Legal challenges mount to Trump administration freeze on funds for Hudson River tunnel

WASHINGTON — The Trump Administration is facing a pair of federal lawsuits demanding it release $15 billion in congressionally approved funds for the Gateway Tunnel Project that President Donald Trump froze last fall.

Attorney General Letitia James on Tuesday filed a suit seeking to unblock funding that was allocated for the massive new Hudson River tunnel in 2021 under a bipartisan infrastructure package. A day earlier, the Gateway Development Commission filed a federal lawsuit accusing the Trump administration of breaching its contractual obligation to release the funding.

Project managers had warned last week in a public hearing that without the federal funding, work on the project would come to a halt on Friday.

"Allowing this project to stop would put one of the country’s most heavily used transit corridors at risk," James said in a statement provided to Newsday. "Our tunnels are already under strain, and losing this project could be disastrous for commuters, workers, and our regional economy. We are taking the administration to court to prevent a shutdown that would ripple far beyond New York and New Jersey."

James filed the lawsuit in the Southern District of New York, along with New Jersey's Acting Attorney General Jennifer Davenport, with both claiming in the lawsuit that Trump's decision to suspend funding for the project is a "brazen act of political retribution."

The White House and Department of Transportation did not return requests for comment late Monday night and Tuesday.

Last October, Trump told reporters at the White House he was "terminating" the funding, taking aim in his remarks at Senate Minority Leader Chuck Schumer (D-N.Y.) who was among the lawmakers who helped secure support for the project.

"It’s billions and billions of dollars that Schumer has worked 20 years to get," Trump told reporters last October. "Tell him it’s terminated."

The lawsuit filed by the commission overseeing the regional rail project, requests that the federal Department of Transportation release more than $205 million in funding owed to the project that has not been released since October.

The Department of Transportation’s "breach has jeopardized the project, threatened the livelihoods of the countless workers employed in its construction, endangered passengers who must rely on decaying, century-old rail infrastructure, and undermined the United States’ reputation as a reliable contracting party," reads the 75-page lawsuit filed with the U.S. Federal Court of Claims. "This Court’s intervention is urgently needed to redress these breaches."

The commission's lawsuit accuses the Trump administration of "shifting explanations" for pausing the funding that are "plainly unlawful."

Last October, Office of Management and Budget Director Russell Vought announced on social media that funding for the Gateway Tunnel Project and the Second Avenue Subway extension were being suspended as the administration reviewed whether the project employed "DEI" — or diversity, equity and inclusion — practices opposed by the administration.

The lawsuit notes that last month, a Trump spokesperson told reporters the money could be restored if New York Democrats reconsider their immigration policies.

"For months, [Gateway Development Commission] has worked cooperatively with its federal partners to meet their requirements for restoring funding," the lawsuit states.

New York lawmakers expressed their support for the commission's lawsuit late Monday. The project, first conceived nearly 15 years ago, is meant to replace the aging 116-year-old North River Tunnel.

"This lawsuit would be unnecessary if President Trump did the right thing for New York and New Jersey and lifted his arbitrary freeze," Schumer (D-N.Y.) said in a statement. "Gateway is the most important infrastructure project in the country, and tens of thousands of union workers depend on it moving forward."

Gov. Kathy Hochul called the Gateway project essential to the region’s economy, saying commuters "depend on a safe, reliable ride under the Hudson River."

"For months, Donald Trump and his enablers in Washington have illegally withheld committed funding for this project in a brazen act of political retribution intended to hurt New Yorkers, putting thousands of union jobs and billions of dollars in economic benefits at risk," Hochul said.

The commission’s chief executive officer, Tom Prendergast, said in a statement: "Our goal has always been to work with our federal partners and get funding flowing again. At the same time, we must hold the federal government to its contractual obligations so that construction is not halted. It’s our responsibility to fight for the nation’s most urgent infrastructure project and the nearly 1,000 workers whose jobs are threatened."

By Laura Figueroa Hernandez

laura.figueroa@newsday.com@Laura_Figueroa

Laura Figueroa Hernandez is the White House correspondent and previously covered New York City politics and government. She joined Newsday in 2012 after covering state and local politics for The Miami Herald.