New York, New Jersey sue Trump admin for withholding train tunnel funds

By Ry Rivard | 02/03/2026 12:58 PM EST

President Donald Trump last fall said he was terminating the tunnels despite the fact that construction had already begun following congressional appropriations.

A tunnel is under construction on Oct. 2 in Manhattan that will connect the new Hudson River rail tunnel to New York Penn Station in New York City. From an overhead view, workers wearing neon green and safety gear are shown.

A tunnel is under construction in Manhattan that will connect the new Hudson River rail tunnel to New York Penn Station in New York City. Ted Shaffrey/AP

New York and New Jersey on Monday sued the Trump administration for attempting to kill the nation’s largest public works project.

The case, filed in the federal court of claims by the bistate Gateway Development Commission, accuses the federal Department of Transportation of illegally withholding money for a decadelong, $16 billion project to build new train tunnels under the Hudson River.

In statements, New York Gov. Kathy Hochul accused President Donald Trump of a “brazen act of political retribution intended to hurt New Yorkers,” while New Jersey Gov. Mikie Sherrill said the lawsuit was part of her fight for “jobs and opportunity.”

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The commission hired a pair of prominent attorneys — Neal Katyal, an acting solicitor general in the Obama administration, and Gurbir Grewal, a former New Jersey attorney general — to fight what the lawyers described as a high-stakes but “straightforward” breach of contract case.

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