A federal appeals court on Tuesday overturned a lower court ruling by Judge Tanya Chutkan, delivering a major victory to the Trump Administration by halting the release of billions of dollars in climate-related grants that had been tied up in litigation.

Earlier this year, U.S. District Judge Tanya Chutkan, an Obama appointee, issued an injunction against the Environmental Protection Agency (EPA) that barred Lee Zeldin from reclaiming funds that had been frozen at Citibank.

The $20 billion in question had been allocated under the Greenhouse Gas Reduction Fund (GGRF) to eight nonprofit organizations.

The funds were previously frozen at Citibank after Zeldin, working with the Trump Administration, took steps to claw them back.

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Judge Chutkan ordered the $20 billion to be released by Thursday to the nonprofits.

The organizations slated to receive the grants included the Coalition for Green Capital, Climate United Fund, Power Forward Communities, Opportunity Finance Network, Inclusiv, and the Justice Climate Fund, according to the Associated Press.

The Trump Administration immediately appealed Judge Chutkan’s ruling.

On Tuesday, a three-judge panel for the U.S. Court of Appeals issued a 2-1 decision siding with the EPA.

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The panel consisted of Judges Neomi Rao and Gregory Katsas, both appointed by President Trump, who formed the majority, while Judge Cornelia Pillard, appointed by President Obama, dissented.

Judge Rao authored the majority opinion, writing that Judge Chutkan had overstepped in issuing the injunction.

“We conclude the district court abused its discretion in issuing the injunction. The grantees are not likely to succeed on the merits because their claims are essentially contractual, and therefore jurisdiction lies exclusively in the Court of Federal Claims. And while the district court had jurisdiction over the grantees’ constitutional claim, that claim is meritless. Moreover, the equities strongly favor the government, which on behalf of the public must ensure the proper oversight and management of this multi-billion-dollar fund. Accordingly, we vacate the injunction,” Rao wrote.

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The dispute over the climate funds dates back to actions taken after President Trump’s election.

Lee Zeldin terminated the grants following revelations from a Project Veritas undercover investigation.

That investigation featured EPA Advisor Brent Efron admitting that the agency rushed to distribute billions of taxpayer dollars to climate-related initiatives before Trump’s inauguration.

“It was an insurance policy against Trump winning,” Efron said in the undercover recording.

He added, “Get the money out as fast as possible before they [Trump Administration] come in … it’s like we’re on the Titanic and we’re throwing gold bars off the edge.”

The appeals court ruling halts the immediate release of the $20 billion and represents a significant setback for the nonprofits that had been expecting the funds.

The decision also reinforces the Trump Administration’s authority to manage and oversee federal spending in the wake of what it has described as rushed allocations during the transition period.

With Tuesday’s ruling, the legal battle over the Greenhouse Gas Reduction Fund is set to continue, but for now, the administration has regained control over the disputed grants.

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