A coalition comprising rural communities, Native tribes, local governments, and nonprofits has filed a class action lawsuit against the U.S. Environmental Protection Agency (EPA) after the abrupt cancellation of $2.8billion in environmental and climate justice grants. These funds-earmarked for flood mitigation, erosion control, and resilience projects-were set to benefit disadvantaged and rural regions that have long awaited action.

In Kipnuk, Alaska, the Native Village was awarded $20million under the EPA's program to stabilize riverbanks undermined by thawing permafrost, erosion, and flooding. The grant would have protected vital infrastructure: boardwalks, fuel tanks, buildings, and wind turbines. Erosion rates there range from 10 to 28 feet per year, jeopardizing the community's subsistence-based lifestyle. However, the funding was terminated within days of its release due to a federal funding freeze initiated by the Trump administration in early March 2025-despite initial award authorization in January and project preparations already underway by March 1.

In Clinchco, Virginia, a rural town of about 300 residents and 40% poverty rate, EPA grants totaling $500,000 (through Appalachian Voices) were funding public resilience and flood mitigation initiatives such as community green spaces, flood buffers, and emergency hubs. Those efforts, shaped through listening sessions and grassroots planning, have now been shelved-leaving locals disillusioned after investing significant effort in the application process.

The lawsuit, filed on June 25, 2025, is scheduled for a hearing on August5, 2025, in U.S. District Court for the District of Columbia. Plaintiffs include the Native Village of Kipnuk, Appalachian Voices, and the Institute for Sustainable Communities, among others. They are represented by Earthjustice and the Southern Environmental Law Center. The central legal argument hinges on the separation of powers, asserting that the EPA unlawfully violated Congress's "power of the purse" by cancelling grants authorized under the Inflation Reduction Act (2022) and section 138 of the Clean Air Act.

Legal precedent may support their case: in Green & Healthy Homes Initiatives, Inc. v. EPA, a Maryland federal court ruled that the EPA lacked authority to cancel environmental justice grant awards-even if the administration deprioritized them. Though that decision did not mandate reinstatement, it reaffirmed that funding decisions cannot nullify obligations already set by Congress.

EPA has responded with a motion to dismiss, citing passage of the One Big Beautiful Bill Act (OBBB), which rescinded unspent funds. However, attorneys for the plaintiffs maintain that the law did not retroactively strip existing obligations, meaning the roughly $2.3billion already awarded should remain intact despite the elimination of remaining unobligated funding (approx. $500million).

For communities like Kipnuk, time is critical. With a short Alaskan construction season ahead, any post-hearing reinstatement of funds might come too late to act before freeze-up. In Clinchco, the funding revocation represents not only a project setback but a breach of trust-especially in areas that historically backed administration policies. As one community member put it, "We're not holding our breaths."

This case spotlights complex intersections of ag policy, infrastructure resilience, climate justice, and the enduring struggle of rural and tribal communities to secure stable federal support. With resources tied to crop insurance, infrastructure, and disaster resilience under constant pressure from climate change and economic uncertainty, the outcome of this lawsuit could set a crucial precedent-either reinforcing Congress's funding authority or enabling future administrations to selectively withdraw critical environmental justice investments.