A federal district court improperly tossed a lawsuit brought by environmental groups and local municipalities over the Trump administration’s mass termination of nearly $3 billion in climate grants, a federal appeals panel ruled Tuesday.

The US Court of Appeals for the DC Circuit said Judge Richard J. Leon failed to consider whether the 2025 spending bill mooted claims brought by recipients of the Environmental Protection Agency’s climate justice program, according to a per curiam judgment.

“The court erred by reaching the merits of the grantees’ constitutional claims before resolving mootness, a jurisdictional issue,” the order said, vacating the opinion from …