State sues Trump to restore grants, including $75M to Gallo Glass in Modesto
California has sued the Trump administration for canceling energy-saving grants, including $75 million to Gallo Glass Co. of Modesto.
Attorney General Rob Bonta said Trump singled out Democratic-leaning states in blocking about $1.2 billion in grants last year. One of them would have helped Gallo cut natural gas use at the huge bottle-making plant next to its main winery.
Bonta joined attorneys general in 12 other states in the lawsuit, filed Feb. 18 in U.S. District Court in San Francisco. Gallo declined to comment to The Modesto Bee.
U. S. Energy Secretary Chris Wright announced in May that he was canceling many of the grants approved by predecessor Jennifer Granholm. A news release said he could support only projects that “bolster affordable, reliable energy sources“ and “generate a positive return on investment of taxpayer dollars.”
Defenders of the grants say they would reduce climate-harming emissions while providing well-paying jobs. About 7,000 people work for E.&J. Gallo Winery in the Central Valley, coastal regions and elsewhere.
The grants were from a pair of spending packages approved in 2021 and 2022 by Congress and Democratic President Joe Biden. The suit says Republican successor Donald Trump has no authority to cancel the money. It also notes his disdain for climate science.
“The president,” Bonta said in a news release, “is cherry-picking this funding at the expense of hard-working Americans and stifling innovation and the economy for the sake of partisan retribution.”
The suit was joined by Oregon, Washington, Colorado, Illinois, Wisconsin, Vermont, Massachusetts, Connecticut, Rhode Island, New York, New Jersey and Maryland.
The 73-page filing does not mention Gallo by name. The company had applied to the Office of Clean Energy Demonstrations, where 24 grants totaling $3.7 billion nationwide were canceled in May. That was out of about $6 billion awarded under Biden.
Gallo planned to test a gas/electric hybrid technology on one of the furnaces that produce molten glass. It estimated a 70% drop in gas consumption, meaning cleaner air for its airport district neighbors and beyond.
The project also would boost by about 30% the plant’s already sizable use of recycled glass. Gallo has a venture in the Beard Industrial District, Halo Glass Recycling, for materials from curbside pickup and other sources.
The glass plant dates to 1958, serving the winery founded in 1933 by brothers Ernest and Julio Gallo. It is now the world’s largest wine producer and also does hard liquors.
The four furnaces have had previous upgrades to conserve gas from PG&E and electricity from the Modesto Irrigation District.
Other canceled grants would have reduced carbon emissions in industries such as concrete, chemicals and food processing.
Wright is one of two defendants in the lawsuit, through his role as energy secretary. The other is Russell Vought, budget director for Trump.
The lawsuit quotes Vought’s comment after a later round of canceled grants, totaling almost $8 billion. He called it “Green New Scam funding to fuel the Left’s climate agenda.”
The Gallo project was one of three blocked grants mentioned in a June 2025 letter to Wright from Sens. Alex Padilla and Adam Schiff. The California Democrats also cited a natural gas plant in Sutter County and a cement company in Los Angeles County.
The Gallo withdrawal prompted a June post on Facebook from Katie Porter, a candidate for governor and former House member.
“Trump cut the grant, and who gets hurt?” she said. “Everyday Californians and our entire environment.”
This story was originally published February 23, 2026 at 6:00 PM.
