NEW YORK — The Trump administration has moved to appeal a federal court decision ordering it to release funds it is withholding from the Hudson Tunnel project.
Reuters reports the administration filed the notice of appeal on Sunday, Feb. 8, to address the decision Friday by U.S. District Judge Jeannette Vargas. That decision granted a temporary restraining order requiring the government to release the funds while the case moves through the courts [see “Judge orders funds released …,” Trains.com, Feb. 7, 2026].
Vargas’ decision said the suit by the states of New York and New Jersey met standards for a temporary restraining order, including that the parties showed immediate harm would occur and that they were likely to win the case on its merits.
Work on the tunnel project was halted on Friday. The Gateway Development Commission, which is overseeing the project, said last month that it would have exhausted all its funding and credit options to continue work without the release of the federal funds by Feb. 6 [see “Hudson Tunnel project could halt …,” Jan. 28, 2026]. The GDC also filed suit last week to try to force release of the funds.
The suit by the two states argues that the funds are being withheld as a matter of “political retribution,” a violation of the Administrative Procedure Act. It cites social media posts by President Trump that said funds were being cut to projects supported by Democrats [see “New York, New Jersey sue …,” Feb. 4, 2026].
The Department of Transportation said in September that it would withhold funds while it reviewed the project’s compliance with rules regarding contracts for disadvantaged businesses that changed under a January 2025 executive order. The commission says it has shown compliance with those rules. More recently, a White House spokesman has tied the funds to the fight over immigration policies, writing in a statement, “There is nothing stopping Democrats from prioritizing the interests of Americans over illegal aliens and getting this project back on track.”
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