U.S. District Judge Jeannette Vargas issued a temporary restraining order Friday requiring the Trump administration to immediately restore more than $200 million in federal funding for the Hudson Tunnel Project, just hours after presiding over an emergency hearing on the critical infrastructure initiative's fate.
The timing of the ruling proved crucial, as the $16 billion project ran out of cash and was winding down construction operations on the same day the order was issued. Vargas, a Biden appointee in the Southern District of New York, found in her 11-page ruling that "the public interest would be harmed by a delay in a critical infrastructure project."
New York and New Jersey filed the lawsuit earlier this week, alleging "political retribution" by the Trump administration in its withholding of previously allocated federal funds for the Hudson Tunnel Project. The massive infrastructure effort aims to increase reliability for Amtrak and NJ Transit riders by constructing a new rail tunnel under the Hudson River.
State attorneys warned that without immediate funding, the project would be left abandoned, creating "substantial public safety and public health threat." Shankar Duraiswamy of the New Jersey Attorney General's Office emphasized the urgency during the hearing, stating: "There is literally a massive hole in the earth in North Bergen, New Jersey, that has to be secured."
The project's importance has grown as the existing 116-year-old Hudson River rail tunnels continue to deteriorate following damage from Hurricane Sandy in 2012. Set for completion by 2035, supporters view the new tunnel as essential infrastructure for the region's transportation network.
In 2023, then-President Joe Biden committed more than $6 billion in federal funding to the initiative. However, in September, the Trump administration abruptly announced an indefinite freeze on federal funding for the project. The administration claimed the contracts were under review for potential violations of the federal ban on diversity, equity and inclusion initiatives.
The Justice Department argued that the states lack standing to sue in Manhattan's federal court, where New York and New Jersey filed their case. However, state attorneys countered that their complaint parallels various other cases challenging the Trump administration's withholding of federal funding.
The states pointed to a similar case from January, where the administration faced scrutiny for cutting off $10 billion in child care and housing funds for five Democratic-led states. In that instance, the suing states successfully obtained a temporary restraining order to restore the funding.
New York and New Jersey sought a similar emergency order in this infrastructure case, arguing that the sudden funding freeze threatened both the project's viability and public safety. The states emphasized that construction had already begun and that abandoning the work would leave dangerous conditions requiring security measures.
The Hudson Tunnel Project represents one of the most significant infrastructure initiatives in the region, designed to address critical transportation needs as the existing tunnels face ongoing reliability issues. The deteriorating condition of the century-old tunnels, exacerbated by Hurricane Sandy damage, has created increasing concerns about service disruptions for hundreds of thousands of daily commuters.
The temporary restraining order provides immediate relief for the project, allowing construction to resume while the underlying legal dispute proceeds. The ruling underscores the court's recognition that critical infrastructure projects require continuity to protect both public safety and substantial public investments already made.
Judge Vargas's decision reflects the judiciary's role in preventing potentially harmful disruptions to essential public works when federal funding disputes arise. The case highlights ongoing tensions between the Trump administration and Democratic-led states over federal funding decisions and their implementation.
The Hudson Tunnel Project's fate now depends on how the legal proceedings unfold, though the immediate crisis has been averted through the court's intervention. The case joins a growing list of legal challenges to the Trump administration's funding decisions, particularly those affecting Democratic-controlled states and their major infrastructure initiatives.
As the litigation continues, the project can proceed with construction while the parties argue the merits of the funding dispute. The court's action ensures that the massive undertaking will not face immediate abandonment while legal questions about the administration's authority to withhold allocated funds are resolved through the judicial process.