California Infrastructure and Economic Development Bank v. Citibank, N.A.
Overview
Overview
Climate United sued Citibank and the EPA over Citibank's refusal to disburse the National Clean Investment Fund contractually obligated to Climate United due to pressure from the federal government. This case was consolidated with similar suits brought by Power Forward Communities, California, Maine, Illinois, and Minnesota state green banks, and the Justice Climate Fund.
The Issue
Issue
Whether an executive order freezing federal financial assistance can compel a private contractor to breach contractual obligations to disburse funds, and whether such withholding violates the Administrative Procedure Act or constitutes breach of contract.
The Rules
Rule
Contract obligations are enforceable according to their terms; a party seeking to avoid performance must establish legal impossibility or illegality. Executive actions must comply with the Administrative Procedure Act and cannot arbitrarily override private contractual obligations without proper statutory authority and procedural compliance.
The Application
Analysis
Citibank held contractual obligations under the National Clean Investment Fund to disburse funds to Climate United, but allegedly refused disbursement due to federal pressure from the executive freeze on financial assistance. Plaintiffs challenge whether the freeze validly authorized Citibank's withholding and seek recovery for breach of contract and violation of the APA.
The Conclusion
The en banc D.C. Circuit affirmed the portion of the preliminary injunction barring EPA from effectuating its March 11, 2025 termination notice, with the remaining portions affirmed by an equally divided court. The EPA is now seeking Supreme Court review: on August 7, 2026 the en banc court granted the government's unopposed motion to stay the mandate and extend the stay pending a petition for a writ of certiorari. The matter is not terminated and is at the certiorari stage.
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