:25-CV-00848-TL (W.D. Wash. Jan. 23, 2026). The NEVI program, established under the Infrastructure Investment and Jobs Act of 2021 ("Infrastructure Act"), provides $5 billion to states for EV-charging infrastructure, primarily along highway corridors.

The court invalidated a February 2025 letter from FHWA Associate Administrator Emily Biondi that froze all new EV-charging funding obligations and effectively rescinded previously approved state infrastructure plans. Judge Lin held that this action violated the Administrative Procedure Act because the agency failed to follow the statutory procedures for withholding funds. Under the Infrastructure Act, agencies must provide states with at least 90 days to address concerns with their plans and a subsequent 60-day notice period before withholding funds—procedures that were not followed.

The ruling bars the federal government from withdrawing or withholding NEVI funding for any reason not explicitly set forth in the Infrastructure Act or without following proper procedural requirements, such as those outlined in the Administrative Procedure Act. States that previously had approved plans may now proceed with implementation, and the decision restores the legal foundation for billions of dollars in obligated funding.

Possibly in response to these court rulings, the federal government recently proposed modifying existing guidance to require electric charging stations be built with 100% American-made components to be eligible for federal funding. This would be an increase from the previous 55% domestic content requirement.

Department of Energy Grants and Constitutional Equal Protection

In a separate but related decision on January 13, 2026, U.S. District Judge Amit Mehta of the District of Columbia ruled that the Department of Energy violated the Fifth Amendment's equal protection guarantee when it terminated over $7.5 billion in environmental project grants based primarily on whether projects were located in states that voted for Kamala Harris in the 2024 election. City of Saint Paul, Minnesota v. Wright, No. 25-CV-03899 (APM) (D.D.C. Jan. 12, 2026). Projects in states that voted for President Trump were not similarly affected. The court found that there was "no rational relationship" between the location-based terminations and the government's stated interest in aligning grant funding with agency priorities.

The terminated grants supported hundreds of energy transition projects in 16 states—all of which had supported the Democratic Party candidates in the 2024 election—including battery plants, solar projects, hydrogen technology projects, grid upgrades, and carbon capture initiatives. Judge Mehta's order vacated the termination notices for seven grants totaling $27.6 million at issue in the case, though advocates argue the court's reasoning applies to all similarly situated grant recipients.

Implications for Businesses

These decisions carry several important implications for businesses operating in the energy and transportation infrastructure sectors. First, the rulings underscore that funding programs established by Congress create binding legal obligations that agencies cannot unilaterally suspend through informal guidance or administrative action. Businesses and state partners involved in such programs may have enforceable rights to obligated funds, and courts have shown willingness to intervene when agencies deviate from statutory procedures.

Second, while these rulings provide near-term certainty for affected projects, industry participants should remain attentive to ongoing policy uncertainty. Even favorable court rulings may not fully address the investment climate for capital-intensive energy projects with multi-year development timelines, particularly where future administrative action remains possible.

Finally, these rulings follow a series of decisions in which federal judges rejected the federal government's attempts to halt construction on five major offshore wind projects on national security grounds, demonstrating that funding for energy transition projects remains an active area that should continue to be monitored.

Conclusion

Businesses in the energy sectors should view these rulings as confirming the legal protections that attach to congressionally authorized programs and constitutionally protected interests. Companies with existing federal funding commitments or permits should assess their legal options if agency action threatens those interests, while prospective investors should factor regulatory and political risk into project planning.

Read the full Climate Report.

Send Print Report

Latest Posts

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
Attorney Advertising.