Federal Judge Blocks Trump Administration’s Funding Withhold for Gateway Tunnel

On Monday, a federal judge in Manhattan issued a permanent injunction against the Trump administration’s move to withhold $16 billion in federal funding intended for the Gateway Tunnel project under the Hudson River. The judge described the attempt made in September as “grossly” illegal.

This ruling, a 59-page order from U.S. District Judge Janet Vargas—appointed by Joe Biden—adds to a temporary restraining order she imposed on February 6. That order coincided with a sudden halt in construction due to funding issues.

Following a nearly three-week pause, construction resumed, but the legal battle continued. The administration maintained that New Jersey and New York lacked the standing to contest the funding freeze.

“Defendants do not dispute that the suspension of federal aid is in flagrant violation of federal law,” Vargas stated, reinforcing that there had been no substantive defense from the administration to justify their actions.

Initially, the Department of Transportation (USDOT) claimed it was withholding funds pending an evaluation by the Gateway Development Commission (GDC) regarding compliance with federal anti-discrimination laws in contract awards.

However, Vargas pointed to remarks made by Trump, expressing a desire to punish Senate Minority Leader Chuck Schumer (D-N.Y.)—an ally of the project—due to his role in a prolonged government shutdown. Trump had declared, “I’m canceling a $20 billion project that Mr. Schumer fought for 15 years to get. And I’m canceling that project, too,” during an interview.

The funding freeze began in February, despite the USDOT not having ascertained whether the GDC was violating civil rights regulations. Separately, the commission has launched its own lawsuit against the USDOT, seeking financial compensation for what they claim to be an unlawful suspension of the project.

In a joint statement, New Jersey Governor Mikie Sherrill, Attorney General Jennifer Davenport, New York Governor Kathy Hochul, and Attorney General Letitia James expressed gratitude for the court’s ruling, emphasizing that it affirmed the illegal nature of the funding freeze. They remarked, “This is America’s most important infrastructure project, and thanks to our lawsuit, 1,000 people are back to work and construction continues every day. This victory sends a clear message: The Trump administration’s attempts to defund Gateway will not work.”

A spokesperson for the USDOT emphasized the department’s commitment to ensuring that taxpayer funds are utilized appropriately and not for unconstitutional or discriminatory contracting practices.