On February 3, 2026, New Jersey Acting Attorney General Jennier Davenport and New York Attorney General Letitia James filed a lawsuit against the Trump administration for withholding $15 billion in federal funding for the Hudson Tunnel Project, a critical infrastructure project essential to regional rail service and the national economy. 

The Hudson Tunnel Project is the central component of the Gateway Program, a long-planned effort to revitalize Hudson River rail travel. The project will repair the 116-year-old North River tunnel and build a new tunnel beneath the Hudson River. The tunnel was severely damaged during Superstorm Sandy and continues to deteriorate, causing frequent service disruptions and emergency maintenance that impact hundreds of thousands of commuters. Construction on the Hudson Tunnel Project began in 2023 and is underway across multiple active sites in New York and New Jersey.  

New York and New Jersey have already invested hundreds of millions of dollars in the project, and the federal government has awarded more than $16 billion in total funding through multiple grant and loan programs. However, despite years of planning and coordination, on September 30, 2025, the U.S. Department of Transportation (DOT) abruptly halted all funding for the project. In response, project administrators promptly addressed every issue raised by the federal government and repeatedly certified full compliance with all applicable requirements. Nevertheless, DOT has refused to resume funding. Without court intervention, work on the project will be forced to stop as early as February 6, 2026, placing one of the most important infrastructure projects in the country in jeopardy. 

The lawsuit, filed in federal court in the Southern District of New York, seeks emergency relief to stop the DOT from continuing its indefinite funding freeze—funds needed to ensure that active construction on the project can continue, that workers do not lose their jobs, and that the States and their residents are not harmed. The attorneys general assert that the funding freeze is not based on any legitimate compliance concern but instead reflects an unlawful, politically motivated decision. They argue that this violates federal law because the government cannot withhold funding without a valid legal basis, proper procedures, or a reasoned explanation.

On February 6, 2026, the court granted a temporary restraining order, prohibiting the Trump administration from shutting down work on the Gateway Program’s Hudson River Tunnel project. 

Allowing this project to stop would put one of the country’s most heavily used transit corridors at risk. 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.Attorney General Letitia James

Our promise to our residents is clear: we will protect them from attacks on their rights and on their pocketbooks, whatever the source. The President’s decision to freeze funding for the Hudson Tunnel Project jeopardizes safe and reliable infrastructure and puts thousands of jobs at risk. The Federal Government has left us no choice: we must challenge this illegal action in court, and demand emergency relief that will protect us from these unlawful harms.Acting Attorney General Jennifer Davenport