Federal judge orders Trump to restore funding to Hudson River Tunnel project

NEW YORK — A Manhattan judge has stopped the Trump administration from freezing funding for the Hudson River Tunnel project in an 11th-hour ruling.

The order by Manhattan Federal Court Judge Jeannette Vargas granted emergency relief to New York and New Jersey, prohibiting the federal government from continuing to withhold funds. Vargas said she was persuaded after hearing arguments that the states would suffer irreparable harm barring an injunction.

The states had “adequately shown that the public interest would be harmed by a delay in a critical infrastructure project,” the judge wrote.

After months of federal funding interference, work on the $16 billion project had effectively shut down at 5 p.m. Friday. It was not immediately clear when work could resume.

“I am grateful the court acted quickly to block this senseless funding freeze, which threatened to derail a project our entire region depends on,” New York Attorney General Letitia James said in a statement following the ruling.

“The Hudson Tunnel Project is one of the most important infrastructure projects in the nation, and we will keep fighting to ensure construction can continue without unnecessary federal interference.”

During arguments in Manhattan Federal Court Friday afternoon, a lawyer for the New Jersey Attorney General’s Office said thousands of construction workers would be forced off the job this weekend and abandon “literally a massive hole in the earth” if the government didn’t immediately restore funding.

The states had filed suit against the Trump administration Wednesday, alleging the government had jeopardized completion of the monumental project — which is slated to generate 90,000 jobs and boost the regional economy by billions — in an act of retribution against Trump’s perceived political enemies.

Duraiswamy said the effects of putting shovels aside now would create overwhelming logistical and public safety issues.

“Project sites cannot simply be abandoned. There is literally a massive hole in the earth in North Bergen, New Jersey that must be secured,” Duraiswamy said. “There is a 1,600-ton tunnel boring machine … that cannot simply be left abandoned.”

Rattling off the potential for irreparable harm, the attorney said demobilizing the project and then restarting it would significantly delay the overall timeline of the critical infrastructure project, or even torpedo the whole thing.

“Workers who have been laid off may find other work,” he said, adding that others may not sign up to come back, “unwilling to commit, given the uncertainty” of the situation.

Representing the government, Assistant U.S. Attorney Tara Schwartz from the Manhattan U.S. Attorney’s Office, argued that any disagreement over the funding was a contract issue to be decided between the Gateway Development Corp. and the feds — part and parcel with a suit brought by GDC in the Court of Federal Claims earlier this week.

But attorneys for the states argued that the injuries to New York and New Jersey were separate, as those states would be responsible for picking up the tab to secure the construction sites once GDC’s coffers run dry in the coming weeks.

Vargas’s Friday order is not a final ruling, but it enjoins the feds from freezing funds while the case continues.

Trump officials first announced a freeze on the funding last year in the hours after the government shutdown began, blaming New York’s supposed “unconstitutional DEI principles” in the selection of contractors and purported noncompliance with newly implemented contracting rules.

After Gateway officials demonstrated compliance, Trump said he was targeting the project because of its importance to Democratic Senate Minority Leader Chuck Schumer, and the White House’s media shop said Democratic lawmakers had not been “prioritizing the interests of Americans over illegal aliens.”

The News reported Thursday that the president, in recent negotiations, said he’d stop meddling with the project if Schumer advocated for plastering Trump’s name on Penn Station and Dulles International Airport in Washington, D.C., a deal Schumer rejected.

The Democratic leader lauded the ruling late Friday.

“This is great news for New York, New Jersey, our economy, our workers, and our commuters,” Schumer said in a statement. “Donald Trump should do the right thing and end the freeze to let Gateway move forward once and for all.”

Gov. Kathy Hochul hailed the ruling on the key infrastructure project.

In a statement, she said, “Today, a judge affirmed what we’ve said from the start: Our case against the Trump Administration is likely to succeed, and Donald Trump’s attempt to rip away funding and derail the Gateway Tunnel project is likely to be found unlawful.

“This ruling is a victory for the thousands of union workers who will build Gateway and the hundreds of thousands of riders who rely on it every day,” Hochul said. “We will work to protect this decision and move as soon as possible to get work back on track.”

“We will continue coordinating with our partners at the Gateway Development Commission and New Jersey to ensure the Administration follows the law and releases the funding New Yorkers are owed.”