A federal judge in the United States has issued a temporary stay on her earlier directive requiring the Department of Transportation (DOT) to release funds for the Hudson Tunnel Project. This pause is intended to afford the Trump administration time to appeal the decision, following their unsuccessful request for a more extended delay. The directive, issued by US District Judge Jeannette Vargas, highlights the administration’s unlikely chance of prevailing on the merits of their appeal. Judge Vargas emphasized that a continued freeze on funding would pose irreparable harm to New York and New Jersey, including a potential loss of 95,000 jobs and a significant negative impact on GDP.
Despite these findings, Judge Vargas acknowledged concerns regarding the court’s jurisdiction, citing that if no stay was granted, $200 million would need to be released imminently. The brief pause granted allows for appellate review, which must occur by the upcoming deadline of Thursday, February 12. The continuing development of the Hudson Tunnel Project is imperative for improving the critical infrastructure that connects New York and New Jersey beneath the Hudson River. For further information, you can access the original article here.
The DOT had initially agreed to fund the project but later initiated a review in alignment with policy changes on race and sex in government funding. In response to these changes, the 2025 repeal of race- and sex-based presumptions in economic disadvantage assessments was cited in their review. With the funding halted, construction activities are at a standstill until federal funds are released, prompting New York and New Jersey to seek legal intervention. The states’ lawsuit challenges the funding freeze, arguing that it breaches statutory requirements under the Administrative Procedure Act.
According to the states, the DOT neglected procedural mandates outlined in 2 C.F.R. § 200.339, which obligates the government to offer remedial opportunities for alleged grant violations before ceasing funding. The Trump administration, however, countered with jurisdictional arguments, proposing that the matter be transferred to the Court of Federal Claims rather than remaining in the current court.
In the political arena, New Jersey Governor Mikie Sherill has been vocal about holding the Trump administration accountable for its commitments, while various senators and congressional members have jointly addressed President Trump, urging the release of funds. In a seemingly transactional offer, Trump was reported to consider the funds’ release contingent upon having Penn Station and Dulles Airport named after him.
The deadline for the DOT to argue its case for a stay with the Second Circuit Court of Appeals is set for Thursday at 5:00 PM. Without an extension, the DOT will have to comply with the existing court mandate to unlock the project funds, a pivotal juncture for the anticipated and much-delayed infrastructure improvement.