Published by TrenBuzz.com | June 29, 2026
Key Points at a Glance – Hudson River Gateway Project Lawsuit
- New York AG Letitia James and New Jersey Acting AG Jennifer Davenport sued the Trump administration over an unlawful suspension of federal funding for the Hudson Tunnel Project after the DOT abruptly froze funding on September 30, 2025.
- The Gateway Development Commission separately filed a breach of contract lawsuit in the Court of Federal Claims, accusing DOT of improperly withholding $205,275,358 in contractually obligated funding.
- The combined Hudson River Gateway Project lawsuit sought to stop the federal government from continuing an indefinite funding freeze affecting roughly $15 billion in committed money.
- If funding had not resumed by February 6, 2026, construction would have paused, resulting in the loss of nearly 1,000 jobs immediately and putting 11,000 jobs at risk overall.
- A federal judge granted a temporary restraining order on February 6, forcing the government to release more than $200 million in overdue funds, which fully resolved by mid-February 2026.
- A judge later dismissed most of the underlying lawsuit in March 2026 after the US government made all disputed payments and construction work fully resumed on the $16 billion project.
Hudson River Gateway Project Lawsuit: Why the Funding Freeze Happened in the First Place
The HTP is an urgent investment in America’s passenger rail network involving a new train tunnel connecting New Jersey and New York under the Hudson River, alongside rehabilitation of the North River Tunnel, which has been in service since 1910.
The lawsuit accused the federal government of withholding funds over the project’s Disadvantaged Business Enterprise program, which the White House labeled “unconstitutional DEI.”
What 200,000 Daily Commuters Had At Stake
Each weekday, more than 200,000 passengers rely on rail service through the Hudson River crossing, and without completion of the project, riders would have to continue depending on the aging, storm-damaged North River Tunnel, which remains vulnerable to major service failures.
“Every time the Trump Administration gets involved, costs go up and working people suffer,” said New Jersey Governor Mikie Sherrill at the time, vowing the state would not back down.
How the Gateway Tunnel Funding Battle Was Finally Resolved
New York Attorney General Letitia James announced that as a direct result of her office’s successful lawsuit, all previously frozen funding for the Gateway Program’s Hudson Tunnel Project was fully released by mid-February 2026.
A judge subsequently dismissed most of the lawsuit in March, since the US government had already made the disputed payments and construction work had resumed on the $16 billion megaproject.
The Hudson River Gateway Project lawsuit became one of the clearest examples in 2026 of states successfully forcing the federal government to honor existing infrastructure contracts through emergency court action. Construction continues today across multiple active sites in both states.
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Disclaimer: This article is for general informational and news reporting purposes only. All legal details and quotes are sourced from the New York Attorney General’s official press releases, THE CITY, the New Jersey Office of the Attorney General, the State of New Jersey, and Bloomberg as of February-March 2026. TrenBuzz.com does not represent any government agency or transportation authority. Readers are encouraged to follow official Gateway Development Commission and credible news sources for the latest project updates.